[Senate Report 106-279]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 528
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-279

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



 
AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 2001 FOR THE INTELLIGENCE 
  ACTIVITIES OF THE UNITED STATES GOVERNMENT AND THE CENTRAL INTELLIGENCE 
  AGENCY RETIREMENT AND DISABILITY SYSTEM AND FOR OTHER PURPOSES

                                _______
                                

                  May 4, 2000.--Ordered to be printed

                                _______
                                

 Mr. Shelby, from the Select Committee on Intelligence, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 2507]

    The Select Committee on Intelligence, having considered the 
original bill (S. 2507), to authorize appropriations for fiscal 
year 2001 for intelligence-related activities of the United 
States Government, the Community Management Account, and the 
Central Intelligence Agency Retirement and Disability System, 
and for other purposes, reports favorably thereon and 
recommends that the bill do pass.

                          Purpose of the Bill

    This bill will:
    (1) Authorize appropriations for fiscal year 2001 for (a) 
U.S. intelligence activities and programs; (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, 
2001, for intelligence activities of the U.S. Government 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) Prohibit the knowing and willful unauthorized 
disclosure of classified information to a person not authorized 
to receive it;
    (5) Establish a POW/MIA analytic capability within the 
Intelligence Community;
    (6) Preclude the application of any U.S. law implementing 
treaties and other international agreements to otherwise lawful 
and authorized U.S. Government intelligence activities unless 
U.S. law expressly states that it will apply to such 
activities;
    (7) Require the Director of Central Intelligence to certify 
to Congress that each element of the Department of State that 
handles, retains, or stores material classified at the 
Sensitive Compartmented Information level is in full compliance 
with applicable Executive Orders and Director of Central 
Intelligence Directives;
    (8) Permit Executive branch agencies to contribute 
appropriated funds for fiscal year 2000 to support the 
Counterdrug Intelligence Executive Secretariat;
    (9) Expand the reporting requirements of the CIA Inspector 
General to include notification concerning certain designated 
senior officials;
    (10) Extend the CIA's Central Services Program and expand 
the authorities for the Central Services Working Capital Fund;
    (11) Permit long-term detailing of CIA employees to the 
National Reconnaissance Office on a reimbursable basis;
    (12) Permit appropriated funds transferred by the CIA to 
other government agencies for the purpose of the acquisition of 
land to remain available for a period of three years;
    (13) Permit the Director of Central Intelligence to 
designate categories of employees in addition to those 
designated in law that would be eligible to receive partial 
reimbursement for the cost of purchasing professional liability 
insurance;
    (14) Extend for two additional years the Secretary of 
Defense's authority to engage in commercial activities as 
security for intelligence collection activities;
    (15) Support the Intelligence Community's effort to monitor 
nuclear weapons tests on a worldwide basis by authorizing the 
Department of Defense to convey nuclear test monitoring 
equipment to a foreign government through a bilateral agreement 
which provides the U.S. the right to install, inspect, and 
maintain such equipment and to have continued access to data 
collected;
    (16) Expand the hiring authority of the Director of Central 
Intelligence to facilitate the recruitment of eminent experts 
in science and engineering for research and development 
projects administered by the National Imagery and Mapping 
Agency (NIMA), National Security Agency (NSA), National 
Reconnaissance Office (NRO), and Defense Intelligence Agency 
(DIA); and
    (17) Clarify the standing of United States citizens to 
challenge the blocking of assets under the Foreign Narcotics 
Kingpin Designation Act.

             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 public law. The classified annex to this report 
explains the full scope and intent of the Committee's action 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.
    The 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 made available to the 
Committees on Appropriations of the Senate and the House of 
Representatives and to the President. The President shall 
provide for appropriate distribution within the Executive 
branch.

                       Scope of Committee Review

    The Committee conducted a detailed review of the fiscal 
year 2001 budget requests for 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 entailed 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. The Committee also monitored compliance 
with numerous reporting requirements contained in statute. Each 
report was scrutinized by the Committee and appropriate action 
was taken when necessary.
    In accordance with a Memorandum of Agreement with the 
Senate Armed Services Committee (SASC), the Committee is 
including its recommendations on both JMIP and TIARA in its 
public report and classified annex. The Senate Select Committee 
on Intelligence (SSCI) has agreed that JMIP and TIARA issues 
will continue to be authorized in the defense authorization 
bill. The SASC has also agreed to involve the 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.
    In addition to its annual review of the Administration's 
budget request, the Committee performs continuing oversight of 
various intelligence activities and programs. The Committee's 
audit staff conducts in-depth audits and reviews of specific 
programs and activities identified by the Committee as needing 
thorough and focused scrutiny. The Audit Staff also supports 
the Committee's continuing oversight of a number of 
administrative and operational issues. During the last year the 
Committee's Audit Staff reviewed the National Imagery and 
Mapping Agency (NIMA) and a covert action program; completed 
portions of the Committee staff's review of counterintelligence 
at the Department of Energy's National Laboratories and the 
mishandling of classified information by former Director of 
Central Intelligence John Deutch; and monitored the products 
and activities of the Community's statutory and administrative 
Inspectors General. These kinds of inquiries frequently lead to 
Committee action with respect to the authorities, applicable 
laws, and budget of the activity or program concerned.

                       Committee Recommendations

    The majority of the Committee's specific recommendations 
relating to the Administration's budget request for 
intelligence and intelligence-related activities are 
classified, and are contained in the classified Schedule of 
Authorizations and the classified annex. The Committee is 
committed, however, to making its concerns over, and priorities 
for, intelligence programs and activities public to the 
greatest extent possible consistent with the nation's security. 
The Committee, therefore, has included in this report 
information that is unclassified.

                     Technical Advisory Group (TAG)

    In 1997, the Committee established a Technical Advisory 
Group (TAG) to inform and advise Members of the threats and 
opportunities presented by the extraordinary technological 
advances of recent years. The TAG members have extensive 
expertise in computer hardware, software, telecommunications, 
aviation, satellites, imagery, physics, chemical engineering, 
and other technical fields, as well as, in many cases, 
extensive Intelligence Community experience. They are drawn 
from both government and industry, and volunteer their time and 
effort to help the Committee understand how the Intelligence 
Community is being affected by, and can take advantage of, 
current and developing technologies.
    The Committee wishes to thank the TAG members for the many 
hours they devoted to examining Intelligence Community 
capabilities. The Committee will continue to study the findings 
of this distinguished group, to draw upon their world-class 
expertise, and to work with the Director of Central 
Intelligence to implement the Committee's recommendations that 
are based in whole or in part on the findings of the TAG.

Signals Intelligence

    In 1997, at the Committee's behest, the TAG undertook a 
study of the National Security Agency (NSA). The NSA has 
responsibility for collecting signals intelligence (SIGINT) 
from electronic signals worldwide, and therefore requires an 
in-depth understanding of the global telecommunications 
revolution to complete its mission. The TAG extensively 
reviewed current and planned operations as well as research and 
development programs at the NSA. Their findings and 
recommendations regarding the NSA's ability to address a 
changing technological environment have been incorporated into 
prior and current Committee initiatives.
    This year, the Committee asked the TAG to update its SIGINT 
review in light of reforms both proposed and underway at the 
NSA. The Committee has again utilized the TAG's analysis and 
recommendations for guidance in drafting the Intelligence 
Authorization Act for Fiscal Year 2001.

Human Intelligence

    In 1998, the Committee asked the TAG to review the status 
of the Intelligence Community's human intelligence (HUMINT) 
capabilities. The TAG concluded that human intelligence 
collection will play an increasingly important role in 
defending U.S. national security interests and recommended that 
the Intelligence Community develop a comprehensive plan that 
recognizes the rapidly changing and technically sophisticated 
world that now confronts the HUMINT collector.
    This year, the Committee also asked the TAG to assess the 
progress that the Intelligence Community has made in 
undertaking the substantial changes to HUMINT recommended in 
1998. The results of this review have been incorporated, where 
applicable, within this year's authorization.

MASINT and IMINT Intelligence

    In 1999, the TAG reviewed the Intelligence Community's 
capabilities to collect measurement and signature intelligence 
(MASINT) and imagery intelligence (IMINT). The Committee 
referred often to the TAG's review of MASINT and IMINT as it 
drafted the Intelligence Authorization Act for Fiscal Year 
2000. Some of the TAG's conclusions have influenced provisions 
within this year's bill as well.

                       Committee Priority Issues


Rebuilding the National Security Agency

    The Committee is increasingly troubled by the National 
Security Agency's (NSA) growing inability to meet technological 
challenges and to provide America's leaders with vital signals 
intelligence (SIGINT). Successful execution of the NSA's 
mission is essential to protecting U.S. national security. The 
Committee is committed to providing the resources and support 
necessary to restore and improve the NSA's capabilities.
    Collecting and deciphering the communications of America's 
adversaries has been instrumental in protecting our national 
security during the last half of the 20th Century. SIGINT has 
played a decisive role in every military confrontation in which 
the United States has been involved, from World War II through 
the Kosovo conflict. SIGINT also has consistently provided our 
nation's policy makers with additional knowledge and 
understanding of international developments and threats to the 
nation's security. This essential intelligence information has 
enlightened our foreign policy, thwarted terrorist attacks, 
disrupted narcotics trafficking, and averted unnecessary 
military conflict. American presidents and senior policy makers 
rely upon this vital source of information to make critical 
decisions on behalf of the national interest.
    As the central repository of the government's SIGINT 
expertise, the NSA is a critical national asset. The NSA 
historically has led the way in development and use of cutting 
edge technology that has kept the United States a step ahead of 
those whose interests are hostile to our own. Unfortunately, in 
recent years, the Administration has failed to invest in the 
infrastructure and organizational changes required to keep pace 
with revolutionary developments in the global 
telecommunications system.
    As detailed above, in 1998, and again this year, the TAG 
reviewed the NSA's operations. The TAG's conclusions are 
disturbing. While the current information revolution presents 
both opportunities for and threats to its mission, the NSA's 
ability to adapt to this changing environment is in serious 
doubt. The TAG's two reports identified serious deficiencies 
resulting from the sustained budget decline of the past decade. 
As resources have been reduced, the NSA systematically has 
sacrificed infrastructure modernization in order to meet day-
to-day intelligence requirements. Consequently, the 
organization begins the 21st Century lacking the technological 
infrastructure and human resources needed even to maintain the 
status quo, much less meet emerging challenges.
    This year's TAG review, however, sounded a note of 
optimism, noting that the NSA Director in November 1999 
initiated an aggressive and ambitious modernization effort. In 
November 1999, the Director began a series of changes designed 
to transform the NSA and sustain it as a national asset. 
Spurred by the NSA computer outage in January 2000, this 
transformation includes sweeping organizational and business 
strategies that promise to transform the way the NSA conducts 
its missions. The Committee is encouraged by these actions, and 
expects that the Director of Central Intelligence and the 
Secretary of Defense will support the Director of the NSA in 
making the difficult decisions necessary for the NSA to restore 
its predominance. To return the NSA to organizational and 
technological excellence, NSA managers, as well as Intelligence 
Community leaders and the Congressional oversight committees, 
must be prepared to accept a level of risk as some resources 
are shifted from short-term collection to long-term 
infrastructure modernization. Failure to do so will 
irreversibly undermine the NSA and its ability to perform in a 
transformed global information technology arena.
    To address these problems, the TAG recommended new business 
practices coupled with additional resources to finance this 
recovery. Inadequate National Foreign Intelligence Program 
(NFIP) spending leaves little flexibility to meet the 
increasingly complex intelligence challenges faced by the NSA, 
but the crisis demands immediate attention and warrants 
shifting resources in order to stave off a steady and 
inevitable degradation of the NSA's unique and invaluable 
capabilities. The budget recommendations in the classified 
annex accompanying this bill constitute a down payment on this 
requirement.
    The Committee supports the NSA Director's transformation 
objectives, and recommends investments in areas that are 
consistent with his plan. The Committee is particularly 
encouraged by the willingness of the Director to reach beyond 
his current workforce to hire industry professionals. The 
Director has hired a Chief Financial Manager from industry, an 
essential prerequisite if the NSA is to develop a comprehensive 
business plan for this effort. As the Director moves forward on 
his plan to reshape the Agency, the Committee will look for 
specific goals to support establishment of business-based 
objectives.
    Despite the need for additional resources, the Committee 
does not believe that money alone will solve the NSA's 
problems. Organizational change also is essential. The Director 
of the NSA has authority over approximately thirty percent of 
the total SIGINT budget within the NFIP. Other agencies and 
organizations within the NFIP and the Department of Defense 
expend funds for cryptologic activities outside the authorities 
of the Director of the NSA. If the Director of the NSA is to 
have functional responsibility for rebuilding the nation's 
cryptologic program, the Director must have greater authority 
in the planning, programming, budgeting, and execution of the 
entire SIGINT budget. To build a comprehensive, efficient U.S. 
Cryptologic System, the NSA Director must have the requisite 
authorities to manage his program. The Committee will work with 
the Director to improve his ability to provide centralized 
direction across the SIGINT infrastructure as he implements his 
modernization strategy.
    Rebuilding the NSA is the Committee's top priority. Failure 
to do so risks our nation's security. The Committee, therefore, 
will take whatever steps are necessary to ensure America's 
continuing superiority in the signals intelligence field.

Tasking, Processing, Exploitation, and Dissemination Funding Shortfall

    The Committee has long been concerned that intelligence 
collection continues to outstrip analysis, and is troubled that 
funding for the latter remains woefully inadequate. This 
funding shortfall challenges the Intelligence Community's 
ability to manage the tasking, processing, exploitation, and 
dissemination (TPED) of intelligence collected by satellites, 
airplanes, unmanned aerial vehicles, and other platforms and 
sensors. The issue of TPED is at the heart of how the 
Intelligence Community collects raw intelligence data, and then 
in a timely manner, turns it into a product that is 
understandable and usable to a wide variety of consumers, from 
the President of the United States to the military commander in 
the field.
    In June 1999, the National Imagery and Mapping Agency 
(NIMA) issued a congressionally-mandated report describing the 
challenges and projected shortfalls in the areas of TPED of 
intelligence to be collected by the Future Imagery Architecture 
(FIA) satellite program and other intelligence collection 
systems. The funding shortfall figures in the NIMA report were 
updated in the summer of 1999.
    The NIMA report addressed only Phase I of three phases 
identified by the Intelligence Community's TPED assessment 
process. The three phases of TPED modernization are defined and 
staged in the following manner:
     Phase One--Infrastructure Foundation: covering 
fiscal years 2001-2005, this portion of the TPED modernization 
plan will (a) provide full support to the Enhanced Imagery 
System (EIS); (b) provide a foundation for the FIA; (c) provide 
infrastructure ``hooks'' for commercial imagery; and (d) 
provide a minimal level of modernization supporting airborne 
systems.
     Phase Two--Imagery and Geospatial Information 
Transition: covering fiscal years 2002-2007, this portion of 
the TPED modernization plan will (a) provide full support for 
the FIA; (b) provide full support for commercial imagery; (c) 
provide intermediate modernization supporting airborne systems; 
(d) expand the ability to handle motion imagery; and (e) 
provide infrastructure ``hooks'' for TPED modernization 
supporting all intelligence collection (``multi-INT''), 
including signals intelligence, human intelligence, and 
measurement and signature intelligence.
     Phase Three--Common Operational Picture: covering 
fiscal years 2004-2009, this portion of the TPED modernization 
plan will (a) provide full support for multi-INT TPED; (b) 
provide support of all sensor platforms; (c) integrate moving 
target indicator (MTI) data; and (d) provide full support for 
airborne systems.
    The updated NIMA modernization plan for Phase One contains 
26 recommendations for TPED modernization with associated cost 
estimates to implement each. The multi-billion dollar 
modernization plan sets forth an overall cost ranging from 
implementing only the Imagery and Geospatial Community's 
highest priority TPED improvements to full funding of all 26 
recommendations over the next five years.
    Complete Phase Two and Phase Three cost estimates have not 
yet been developed and are expected to be formulated in the 
context of the fiscal year 2002 and fiscal year 2004 budget 
cycles, respectively. Preliminary indications are that each 
phase will carry a significant price tag over and above the 
funding range currently estimated for Phase One.
    The funding contained in the proposed fiscal year 2001 
budget for Phase One TPED modernization is about 10% of the 
total funding amount pledged by the Administration for the 
effort over the next five years. A proportionate, one-fifth, 
installment of the total amount pledged would have required a 
funding commitment in fiscal year 2001 nearly double the amount 
actually proposed.
    The inadequacy of the fiscal year 2001 TPED funding request 
is more stark when compared to the needs set forth in the 
NIMA's updated TPED modernization plan. The fiscal year 2001 
request for NIMA TPED is significantly below what is required 
in the upcoming year to support only the top priorities in the 
modernization plan. This shortfall balloons when compared to 
the funds needed to proceed with all the recommended fiscal 
year 2001 TPED improvements. When expressed in percentage form, 
the proposed funding in fiscal year 2001 for NIMA TPED is 25% 
of what is required for the top priorities alone, and 15% of 
what is required for the full complement of modernization 
projects.
    The recently completed Defense Science Board Task Force 
report on NIMA also found the TPED modernization funding plan 
to be insufficient and recommended an investment of $3 billion 
over the next five years in order for the U.S. to maintain 
information superiority in the future.
    The Committee concludes that Phase One of the TPED 
modernization plan is woefully underfunded in the proposed 
fiscal year 2001 budget and over the Future Years Defense Plan 
(FYDP), i.e., fiscal years 2001-2005. The Committee is troubled 
by the Administration's unwillingness to recognize the 
significant disparity between its proposed funding plan and the 
TPED modernization funding plan, which is based on a rigorous 
technical evaluation that has yet to be challenged as being 
either flawed or inflated. The proposed funding for the TPED 
modernization effort to date has come from anticipated savings 
from lower than expected inflation over the next five years and 
not from other programs within the Intelligence Community and 
defense budgets, thus avoiding the tough programmatic trade-
offs and choices required to fully fund needed modernization.
    The Committee is concerned that the dramatic underfunding 
of Phase One TPED modernization in fiscal year 2001 is setting 
up a budgetary crunch wherein a disproportionate amount of 
funds will be required in subsequent years of the FYDP. 
Assuming the budgetary top line for national security is not 
increased over this period of time to cover the emerging TPED 
modernization bill, these out-year balloon payments will create 
a Hobson's choice for the Intelligence Community: either make 
abrupt and deep cuts in other needed programs or curtail the 
TPED modernization program to an extent that raises serious 
doubt as to why tens of billions of dollars are being spent on 
intelligence collection platforms when the customers of the 
intelligence will not be able to use much of the raw data that 
is collected. The Committee cannot and will not accept either 
alternative.
    When the yet unknown costs for the Phase Two TPED 
modernization effort covering fiscal years 2002-2007 and the 
Phase Three TPED modernization effort covering fiscal years 
2004-2009 are added to the equation, this chasm widens as does 
the challenge to find the needed funding to bridge it.
    Therefore, the Committee recommends a number of funding 
changes within the NIMA budget, both in the National Foreign 
Intelligence Program and the Joint Military Intelligence 
Program, to bolster Phase One TPED modernization efforts in 
fiscal year 2001. These funding changes are described in the 
classified annex to this Report.

       Mishandling of Classified Information by Former DCI Deutch

    The Committee was deeply concerned to learn of serious 
breaches of security by former Director of Central Intelligence 
(DCI) John M. Deutch. As the DCI, Mr. Deutch was entrusted with 
protecting our nation's most sensitive secrets pursuant to the 
National Security Act of 1947, which charges the DCI to protect 
the sources and methods by which the Intelligence Community 
conducts its mission. It is this Committee's view, based upon 
the Committee's inquiry to date, that Mr. Deutch failed in this 
responsibility. Mr. Deutch, whose conduct should have served as 
the highest example, instead displayed a shocking and reckless 
disregard for the most basic security practices required of 
thousands of government employees throughout the CIA and other 
agencies of the Intelligence Community. In open testimony 
before the Committee, current DCI George Tenet stated, ``there 
was enormously sensitive material on [Mr. Deutch's] computer, 
at the highest levels of classification.''
    The Committee believes further, based upon the Committee's 
inquiry to date, that, in their response to Mr. Deutch's 
actions, Director Tenet, Executive Director Nora Slatkin, 
General Counsel Michael O'Neil, and other senior CIA officials 
failed to notify the Committee in a timely manner regarding the 
Deutch matter, as they are required by law to do.
    The Committee has determined that there are several gaps, 
or potential gaps, in existing law that require legislative 
action. The Committee has decided to proceed with one statutory 
change at this time (Section 401, described below), despite the 
fact that the Committee has not completed its inquiry, because 
there is broad agreement on the nature of, and the solution to, 
this particular problem. The Committee also wishes to ensure 
that this amendment can be enacted into law expeditiously as 
part of the Intelligence Authorization Act for Fiscal Year 
2001. The Committee is reviewing additional proposals for 
statutory changes, and may make recommendations when the 
Committee completes an unclassified report setting forth the 
Committee's findings and conclusions.

Inspector General reporting requirements relating to senior CIA 
        officials

    Section 401 of the Intelligence Authorization Act for 
Fiscal Year 2001 closes gaps in the Congressional reporting 
requirements to the intelligence committees revealed by the 
Deutch matter. Current law requires the Inspector General to 
notify the committees ``immediately'' if the Director or Acting 
Director, but not the former Director, is the subject of an 
Inspector General inquiry. The committees were not notified of 
the security breach by Mr. Deutch until more than 18 months 
after it was discovered, and even then the full scope of the 
problem was not adequately disclosed. This amendment broadens 
the notification requirement to include former DCIs, all Senate 
confirmed officials (Deputy Director of Central Intelligence, 
Deputy Director of Central Intelligence for Community 
Management, Assistant Directors for Central Intelligence, and 
General Counsel), the Executive Director and the Deputy 
Directors for Operations, Intelligence, Administration, and 
Science and Technology. In addition to expanding the number of 
senior officials covered by the notification requirement, the 
amendment also requires the IG to notify the intelligence 
oversight committees whenever one of the designated officials 
is the subject of a criminal referral to the Department of 
Justice.

           State Department Security and Counterintelligence


Limitation on Retention or Storage of Certain Classified Materials by 
        the Department of State

    In the last two years, the Committee has taken a series of 
steps designed to identify, and require the State Department to 
address, serious deficiencies in policies, procedures, and 
attitudes relating to the protection of classified information. 
Despite these efforts, and a nascent, if belated, recognition 
by the State Department of the magnitude and severity of the 
problem, serious breakdowns in security and counterintelligence 
practices continue to occur.
    Most recently, on April 17, 2000, The Washington Post 
published an article entitled ``State Dept. Computer with 
Secrets Vanishes.'' According to this article and subsequent 
press reporting, a laptop computer containing highly sensitive 
classified intelligence materials, including Sensitive 
Compartmented Information (SCI) relating to weapons 
proliferation, has disappeared from the State Department Bureau 
of Intelligence and Research (INR), and is presumed stolen. The 
FBI is investigating the matter. The Committee has been briefed 
by the Department of State, the CIA and the FBI.
    The loss of this information, which endangers intelligence 
sources and methods directed at one of our most critical 
intelligence targets, is a matter of urgent concern. The 
Committee expects that the FBI will thoroughly pursue all 
aspects of this loss, including a full counterintelligence 
investigation.
    In addition to security and counterintelligence issues with 
regard to the loss of the classified laptop, the Committee also 
was distressed at the failure of the State Department, and the 
CIA, to notify the Congressional intelligence committees about 
this incident--even after the story appeared in the press. The 
State Department had known of the loss for almost three months. 
The CIA became aware of the loss of the computer in mid-
February.
    Section 502 of the National Security Act [50 U.S.C. 413a] 
requires that the heads of all departments of the United States 
Government involved in intelligence activities keep the 
intelligence committees ``fully and currently informed of all 
intelligence activities,'' including ``significant intelligence 
failures.'' Clearly, the loss and possible compromise of highly 
sensitive compartmented intelligence information should be 
considered a significant intelligence failure and should have 
been reported in a timely manner to this Committee and the 
House Permanent Select Committee on Intelligence.
    Beyond the clear legal requirement for notification, we 
note that the State Department is well aware of this 
Committee's sustained interest in security and 
counterintelligence problems at INR and the Department at 
large, and therefore should have informed us of this event even 
in the absence of a statutory requirement.
    The January 2000 laptop incident follows the discovery of a 
Russian listening device in a seventh floor State Department 
conference room. On December 8, 1999, the FBI detained a 
Russian intelligence officer, Stanislav Gusev, as he was 
recording transmissions from a bug implanted in a piece of 
chair rail, in a conference room within the Department of State 
headquarters building. Gusev was declared persona non grata and 
required to leave the United States.
    Gusev's expulsion capped a six-month investigation that 
began when the FBI spotted the Russian intelligence officer 
loitering near the State Department. Following surveillance and 
observation of Gusev, technical countermeasures discovered the 
remotely-activated device in the conference room.
    The FBI and State Department continue to investigate who 
was responsible for planting the bug, and what sensitive 
materials discussed in the conference room may have been 
compromised. Recreating the extent to which Russian 
intelligence or other personnel may have had access to the room 
in question has been complicated by the fact that from 1992 
until August 1999, there were no escort requirements for 
Russian (or other foreign) visitors to the State Department.
    The Gusev incident followed a February 1998 incident, in 
which an unidentified man wearing a tweed jacket entered the 
Secretary of State's seventh floor office suite and removed 
classified documents, including SCI documents. He has never 
been identified, the documents have never been recovered, and 
poor procedures for handling classified information resulted in 
the Department's inability to reconstruct which documents were 
taken.
    Following the ``tweed jacket'' affair, the SSCI, in the 
Annex to the Intelligence Authorization Act for Fiscal Year 
1999, directed the State Department Inspector General (IG) to 
review and report on State Department policy and procedures for 
handling classified information within the State Department 
Headquarters facility.
    The resulting IG report, entitled Protecting Classified 
Documents at State Department Headquarters, found that ``[t]he 
Department [of State] is substantially not in compliance with 
the DCIDs [Director of Central Intelligence Directives] that 
govern the handling of SCI.'' (emphasis in original) According 
to the Report:
     ``Very highly classified documents relating to 
intelligence reporting are not safeguarded in accordance with 
government regulations. Most offices have never been inspected 
and accredited for handling such documents.
     A significant number of foreign nationals are 
permitted unescorted access to the Department. Uncleared 
maintenance, repair, and char force personnel are not always 
escorted in areas where classified information is handled, 
processed, stored, and discussed.
     Administrative actions taken to discipline 
employees are ineffective to ensure that poor security 
practices are corrected.
     Unit security officers are not well informed about 
security requirements and do not have the authority to enforce 
security requirements.''
    In response to the IG Report, in the Annex to the 
Intelligence Authorization Act for Fiscal Year 2000, the 
Congressional intelligence committees fenced funds for the 
State Department Bureau of Intelligence and Research pending 
receipt of (1) a State Department report on specific plans for 
enhancing the security of classified information within the 
State Department and fully implementing, as appropriate, the 
recommendations found within the Inspector General's report, 
and (2) a report from the Director of Central Intelligence 
(DCI) evaluating the State Department's compliance with all 
DCIDs related to the protection of Sensitive Compartmented 
Information. These reports were provided to the Congressional 
committees in February of this year. The State Department, in 
its response, identified a number of actions or proposed 
actions it intended to take in response to the IG Report.
    The DCI report noted that an independent review by the CIA 
and the Community Management Staff confirmed that the State 
Department was not in compliance with applicable DCID 
requirements, and concluded that certain additional steps were 
required to ``improve security practices in Department offices 
where SCI is handled and discussed as well as to strengthen SCI 
document control and accountability.'' The Department agreed 
with the findings of the DCI report as to the steps required to 
address these deficiencies.
    In addition, in the wake of the Gusev incident, Secretary 
Albright ordered a ``top-to-bottom'' review of the Department's 
security practices and procedures led by Assistant Secretary 
for Diplomatic Security David Carpenter. The review is expected 
to be completed in the near future. The Committee looks forward 
to receiving the presentation of a comprehensive plan that will 
ensure that security and counterintelligence receive adequate 
resources and consistent senior management attention.
    Despite the February 2000 report confirming that the State 
Department failed to comply with applicable DCID requirements, 
the DCI decided to permit the CIA and other Intelligence 
Community components to continue to provide SCI materials to 
INR and other authorized recipients at the Department of State. 
The Committee believes, however, that the time has come for the 
State Department to be held accountable for its failure to 
comply with directives governing the protection of SCI 
information.
    The Committee therefore has adopted a provision, Section 
306 of the Intelligence Authorization Act for Fiscal Year 2001, 
that would require the DCI to certify to the Congressional 
intelligence and foreign affairs committees whether each 
element of the State Department that handles, retains or stores 
classified information that is classified as SCI complies with 
all applicable DCI directives (DCIDs) and all applicable 
Executive Orders relating to the handling, retention, or 
storage of such classified information. Moreover, the DCI may 
not certify, as in compliance, any element that is operating 
under a DCI waiver of compliance with respect to any such 
directive or Executive Order. The DCI must promptly notify the 
Congressional intelligence and foreign affairs committees if 
the DCI determines that any element is not in full compliance.
    Unless the DCI has certified each covered element of the 
Department of State to be in full compliance, the following 
restrictions take effect as of January 1, 2001: (1) no funds 
authorized to be appropriated under the Intelligence 
Authorization Act for Fiscal Year 2001 may be obligated or 
expended by the Bureau of Intelligence and Research of the 
Department of State, until each covered element has been 
determined to be in full compliance, and (2) no covered element 
that has not been certified to be in full compliance may retain 
or store SCI material, until the DCI has certified that it is 
in full compliance.
    The provision further stipulates that the President may 
waive the application of the restriction on the retention or 
storage of classified information if the President determines 
that such a waiver is in the national security interests of the 
United States. The President must provide to the Congressional 
intelligence and foreign affairs committees a report with 
respect to any such waiver, describing the element affected, 
the reasons for the waiver, and the actions taken by the 
President to protect covered classified material to be handled, 
retained, or stored by the element in question.

Department of State Inspector General Review

    The Committee anticipates that the Department will come 
into compliance with applicable DCIDs in the near future. There 
will be a need for continued monitoring and oversight to ensure 
ongoing compliance, however. Therefore, the Committee directs 
the Department of State Office of Inspector General to conduct 
reviews of State Department policies and procedures for 
protecting classified information at Main State Headquarters 
annually for the next five years, beginning with a report to be 
submitted by December 31, 2001. As in the September 1999 
report, the Committee expects the State IG to determine, among 
other matters, compliance with Director of Central Intelligence 
Directives (DCIDs) regarding the storage and handling of 
Sensitive Compartmented Information (SCI) material.

Transfer of SCI Authority at the Department of State

    In 1998, the Committee directed a State Department Office 
of Inspector General review of the protection of classified 
information at the Department of State, and last year the 
Committee directed a review by the Director of Central 
Intelligence Department compliance with directives regarding 
protection of classified material. Among the State IG 
recommendations included in its review was the transfer of 
responsibility for protection of Sensitive Compartmented 
Information (SCI) from the Bureau of Intelligence and Research 
(INR) to the Bureau of Diplomatic Security (DS). The DCI review 
did not address this recommendation. The Committee believes 
such a transfer unnecessarily complicates efforts to address 
this issue, and may hinder the possibility for success in this 
vitally important task.
    The transfer of responsibility for protection of SCI 
material from INR to DS improperly transfers authority from an 
Intelligence Community element to a bureau over which the 
Director of Central Intelligence has no oversight authority. 
Despite INR's record, it is a member of the Intelligence 
Community, and the DCI has statutory authority to approve its 
budget. This oversight and budgetary authority will be critical 
to ensure effective implementation of measures to protect 
intelligence information. The DCI does not approve the budget 
request for DS, has no influence over DS personnel, and will 
not have the organizational authority to review directly DS 
compliance with directives concerning the handling of 
classified information. This will severely limit the ability of 
the DCI to carry out his responsibility under the National 
Security Act of 1947 to ensure the protection of intelligence 
sources and methods.
    Further, the proposed transfer will complicate and hinder 
oversight of protection of SCI material at the State Department 
by the Legislative branch. This Committee and the House 
Permanent Select Committee on Intelligence (HPSCI) are the 
congressional bodies with the legal responsibility, 
institutional knowledge, and expertise necessary to exert 
legislative oversight over the protection of SCI material. The 
SSCI and HPSCI are charged with overseeing the Intelligence 
Community, which produces the SCI material that requires 
stringent controls and accounting. Neither the SSCI nor the 
HPSCI currently have direct jurisdiction or oversight over the 
Bureau of Diplomatic Security.
    For the reasons stated above, the Committee believes the 
proposed transfer of the responsibility for protection of SCI 
material from INR to DS imprudently takes this function away 
from those with the authority to ensure successful 
implementation. Therefore, the Committee will closely review 
any Department of State plan to transfer the responsibility for 
protecting Sensitive Compartmented Information from the Bureau 
of Intelligence and Research to the Bureau of Diplomatic 
Security. The Committee supports the efforts by the Secretary 
of State to improve the security procedures and practices 
throughout the State Department. However, the Committee 
believes the responsibility for protecting SCI material within 
the Intelligence Community elements that use and produce such 
information must continue to reside with those elements 
themselves.

                       Counterintelligence--CI 21

    The Committee has become increasingly concerned about the 
ability of existing U.S. counterintelligence structures, 
programs, and policies to address both emerging threats and 
traditional adversaries using cutting edge technologies and 
tradecraft in the 21st Century. The Committee has made its 
views known to the nation's senior intelligence and 
counterintelligence officials, and found many of them share 
these concerns.
    On March 8, 2000, the Director of Central Intelligence, the 
Director of the FBI, and the Deputy Secretary of Defense 
unveiled a proposal entitled ``Counterintelligence for the 21st 
Century'' during a closed hearing before the SSCI. The plan, 
generally referred to as ``CI 21,'' resulted from a review 
launched in June 1999 to assess existing counterintelligence 
structures and capabilities to address emerging as well as 
traditional counterintelligence threats.
    CI 21 restates and expands upon other recent assessments of 
the emerging counterintelligence environment. The report notes 
that the threat has expanded beyond the traditional paradigm of 
``adversary states stealing classified data''--which includes 
traditional espionage by Russia, the PRC, North Korea, Cuba, 
Iran, and Iraq--to include new efforts by these traditional 
adversaries, as well as threats from certain allies and 
friendly states, to collect economic information and critical 
but unclassified technologies.
    Terrorist groups, organized crime, and drug cartels are 
additional, non-state actors that pose an increasing 
counterintelligence threat. New roles and missions for U.S. 
military forces, such as peacekeeping and new kinds of 
coalition operations, create new force protection and 
counterintelligence challenges. Academic exchanges and joint 
ventures also are venues for the loss--witting or unwitting--of 
sensitive or even classified information.
    Both traditional and non-traditional threats are exploiting 
modern technology, particularly modern computer technology and 
the Internet, to develop information warfare (IW) and 
intelligence collection capabilities and tradecraft that alter 
traditional notions of time, distance and access.
    Complicating the task of U.S. counterintelligence agencies 
is the sheer volume of classified and sensitive information 
that requires protection, and the resulting need for top level 
policy guidance and prioritization in determining which 
information and technologies must be protected.
    CI 21 found current U.S. counterintelligence capabilities 
intended to confront this expanding and changing threat to be 
``piecemeal and parochial.'' Key problems include:
           inadequate coordination between policy and 
        counterintelligence, including failure to identify 
        ``must protect'' information;
           inadequate coordination, cooperation, and 
        information-sharing between counterintelligence 
        agencies;
           lack of strategic counterintelligence threat 
        analysis;
           lack of agility, and a focus that is 
        reactive instead of proactive--at both the national and 
        operational levels;
           failure to adequately exploit new 
        technologies;
           lack of a national counterintelligence plan 
        to integrate information, analysis, and a new proactive 
        focus;
           an inadequately prepared workforce and 
        insufficient, diffused resources;
           a lack of a national advocate for resources, 
        policies, and proactive initiatives; and
           inadquate coordination with the private 
        sector.
    To address these shortfalls, the CI 21 report recommends 
adoption of a new counterintelligence philosophy--described as 
more policy-driven, prioritized, and flexible, with a 
strategic, national-level focus--and a restructured national 
counterintelligence system. The proposed new national 
counterintelligence system would include:
           A National Counterintelligence Executive;
           A National Counterintelligence Board of 
        Directors; and
           A National Counterintelligence Steering 
        Committee.
    The Committee commends both the senior leadership and the 
senior counterintelligence officials of the CIA, FBI, and the 
Defense Department for their work in developing the CI 21 
proposal. This ambitious plan proposes significant changes in 
the way the United States Government approaches, and organizes 
itself to meet, the threat of foreign espionage and 
intelligence gathering. Implementation would require additional 
resources, as well as changes to existing Presidential 
directives and statutory authorities. Perhaps most difficult, 
it would challenge traditional ways of doing business.
    The Committee notes that the CI 21 plan has not yet 
received final interagency approval. Given the seriousness and 
evolving nature of the threat, and the demonstrated 
shortcomings of current counterintelligence structures, the 
Committee strongly urges the agencies involved to reach 
agreement on this matter.

               Counterintelligence--Department of Energy

    Following its extensive 1999 review of Department of Energy 
(DOE) security and counterintelligence problems, the Committee 
continues its oversight over the Department's 
Counterintelligence and Intelligence programs. The Committee is 
monitoring closely the Department's implementation of 
Presidential Decision Directive-61 (PDD), the DOE 
Counterintelligence Implementation Plan and the National 
Defense Authorization Act of Fiscal Year 2000 to ensure that 
the Department follows through on these and other long-overdue 
reforms. Although the Committee understands that the 
Department's problems are deeply-rooted and will not be solved 
overnight, the Committee is disappointed that in the 
Department's initial counterintelligence inspections of the 
major weapons laboratories, only one lab--Lawrence Livermore 
National Laboratory--received a ``Satisfactory'' rating. Sandia 
National Laboratories received an ``Unsatisfactory'' grade, 
while Los Alamos National Laboratory was judged ``Marginal.''
    The Committee is also concerned that, to date, neither the 
DOE Director of Counterintelligence, the DCI, nor the FBI 
Director has been able to certify to the Congress, pursuant to 
Section 3146(b) of the National Defense Authorization Act for 
Fiscal Year 2000, that the foreign visitors program at any one 
of the national laboratories: complies with applicable DOE 
orders, regulations, and policies, and PDD and similar 
requirements, relating to the safeguarding and security of 
sensitive information; fulfills counterintelligence 
responsibilities arising under such requirements or Directives; 
has adequate protections against the inadvertent release of 
Restricted Data or other sensitive information; and does not 
pose an undue risk to the national security of the United 
States.
    The results of the DOE counterintelligence inspections, 
which will make it difficult indeed to make the certifications 
set forth under Section 3146, underline the extent and 
resilience of the problems identified at the Department of 
Energy. They also reinforce the need for continued vigorous 
executive leadership at the Department, together with 
aggressive Congressional oversight, to ensure that the current 
momentum for reform is maintained.

                          Management of MASINT

    The Committee has repeatedly noted the significant 
contribution that measurement and signature intelligence 
(MASINT) can make in accomplishing critical missions within the 
Intelligence Community, particularly in countering 
proliferation of weapons of mass destruction. As a result, the 
Congress has specifically designated a significant amount of 
additional funds provided over the last three years to bolster 
MASINT capability. At the same time, the Congress and various 
independent entities, including the Department of Defense (DOD) 
Inspector General, have criticized the Intelligence Community 
for failing to come to grips with resources, management, and 
organizational MASINT deficiencies. Therefore, the Committee 
was not surprised to learn that during its first real combat 
test in Kosovo, MASINT performed poorly. The January 31, 2000, 
Kosovo/Operation Allied Force After-action Report stated that 
MASINT's ``flaws in supporting tasking, processing, 
exploitation, and dissemination limited their overall utility 
and needed to be corrected to make these capabilities an 
integral part of intelligence support to operations.''
    The Committee believes that the continued lack of adequate 
management within the Intelligence Community for the MASINT 
program has been demonstrated by the failure to sustain 
Congressional priorities, especially in the General Defense 
Intelligence Program (GDIP). The Committee is concerned with 
the funding shortfalls in individual programs that have not 
been addressed as part of a comprehensive plan.
    At the same time, the Committee also recognizes that the 
capitalization of these sensors appears to be beyond the 
capability of the GDIP as it is currently constituted and 
resourced by the Administration. The Committee also questions 
whether the Cold War orientation of many of these sensors, and 
level of funding required to maintain them, is reflective of 
the current realities regarding transfer and proliferation. 
Rather than a piecemeal approach to recapitalization, it seems 
prudent to the Committee to direct a review of the technical 
collection ``system of systems,'' with particular emphasis on 
articulating the requirements base, programmatic status, 
operations and maintenance costs, and the Administration's 
approach to recapitalizing or reconfiguring the current 
systems. The review should be conducted by the DCI, in 
conjunction with the GDIP Program Manager and the Director of 
the Central MASINT Organization, and result in a report to be 
delivered to the Committee no later than October 1, 2000. As 
far back as 1993, this Committee has expressed its displeasure 
with the management of MASINT. The Intelligence Authorization 
Act for Fiscal Year 1994, noted that ``[t]he Senate has been 
critical of the performance of the Central MASINT Office (CMO) 
to date and concerned that the Director, DIA, did not have the 
interest or authority to manage a major but uncoordinated and 
underdeveloped discipline.'' Little, other than the 
organization's name, has changed and intelligence support to 
our operational forces is now suffering.
    Last year, the Committee concurred with the findings and 
recommendations of its Technical Advisory Group (TAG). In their 
report, the TAG recommended the creation of a new high-level 
organization, led by a world-class expert and staff detailed 
from operational elements to facilitate deployment of 
technologies on an urgent basis. The Senate and House Conferees 
noted the importance and potential offered by MASINT 
technologies--if they are rigorously developed and rapidly 
deployed. The Conferees specifically noted that, (1) successful 
exploitation of MASINT technologies could significantly enhance 
U.S. national security; (2) MASINT technologies could 
potentially eclipse in value the more traditional intelligence 
disciplines; (3) MASINT technologies offer potential solutions 
to denial and deception capabilities and other countermeasures; 
and (4) the IC currently lacks a sufficiently robust MASINT 
organizational structure, particularly for development and 
integration of close-in (less than 10 km) MASINT technologies.
    In addition, the House of Representatives dealt with the 
management issue of MASINT legacy systems, and as a result, the 
Conferees to the fiscal year 2000 authorization bill directed a 
report, now in the hands of Congress, that addresses concerns 
such as the identification of collection systems, the need to 
review requirements, and the need to overcome operational 
shortfalls between national level collection and analysis and 
warfighter support.
    Therefore, the Committee directs the Deputy Director of 
Central Intelligence for Community Management to conduct a 
utility and feasibility study to find a way to improve MASINT 
management and organization including the possible 
establishment of a centralized tasking, processing, 
exploitation and dissemination (TPED) facility. Of the facility 
options, one which should be explored is a facility located 
within the extended metropolitan region (less than 100 miles 
from nation's capital). As envisioned, such a facility would 
serve as a significant integration capability for specified 
MASINT integration cells (i.e. SURF EAGLE MASINT Integration 
Cell/Navy Oceanographic Command, SAR/MASINT Integration Cell/
National Air Intelligence Center, the Integrated Missile-
related MASINT Cell/Missile and Space Intelligence Center 
located in Huntsville, Alabama (see the GDIP section of the 
Classified Annex for details). The conceptual outline of the 
aforementioned study shall include management, organization and 
the integration facility and shall be briefed to the 
Intelligence Committees prior to the conference on the 
Intelligence Authorization Act for Fiscal Year 2001. An interim 
report with cost data shall be provided to the Intelligence, 
Appropriations, and Armed Services Committees not later than 
December 15, 2000. The final study shall be transmitted not 
later than April 1, 2001.

                            Counterterrorism

    The Committee continues to be extremely concerned by the 
threat posed by international terrorism to our nation's 
security, and to the lives of Americans here and around the 
world. The Committee is further concerned that, in addition to 
traditional weapons such as hijacking and car bombs, 
terrorists' attacks are ever more likely to include chemical, 
biological, radiological, and nuclear weapons.
    The threat of terrorist use of such weapons exacerbates an 
already critical threat. This threat took on crisis proportions 
during the recent millennium celebrations. Counterterrorism 
experts throughout the U.S. Government worked around the clock 
and resources were reportedly stretched thin. This is of 
particular concern given the assessment that the threat was 
deferred rather than defeated.
    The Committee notes that all too often the United States 
Intelligence Community receives no thanks for its efforts. Its 
operations, by necessity conducted in secret, are unknown to 
the people whose lives are saved. The United States 
intelligence and law enforcement communities stand between 
America and terrorist plans to attack U.S. interests. The 
Committee has expressed its appreciation and again thanks the 
Intelligence Community on behalf of the American people.
    The Committee will work to ensure that the Intelligence 
Community's efforts to fight international terrorism are well 
funded. In support of this goal, and because the Committee is 
concerned about repeated leaks of classified intelligence and 
the impact of these leaks on the counterterrorist effort, the 
Committee directs that the DCI provide a report describing any 
and all known leaks since January 1, 1998, that may have made 
the counterterrorist effort more difficult. The report should 
include an assessment of the potential damage to sources and 
methods arising from these leaks. This report should be 
provided to the Committee no later than December 1, 2000.

                 Counterproliferation and Arms Control


Proliferation of chemical, biological, radiological and nuclear weapons

    The Committee believes that the bi-annual reports provided 
by the Director of Central Intelligence pursuant to Section 721 
of the Intelligence Authorization Act for Fiscal Year 1997 are 
valuable to the Senate and contribute to the public's knowledge 
of proliferation activities of concern. The Committee also 
acknowledges the many classified reports and briefings on 
proliferation provided to the Committee and Committee Staff.
    The Committee believes, however, that a number of issues 
warrant comprehensive assessments and in some cases, 
publication of unclassified separate reports.
            1. Russian and Chinese proliferation to Iran
    The Committee directs the DCI to provide the Committee with 
a comprehensive report detailing available information 
concerning Russian and Chinese cooperation with Iranian 
military programs and their transfer of sensitive technologies 
to Iran. This report should be provided no later than October 
1, 2000, and if possible should be provided in classified and 
unclassified versions. The classified report should include 
information gained from bilateral discussions with the 
Russians. The unclassified version should include, to the 
maximum extent possible, declassification of information 
provided to the government of Russia under the classification 
``Secret, Release Only to Russia.''
            2. Biological weapons capabilities
    The Committee commends the Intelligence Community on its 
publication of the National Intelligence Estimate (NIE) on 
biological weapons capabilities. However, the Committee 
believes that the information in this report should be provided 
in an unclassified form to the maximum extent possible. The 
Committee therefore directs the DCI to provide the Committee 
with an update to the NIE as well as an unclassified version of 
the NIE no later than October 1, 2000.
            3. Possible Iraqi misuse of Oil for Food Program funds
    The Committee is concerned by the lack of monitoring and 
verification of Iraqi purchases under the United Nations Oil 
For Food Program. While the United States reviews contracts 
prior to United Nations approval, no monitoring and 
verification program exists to confirm identified end uses and 
end users once items enter Iraq. The Committee therefore 
directs the DCI to provide the Committee with a report on the 
challenge posed by this lack of monitoring and verification, 
the number and nature of dual use items provided under Oil For 
Food contracts to date, and the contribution these dual use 
items could make to Iraq's chemical, biological, radiological 
and nuclear weapons, and missile programs. The report should be 
provided to the Congressional intelligence committees no later 
than February 28, 2001.

Foreign missile developments and the ballistic missile threat to the 
        United States

    The Senate report 105-24 accompanying the Intelligence 
Authorization Act for Fiscal Year 1998 directed the 
Intelligence Community to produce annual reports on the 
ballistic missile threat. The reports, due annually in March, 
have been provided in March 1998 and September 1999.
    In July 1998, the Commission to Assess the Ballistic 
Missile Threat to the United States, also known as the Rumsfeld 
Commission, produced an independent assessment of and 
recommendations for improvements to Intelligence Community 
assessments. The Intelligence Community adopted these 
recommendations and the changes were reflected in the September 
1999 report. The Committee applauds the more realistic approach 
to the ballistic missile threat and the analytical rigor of the 
September 1999 report, which was prepared as a National 
Intelligence Estimate, and which drew upon outside expertise as 
recommended by the Rumsfeld Commission.
    The Committee is disappointed, however, that the 
Intelligence Community has missed the deadline for submission 
of this year's congressionally-mandated annual report. The 
Committee also notes that the requirement for an annual 
estimate on the ``non-traditional'' weapons of mass destruction 
threat to the United States, as detailed in the Senate report 
105-24, has not been met. The Committee urges the Director of 
Central Intelligence to ensure that these Congressional 
requirements are satisfied. The Administration should also 
ensure that adequate funds and other resources are made 
available to enable timely provision of rigorous assessments to 
Congress and the American public.

Consolidation of Theater and Cruise Missile Analysis and Production

    The Committee remains deeply concerned with the growing 
threat posed by ballistic and cruise missiles. On February 2, 
2000, the Director of Central Intelligence testified before the 
Committee that the proliferation situation was ``stark and 
worrisome.'' The DCI testified that ``[t]ransfers of enabling 
technologies to countries of proliferation concern have not 
abated. Many states in the next ten years will find it easier 
to obtain weapons of mass destruction and the means to deliver 
them.''
    The Committee notes that the analysis and assessment of 
these weapons is spread among organizations within the 
Intelligence Community to such an extent that developers of our 
theater ballistic and cruise missile defense programs must deal 
with many different organizations, each employing different 
analytical methodologies and differing assumptions about the 
threat. The Committee believes that this situation often 
results in problems ranging from inconsistent data, duplication 
of effort, and poor use of resources.
    Accordingly, the Committee recommends that the GDIP Program 
Manager consolidate all analysis and production of intelligence 
on foreign theater ballistic missiles (with ranges less than or 
equal to 3500 km, guided or unguided, and regardless of basing) 
within elements of the Defense Intelligence Agency. 
Furthermore, to allow a consistent approach to the analysis of 
all missile threats within a theater of operation, the 
Committee also recommends that the GDIP Program Manager 
consolidate all intelligence analysis of foreign cruise 
missiles, regardless of basing, within elements of the Defense 
Intelligence Agency.

North Korea

    The Committee directs the Director of Central Intelligence 
to provide an all-source, comprehensive report covering the 
history and status of all North Korean chemical, biological, 
radiological and nuclear programs and North Korean missile 
programs. This report should include all available information 
regarding assistance or cooperation received by North Korea 
from other countries. The Report should be provided no later 
than December 1, 2000.

Arms control monitoring

    The Committee is aware that a number of arms control 
negotiations are underway regarding follow-on agreements to the 
Strategic Arms Reduction Treaty, the Anti-Ballistic Missile 
Treaty and the Biological and Toxin Weapons Convention. The 
Committee directs the Director of Central Intelligence to 
provide the Committee with a report on the Intelligence 
Community's ability to monitor the follow-on agreements under 
discussion and negotiation, and the contribution and challenges 
each agreement will make to the U.S. Government's understanding 
regarding other nations' programs in each of these areas. Key 
areas of uncertainty and resource requirements for monitoring 
should be addressed. To the extent possible, this report should 
be provided in classified and unclassified forms no later than 
December 1, 2000.

Enhanced monitoring of nuclear test explosions worldwide

    Section 502 authorizes the Secretary of Defense to convey 
to a foreign government nuclear test explosion equipment to be 
installed within the sovereign territory of that government. 
This authority may be delegated to the Secretary of the Air 
Force. Conveyance, or other provision, of the monitoring 
equipment would be accomplished through bilateral agreements in 
which the nation receiving the equipment agrees to provide the 
United States with full and timely access both to the data 
collected and to the equipment for purposes of inspection and 
maintenance.
    The goal of this arrangement is for the United States to 
obtain the cooperation of foreign governments in locating 
monitoring equipment in important sites throughout the world 
and to have the guarantee of full access to the data and 
equipment. This equipment would be installed as part of the 
United States Atomic Energy Detection System. The Intelligence 
Community has relied heavily on data from this system, which is 
operated by the United States Air Force, to monitor nuclear 
weapons tests on a worldwide basis. The agreements envisioned 
by Section 502 are with governments judged by the Intelligence 
Community to be capable of providing monitoring coverage in 
parts of the world of high U.S. national security concern.
    These instruments must be properly maintained to achieve 
top performance. Moreover, as technology evolves, they must be 
upgraded to meet new U.S. standards. Section 502 authorizes the 
use of appropriated funds to maintain and upgrade the equipment 
that has been provided or conveyed to foreign governments under 
the agreements.
    Section 502 would not authorize the provision of nuclear 
test explosion monitoring equipment to any international 
organization, including the Comprehensive Test Ban Organization 
and its International Monitoring System.

                              Counterdrug

    Section 308 waives two existing prohibitions and authorizes 
Executive branch agencies to contribute appropriated funds for 
the purpose of supporting the Counterdrug Intelligence 
Executive Secretariat established by the President's General 
Counterdrug Intelligence Plan (the Plan) on February 12, 2000. 
The Plan fulfills requirements contained in the Treasury and 
General Government Appropriations Act of 1998 (P.L. 105-61) and 
the Conference Report accompanying the Intelligence 
Authorization Act for Fiscal Year 1998. These two provisions 
required the Director of the Office of National Drug Control 
Policy to submit ``a plan to improve coordination and eliminate 
unnecessary duplications among the counterdrug intelligence 
centers and counterdrug activities of the Federal Government,'' 
and to specifically report on efforts to structure the National 
Drug Intelligence Center to ``effectively coordinate and 
consolidate strategic drug intelligence.'' The Congress had 
requested completion of these two tasks by February and April 
1998 respectively. While disappointed by the two year delay, 
the Committee understands the difficulty in undertaking such a 
far-reaching, multi-agency review and appreciates the 
thoroughness of this effort and the subsequent Plan.
    The Committee has and continues to place high priority on 
counterdrug intelligence programs. These programs provide 
essential support to the nation's efforts to attack the supply 
of illicit drugs and thereby reduce drug abuse and its 
devastating societal consequences in the United States. 
Intelligence is critical to effective source country programs, 
interdiction actions, and law enforcement investigations.
    The Committee is encouraged by the steps outlined in the 
Plan. Although the initial reorganization and the 
implementation of action items is modest, the Plan has the 
potential to significantly enhance coordination among the 
various law enforcement and intelligence agencies that play a 
role in counterdrug efforts. Increased coordination should lead 
to better information sharing not only among Federal agencies, 
but also with and between state and local law enforcement 
entities.
    In addition to the Counterdrug Intelligence Executive 
Secretariat, the Plan establishes the Counterdrug Intelligence 
Coordinating Group as a sub-cabinet level interagency body to 
oversee the Secretariat. The Group will be the primary forum 
for counterdrug intelligence policy discussions and resolution 
of interagency disputes. The Committee directs the co-chairs of 
the Counterdrug Intelligence Coordinating Group to provide 
annual reports concerning outstanding drug intelligence issues 
to the appropriate committees of Congress, including the 
Committees on Intelligence and Appropriations.
    One area of concern is the lack of a permanent staff for 
the Counterdrug Intelligence Executive Secretariat. As 
currently structured, the staff will be comprised entirely of 
individuals on loan from other agencies. The Committee 
understands the valuable role that detailees can play in an 
interagency organization such as this, but also considers it 
important to maintain some number of senior staff who can 
provide continuity and corporate memory. The Plan addresses 
this question and calls on the Counterdrug Intelligence 
Coordinating Group to annually review and recommend the 
appropriate mix of detailees and permanent staff. The Committee 
requests that the co-chairs of the Counterdrug Intelligence 
Coordinating Group inform the Committee of that recommendation.

                             Export Control

    The Committee remains concerned with exports of sensitive 
technologies and the effect of these transfers on the 
capability of the Intelligence Community to collect information 
regarding critical threats to our nation. In recent years, the 
development and widespread usage of advanced computing and 
telecommunications systems has brought technologies previously 
limited to governments and militaries into the worldwide 
marketplace. Most of these technologies are of little or no 
national security significance, and pose no threat to the 
capabilities of intelligence agencies. Many of these 
technologies, however, may be used by adversaries of the United 
States to thwart the ability of the Intelligence Community to 
collect intelligence critical to our national security.
    In light of these concerns, the Committee will continue to 
review modifications to export regulations and proposed 
statutory changes to existing export laws to ensure such 
changes do not adversely affect intelligence and national 
security interests.

                          Intelligence Sharing

    The Committee maintains a keen interest in the 
intelligence-related implications of NATO enlargement and the 
subsequent evolution of European security structures. In a 
March 1998 report to the Senate Foreign Relations Committee, 
Committee staff assessed the intelligence, security, and 
counterintelligence implications of admitting Poland, Hungary, 
and the Czech Republic into NATO, noting the risks posed by 
these nations' past associations with Soviet intelligence 
services, their proximity to Russia, and continuing Russian 
intelligence efforts in these countries. The report also 
highlighted the significant steps taken by the three NATO 
entrants to restructure, reform, and redirect the activities of 
their intelligence services.
    To establish a mechanism for continued monitoring of these 
issues, the Committee directed two reports on the procedures 
and methods utilized in each of the countries for the 
protection of intelligence sources and methods, and how these 
procedures and methods compared with those in place in other 
NATO countries. These reports have made a useful contribution 
to the Committee's understanding and continued oversight of 
these issues.
    The Committee is also concerned about the implications of 
the evolution and proliferation of European security structures 
for intelligence sharing with, and within, the NATO alliance. 
At the recent Helsinki summit, European Union (EU) members took 
steps to create a European Security and Defense Identify 
(ESDI), but failed at the time to develop a mechanism to work 
with NATO on military matters. Moreover, current EU structures 
were not designed to manage elements such as the proposed 
rapid-reaction corp nor to coordinate closer intelligence 
sharing among the EU members.
    In addition to structural issues, as a practical matter, EU 
members face enormous resource challenges in making ESDI a 
reality, with the result that European reliance on NATO--and 
thus U.S.--intelligence support will remain a military reality 
in Europe for the foreseeable future. Many of these operational 
and organizational problems and shortfalls were highlighted 
during NATO air operations last year in the Balkans. The 
difficulties encountered under the relatively undemanding 
combat conditions over Kosovo point to far more serious 
difficulties that might arise in a more challenging political 
and military environment.
    To address these and related issues, the Committee directs 
the DCI to provide to the Congressional intelligence 
committees, no later than January 1, 2001, a report in 
classified and unclassified form, to address the following 
issues:
           An update of the findings contained in the 
        reports previously provided to the Committee concerning 
        (a) the status and effectiveness of procedures and 
        requirements established by Poland, Hungary and the 
        Czech Republic for the protection of intelligence 
        sources and methods, to include measures relating to 
        computer, information, and communications security, and 
        (b) an assessment of how these procedures and 
        requirements compare with the procedures and 
        requirements for the protection of intelligence sources 
        and methods of other NATO members. The report should 
        include any examples of unauthorized disclosures of 
        U.S. or NATO classified information by any NATO member 
        or official, or any official of a NATO member;
           The extent and adequacy of cooperation in 
        resolving cases of espionage against the United States 
        or NATO by U.S. citizens;
           An analysis of the NATO intelligence 
        shortfalls and other intelligence-related lessons 
        learned from the Kosovo campaign; and
           An analysis of the potential implications 
        for U.S. intelligence sharing with NATO, including the 
        protection of sources and methods, that may arise as a 
        result of the evolution and proliferation of European 
        security structures.

                  Collection of National Intelligence

    The Committee is concerned about impediments and 
restrictions imposed by policies, other than those directed by 
statute or Executive order, of any entity of the U.S. 
Government on the collection of national intelligence in 
foreign countries. The Committee notes that such policies have 
in some cases impeded collection of intelligence by elements of 
the Intelligence Community legally authorized to undertake such 
collection. These policies can restrict U.S. collection of high 
priority intelligence regarding some of the most dangerous 
threats to the United States. The Committee is further 
concerned that it was not notified of these impediments and 
restrictions.
    The Committee therefore directs that the DCI report to the 
Congressional intelligence committees on all policy impediments 
and restrictions--written or understood--that have been 
interpreted to prohibit, restrict, or discourage intelligence 
collection. The report should be provided to the Committees no 
later than 90 days after the enactment of this bill. The 
Committee further directs that any such impediment or 
restriction on the duly authorized collection of intelligence 
should be notified to Congress pursuant to Section 502(1) of 
the National Security Act of 1947, as amended.

                   Administrative Inspectors General

    Last year the Senate Select Committee on Intelligence 
reconfirmed its ongoing interest in sustaining the capabilities 
and independence of the administrative Inspectors General 
within the Intelligence Community. These include the Inspectors 
General at the National Security Agency (NSA), the Defense 
Intelligence Agency (DIA), the National Reconnaissance Office 
(NRO), and the National Imagery and Mapping Agency (NIMA).
    Senate Report 106-48 called for the Directors of the above 
agencies to provide a written response setting out their 
efforts to ensure that each agency's administrative Inspector 
General has a separate budget line item and personnel 
authorization, and the authorities required to independently 
manage those resources. The responses to this request indicated 
that appropriate steps were being taken to meet these 
requirements. The Fiscal Year 2001 Congressional Budget 
Justification for each of the agencies, except the DIA, 
contained a separate line item for the Inspector General. The 
Committee also notes that the budget submission for the NIMA 
contained a significant budget increase for the Inspector 
General, giving that office greater parity with the size and 
capabilities of the other Intelligence Community administrative 
Inspectors General.
    While clear progress has been made, the Committee remains 
concerned about the ability of the Intelligence Community's 
administrative Inspectors General to hire and retain staffs 
that are professionally and technically qualified. At some 
agencies, limited hiring authorities, with respect to both 
positions and occupations, will not allow the Inspector General 
to keep pace with attrition. As they seek to fill vacancies, 
the Inspectors General need the flexibility to hire individuals 
with demonstrated audit, inspection, and investigation skills, 
as well as individuals with expertise in critical areas such as 
information technology and financial and contract management. 
The Committee also is concerned that the relatively low 
government service pay for the senior managers within selected 
administrative Inspectors General has the potential to impair 
their independence, effectiveness, and credibility.
    Based on these concerns, the Committee requests that the 
Directors of the NSA, DIA, NRO, and NIMA provide the Committee 
with a report outlining the projected hiring requirements of 
their agencies' Inspector General over the next five years. The 
report should include a projection of the number, 
qualifications, and rank of staff, as well as anticipated 
difficulties in acquiring or retaining these skills and 
positions. This report should be provided to the Committee no 
later than July 31, 2000.
    Senate Report 106-48 also required annual reports from each 
administrative Inspector General detailing the fiscal and 
personnel resources requested for the coming fiscal year, plans 
for their use, comments on the office's ability to hire and 
retain qualified personnel, and any other concerns relating to 
the independence and effectiveness of the Inspector General's 
Office. The initial reports were helpful to the oversight 
process, but the Committee requests that the following 
information be added to future reports: a specific breakdown of 
staff by function (e.g. audit, inspection, investigation, or 
support); budget information for the two previous years, the 
current request, and projections for the next two years; and an 
overall assessment of the agency's response to the Inspector 
General's individual report findings and recommendations during 
the previous year. These reports should be provided to the 
Congressional intelligence committees by January 31 of each 
year.

                     Rule of Statutory Construction

    Section 305 amends the National Security Act of 1947 to add 
a new provision which articulates a rule of statutory 
construction applicable to U.S. laws enacted to implement the 
provisions of treaties and other international agreements. 
Section 305 provides that future U.S. criminal laws enacted to 
implement treaties shall not be construed as making unlawful 
what are otherwise lawful and authorized intelligence 
activities of the United States Government, unless Congress 
includes an express provision to the contrary.
    United States intelligence activities currently are subject 
to a comprehensive regime of U.S. statutes, regulations and 
presidential directives that provide authorizations, 
restrictions and oversight. In addition, U.S. agencies involved 
in intelligence activities have extensive internal regulations 
and procedures governing appropriate levels of approval and 
authorization depending on the nature of such activities. These 
laws and regulations have developed from decades of interaction 
and agreement between the executive and legislative branches of 
the U.S. Government. The intelligence oversight committees 
themselves were created to meet a perceived need that the 
Congress must keep a close watch on the potential abuses that 
can occur in the intelligence area.
    It is important that the Intelligence Community be able to 
look to this clear and precise body of U.S. domestic law, 
regulation and procedures as the controlling source of 
authority for its activities. There has been a concern that 
future legislation implementing international agreements could 
be interpreted, absent the enactment of Section 305, as 
restricting intelligence activities that are otherwise entirely 
consistent with U.S. law and policy. Of course, Congress may 
extend any such implementing statutes to cover intelligence 
activities if that is its intent, but it must do so expressly 
under the new provision. Such an expression of congressional 
intent would result in a clear prohibition that would be added 
to the existing body of law regulating intelligence activities. 
The intelligence officers who work hard to conduct lawful and 
authorized activities to protect the national security of the 
United States will not be burdened by the uncertainty that laws 
never intended to apply to their activities could be so 
interpreted.

                            POW/MIA Analysis

    Section 304 directs the Director of Central Intelligence to 
establish and maintain an analytic capability within the 
Intelligence Community with responsibility for supporting 
activities related to prisoners of war and missing persons 
since 1990. Currently, no standing analytic capability exists. 
This analytical shortfall was highlighted by the case of Navy 
Lt. Commander Michael Speicher who was shot down over Iraq on 
January 17, 1991, during the Persian Gulf War. Section 943 of 
the National Defense Authorization Act for Fiscal Year 1998 
(Public Law 105-85; 111 Stat. 1866; 10 U.S.C. 1501 note) 
requires the Director of Central Intelligence to provide 
intelligence analysis on matters concerning prisoners of war 
and missing persons to all departments and agencies of the 
Federal Government involved in such matters.
    The Committee notes that Commander Speicher's fate remains 
unknown. The Navy declared Commander Speicher ``killed in 
action'' in May 1991. Federal regulations state that a finding 
of presumptive death is made when a survey of all available 
sources of information indicates, beyond doubt, that the 
presumption of continuance of life has been overcome. 
Information available to Congress does not necessarily support 
this conclusion.
    The Committee has reviewed the support of the Intelligence 
Community for the decision of the United States Government to 
characterize Commander Speicher's status as ``killed in 
action.'' The review was based upon a September 1998 report by 
the Direct or Central Intelligence and additional information 
on the chronology of the disappearance of Commander Speicher. 
The Committee concluded that it is critical that an 
intelligence organization be specifically assigned 
responsibility for analysis of all-source information on POW/
MIA matters, including information derived from sensitive 
intelligence sources and methods, such as the information 
collected with respect to Commander Speicher.
    The case of Commander Speicher demonstrates that valid 
questions about POW/MIAs remain today, and that rigorous and 
timely analytic assessments and accountability are essential to 
resolving such questions. A POW/MIA analytic capability in the 
Intelligence Community is required. The Committee understands 
the sporadic nature of the requirement for this analytic 
capability and directs the DCI to designate a small number of 
analysts with responsibility for current POW/MIA issues and 
with the capability to surge their effort should the need 
arise.

                 National Foreign Intelligence Program


Guidelines and limitations governing intelligence collection 
        information on U.S. persons

    The Committee is concerned about recent media accounts 
alleging that the National Security Agency (NSA) conducts 
activities that may violate the constitutional rights of United 
States persons.
    The NSA's primary mission is to intercept and analyze the 
communications of foreign adversaries, including terrorists and 
drug traffickers. The President and other policymakers rely 
heavily on the critical information provided by the NSA. The 
Committee recognizes the potential intrusion into the private 
lives of U.S. citizens inherent in this type of intelligence 
collection, and the need to remain vigilant to ensure that the 
laws and regulations that protect the privacy of U.S. persons 
are strictly adhered to. This Committee was created in part in 
response to violations of the constitutional rights of American 
citizens by intelligence agencies that at times lost sight of 
the critical balance between defending national security and 
defending those values upon which our security as a nation 
ultimately depends. The Committee has no more critical 
responsibility than to ensure that this balance is maintained.
    In the 1970's, after congressional inquiries revealed 
abuses by the NSA, CIA and FBI, the Congress and the Executive 
branch created an extensive structure of laws and oversight 
(including the creation of the Congressional oversight 
committees). These laws, executive orders and regulations 
established stringent guidelines and limitations governing the 
collection of information on U.S. persons. Finally, the 
intelligence agencies, including the NSA, were prohibited by 
presidential executive order from circumventing United States 
legal restrictions by asking foreign agents or governments to 
collect information on their behalf.
    The Committee believes, based on all available information, 
that the NSA is in compliance with applicable laws and 
regulations. The NSA is required by law to keep the oversight 
committees fully and currently informed of all significant 
intelligence activities and must report any illegal 
intelligence activities. Moreover, the NSA, in coordination 
with the CIA and the Justice Department, was required last year 
by Congress to conduct a review of the legal standards in place 
to protect the constitutional rights of U.S. persons from 
intrusive electronic surveillance. The report indicates that 
the legal standards controlling the NSA's electronic 
surveillance are effective in adhering to the requirements of 
the Fourth Amendment to the United States Constitution. As 
noted above, however, the Committee has no more critical 
responsibility than to ensure that the balance between national 
security and rights of Americans established in law is 
maintained, and will continue to monitor strictly the NSA's 
activities.

Experimental Personnel Management Program for Technical Personnel for 
        Certain Elements of the Intelligence Community

    Section 503 establishes an experimental personnel program 
providing the Director of Central Intelligence with limited 
authority over a five-year period to recruit up to 39 science 
and engineering experts for advanced research and development 
projects administered by three elements of the Intelligence 
Community. Of the 39 positions covered under this personnel 
program, the National Imagery and Mapping Agency (NIMA) will be 
allocated no more than fifteen positions, the National Security 
Agency twelve positions, the National Reconnaissance Office six 
positions, and the Defense Intelligence Agency six positions. 
Expanded hiring authorities of this type were granted to the 
Defense Advanced Research Projects Agency in fiscal year 1999. 
The need for such authorities in the Intelligence Community has 
been supported by the testimony of the respective program 
managers and was reaffirmed by the Committee's May 1999 
Technical Advisory Group report on the NIMA, the future of 
imagery intelligence, and the emerging challenge of modernizing 
the Intelligence Community's tasking, processing, exploitation, 
and dissemination system.
    Beginning in 2001, the DCI must submit, no later than 
October 15 of each year in which employees serve under the 
program, an annual report to the intelligence oversight 
committees of the Congress. The annual report shall include a 
discussion on the DCI's exercise of the special personnel 
management authority during the reporting period, the sources 
from which individuals appointed were recruited, and the 
methodology of identification and selection of recruits.

Functional management of Tactical Imagery and Geospatial Programs

    The Committee is concerned that the National Imagery and 
Mapping Agency (NIMA) does not exercise comprehensive 
functional management authority over U.S. imagery and 
geospatial programs. The NIMA's founding legislation, Public 
Law 104-201, sets forth authorities provided to the NIMA 
Director in relation to other elements of the Intelligence 
Community, the Department of Defense, and the military 
services. Department of Defense Directive Number 5105.60 
established the NIMA within the Defense Department and 
prescribed its mission, organization, responsibilities, and 
authorities. Department of Defense Directive Number 5105.60 
notes two types of management authority those of a functional 
manager and those of a program manager. Functional management 
is defined as ``[t]he review of and coordination on investment 
activities related to imagery, imagery intelligence, and 
geospatial information, which includes RDT&E [research, 
development, testing, and evaluation] and procurement 
activities within the NFIP (National Foreign Intelligence 
Program), JMIP (Joint Military Intelligence Program), and TIARA 
(Tactical Intelligence and Related Activities) aggregate.'' 
Although not defined, program management authority is 
understood in practice to include the authority to make program 
investment decisions as well as all authorities present under 
functional management.
    The NIMA's authorities regarding national and tactical 
level imagery, imagery intelligence, and geospatial programs 
are different for each function. The NIMA Director is both 
``program manager'' and ``functional manager'' for the National 
Imagery and Mapping Program within the NFIP and the Defense 
Imagery and Mapping Program within the JMIP. As such, the NIMA 
Director is tasked with providing imagery, imagery 
intelligence, and geospatial information for national customers 
within the CIA, the State Department, the Office of the 
Secretary of Defense, and the service components, and has the 
authority to make program investment decisions to support these 
missions.
    However, the NIMA Director serves only as the ``functional 
manager for imagery, imagery intelligence, and geospatial 
investment activities which include Research, Development, 
Testing and Evaluation (RDT&E) and procurement initiatives 
within the Tactical Intelligence and Related Activities (TIARA) 
aggregate.'' As a result, the NIMA Director has less influence 
over the tactical imagery and geospatial programs within the 
military services.
    The National Defense Authorization Act (P.L. 104-201) 
amended the National Security Act of 1947 (50 U.S.C. 403-5(b)) 
to provide the NIMA with substantial functional management 
authority. Under the amended section 105(b)(2) of the National 
Security Act, the NIMA Director is responsible, 
``notwithstanding any other provision of law, for prescribing 
technical architecture and standards related to imagery 
intelligence and geospatial information and ensuring compliance 
with such architecture and standards.'' This provision was 
further expanded by Department of Defense Directive 5105.60, 
which provides the NIMA with the authority to set standards for 
end-to-end architecture related to imagery, imagery 
intelligence, and geospatial information; geospatial 
information products; career and training programs for imagery 
analysts, cartographers, and related fields; and technical 
guidance regarding standardization and interoperability for 
systems utilizing imagery, imagery intelligence, and geospatial 
information.
    Officials involved in the formation of the NIMA believed 
the combination of authority to set standards, and review 
investment and RDT&E decisions, would provide the NIMA with a 
significant ability to influence tactical imagery and 
geospatial programs even though the agency did not control 
their funding. However, current NIMA officials have commented 
that the authority merely to review investment and RDT&E 
decisions has not given the NIMA a prominent position in the 
budget review process. Being a relatively new agency, the NIMA 
has had to work to assert its role in the already established 
Department of Defense and Intelligence Community 
infrastructures.
    To address a similar lack of comprehensive management with 
regard to tactical signals intelligence programs, the Deputy 
Secretary of Defense in 1995 granted the National Security 
Agency Director approval authority over the tactical investment 
and RDT&E decisions of the Defense Cryptologic Programs of the 
service components. National Security Agency (NSA) officials 
have stated that this approval authority enabled the NSA 
Director to be more involved in investment and RDT&E decisions 
earlier in the budget process, thereby assuring that his 
recommendations and guidance as functional manager of signals 
programs were incorporated into tactical systems.
    In September 1999, the Committee issued an audit report of 
the NIMA's structure, mission, and role within the Intelligence 
Community. The first conclusion of the audit report is that the 
lack of approval authority over tactical investment and RDT&E 
programs limits the ability of the NIMA Director to serve as 
the functional manager for imagery and geospatial programs. The 
NIMA has had difficulty receiving information about tactical 
programs in a timely manner and has had to provide its 
recommendations on service components plans late in the budget 
review process. The Committee recommended that the Secretary of 
Defense grant the NIMA Director the approval authority over 
service component imagery and geospatial investment and RDT&E 
programs to ensure that NIMA has an established role and can 
provide oversight early in the budget process.
    The recently completed Defense Science Board Task Force 
report on NIMA concurred with the Committee's recommendation:

          ``RECOMMENDATION 1: Strengthen NIMA's Role as 
        Functional Manager of U.S. Imagery and Geospatial 
        Information ``* * * The Deputy Secretary of Defense and 
        the Director of Central Intelligence (DCI) need to 
        reemphasize NIMA's charter as the executive agency for 
        all geospatial information, much as NSA is the 
        executive agency for all SIGINT information.''

    The Secretary of Defense, in his January 5, 2000, reply to 
the Committee's audit report concurred with all of its 
conclusions and recommendations and noted that his staff was 
working with the NIMA on implementing them, with the exception 
of the recommendation to grant the NIMA approval authority over 
tactical investment and RDT&E decisions. The reply states: ``We 
are currently working with the Services and with NIMA to 
evaluate this recommendation, and we hope to reach a decision 
within the next few months.'' To date, no such decision has 
been reached.
    The Committee reiterates its support for strengthening the 
role of the NIMA Director as functional manager of U.S. imagery 
and geospatial programs and directs the Secretary of Defense to 
provide a status report on efforts to implement the 
recommendations pertaining to this issue contained in the 
Committee and Defense Science Board Task Force reports. The 
report shall be submitted to the Committee no later than July 
31, 2000.

Hard Copy Production in the Future Imagery Architecture (FIA) Era

    The National Reconnaissance Office (NRO) has no stated 
requirement to generate hard copy products for the Intelligence 
Community as part of the Future Imagery Architecture (FIA), nor 
does the National Imagery and Mapping Agency (NIMA) plan to 
produce these products. The Committee is concerned that the 
transition to soft copy image display and archiving systems has 
been slower than planned, potentially creating a situation 
where current hard copy imagery users will not be able to 
receive soft copy images when the FIA becomes operational. 
Therefore, the Committee directs the Director of the NIMA, in 
coordination with the Director of the NRO, to provide a report 
detailing imagery user requirements and a roadmap for the 
transition of hard copy imagery users to soft copy before the 
FIA begins operation. The report shall be submitted to the 
Congressional intelligence committees no later than July 31, 
2000.

Critical Intent Model 2 (CIM2)

    Given the emergence of new and ambiguous threats, it is 
important for the United States, its allies and future 
coalition partners to find and develop additional ways to 
exploit new information technology to improve radically their 
crisis avoidance, situation assessment, and collaboration 
capabilities. The explosion of information available combined 
with reduced resources available for national security programs 
highlighted the need for a fast and efficient capability to 
detect and manage crises. The Committee is aware of the 
Critical Intent Model (CIM)--a structured argumentation tool--
as a key enabling technology in PROJECT GENOA, which provides 
analysts and policy makers with the capability to track ongoing 
and evolving situations, collect analysis, and enable users to 
discover previously unknown information and critical data 
relationships. The CIM structured argumentation tool 
facilitates more comprehensive analysis, creates a corporate 
memory for use in current analysis, and allows the comparison 
and contrasting of details of a particular argument. Moreover, 
CIM captures logic patterns for policy option analysis and 
serves as a foundation for scenario-based crisis avoidance 
systems.
    The Committee recommends the transition of the CIM 
structured argument prototype software from the Defense 
Advanced Research Projects Agency to the Intelligence 
Community, and strongly recommends investment by the 
Intelligence Community in the CIM structured argument tool with 
available fiscal year 2000 and 2001 funds.

Funding of intelligence activities, section 504

    At a time when the Intelligence Community faces many 
difficult decisions about spending priorities, the Committee 
continues to be concerned that the budget practices of the CIA 
and the Intelligence Community as a whole are simply inadequate 
to address current requirements. Upper level program managers 
lack sufficient insight into the process to make informed and 
timely decisions regarding the allocation of funds, and to 
assure Congress, and themselves, that funds are being spent as 
appropriated and authorized. The Committee is particularly 
troubled by recent CIA reprogramming requests that appear not 
to meet legal requirements.
    Those legal requirements are outlined in Section 504 [50 
U.S.C. 414] of the National Security Act of 1947. According to 
Section 504, ``[a]ppropriated funds available to an 
intelligence agency may be obligated or expended for an 
intelligence or intelligence-related activity only if:
          (1) those funds were specifically authorized by the 
        Congress for use for such activities; or
          (2) in the case of funds from the Reserve for 
        Contingencies * * * or
          (3) in the case of funds specifically authorized by 
        Congress for a different activity--
                  (A) the activity to be funded is a higher 
                priority intelligence or intelligence-related 
                activity;
                  (B) the need for funds for such activity is 
                based on unforseen requirements; and
                  (C) the Director of Central Intelligence, * * 
                * has notified the appropriate congressional 
                commitees of the intent to make such funds 
                available for such activity * * *'' (emphasis 
                added).
    In the case of the CIA, the Committee is not convinced that 
all funds reprogrammed in fiscal year 2000 met the thresholds 
of ``higher priority'' and ``unforseen requirements'' as stated 
in the National Security Act of 1947. Recent actions, including 
taxing directorates for funds to be used in other areas, and 
moving funds within expenditure centers without Congressional 
notification, have eroded this Committee's confidence that 
appropriations are used as intended. The Committee understands 
that the CIA's Inspector General is conducting an audit of the 
CIA's budget process and reprogramming practices and will 
report on the overall budget process and compliance with 
Section 504. Such an independent and detailed assessment is 
long overdue, and we applaud the Inspector General's efforts in 
this regard.
    To address the Committee's concern that resources be 
obligated and expended as intended by Congress, without unduly 
restricting the CIA's flexibility to respond to high-priority 
unfunded requirements, the Committee directs the CIA's 
Comptroller to provide to the Congressional intelligence 
committees quarterly briefings on the CIA's execution of its 
budget during the remainder of fiscal year 2000 and in fiscal 
year 2001. These briefings should provide the committees with 
sufficient information to demonstrate the CIA's compliance with 
Section 504.

Joint Signals Intelligence (SIGINT) Avionics Family

    The proposed fiscal year 2001 budget includes $17.0 million 
in Air Force procurement funding for the purchase of one Joint 
SIGINT Avionics Family (JSAF) High Band Subsystem (HBSS)/Low 
Band Subsystem (LBSS) unit. The proposed funding is 
insufficient to purchase the appropriate spares, aircraft 
cabling, antennas, and installation needed to field the first 
operational JSAF system on the U-2 aircraft. The current JSAF 
procurement plan is to procure one U-2 JSAF unit in fiscal year 
2002 and two JSAF units in each of the next five years. This 
funding plan fails to take advantage of economics of scale 
associated with higher production rates, delays fielding the 
JSAF capability in the U-2 fleet, and will not support the 
stated goal of maintaining 11 sensors (a combination of RAS-1R 
and JSAF) by the end of 2004 when aircraft currently in the 
fleet will no longer be flown. The Air Force deploys the U-2 
aircraft in detachments of three planes to their forward 
operating bases, and the current requirement is to have no 
fewer than two of the three aircraft carrying the JSAF.
    Therefore, the Committee recommends an addition of $52.0 
million in Air Force procurement funding to the JSAF program: 
(1) $8.0 million to fully fund the first JSAF unit with 
appropriate antennas, spares and installation on the U-2; and 
(2) $44.0 million to procure two additional units to take 
advantage of economies of scale and to provide sufficient units 
for fielding a complete detachment of three U-2 aircraft.

Geospatial Production

    The National Imagery and Mapping Agency (NIMA) is in the 
initial stages of an internal reorganization and realignment of 
personnel that will shift almost one-tenth of its geospatial 
workforce over to imagery analysis to better meet the growing 
needs of the imagery customer base. Over the five years, 
beginning in fiscal year 2001, a total of 300 geospatial 
experts--60 positions a year--will be retrained as imagery 
analysts. As a result, geospatial production readiness within 
the Intelligence Community will degrade and the NIMA's reliance 
on the contractor community for the outsourcing of geospatial 
products will increase. The Committee recommends an additional 
$5.0 million for geospatial production under the NIMA's Omnibus 
Outsourcing Program to shore up this erosion in readiness.

              Tactical Intelligence and Related Activities


GUARDRAIL Common Sensor

    The GUARDRAIL Common Sensor (GRCS) is a corps-level, 
airborne signals intelligence collection and location system 
capable of providing tactical commanders with near-real time 
targeting information. The GRCS combines communications 
intelligence and electronic intelligence capabilities onboard 
multiple versions of RC-12 fixed-wing aircraft.
    The Committee recommends an addition of $2.0 million in 
Army procurement funding for the GUARDRAIL modifications effort 
to accelerate the integration of the Tactical Intelligence 
Broadcast System (TIBS) capability for GRCS System 2. The 
additional funding will complete the integration of TIBS in the 
last of four GRCS systems.

Joint Surveillance Target Attack Radar System Common Ground System

    The Common Ground System receives, processes, correlates, 
and disseminates data simultaneously from the Joint 
Surveillance Target Attack Radar System, unmanned aerial 
vehicles, and other tactical, theater and national systems for 
targeting, situation development, and battle management.
    The Committee recommends a reduction of $2.0 million in 
Army RDT&E funding proposed for the Distributed Common Ground 
Station--Army prototype. The Committee understands that this 
effort duplicates an effort being performed under the Army's 
Tactical Exploitation of National Capabilities program.

              Section-by-Section Analysis and Explanation


                    title I--intelligence activities

Section 101. Authorization of Appropriations

    Section 101 lists departments, agencies, and other elements 
of the United States Government for whose intelligence and 
intelligence-related activities the Act authorizes 
appropriations for fiscal year 2001 and lists authorization of 
appropriations for conduct of intelligence and intelligence 
activities for certain elements of the United States Government 
for fiscal years 2002 through 2005.

Section 102. Classified Schedule of Authorizations

    Section 102 states that the details of the amounts 
authorized to be appropriated for intelligence and 
intelligence-related activities and personnel ceilings for the 
entities listed in section 101 for fiscal year 2001 are 
contained in a classified Schedule of Authorizations. The 
Schedule of Authorizations is incorporated into the Act by this 
section.

Section 103. Personnel ceiling adjustments

    Section 103 authorizes the Director of Central 
Intelligence, with the approval of the Director of the Office 
of Management and Budget, in fiscal year 2001 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 intelligence oversight committees of the 
Congress.

Section 104. Community Management Account

    Section 104 provides details concerning the amount and 
composition of the Community Management Account (CMA) of the 
Director of Central Intelligence.
    Subsection (a) authorizes appropriations in the amount of 
$232,051,000 for fiscal year 2001 for the staffing and 
administration of various components under the CMA. Subsection 
(a) also authorizes funds identified for the Advanced Research 
and Development Committee to remain available for two years.
    Subsection (b) authorizes a total of 618 full-time 
personnel for elements within the CMA for fiscal year 2001 and 
provides that such personnel may be permanent employees of the 
CMA element or detailed from other elements of the United 
States Government.
    Subsection (c) explicitly authorizes the classified portion 
of the CMA.
    Subsection (d) requires that personnel be detailed on a 
reimbursable basis, with certain exceptions.
    Subsection (e) authorizes $27,000,000 of the amount 
authorized for the CMA under subsection (a) to be made 
available for the National Drug Intelligence Center (NDIC) in 
Johnstown, Pennsylvania. Subsection (e) requires the Director 
of Central Intelligence to transfer the $27,000,000 to the 
Department of Justice to be used for NDIC activities under the 
authority of the Attorney General, and subject to Section 
103(d)(1) of the National Security Act.

 title ii--central intelligence agency retirement and disability system

Section 201. Authorization of Appropriations

    Section 201 authorizes appropriations in the amount of 
$216,000,000 for fiscal year 2001 for the Central Intelligence 
Agency Retirement and Disability Fund.

                     title iii--general provisions

Section 301. Increase in Employee Compensation and Benefits Authorized 
        by Law

    Section 301 provides that appropriations authorized by the 
conference 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. Restriction on Conduct of Intelligence Activities

    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. Prohibition on Unauthorized Disclosure of Classified 
        Information

    Section 303 creates a basis in law for prosecuting the 
knowing and willful unauthorized disclosure of classified 
information to a person not authorized to receive that 
information. This section closes the gap in existing law for 
the unauthorized disclosure of classified information.

Section 304. POW/MIA Analytic Capability in the Intelligence Community

    Section 304 requires the Director of Central Intelligence 
to establish and maintain a POW/MIA analytic capability within 
the Intelligence Community with responsibility for intelligence 
in support of the activities of the United States relating to 
prisoners of war and missing persons.

Section 305. Applicability to Lawful United States Intelligence 
        Activities of Federal Laws Implementing International Treaties 
        and Agreements

    Section 305 amends the National Security Act of 1947 to add 
a new provision which articulates a rule of statutory 
construction applicable to U.S. laws enacted to implement the 
provisions of treaties and other international agreements. 
Section 305 provides that future U.S. laws enacted to implement 
treaties shall not be construed as making unlawful what are 
otherwise lawful and authorized intelligence activities of the 
United States, unless Congress includes an express provision to 
the contrary.

Section 306. Limitation on Handling, Retention, and Storage of Certain 
        Classified Materials by the Department of State

    Section 306 requires the Director of Central Intelligence 
to certify to Congress that each element of the Department of 
State that handles, retains or stores material classified at 
the Sensitive Compartmented Information (SCI) level is in full 
compliance with all applicable Director of Central Intelligence 
directives (DCIDs) or Executive Orders regarding the handling, 
retention, or storage of SCI materials. As of January 2001, 
funds authorized to be appropriated under this Act for the 
Department of State Bureau of Intelligence and Research shall 
be prohibited from obligation or expenditure so long as any 
covered element of the Department of State has not been 
certified by the Director of Central Intelligence (DCI) as 
being in full compliance. Any element of the Department of 
State not certified will be prohibited from retaining or 
storing material classified at the SCI level until the DCI 
certifies its compliance, unless such elements receive a 
Presidential waiver.

Section 307. Clarification of Standing of United States Citizens to 
        Challenge Certain Blocking of Assets

    Section 307 amends the Foreign Narcotics Kingpin 
Designation Act (title VIII of Public Law 106-120) (hereafter 
referred to as the ``Act''). This provision simply states that 
whatever process was available to a United States citizen under 
the Administrative Procedure Act or any other provision of law, 
with respect to the blocking of assets by the United States, 
prior to the enactment of the Act, remains available after the 
enactment of the Act. It was not the intent of the United 
States Congress to abrogate in any way the due process rights 
of U.S. citizens upon the enactment into law of the Foreign 
Narcotics Kingpin Designation Act. Section 307 expressly states 
in statutory language Congress's original intent.

Section 308. Availability of Certain Funds for Administrative Costs of 
        Counterdrug Intelligence Executive Secretariat

    Section 308 waives prohibitions that prevent Executive 
branch agencies from contributing appropriated fiscal year 2000 
funds to an interagency body for the purpose of supporting the 
Counterdrug Intelligence Executive Secretariat.

                 title iv--central intelligence agency

Section 401. Expansion of Inspector General Actions Requiring a Report 
        to Congress

    Section 401 closes gaps in the reporting requirements to 
the intelligence oversight committees of the Congress revealed 
by the Committee's inquiry into the mishandling of classified 
information by former DCI John Deutch. Current law requires the 
Inspector General to notify the intelligence oversight 
committees only if the Director or Acting Director is the 
subject of an inquiry. This amendment broadens the notification 
requirement to include former DCIs, all confirmed officials 
(General Counsel, DDCIs and ADCIs), the Executive Director, and 
the Deputy Directors for Operations, Intelligence, 
Administration, and Science and Technology. In addition to 
expanding the number of senior officials covered by the 
notification requirement, the amendment also requires 
congressional notification whenever a criminal referral to the 
Department of Justice is made on one of the designated 
officials.

Section 402. Subpoena Authority of the Inspector General of the Central 
        Intelligence Agency

    Section 402 provides several technical corrections to the 
Central Intelligence Agency Act of 1949 to address superseding 
legislation, conform language and streamline reporting 
procedures.

Section 403. Improvement and Extension of Central Services Program

    Section 403 extends the Central Services Program until 
March 31, 2005, and clarifies that the Central Services Program 
Working Capital Fund may retain and use receipts resulting from 
reimbursements for utility services and meals provided to 
individuals and cash receipts from the rental of property and 
equipment to employees and detailees. This change would allow 
the Central Services Program Working Capital Fund to retain 
miscellaneous receipts that are paid directly to an enterprise 
by an individual, thereby properly offsetting costs incurred in 
the operation and maintenance of enterprise facilities where 
the Government incurs costs associated with those individuals. 
In addition, this section expands the current law to allow 
retention of rents collected from individuals who are not CIA 
employees, and therefore not subject to payroll deduction. 
Finally, this section excludes depreciation of CIA owned 
structures as a recoverable operating expense.

Section 404. Details of Employees to the National Reconnaissance Office

    Section 404 amends the Central Intelligence Agency Act to 
permit the Director of Central Intelligence to detail CIA 
employees on a long-term basis to the National Reconnaissance 
Organization (NRO). Current laws, regulations and Comptroller 
General opinions which govern the detailing of employees from 
one government agency to another have been interpreted by the 
CIA General Counsel to limit details to NRO to no more than 
five years. This amendment would exempt CIA from these 
requirements and would provide the flexibility necessary to 
deal with the unique staffing requirements of the NRO.

Section 405. Transfers of Funds to Other Agencies for Acquisition of 
        Land

    Section 405 extends the life of appropriated funds 
transferred by the CIA permitting them to remain available for 
three years to other government agencies for the purpose of 
purchasing land. Any exercise of this authority must be 
reported to the intelligence oversight committees of the 
Congress.

Section 406. Eligibility of Additional Employees for Reimbursement for 
        Professional Liability Insurance

    Section 406 allows the Director of Central Intelligence to 
designate categories of employees in addition to those noted in 
Public Law 104-208, who would be eligible to receive 
reimbursement for up to one-half of the cost of purchasing 
professional liability insurance. This section permits the 
expenditure of appropriated funds to reimburse employees who 
are at risk of incurring liability claims due to the nature of 
their duties, but are not included within the existing job 
categories that are currently eligible for reimbursement. Any 
exercise of this authority must be reported to the intelligence 
oversight committees of the Congress.

         title V--department of defense intelligence activities

Section 501. Two-year Extension of Authority to Engage in Commercial 
        Activities as Security for Intelligence Collection Activities

    Section 501 amends section 431(a) of title 10 to extend 
current Department of Defense authority to engage in commercial 
activities as security for intelligence collection activities 
until December 31, 2002. This authority expires on December 31, 
2000.

Section 502. Nuclear Test Monitoring Equipment

    Section 502 authorizes the Secretary of Defense, who may 
delegate the authority to the Secretary of the Air Force, to 
convey to a foreign government nuclear test explosion 
monitoring equipment that is installed within the territory of 
that government. This equipment would be conveyed with a 
bilateral agreement in which the recipient nation agrees to 
provide the United States with timely access to the data 
produced, collected, or generated and to provide the U.S. 
access to the equipment for purposes of inspecting, testing, 
maintaining, repairing, or replacing the equipment.

Section 503. Experimental Personnel Management Program for Technical 
        Personnel for Certain Elements of the Intelligence Community

    Section 503 allows the Director of Central Intelligence 
(DCI), for a period of five years from the date of enactment of 
this Act, to carry out an experimental program using special 
personnel management authority to facilitate the recruitment of 
eminent experts in science or engineering for research and 
development projects administered by the National Imagery and 
Mapping Agency (NIMA), the National Security Agency (NSA), the 
National Reconnaissance Organization (NRO), and the Defense 
Intelligence Agency (DIA). Under this limited authority, the 
DCI may appoint scientists and engineers from outside the civil 
service and uniformed services to the NIMA, NSA, NRO and DIA.

                            Committee Action

    On April 27, 2000, the Select Committee on Intelligence 
approved the Bill and ordered that it be favorably reported. 
The Committee approved by a vote of 12-1 an amendment by 
Senator Levin to add Section 307, a clarification of the 
standing of United States citizens to challenge certain 
blocking of assets by the United States.

                           Estimate of Costs

    Pursuant to paragraph 11(a) of rule XXVI of the Standing 
Rules of the Senate, the estimated costs incurred in carrying 
out the provisions of this Bill, for fiscal year 2001, 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. On May 4, 
2000, the Committee transmitted this Bill to the Congressional 
Budget Office (CBO) and requested that it conduct an estimate 
of the costs incurred in carrying out the provisions of this 
Bill.

                    Evaluation of Regulatory Impact

    In accordance with paragraph 11(b) rule XXXVI of the 
Standing Rules of the Senate, the Committee finds that 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.

                                  
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