[House Report 105-839]
[From the U.S. Government Publishing Office]




                                                 Union Calendar No. 480

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105th Congress                                                   Report
  2d Session            HOUSE OF REPRESENTATIVES                105-839
_______________________________________________________________________



 
SURVEY OF ACTIVITIES OF THE PERMANENT SELECT COMMITTEE ON INTELLIGENCE 
                       DURING THE 105TH CONGRESS

                               __________

                              R E P O R T

                                 OF THE

               PERMANENT SELECT COMMITTEE ON INTELLIGENCE




January 2, 1999.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                               --------

                    U.S. GOVERNMENT PRINTING OFFICE                    
69-006                     WASHINGTON : 1999






                         LETTER OF TRANSMITTAL

                              ----------                              

                          House of Representatives,
                Permanent Select Committee on Intelligence,
                                   Washington, DC, January 2, 1999.
Hon. Newt Gingrich,
Speaker of the House,
The Capitol, Washington, DC.
    Dear Mr. Speaker: Pursuant to the Rules of the House, I am 
pleased to transmit herewith an activity report of the 
Permanent Select Committee on Intelligence, titled ``Committee 
Activity Report for the 105th Congress.'' The report includes a 
summary of oversight activities and findings of the Committee 
during the course of the 105th Congress.
            Sincerely yours,
                                          Porter J. Goss, Chairman.




                                                 Union Calendar No. 480

105th Congress                                                   Report
 2d Session             HOUSE OF REPRESENTATIVES              106-5/839
                                                                       
=======================================================================



SURVEY OF ACTIVITIES OF THE PERMANENT SELECT COMMITTEE ON INTELLIGENCE 
                       DURING THE 105TH CONGRESS

                                _______
                                

January 2, 1999.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


    Mr. Goss, from the Permanent Select Committee on Intelligence, 
                        submitted the following

                              R E P O R T

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

 Subcommittee on Human Intelligence, Analysis, and Counterintelligence

Bill McCollum (R-Florida),          Julian Dixon (D-California), 
  Chairman                            Ranking
Bud Shuster (R-Pennsylvania)        David E. Skaggs (D-Colorado)
Michael N. Castle (R-Delaware)      Nancy Pelosi (D-California)
Sherwood Boehlert (R-New York)      Sanford D. Bishop (D-Georgia)
Charles F. Bass (R-New Hampshire)
Jim Gibbons (R-Nevada)

          Subcommittee on Technical and Tactical Intelligence

Jerry Lewis (R-California)          David E. Skaggs (D-Colorado), 
                                    Ranking
C.W. Bill Young (R-Florida)         Norm D. Dicks (D-Washington)
Michael N. Castle (R-Delaware)      Jane Harman (D-California)
Sherwood Boehlert (R-New York)      Ike Skelton (D-Missouri)
Charles F. Bass (R-New Hampshire)
Jim Gibbons (R-Nevada)

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

                       SCOPE OF COMMITTEE REVIEW

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

                          Oversight Activities

    The House Permanent Select Committee on Intelligence 
(HPSCI), under the leadership of Chairman Porter Goss, has--
          Promoted the education of Members of Congress and the 
        public on the several distinct roles intelligence plays 
        in our country's national security;
          Worked to enlist the trust and cooperation of other 
        committees in performing oversight for issues that 
        cross committee jurisdiction, such as terrorism, 
        narcotics, etc.;
          Worked diligently to promote the awareness of 
        national security issues far more broad and diverse 
        than those emphasized during the past 50 years;
          Worked with the Intelligence Community (IC) to 
        enhance the notification process, resulting in more 
        timely and accurate notification to the committee 
        leadership;
          Spearheaded a community-wide study to assess current 
        intelligence capabilities; and
          Focused on the strategic needs of the IC
    The Committee has been specifically concerned that 
intelligence capabilities be able to meet the future needs of 
United States foreign and national security policies. The 
Committee has continued to reach out to the Administration, 
through the National Security Council (NSC), to ensure that 
planning for these capabilities is consistent. Unfortunately, 
dialogue between the Committee and the NSC on these issues is 
virtually non-existent, despite repeated attempts by the 
Committee's senior Members. Thus, the Committee has found a 
lack in focus and planning on national security issues by the 
NSC and the relationship between the NSC and this Committee is 
unsatisfactory.
    The Committee identified five areas of concern and made 
several prescriptive recommendations in its two Intelligence 
Authorization bills. Those recommendations, which are currently 
in the process of being implemented by the IC include: steps to 
improved analytic capabilities; ensuring human intelligence 
(HUMINT) capabilities are equipped to fill intelligence gaps; 
promoting technological flexibility in meeting diverse 
intelligence needs; rebuilding and diversifying covert action 
capabilities; and developing an IC that is quick to respond in 
depth to a crisis, while maintaining its long term strategic 
focus.
    The Committee has prudently endeavored to direct taxpayer 
investment in the programs and infrastructure that will sustain 
the IC well into the 21st century. The Committee took the 
initial steps to address the overabundance of the unmet needs 
found throughout the IC; and urged the development of a leaner, 
more corporate, and increasingly efficient community.

     INTELLIGENCE AUTHORIZATION ACTS FOR FISCAL YEARS 1998 AND 1999

    During the 105th Congress, the Committee authorized funding 
and personnel levels for fiscal years 1998 and 1999. This 
activity was carried out at both the full committee and 
subcommittee levels.
    The Committee conducted detailed and extensive reviews of 
the President's fiscal year 1998 and fiscal year 1999 budget 
requests for intelligence and intelligence-related activities. 
These reviews included substantive and programmatic hearings, 
Member briefings and numerous staff briefings. The Committee 
conducted hearings organized across functional lines within the 
IC rather than by agency. This permitted the Committee to take 
a broader view of each of the issues and analyze how the 
various intelligence functions relate to one another.
    Testimony on the President's budget submission was taken 
from the Director of Central Intelligence (DCI); the Assistant 
Secretary of Defense for Command, Control, Communications and 
Intelligence (C3I); the Directors of the DIA, NSA, 
NIMA, NRO, the FBI; and other major intelligence program 
managers.
    The Committee began its review of these budget submissions 
with the view that the recommended authorization levels for the 
past several years had been driven to some degree by political 
considerations as to an ``acceptable'' intelligence budget 
level. For the fiscal years 1998-1999, the Committee emphasized 
both current and future needs, believing firmly that the U.S. 
must start building now for the 21st century.
    In the two budget authorization bills, enacted during the 
105th Congress, the Committee invested in a recapitalization 
and modernization of US SIGINT capabilities; continued to 
invest in all-source analysis in establishing a ``global,'' 
strategic outlook which will allow for proper indications and 
warnings for policymakers throughout the government; and funded 
the return of more intelligence officers. Additionally the 
Committee has sought to rebuild covert action capabilities, 
invest in advanced research and development programs, and 
addressed the risk aversion engendered by previous CIA 
management.
    As a result of these findings and recommends, the Committee 
sought very modest increases for both fiscal years in order to 
reverse the decline of past years and to create the stability 
necessary for the IC so that intelligence program managers can 
formulate appropriate plans for the future.
    The ``Intelligence Authorization Act for Fiscal Year 1998'' 
(P.L. 105-107) included a provision to bring cost-based 
accounting, specifically the Central Services Program (CSP), to 
certain operational activities of the Central Intelligence 
Agency. The CSP is anticipated to develop more efficient and 
cost-saving methods to provide administrative support for 
Agency activities. Additionally P.L. 105-107 included more 
funding for the Department of Defense Counterintelligence 
Programs that are responsible for force protection, 
counterterrorism programs, and general DOD counterintelligence 
activities. As a result of the Committee's actions and interest 
in these programs, the DOD has taken action to provide a large 
increase in counterintelligence positions and has supported 
continued investment in a Defense Counterintelligence 
Information Management System. Finally, the fiscal year 1998 
Intelligence Authorization bill included provisions that apply 
specific attention to the IC's satellite-based collection 
programs with particular emphasis on system cost and utility.
    The ``Intelligence Authorization Act for Fiscal Year 1999'' 
(P.L. 105-272) included the ``Intelligence Community 
Whistleblower Protection Act of 1998'' (H.R. 3829) as Title VII 
of the bill. The bill also amended the Foreign Intelligence 
Surveillance Act to authorize court ordered access to common 
carrier records, pen registers, and trap and trace devices in 
the course of an authorized foreign counterintelligence and 
international counterterrorism investigation. Additionally, 
P.L. 105-272 amended title 18 U.S.C. Sec. 2518 to permit the 
use of multipoint wiretaps for criminal investigations where 
the criminal targets' actions have the effect of thwarting a 
traditional wiretap investigation.

                       AREAS OF SPECIAL INTEREST

    The following issues were of special interest to the 
Committee during the 105th Congress:

``Intelligence Community Whistleblower Protection Act of 1998''

    H.R. 3829 was included as Title VII of H.R. 3694 (P.L. 105-
272) enacted provisions to protect and promote whistleblowers 
within the IC wishing to report serious problems with the House 
and Senate Intelligence Committees. Enactment of this 
legislation precluded a presidential veto of the bill H.R. 3694 
``Intelligence Authorization Act for Fiscal Year 1999.''

Counternarcotics Efforts

    H.R. 4300 ``Western Hemisphere Drug Elimination Act 
(WHDEA)'' Chairman Goss and Human Intelligence and Analysis 
Subcommittee Chairman Bill McCollum worked closely with the 
Speaker and the Drug-Free America Task Force Chairman Dennis 
Hastert to pass this legislation in the House by a vote of 389-
89. The bill authorizes $2.34 billion during fiscal years 1999-
2001 covering a range of new counternarcotics initiatives 
designed to reduce the global supply of coca and opium poppy; 
enhance counternarcotics efforts in the source countries of 
Bolivia, Peru and Colombia; and to improve US intelligence 
capabilities in the detection and interdiction of narcotics 
traffickers and money laundering. An amended version of the 
WHDEA was included as part of the Omnibus Appropriations bill, 
H.R. 4328 (P.L. 105-277).

Encryption

     H.R. 695 ``Safety And Freedom through Encryption (SAFE) 
Act'' With near unanimity, the Committee reported to the Full 
House an amendment in the nature of a substitute to the 
Goodlatte version of the encryption bill. With the Committee's 
action on this issue, the legislative debate finally included 
debate on compelling public safety and national security risks 
attendant to the complete and immediate deregulation of 
encryption exports.

Iran/Bosnia

    On April 5, 1996, the Los Angeles Times published an 
article, ``U.S. OK'd Iran Arms for Bosnia, Officials Say,'' 
alleging that, in 1994, the Clinton Administration gave a 
``green light'' for Iranian arms shipments to Bosnia to transit 
Croatia. This decision came despite the United Nations arms 
embargo imposed on the former Yugoslavia that the United States 
had pledged to uphold and despite the Administration's policy 
of isolating Iran internationally. On April 23, 1996, the HPSCI 
initiated an investigation into ``those aspects of the transfer 
of arms to Bosnia that fall within the committee's 
responsibilities to conduct oversight of the intelligence 
activities of the United States Government.''
    On October 9, 1998 the Committee issued committee report 
number 105-804, concluding its investigation of this matter. 
Among its findings were:
          The ``no instructions'' instruction constituted a 
        change in U.S. policy.
          The Clinton Administration failed to inform Congress 
        about its decision to allow Iranian arms to transit 
        Croatia into Bosnia.
          Policymakers did not keep their own senior 
        intelligence officials informed of U.S. policy 
        concerning these arms shipments.
          When the U.S. ambassador in Croatia asked the 
        Intelligence Community Representative in Croatia to 
        pass on the U.S. position on these Iranian arms 
        shipments, the ICR acted properly and responsibly in 
        refusing to carry out this request and informing his 
        superiors.
          The Committee found that there was no unauthorized 
        covert action to arm the Bosnian Muslims.
          Based on the available evidence, the Committee cannot 
        conclude that any U.S. official crossed the line into 
        covert action. However, questions remain about whether 
        any U.S. official exceeded the ``no instructions'' 
        policy and actively facilitated a weapons shipment to 
        Bosnia in September 1995.

CIA Drug Trafficking Investigation

    In August 1996, the San Jose Mercury News published a 
series of articles regarding the introduction, financing, and 
distribution of crack cocaine into communitiesof Los Angeles. 
The articles alleged that one of the drug trafficking rings responsible 
for introducing crack cocaine to Los Angeles was operated by a 
Nicaraguan who used some of his drug profits to provide lethal and non-
lethal assistance to the Contras. Furthermore the Mercury News articles 
implied that the CIA either backed, or at least condoned, the drug 
trafficking activity. In September 1996, the Committee began a formal 
investigation into these allegations. Separate investigations were also 
begun by the Inspectors General (IG) of the Department of Justice and 
the CIA.
    The scope of the Committee's investigation focuses on the 
following questions:
          Were any CIA operatives/assets involved in the supply 
        or sale of drugs in the Los Angeles area?
          If CIA operatives or assets were involved, did the 
        CIA have knowledge of the supply or sales of drugs in 
        the Los Angeles area by anyone associated with the 
        Agency?
          Did any other U.S. Government agency or employee 
        within the Intelligence Community have knowledge of the 
        supply or sale of drugs in the Los Angeles area between 
        1979-1996?
          Were any CIA officers involved in the supply or sales 
        of drugs in the Los Angeles area since 1979?
          Did the Nicaraguan Contras receive any financial 
        support, through the sale of drugs in the United 
        States, during the period when the CIA was supporting 
        the Contra effort? If so, were any CIA officials aware 
        of this activity?
          What is the validity of the allegations in the San 
        Jose Mercury News?
    Since the beginning of its investigation, the Committee has 
engaged in many activities to gather information, including: 
tasking the Congressional Research Service for background data 
related to the Iran-Contra investigations; tasking the IGs of 
the Department of Justice and CIA to provide access to all 
material that they compile in the course of their 
investigations, conducting several interviews in Washington, 
Los Angeles, and Nicaragua; and attending and participating in 
two ``town hall'' meetings in South Central Los Angeles. The 
Committee has also received and is reviewing the results of the 
CIA and Department of Justice IG investigations, as well as an 
investigation by the Los Angeles County Sheriff's office.
    The Committee's investigation will continue during the 
106th Congress, with much data reviewed and interviews 
conducted. The CIA IG identified over 6000 documents for 
Committee review. The Committee expects to complete its 
investigation in early 1999.

U.S. Dual-Use Technology Transfers to China

    The Chairman and Ranking Democratic Member, along with 
selected staff, participated in the hearings, briefings, and 
other business meetings of the Select Committee on U.S. 
National Security and Military/Commercial Concerns with China, 
and they fully support the Committee's findings. The Select 
Committee was initially mandated to investigate allegations 
that two U.S. companies, Hughes Aircraft and Space Systems 
Loral, illegally transferred dual-use technology to China that 
improved Beijing's space launch vehicles and ballistic 
missiles. It concluded that the transfers in question did 
indeed take place and that Chinese capabilities were improved, 
but the extent to which both firms were knowingly complicit was 
not clearly established. The Select Committee expanded its 
investigation into other areas, such as the role of the space 
insurance industry in the Hughes and Loral cases, the issue of 
lax site security for U.S.-manufactured satellites being 
launched in China, trends in the U.S. export control regime, 
China's acquisition of U.S. high performance computers, its 
illegal diversion of McDonnell-Douglas' precision machine tools 
and of jet engines manufactured by Garrett Jet Engine 
Corporation, and Chinese espionage at U.S. Department of Energy 
facilities. The capabilities of China's missile and space 
forces were assessed, as were Beijing's targeting techniques 
and other activities related to the acquisition of restricted 
technologies from U.S. sources. Numerous recommendations were 
made to improve America's regulatory and enforcement 
capabilities related to future technology transfers. In the 
106th Congress the Intelligence Committee will follow up on 
several of the matters discussed in the Select Committee's 
final report.

                         COMMITTEE FACTFINDING

    Hearings and briefings play an important role in advising 
the Committee, however, good oversight demands much more than 
simply taking what is given in the way it is packaged by the 
Executive Branch. On-site oversight, examination, and 
inspection are essential to delve into detail and develop 
unambiguous, firsthand knowledge of which IC activities are 
working well and which are not. That is the case even more 
since a significant portion of the IC--particularly its 
collection, operations, and military support elements--is 
located outside the Washington, D.C. area. Accordingly, in the 
105th Congress, Committee Members and staff inspected over 50 
intelligence and intelligence-related facilities within the 
U.S. as well as examined U.S. intelligence activities and 
intelligence-related issues in over thirty countries overseas.
    In August 1997, Committee Members visited Pyongyang, 
Democratic People's Republic of Korea, where they engaged North 
Korean leadership on the perils and pitfalls of the DPRK's 
continued intransigence on security and humanitarian issues.
    In December 1997, Committee Members traveled to the United 
Kingdom where they discussed oversight issues falling within 
the jurisdiction of the IC. These discussions included such 
topics as: encryption, NATO expansion, proliferation of weapons 
of mass destruction, Bosnia, and the role of British oversight 
committees in collection and production.
    In late January early February 1998, Committee Chairman 
Goss and Human Intelligence and Analysis Subcommittee Chairman 
Bill McCollum traveled to Mexico City, Mexico and Panama City, 
Panama. Chairman Goss and Mr. McCollum participated in 
discussions with the Attorney General of Mexico, and various 
other officials of the Mexican Ministry of Foreign Affairs, 
during which the necessity of fighting the drug war on a 
bilateral basis was reinforced. The Members also had an 
opportunity to participate in an opium poppy eradication 
operation with the Mexican Military's 9th Brigade. In Panama, 
Chairman Goss and Mr. McCollum reviewed the national security 
and intelligence issues affected by the impending departure of 
the American military pursuant to the terms of the Panama Canal 
Treaty.

                                
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