[Senate Report 108-359]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-359
_______________________________________________________________________

                                     

                                                       Calendar No. 712


                      NATIONAL INTELLIGENCE REFORM

                              ACT OF 2004

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 2840

                             together with


                            ADDITIONAL VIEWS

     TO REFORM THE INTELLIGENCE COMMUNITY AND THE INTELLIGENCE AND 
 INTELLIGENCE-RELATED ACTIVITIES OF THE UNITED STATES GOVERNMENT, AND 
                           FOR OTHER PURPOSES




               September 27, 2004.--Ordered to be printed
                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania          RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois        MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire        FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama           MARK PRYOR, Arkansas
           Michael D. Bopp, Staff Director and Chief Counsel
                  Ann C. Fisher, Deputy Staff Director
               David A. Kass, Chief Investigative Counsel
       Michael L. Stern, Deputy Staff Director for Investigations
                    Johanna L. Hardy, Senior Counsel
                     Alec D. Rogers, Senior Counsel
                     James R. McKay, Senior Counsel
               Jane A. Alonso, Professional Staff Member
            Jennifer A. Hemingway, Professional Staff Member
                Bruce P. Kyle, Professional Staff Member
                Jennifer E. Gagnon, Executive Assistant
           Deborah G. Barger, Intelligence Community Detailee
       Don L. Bumgardner, U.S. General Accounting Office Detailee
        Keith E. Herrington, U.S. Department of Defense Detailee
          William D. Murray, U.S. Department of State Detailee
      Edward W. Priestap, Federal Bureau of Investigation Detailee
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
               Laurie Rubenstein, Minority Chief Counsel
                  Lawrence B. Novey, Minority Counsel
                    Kevin J. Landy, Minority Counsel
                   Beth M. Grossman, Minority Counsel
         Michael Alexander, Minority Professional Staff Member
            David Barton, Minority Professional Staff Member
           Andrew Weinschenk, U.S. Department of State Fellow
                  Rajesh De, Special Bi-Partisan Staff
              Christine Healey, Special Bi-Partisan Staff
          Gordon Nathaniel Lederman, Special Bi-Partisan Staff
                      Amy B. Newhouse, Chief Clerk


                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background.......................................................4
III. Legislative History.............................................46
 IV. Committee Hearings..............................................50
  V. Section-by-Section Analysis.....................................52
 VI. Estimated Cost of Legislation...................................79
VII. Evaluation of Regulatory Impact.................................84
VIII.Additional Views................................................85

 IX. Changes in Existing Law.........................................96


                                                       Calendar No. 712
108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-359

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



 
                     NATIONAL INTELLIGENCE REFORM
                              ACT OF 2004

                                _______
                                

               September 27, 2004.--Ordered to be printed

                                _______
                                

Mrs. Collins, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 2840]

    The Committee on Governmental Affairs, having considered 
the original bill (S. 2840) to reform the intelligence 
community and the intelligence and intelligence-related 
activities of the United States Government, and for other 
purposes, reports favorably thereon and recommends that the 
bill do pass.

                         I. Purpose and Summary

    On September 22, 2004, the Senate Governmental Affairs 
Committee (the ``Committee'') unanimously approved the Collins-
Lieberman National Intelligence Reform Act of 2004, S. 2840. 
The purpose of this legislation is to transform the U.S. 
intelligence community's Cold War-era organizational structure 
into an integrated enterprise capable of marshaling the full 
range of intelligence capabilities against terrorism and other 
21st Century threats to U.S. national security. This 
legislation represents the most sweeping reform of the 
intelligence community in more than fifty years.
    The immediate genesis for this legislation is the report of 
the National Commission on Terrorist Attacks Upon the United 
States (the ``9/11 Commission''), an independent, bipartisan 
body which spent eighteen months investigating the causes of 
the September 11, 2001 terrorist attacks and assessing 
recommendations for preventing future attacks. The 9/11 
Commission itself built upon the work of several prior 
commissions as well as the December 2002 report of the Joint 
Inquiry of the Senate Select Committee on Intelligence and the 
House Permanent Select Committee on Intelligence into 
Intelligence Community Activities Before and After the 
Terrorist Attacks of September 11, 2001 (the ``Congressional 
Joint Inquiry'').
    On July 22, 2004, the 9/11 Commission issued a 567-page 
report containing over forty recommendations for improving the 
United States's ability to prevent future terrorist attacks. 
Its recommendations were divided into two parts: (1) policy-
oriented recommendations, and (2) recommendations for 
structural change to enable the U.S. Government to implement 
these new policies.
    In its report, the 9/11 Commission issued a stinging 
indictment of the intelligence community's organizational 
structure, concluding that ``the intelligence community's 
confederated structure left open the question of who really was 
in charge of the U.S. intelligence effort'' against al 
Qaeda.\1\ In testimony before this Committee, 9/11 Commission 
Chairman Thomas Kean and Vice Chairman Lee Hamilton stated that 
the two most important Commission recommendations dealt 
squarely with intelligence reform: (1) creation of a National 
Intelligence Director (NID), separate from the intelligence 
agencies, with sufficient authorities to manage the 
intelligence community, and (2) formation of a National 
Counterterrorism Center (NCTC) to unify intelligence against 
terrorism and to draft Executive Branch-wide interagency plans 
for countering terrorism.\2\
---------------------------------------------------------------------------
    \1\ National Commission on Terrorist Attacks Upon the United 
States, The 9/11 Commission Report (W.W. Norton & Co., 2004) 
(hereinafter ``Commission report''), p. 93.
    \2\ Making America Safer: Examining the Recommendations of the 9/11 
Commission, hearing before the Senate Committee on Governmental 
Affairs, 108th Congress (July 30, 2004) (testimony of Thomas Kean, 
Chair of the 9/11 Commission, and Lee Hamilton, Vice Chairman of the 9/
11 Commission).
---------------------------------------------------------------------------
    Immediately following the release of the 9/11 Commission's 
report, Senate Leaders assigned the Committee the task of 
examining the recommendations of the 9/11 Commission with 
respect to reorganization of the executive branch and, in 
particular, the proposals to create a NID and an NCTC.
    The Committee responded immediately and in a bipartisan 
manner, holding hearings and numerous meetings with experts 
during the August recess. In the two months following the 
release of the 
9/11 Commission report, the Committee conducted an intensive 
and in-depth review of the intelligence community's structure 
and performance and the 9/11 Commission's findings and 
recommendations related thereto. The Committee held eight 
hearings in this time period, taking testimony from, among many 
others, the Commission's Chair and Vice Chairman, Secretary of 
State Colin Powell, Secretary of Homeland Security Tom Ridge, 
Federal Bureau of Investigation Director Robert Mueller, Acting 
Director of Central Intelligence John McLaughlin, and family 
members of victims of the 
9/11 terror attacks. The Committee also received input from and 
conducted consultations with numerous others, including other 
members of the Senate, the Administration, the 9/11 Commission 
staff, and current and former intelligence, defense, andlaw 
enforcement officials. In addition, the Committee reviewed and 
benefited from many hearings on this subject conducted by other 
committees of the Senate and House during this time.
    The resulting legislation adopts and implements the two 
most important recommendations of the 9/11 Commission: First, 
it creates a NID who will manage the intelligence community and 
serve as the President's chief intelligence adviser. The NID 
will have the strong budget, personnel, standard-setting, and 
other authorities needed to manage the intelligence community 
and to create a flexible and agile network to respond to global 
terrorism and emerging threats. Second, it forms the NCTC to 
unify intelligence against terrorism and to draft interagency 
plans for countering terrorism.
    By adopting these key measures, the bill addresses the 
central organizational problem identified by the 9/11 
Commission and many others. The objective of the Collins-
Lieberman legislation is to put someone in charge of U.S. 
intelligence by creating a unified structure in which one 
person, the NID, is in charge of and accountable for the 
nation's intelligence operations. The creation of the NCTC, 
operating under the NID's supervision and authority, will 
likewise ensure that there is one place where terrorism-related 
information comes together, and that Executive Branch-wide 
interagency plans are developed to fight terrorism.
    Collins-Lieberman contains a number of other important 
measures which also implement recommendations of the 9/11 
Commission. These include provisions (1) to establish an 
information-sharing network designed to facilitate and promote 
the sharing of information throughout the federal government, 
with state and local authorities, and where appropriate, the 
private sector, and (2) to create a Civil Liberties Board to 
ensure that privacy and civil liberties are protected as the 
President and executive agencies propose and implement policies 
to fight terrorism.
    Although the Committee gave considerable weight to the 
unanimous, bipartisan recommendations of the 9/11 Commission, 
it did not accept these recommendations without scrutiny or 
careful consideration. In fact, as discussed herein, there were 
a number of instances where the Committee chose to modify or 
enhance particular recommendations made by the 9/11 Commission.
    Further refinements and improvements to the legislation 
were made during the markup of the bill on September 21 and 22, 
2004. Several amendments, for example, made enhancements to the 
legislation's provisions designed to ensure that intelligence 
is collected, analyzed and reported in an objective, impartial 
and apolitical manner.
    The Committee's unanimous approval of the resulting 
legislation reflects a strong, bipartisan consensus that 
transformational intelligence reform is urgently needed. Simply 
put, the Committee concluded that the United States's current 
intelligence structure will not produce the level of 
performance needed to protect national security in the 21st 
Century. Structural reform is necessary to unlock the potential 
in the U.S. intelligence apparatus to counter 21st Century 
threats. This reform will enable the knitting together of 
intelligence agencies into an agile and flexible network to 
fight terrorist networks.
    As the 9/11 Commission put it:

          We know that the quality of the people is more 
        important than the quality of the wiring diagrams. Some 
        of the saddest aspects of the 9/11 story are the 
        outstanding efforts of so many individual officials 
        straining, often without success, against the 
        boundaries of the possible. Good people can overcome 
        bad structures. They should not have to.\3\
---------------------------------------------------------------------------
    \3\ Commission report, p. 399.

    Of course, no amount of structural reform can ensure 
perfect performance by the intelligence community or guarantee 
the safety of Americans against terrorist attacks. But Congress 
needs to act quickly to create the structural framework 
necessary for maximizing the intelligence community's 
performance.

                             II. Background


                        I. PRIOR REFORM EFFORTS

    Recommendations for fundamental intelligence reform--and 
specifically, to create the equivalent of a strong National 
Intelligence Director--date back decades. Aside from numerous 
books and private-sector reports,\4\ examples include:
---------------------------------------------------------------------------
    \4\ Examples of private recommendations include former DCI Admiral 
Stansfield Turner's 1985 book, Secrecy and Democracy: The CIA in 
Transition, advocating creating a Director of National Intelligence 
separate from the CIA director.
---------------------------------------------------------------------------
     In 1955, a commission chaired by former President 
Hoover recommended that management of the CIA be turned over to 
an ``executive officer,'' so that the DCI could focus attention 
on managing the intelligence community.
     In 1971, then Deputy OMB Director James 
Schlesinger submitted a report to the President on the 
intelligence community criticizing the failure to coordinate 
intelligence resources due to lack of a strong central 
intelligence community leadership.
     In 1995-96, the Aspin-Brown Commission and the 
House Intelligence Committee undertook separate reviews of the 
intelligence community in the post-Cold War environment. Both 
recommended strengthening the DCI's ability to manage and 
coordinate the activities of the intelligence community as a 
whole, including by separating the DCI from running the CIA and 
providing the DCI with new authorities over budgets and 
personnel. These recommendations led to some limited 
reforms.\5\
---------------------------------------------------------------------------
    \5\ These recommendations resulted in the Intelligence 
Authorization Act of 1997, which created four Senate-confirmed 
positions to enhance intelligence capabilities and coordination. The 
Act also gave the Director of Central Intelligence the right of 
concurrence in the Secretary of Defense's recommendations for the 
directors of the National Security Agency and other intelligence 
agencies in the Defense Department. But as the Commission noted, 
``[T]he authority of these positions is limited, and the vision of 
central management clearly has not been realized.'' Commission report, 
p. 357.
---------------------------------------------------------------------------
    More recently, the Joint Inquiry by the intelligence 
committees of the House and Senate and the Senate Select 
Committee on Intelligence conducted thorough investigations and 
recommended fundamental reform. And finally, the Commission 
spent eighteen months investigating intelligence lapses related 
to 9/11, among other topics. The Commission's unanimous 
approval of its report, and its prioritization of intelligence 
reform for immediate action, testify to both the wisdom and 
urgency of transformational intelligence reform.
    In short, the Collins-Lieberman National Intelligence 
Reform Act represents the culmination of years of the most 
thorough and extensive review of the intelligence community in 
history. Some of the bill's most important measures draw upon 
intelligence reform proposals and recommendation that long pre-
date 9/11. For example, the concept of creating the equivalent 
of a strong National Intelligence Director dates back decades 
and reflects a longstanding concern that the intelligence 
community lacks sufficient cohesion and management.

                 II. THE GOLDWATER-NICHOLS ACT OF 1986

    The notion of a ``Goldwater-Nichols for the Intelligence 
Community'' has been a recurring metaphor for intelligence 
reform since even before 9/11. Indeed, in 1992, Senator Boren 
and Representative McCurdy, then the respective chairmen of the 
Senate and House intelligence committees, proposed bills to 
restructure the intelligence community modeled on the 
Goldwater-Nichols reorganization of the Defense Department in 
1986. The legislation would have created the equivalent of a 
NID, separate from the CIA director, with authority to program 
and reprogram funds throughout the intelligence community and 
to direct their expenditure, to task intelligence agencies and 
to transfer personnel temporarily from one agency to another. 
To understand this parallel, it is helpful to present some 
background material on Goldwater-Nichols.
    The Goldwater-Nichols Department of Defense Reorganization 
Act of 1986 moved the Department of Defense (DoD) from a 1950s-
era industrial, stovepiped model to a ``matrix management'' 
model of integrating its vast array of capabilities to 
accomplish missions. The Act is a model for restructuring 
intelligence not because intelligence agencies should become a 
Department of Intelligence, equivalent to DoD. Rather, 
Goldwater-Nichols is highly relevant to the intelligence reform 
context because of the principles that underlay Goldwater-
Nichols: thatgood people cannot overcome bad structure on a 
consistent basis, and that the aim of structural reform is to clarify 
responsibility, authority, and accountability and to provide personnel 
with the right incentives to develop the mindsets and organizational 
culture for integrated operations.
    The objective of Goldwater-Nichols was two-fold: (1) to 
improve the quality of military advice given to the President, 
and (2) to achieve greater integration among the Military 
Services. Goldwater-Nichols was intended to transform DoD from 
a weak structure dominated by the Military Services to an 
effective corporate entity.

A. The Origins of the Military Services

    Warfare in the 19th Century and into the 20th Century was 
cleanly divided between land and sea. As a result, the Army and 
the Navy developed as separate Services with their own 
traditions and processes. Cooperation between them was minimal. 
But warfare changed in the middle of the 20th Century. The 
advent of the airplane added a third medium of warfare. And 
warfare became a global endeavor--with millions of Americans 
under arms, mobilization of America's industrial might to field 
enormous amounts of equipment, and the need for grand strategy 
against what at that time was considered a fast and agile 
enemy. President Roosevelt created the Joint Chiefs of Staff, 
modeled on the British system and composed of the heads of the 
Army and Navy in order to coordinate among them. But military 
operations in World War II evinced a lack of interservice 
coordination or ``jointness.'' For example, the Army and the 
Navy had separate commanders in the Pacific theater, leading to 
confusion and inefficiency.

B. Problems Leading To Passage of Goldwater-Nichols

    After World War II, Congress passed the National Security 
Act of 1947 to establish the National Security Council (NSC), 
the Air Force as a separate Military Service, and what 
eventually became the Central Intelligence Agency and DoD. 
Congress's objective in passing the Act was to create a 
national security establishment capable of fighting the Cold 
War and to avoid another Pearl Harbor-like surprise attack. The 
original defense department--called the Department of National 
Defense by the National Security Act of 1947--was headed by a 
Secretary with very weak authorities over the Military 
Services. Only two years later, Congress passed legislation to 
strengthen the Secretary of Defense's authorities over the 
Military Services and renamed the entity the Department of 
Defense. Both Congress and the Executive Branch took action 
over the ensuring forty years to strengthen the Secretary of 
Defense's authorities over the Military Services.
    One early attempt to integrate was the DoD's creation of 
the Commanders-in Chief (CINCs) to command units from the 
Military Services in wartime. DoD carved the world into 
commands, which were both geographic (such as the European 
Command) and functional (the Transportation Command). These 
commands were designed to prevent a recurrence of divided 
command as in the World War II Pacific theater. The CINCs were 
supposed to command all Military Service units assigned to 
accomplish a particular mission--such as warfighting in Europe 
or transportation. Thus a military unit such as the 82nd 
Airborne Division would have two chains of command: (1) 
administrative control, under which the 82nd Airborne was 
manned, equipped, and trained by the Army; and (2) operational 
control, under which the 82nd Airborne was deployed and 
conducted operations only at a CINC's direction.
    Despite various attempts to achieve integration, by the 
early 1980s DoD was still dominated by the Military Services in 
two ways.
    First, military advice to the President and the Secretary 
of Defense was provided by the Joint Chiefs of Staff, a 
committee composed of the heads of the Military Services (the 
Chief of Staff of the Army, the Chief of Staff of the Air 
Force, the Chief of Naval Operations, and the Commandant of the 
Marine Corps). The Joint Chiefs of Staff had a Chairman, but he 
was very weak; instead, the Joint Chiefs of Staff as a 
committee was responsible for rendering military advice.
    The Joint Chiefs of Staff had a staff--the Joint Staff--to 
assist it, but that staff was not manned by the Military 
Services' best and brightest officers. Indeed, duty outside of 
one's Military Service was the kiss-of-death for an officer's 
career. The Military Services often sent lesser-quality 
officers to the Joint Staff and also interfered to prevent the 
Joint Staff from producing recommendations that were contrary 
to the Military Services' interests.
    The result of the Joint Chiefs of Staff operating as a 
committee and being served by a weak staff was that the Joint 
Chiefs' military advice generally represented a lowest-common-
denominator approach among the Military Services. Over time, 
Secretaries of Defense became unsatisfied with the quality of 
military advice from the Joint Chiefs.
    In addition to the lack of quality military advice, the 
Military Services were unable to conduct integrated, ``joint'' 
military operations successfully. The CINCs had weak authority, 
and--like the Joint Chiefs of Staff's Joint Staff--the CINCs' 
staffs did not attract the best-and-brightest from the Military 
Services. Moreover, officers in each Military Service had 
little understanding of the other Services and would approach 
issues not from the perspective of the corporate Department of 
Defense but rather from the perspective of their individual 
Service. Each Service's culture was insular and biased against 
integration. There were no incentives for officers to think 
``jointly'' and every incentive for officers to prioritize 
their Service's needs.
    The net result was that the Military Services dominated 
operations and impeded joint operations. Examples of disjointed 
combat operations abounded: (1) the uncoordinated, four-part 
air war in Vietnam, in which the country was divided into four 
quadrants and each Military Service conducted air operations in 
its quadrant; (2) the botched Iranian hostage rescue operation, 
in which each Military Service wanted to have a ``piece of the 
action''--leading to Air Force pilots flying Navy helicopters 
loaded with Army troops; and (3) the haphazard Grenada 
invasion, in which Army troops could not communicate with Navy 
vessels to coordinate fire support from off-shore.

C. Passage of the Goldwater-Nichols Act

    Critics of defense reorganization argued that DoD's problem 
was not organization and that DoD just needed better people--
that good people could overcome bad structure. Yet Congress 
ultimately decided that organizational structure mattered and 
that, while good people could overcome a bad structure 
temporarily, they could not do so consistently--nor should they 
have to.
    The Goldwater-Nichols Act elevated the Chairman of the 
Joint Chiefs to be the principal military adviser to the 
President and the Secretary of Defense. While the Joint Chiefs 
as a committee was preserved, the Act dictated that the 
Chairman--not the Joint Chiefs as a committee--was responsible 
for giving military advice to the President and the Secretary.
    To strengthen the CINCs, Goldwater-Nichols did not mandate 
the particular substantive focus of the CINCs--for example, 
that there be a CINC for Europe or for South America. 
Goldwater-Nichols left that decision to the Executive Branch, 
to create and adjust the CINC's substantive foci as U.S. 
security dictated. But Goldwater-Nichols specified in great 
detail that the CINCs had authoritative direction over the 
Military Services for warfighting purposes and that the 
Services could not carry out operations on their own. Thus 
accountability was clarified: the CINCs were responsible for 
overall strategy and operations to achieve missions.
    Critics argued that strengthening of the CINCs would weaken 
the Military Services. But that criticism assumed that the 
Military Services were the key operating units of DoD. Instead, 
warfare in the late 20th Century required integration of land, 
sea, and air forces, which the Services could not accomplish on 
their own. As noted above, the Military Services were 
responsible for administrative control--recruiting, training, 
and equipping forces--while the CINCs were responsible for 
using those forces in combat. As several military operational 
fiascos demonstrated, the balance between the Services and the 
CINCs was tipped toward the Services. Goldwater-Nichols sought 
to right that balance by increasing the authority of the CINCs.
    In addition to elevating the Chairman and strengthening the 
CINCs, Goldwater-Nichols sought to change the military's 
Service-specific culture and mentality over the long term. Of 
course, legislation could not just order officers to ``think 
joint''--or, as the military would say, to ``think purple.'' 
Instead, the Act sought to create incentives to motivate the 
best-and-brightest officers to serve on the Joint Staff and 
CINCs' staffs and thus develop experience outside of their 
Service. To create such incentives, the Act ventured into the 
details of the military's personnel management system. The Act 
required officers to serve on joint duty--that is, on the Joint 
Staff or a CINC's staff--in order to be promoted to general or 
admiral. In addition, the Act created a quota system to ensure 
that officers who served on joint duty were promoted at the 
same or better rate as officers who served in assignments 
simply within their respective Services. Finally, the Act 
created a ``joint specialty'' by which officers could choose to 
focus their career on serving in joint assignments.

D. Goldwater-Nichols's Effect on the Department of Defense

    Parts of the Goldwater-Nichols Act affected DoD almost 
immediately--namely the elevation in the Chairman's status. The 
other changes instituted by Goldwater-Nichols took longer to 
come to fruition. The CINCs--renamed the Combatant Commanders 
by Secretary of Defense Rumsfeld--have grown significantly in 
power within DoD. Military operations have become more 
``joint'' in nature. Most important, DoD's culture is widely 
regarded as having changed from Service-specific to joint. The 
Goldwater-Nichols personnel changes were the driving force of 
this change. The effects of the personnel requirements were not 
felt for over a decade, as a new generation of officers 
developed and was forced to serve in joint assignments. But the 
officer corps today is viewed as having a far more joint 
orientation than previous generations. The Joint Staff and 
CINCs' staffs are attracting the best and the brightest due to 
the promotion requirement. In sum, Goldwater-Nichols is widely 
regarded as having successfully effected a fundamental shift of 
power within DoD from the Military Services to the CINCs in 
order to ensure the integration of the Military Services to 
accomplish missions.

                III. THE STRUCTURE OF U.S. INTELLIGENCE

    The need for greater integration among intelligence 
agencies parallels the problem that Goldwater-Nichols sought to 
resolve in the DoD context: how to achieve greater integration 
among capabilities to accomplish missions, and how to change 
organizational culture toward a ``joint'' rather than 
capability-specific perspective. As the Commission recorded:

          Recalling the Goldwater-Nichols legislation of 1986, 
        Secretary Rumsfeld reminded us that to achieve better 
        joint capability, each of the armed services had to 
        ``give up some of their turf and authorities and 
        prerogatives.'' Today, he said, the executive branch is 
        ``stove-piped much like the four services were nearly 
        20 years ago.'' He wondered whether it might be 
        appropriate to ask agencies to ``give up some of their 
        existing turf and authority in exchange for a stronger, 
        faster, more efficient government wide joint effort.'' 
        Privately, other key officials made the same point to 
        us.\6\
---------------------------------------------------------------------------
    \6\ Commission report, p. 403, endnotes omitted.

    Understanding the nature of the problem, and how the 
National Intelligence Reform Act proposes to solve it, first 
requires an overview of the intelligence community. As the 
Commission noted, ``Over the decades, the agencies and rules 
surrounding the intelligence community have accumulated to a 
depth that practically defies public comprehension.'' \7\
---------------------------------------------------------------------------
    \7\ Commission report, p. 410.
---------------------------------------------------------------------------
    Intelligence is created in a two-part process. First, 
intelligence is collected from one or more of several sources: 
human intelligence (spies); signals intelligence (intercepted 
communications); imagery intelligence (photographs from the 
heavens); open source intelligence (publicly available 
literature); and the measurement of scientific data such as 
telemetry. Somebasic analysis is needed to process the 
collected material into meaningful information. Second, the collected 
information, from all sources, is analyzed by ``all-source analysts'' 
in order to produce a comprehensive picture.
    The Executive Branch is generally composed of basic 
building blocks of departments and agencies. From that 
perspective, U.S. intelligence is a strange hybrid, neither 
fish nor fowl. The National Security Act of 1947 as amended 
creates the concept of the ``Intelligence Community,'' composed 
of two actors who are independent and many pieces of other 
departments. The Intelligence Community thus is akin to a 
``virtual community,'' lacking a physical structure but 
composed of members from various departments.
    The members of the Intelligence Community are:
          (1) The Office of the Director of Central 
        Intelligence includes senior intelligence community 
        officers (as opposed to CIA officers), including the 
        Deputy DCI for Community Management and the Assistant 
        DCIs for Collection, Analysis & Production, and 
        Administration. This office also includes the National 
        Intelligence Council and the Community Management Staff 
        (which assist the DCI in his capacity as head of the 
        intelligence community). The Office of the DCI is 
        statutorily distinct from the CIA. The Terrorist Threat 
        Integration Center (TTIC) is also an independent 
        entity, separate from the CIA. These entities are also 
        independent of any other department;
          (2) The CIA, an independent agency which collects 
        human intelligence and conducts all-source intelligence 
        analysis;
          (3) The National Security Agency (NSA), a DoD agency 
        which collects signals intelligence;
          (4) The National Geospatial-Intelligence Agency 
        (NGA), a DoD agency which collects imagery 
        intelligence;
          (5) The National Reconnaissance Office (NRO), a DoD 
        agency which builds satellites to support NSA and NGA;
          (6) The Defense Intelligence Agency (DIA), a DoD 
        agency which serves DoD's departmental needs but also 
        participates actively in serving other customers and in 
        the national estimate process;
          (7) The intelligence components of the Federal Bureau 
        of Investigation (FBI);
          (8) The Bureau of Intelligence and Research in the 
        State Department, which serves State's needs for 
        analysis but also participates in the national estimate 
        process;
          (9) Elements of the Department of Homeland Security 
        concerned with the analyses of foreign intelligence 
        information;
          (10) Intelligence components of the Department of 
        Energy;
          (11) The Office of Intelligence and Analysis in the 
        Treasury Department; and
          (12) The intelligence components of the Military 
        Services.
    The National Security Act gives the Director of Central 
Intelligence (DCI) three jobs. The DCI is the head of the 
Intelligence Community. The DCI also is the principal 
intelligence adviser to the President and the head of the CIA.
    It is helpful to think of the intelligence apparatus as two 
concentric circles. The larger circle is the Intelligence 
Community, which is composed of the offices and organizations 
enumerated above. The second, smaller circle within the larger 
circle is the National Foreign Intelligence Program (NFIP), 
which is the budget program formulated by the DCI for 
submission to the President and Congress. DoD has its own 
intelligence budget programs: the Joint Military Intelligence 
Program (JMIP), which includes intelligence assets that serve 
DoD-wide customers; and the Tactical Intelligence and Related 
Activities program (TIARA), which refers to the Military 
Services' intelligence capabilities that are ``in the 
trenches'' and serving warfighters on a tactical basis.
    According to the National Security Act, the NFIP is a 
collection of intelligence programs which are designated by 
agreement between the DCI and the affected department. Thus the 
DCI and DoD negotiate about which pieces of NSA, NGA, NRO, and 
DIA are to be paid for by the NFIP and which by JMIP and/or 
TIARA. In essence, the NFIP contains the CIA and the Office of 
the DCI and parts of NSA, NGA, NRO, DIA, FBI, and other 
departments.

      IV. THE NEED FOR INTEGRATION TO COUNTER 21ST CENTURY THREATS

    The Intelligence Community was founded and structured to 
fight the Cold War. The enemy in the Cold War was a lumbering 
and bureaucratic behemoth, fielding a massive military backed 
by an equally massive industrial complex. The main challenge 
for intelligence was to penetrate the Iron Curtain to learn 
what was happening on the other side. Intelligence collection 
therefore was all about learning the enemy's secrets; open 
sources were less important because the Communist bloc did not 
publish much useful information openly. The Intelligence 
Community responded to the challenge of collecting on the other 
side of the Iron Curtain by building large collection agencies.
    By comparison to 21st Century challenges, each of human, 
signals, and imagery intelligence collection could be done with 
relative autonomy. The CIA, NSA, and imagery capabilities 
shared information only via formal, finished reports. Each 
collection capability acquired vast amounts of ``raw data,'' of 
which only a percentage survived the process of sanding and 
smoothing the raw data into finished reports. The 
counterintelligence threat was real, so agencies adopted 
rigorous security policies to slow information-sharing by 
keeping it within rigid regimes. And there was little need for 
integration with the FBI aside from on counterintelligence, 
because the main threat to the United States was a military 
force poised overseas.
    But the nature of the threat changed in the 1990s. Al Qaeda 
is not a lumbering, bureaucratic enemy fielding conventional 
armies. Instead, it operates globally--in mosques,universities, 
and back alleys--while being headquartered in failed states like 
Afghanistan. It uses modern technology to communicate and travel 
globally in service of centuries-old extremist ideology. It can travel 
into the American homeland and strike with daring, imagination, and 
surprise. And much more about it--and about the Islamic extremist 
movement generally--is available via open sources.
    Given that the Intelligence Community was a 20th Century 
creature chasing a 21st Century enemy, it was not surprising 
that the Intelligence Community could not keep up before 9/11--
as is chronicled in the Commission's report. Gathering 
intelligence on terrorist cells in the slums of Karachi and 
monitoring their connections to Kansas requires far more 
intimate sharing of information among agencies. Collection on 
terrorists is like a jigsaw puzzle without the box cover--
information must be shared at the raw data level because no 
agency possesses all the pieces of the puzzle nor knows what 
the picture on the box top looks like. The world's transition 
to ``Internet speed'' makes sharing via formal reports an 
impediment to speedy action. And the Intelligence Community 
downplayed open sources by focusing only on ``secrets.''
    Indeed, as early as 1986, the Intelligence Community began 
to recognize that transnational terrorism was a challenge to 
the Intelligence Community's very structure. Following the 
terrorist attacks on the Rome and Athens airports in 1986, the 
CIA formed the Counterterrorist Center to overcome CIA's 
internal divide between its human intelligence collectors and 
its analysts and the geographic divisions in which its human 
intelligence collectors operated impeded the CIA's actions 
against terrorism. The human intelligence collectors at the 
Counterterrorist Center recognized that trying to recruit 
terrorists required significant analytic support--more than 
recruiting diplomats at the proverbial embassy cocktails 
parties. Thus the analysts at the center became an integral 
part of human collection activities--albeit at the expense of 
doing strategic analysis.\8\
---------------------------------------------------------------------------
    \8\ Joint Inquiry Into Intelligence Community Activities Before and 
After the Terrorist Attacks of September 11, 2001, Report of the U.S. 
Select Committee on Intelligence and U.S. House Permanent Select 
Committee on Intelligence, Together with Additional Views, S. Rep. No. 
107-351, H. Rep. No. 107-792, 107th Congress, 2d Session (December 
2002) (hereinafter ``Joint Inquiry report''), pp. 60-61, 96, 551.
---------------------------------------------------------------------------
    The Counterterrorist Center's mission was eventually 
broadened to integrating collection and analysis activities on 
terrorism across the entire Intelligence Community. But as the 
Congressional Joint Inquiry records, the Counterterrorist 
Center never fulfilled this vision. The center did not become 
the Intelligence Community's leader on counterterrorism. The 
center was physically housed at CIA and essentially became a 
CIA organism. It never emerged as a body independent from any 
agency with authoritative direction over all intelligence 
agencies for the counterterrorism mission. Relations among the 
CIA, NSA, and FBI left much to be desired and were anything but 
seamless, against a foe for which integration of U.S. 
intelligence capabilities was critical.\9\
---------------------------------------------------------------------------
    \9\ Joint Inquiry report, p. 339; Commission report, pp. 353-358.
---------------------------------------------------------------------------
    In the most classic example of the system's inability to 
function against transnational terrorism, the Counterterrorist 
Center lost track of future 9/11 hijackers Hazmi and Mihdhar as 
they traveled across Asia and did not inform the FBI that these 
hijackers had U.S. visas until it was too late for the FBI to 
catch them domestically. Ultimately there was no 
accountability--the Counterterrorist Center, NSA, and the FBI 
could all blame each other, and no one had the responsibility 
and authority to make all intelligence capabilities work 
together to accomplish the counterterrorism mission. The only 
place where the counterterrorism activities of CIA, NSA, and 
other intelligence agencies came together was at the level of 
the DCI. There was no one lower--the equivalent of a DoD 
combatant commander--responsible for fulfilling the 
counterterrorism mission by developing strategy and unifying 
the intelligence community's array of capabilities.
    But the Counterterrorist Center failure to fulfill the 
vision for it was a microcosm of the larger structural problems 
afflicting the intelligence community. As the Commission notes, 
different personnel, security, and technology standards 
prevented the Intelligence Community from operating as a 
network to share information, particularly at the raw data 
level. Security rules inhibited information-sharing; agencies 
had rules that inhibited sharing, and there were no sanctions 
for not sharing. Development of technology to facilitate 
information-sharing was stunted, as agencies prioritized their 
own needs over the Intelligence Community's corporate needs.
    After 9/11, the Administration created the TTIC to 
integrate analysis on the terrorist threat. TTIC exists outside 
of any intelligence agency. TTIC represents a step forward in 
terms of integrating information for analytic purposes. 
However, as the Commission found, TTIC falls short of true 
intelligence community integration because TTIC has no 
authority to order collection. Thus TTIC has limited ability to 
task collectors to fill in gaps in understanding regarding 
terrorism.\10\ TTIC does not have its own career cadre and has 
had difficulty in attracting analysts to come to TTIC from the 
Counterterrorist Center and other parts of the Intelligence 
Community. Finally, as the Commission found, there is no 
effective counterterrorism planning function being done across 
the Executive Branch.
---------------------------------------------------------------------------
    \10\ Commission report, pp. 401-402.
---------------------------------------------------------------------------

V. THE DCI'S LACK OF ADEQUATE AUTHORITIES TO TRANSFORM THE INTELLIGENCE 
                               COMMUNITY

    The intelligence community must become an agile and 
flexible network to fight terrorist networks. But the DCI 
currently lacks authority to transform the intelligence 
community into a network and knit together the disparate 
intelligence agencies. And the DCI is too burdened by having to 
direct the CIA simultaneously, not allowing the DCI to focus on 
community management.

A. Current DCI Authorities

    The DCI has plenary authority over the CIA. In fact, the 
DCI has extraordinary authority in this role as compared to the 
heads of other departments and agencies. For example, the DCI 
can authorize CIA to perform procurement without abiding by 
standard Executive Branch procurement laws and regulations, and 
the DCI can terminate any CIA employee at-will. In contrast to 
the DCI's clear authority over the CIA, the question of whether 
the DCI already has adequate authority over the Intelligence 
Community has been the subject of dispute.
    The basic dilemma regarding the DCI's authorities is the 
extent of DCI control over Intelligence Community entities 
contained in other departments, particularly those in DoD, both 
on paper and in reality. On paper, many of the DCI's 
authorities under the National Security Act seem quite robust, 
including:
     Collection tasking. The DCI establishes 
requirements and priorities to govern the Intelligence 
Community's collection of intelligence for ``national'' 
purposes.
     Analysis and production. The Assistant DCI for 
Analysis and Production is given the authority to ``oversee'' 
and ``establish standards and priorities'' for the analysis and 
production of intelligence.
     Providing services of common concern. The DCI 
performs services of common concern that the DCI determines are 
more efficiently accomplished centrally, including to 
consolidate personnel, administrative, and security programs 
across the Intelligence Community.
     Coordinating intelligence liaison. The DCI 
coordinates the relationships of Intelligence Community 
entities with foreign intelligence or security services.
     Access to intelligence across the Executive 
Branch. To the extent recommended by the NSC and approved by 
the President, the DCI has access to all intelligence related 
to national security which is collected by an Executive Branch 
component.
    But the above-referenced authorities do not give the DCI 
actual levers to control the actions of Intelligence Community 
entities aside from the CIA. The DCI's main levers for 
enforcing his will on intelligence agencies are as follows:
     Budget authority. The DCI develops the budget for 
the National Foreign Intelligence Program and presents it to 
the President for submission to Congress. In developing the 
budget, the DCI provides guidance to intelligence agencies in 
formulating the parts of their budgets that are included in the 
NFIP. Thus the DCI could theoretically refuse to put an 
agency's budget into the NFIP unless that agency abided by the 
DCI's wishes.
     Transferring funds. Subject to the approval of the 
Office of Management and Budget, the DCI may only transfer 
funds appropriated to one account within the NFIP to another 
account within the NFIP if the secretary of the affected 
department does not object. The DCI cannot transfer any funds 
from the FBI. The DCI could theoretically attempt to attain the 
affected secretary's approval for such a transfer. However, 
currently it takes the DCI, on average, three to five months to 
transfer appropriations; this simply does not provide the DCI 
with the agility to respond to rapidly changing circumstances.
     Transferring personnel. The DCI may transfer 
personnel within the Intelligence Community only if the 
secretary of the affected department does not object. The DCI 
cannot move personnel from the FBI. As regarding the transfer 
of funding, the DCI could theoretically attempt to attain the 
affected secretary's approval for such a transfer, but in 
practice the process is cumbersome and not compatible with the 
Intelligence Community becoming an agile network.
     Hiring senior intelligence managers. The Secretary 
of Defense is required to seek the DCI's concurrence before 
recommending to the President an individual for appointment to 
head NSA, NGA, and NRO. However, the Secretary of Defense may 
forward the recommendation to the President without the DCI's 
concurrence, although the Secretary must inform the President 
of the DCI's nonconcurrence. The DCI is merely consulted by the 
relevant department head in the selection of the Assistant 
Secretary of State for Intelligence and Research, the head of 
DIA, and the head of the Energy Department's intelligence 
office. The DCI is merely given timely notice by the FBI 
Director of the selection of an individual to head the FBI's 
intelligence component.
    The question, then, is whether the NID needs additional 
authorities beyond the DCI's current authorities in order to 
manage the Intelligence Community effectively.

B. DCI Tenet's 1998 Declaration of War

    The best example of the institutional weakness of the DCI 
is DCI Tenet's ill-fated declaration of war against al Qaeda. 
In December 1998, DCI George Tenet issued a memorandum 
declaring that the Intelligence Community was at war with al 
Qaeda and that no resources should be spared in the effort. But 
nothing happened as a result. The NSA director told the 
Congressional Joint Inquiry that he did not think that the 
memorandum applied to NSA. In contrast, individuals at CIA 
thought that the memorandum applied to the rest of 
theIntelligence Community and not them. There was little focus across 
the Intelligence Community on developing capabilities over the long 
term against the terrorist threat.\11\
---------------------------------------------------------------------------
    \11\ Commission report, p. 358.
---------------------------------------------------------------------------
    Some argue that DCI Tenet did not attempt to implement his 
declaration of war memorandum, such as by developing a 
Community-wide counterterrorism strategy that focused on 
breaking down barriers to information-sharing and building 
long-term capabilities. Indeed, DCI Tenet apparently did not 
contact the NSA director after issuing the declaration of war 
memorandum to assess NSA's counterterrorism performance--which 
would have clarified to the NSA director that the memorandum 
was indeed intended for NSA.
    Ultimately, however, the Commission's decision based upon 
its analysis is that, regardless of whether DCI Tenet could 
have taken some steps to implement his declaration of war, the 
position of DCI is so institutionally weak that DCI Tenet 
lacked the necessary levers to ensure compliance. The 
Commission argues that the DCI is an institutionally weak 
position because the DCI lacks two key authorities that any 
business person would consider necessary to run a business: the 
purse strings, and the ability to hire and fire key 
subordinates. And by virtue of being an institutionally weak 
position, DCIs have historically not exploited and in effect 
have waived their other authorities.

C. The DCI and the Intelligence Appropriation

    According to the Commission, the DCI's current authority to 
develop the NFIP budget does not constitute real control over 
NFIP funding. Instead, the DCI is institutionally weak because 
the DCI does not receive the intelligence appropriation from 
Congress. Most of the intelligence appropriation is contained 
within the Defense Appropriations Bill. By doing so, the top-
line intelligence appropriation remains secret. As a result, 
the Secretary of Defense receives the appropriation for NSA, 
NGA, NRO, DIA, CIA, and the Community Management Account (which 
includes the Office of the DCI, and some funding for the 
National Intelligence Council, the Community Management Staff, 
and the TTIC). The Secretary of Defense mechanically transfers 
the appropriations for the Community Management Account and the 
CIA to the DCI but administers the NSA, NGA, NRO, and DIA 
appropriations himself. The appropriation for the FBI's 
intelligence component is given to the Attorney General, not 
the DCI, in a separate appropriations bill.
    The receipt of an appropriation is important for three 
reasons:
    (1) It is emblematic in the Executive Branch of which 
officials are truly powerful and which are merely advisory. As 
former President and CEO of Lockheed Martin, Norman Augustine, 
wrote regarding power in the federal government, ``As in 
business, cash is king.'' Because the DCI does not receive the 
intelligence appropriation, the DCI has diminished stature.
    (2) Receipt of the appropriation brings with it the power 
of apportionment. The recipient of the appropriation can use 
the process of apportioning the appropriation to various sub-
entities as a means of control. Currently, DoD has that power 
over NSA and other Defense intelligence entities.
    (3) Receipt of an appropriation brings with it certain 
fiduciary duties, namely to track the obligation and 
expenditure of the funding by sub-entities. If the DCI were 
able to ``execute'' the budget, then the DCI would not only 
have a window into how intelligence agencies are spending their 
money but also would know what funds have been obligated yet 
not expended--and thus are available for reprogramming to meet 
emergency needs. Currently, the DCI has little insight into how 
intelligence agencies aside from CIA are spending their funds. 
An official could theoretically receive execution authority 
without receiving the relevant appropriation, but Executive 
Branch officials have told us that such a situation creates a 
mess and essentially is not good government.
    As the Commission records, before 9/11 the CIA and the Air 
Force squabbled regarding the deployment of the Predator 
unmanned aerial vehicle because neither wanted to be stuck with 
the $3 million bill should the Predator be lost. The image of 
the DCI apparently being unable to find $3 million in the NFIP 
to fund a Predator to be used against Osama bin Ladin is a 
sobering indictment of the current state of the DCI's financial 
management of the intelligence community.\12\
---------------------------------------------------------------------------
    \12\ Commission report, p. 211.
---------------------------------------------------------------------------

D. Integration Requires Centralized Authority

    The justification for giving the National Intelligence 
Director strong authorities derives directly from what the NID 
is supposed to accomplish in practice. The Intelligence 
Community has failed to transform itself into a network in 
which information and personnel can move seamlessly across the 
Community. Instead, security prohibitions, personnel 
regulations, and information technology disjunctions prevent 
the Intelligence Community from becoming a decentralized 
network. And the reason that security, personnel, and 
information technology policies obstruct intelligence 
transformation is that the DCI lacks the authority over the 
component agencies to break stovepipes and enforce common 
protocols. The objective of giving the NID greater authority is 
not to centralize operations at the level of the NID but rather 
to have the NID set and enforce the common personnel, security, 
and information technology standards and protocols to transform 
the Intelligence Community into a network to facilitate 
decentralized operations.

VI. CREATING A NATIONAL INTELLIGENCE DIRECTOR TO INTEGRATE INTELLIGENCE 
                              CAPABILITIES

    Intelligence transformation is needed to enable the 
intelligence community to counter 21st Century national 
security threats--epitomized by transnational and suicidal 
terrorists who targetthe American homeland--that require a 
quantum leap in U.S. intelligence agencies' ability to integrate their 
efforts and share information. That transformation can only occur if 
the new National Intelligence Director receives strengthened authority 
to bridge agency stovepipes and knit intelligence agencies into a 
network. With this aim in mind, the legislation provides the National 
Intelligence Director with a robust and carefully crafted series of 
authorities.

A. The National Intelligence Program

    Pursuant to the Commission's recommendation, the bill 
renames the NFIP as the National Intelligence Program (NIP). 
The new name expresses the need for intelligence collection and 
analysis to cross the foreign/domestic divide given the nature 
of the transnational terrorist threat. It also preserves the 
concept that only ``national intelligence''--pertaining to the 
interests of more than one government agency or department--is 
included in the NIP. The bill defines national intelligence as 
intelligence that serves more than one department.
    The bill significantly changes the definition of the 
National Foreign Intelligence Program. The NIP is defined to 
include all programs, projects, and activities (whether or not 
pertaining to national intelligence) of the National 
Intelligence Authority, the Central Intelligence Agency, the 
National Security Agency, the National Geospatial-Intelligence 
Agency, the National Reconnaissance Office, the Office of 
Intelligence of the Federal Bureau of Investigation, and the 
Office of Information Analysis of the Department of Homeland 
Security. The NIP also includes all national intelligence 
programs, projects and activities of the elements of the 
intelligence community and any other program, project, or 
activity of a department, agency or element of the United 
States Government relating to national intelligence unless the 
NID and the head of the affected entity determine otherwise. 
These provisions ensure that the NID will have complete 
budgetary control over the core elements of the intelligence 
community which produce national intelligence.
    The NIP definition specifically excludes programs, projects 
and activities of the military departments that acquire 
intelligence principally for the planning and conduct of joint 
or tactical military operations by the United States Armed 
Forces. Any assets that are currently in the JMIP but are 
national and do not acquire intelligence principally for the 
planning and conduct of joint or tactical military operations 
by the United States Armed Forces should be moved to the NIP. 
The inclusion of the word ``principally'' is meant to reflect 
that some military assets serve both national and tactical or 
joint purposes; the mere fact that a DoD asset produces some 
national intelligence thus does not require that asset to be 
moved to the NIP.
    Any programs, projects, or activities in DIA that are not 
part of the NFIP as of the date of the legislation's enactment 
would not be part of the NIP. This provision is meant to ensure 
that certain DIA assets are not moved to the NIP. It should be 
noted that the Commission's report calls for DIA to be included 
in the NIP, but the Committee disagreed with this 
recommendation. Still, it is expected that national collection 
done by DIA will be moved to the NIP.
    The State Department's Bureau of Intelligence and Research 
and similar offices in the Departments of Energy and Treasury 
would likely not be part of the NIP because of their largely 
departmental rather than national focus. These entities focus 
on analysis, not collection activities; on the other hand, the 
NID would ensure that these entities' analytic expertise is 
solicited when the Intelligence Community is producing national 
intelligence estimates or analysis on important national 
security topics.

B. The NID's Responsibilities

    The NID is responsible for serving as the head of the 
intelligence community, as the principal adviser to the 
President for intelligence related to the national security, as 
the head of the National Intelligence Authority, and for 
directing and overseeing the National Intelligence Program.
    The NID is also responsible for providing national 
intelligence to the President, the heads of executive branch 
departments and agencies, the Chairman of the Joint Chiefs of 
Staff and other senior military commanders, the Senate, House 
of Representatives, and their committees, and to other people 
and entities as directed by the President. The national 
intelligence provided by the NID is to be timely, objective, 
independent of political considerations, and based upon all 
sources available to the intelligence community.
    The NID is given a number of specific responsibilities. 
Many of these responsibilities are new, and are intended to 
address shortcomings the Committee perceived in the existing 
responsibilities of the Director of Central Intelligence.
    The NID is clearly given the responsibility to determine 
the annual budget for intelligence and intelligence-related 
activities of the United States, and for managing and 
overseeing the National Intelligence Program. The NID is also 
given greater responsibility to oversee the collection, 
analysis and dissemination of intelligence. The NID is required 
to establish the requirements and priorities to govern the 
collection, analysis, and dissemination of national 
intelligence, and to establish collection and analysis 
requirements for the intelligence community, and for 
determining collection and analysis priorities, issuing and 
managing collection and analysis tasking, and resolving 
conflicts in tasking of elements of the National Intelligence 
Program.
    As is the DCI under current law, the NID is also 
responsible for establishing requirements and priorities for 
foreign intelligence collected under the Foreign Intelligence 
Surveillance Act, and for assisting the Attorney General in 
ensuring that intelligence derived from surveillance and 
searches under FISA is appropriately disseminated.
    Finally, the NID is responsible for providing advisory 
tasking on the collection of intelligence to elements of the 
U.S. government having information collection capabilities, but 
which are not members of the intelligence community. This 
responsibility is critical becauseinformation relevant to 
terrorism can be found throughout the government--hypothetically, from 
surveillance data at government buildings, to border and customs 
officers' observations, to immigration statistics.
    The NID is responsible for managing and overseeing the 
National Counterterrorism Center and other national 
intelligence centers which may be established in the future. 
The NCTC is critical to fulfilling the 9/11 Commission's vision 
of unity of effort in the intelligence community and across the 
Executive Branch against terrorism, while the national 
intelligence centers are meant to unify intelligence activities 
against NSC priorities. The NID is responsible for ensuring 
that the NCTC and the national intelligence centers fulfill 
their intended purposes.
    The NID is also charged with developing personnel policies 
and programs to make a number of improvements in the management 
of the intelligence community. These responsibilities include 
setting standards for education, training, and career 
development across the intelligence community, and ensuring 
that the personnel of the intelligence community are 
sufficiently diverse for the purposes of collection and 
analysis of intelligence. The NID is also responsible for 
facilitating assignments to the NCTC and other national 
intelligence centers that may be established in the future, and 
for making service in more than one element of the intelligence 
community a condition of promotion to certain positions within 
the intelligence community. Such policies will help promote the 
concept of ``jointness'' in intelligence collection, analysis, 
and operations. Generally speaking, the NID is responsible for 
creating an intelligence workforce and intelligence 
capabilities necessary to meet 21st Century threats. As with 
Goldwater-Nichols, this is a long-term process. It is the NID's 
responsibility to ensure that it happens.
    The NID is given responsibilities for facilitating the 
dissemination of intelligence, while still protecting 
classified information. A key responsibility within this 
general area is developing an integrated, interoperable 
communications network between intelligence community elements. 
This responsibility is critically important in fulfilling the 
9/11 Commission's mandate to bring national security 
institutions into the information age.
    The Committee is aware that there is a considerable 
potential for duplication of effort as a number of agencies 
make efforts to address common problems without the benefit of 
a strong NID to coordinate their activities. Likewise, certain 
problems can remain if no agency addresses them. Therefore, it 
is possible that the NID might discover duplication of effort 
or gaps in the intelligence community that the NID should 
address through budget, personnel, and other authorities.
    The legislation strengthens the Intelligence Community's 
ability to exploit open sources by requiring the NID to 
establish and maintain within the intelligence community an 
effective open-source information capability.
    Finally, the bill makes clear that the NID must ensure that 
the elements of the intelligence community are complying with 
the Constitution and all applicable laws and executive orders, 
including those relating to privacy and civil liberties of U.S. 
persons. Effective intelligence activities cannot come at the 
expense of civil liberties.

C. The NID's Authorities

    The legislation sets forth a wide range of authorities for 
the NID to fulfill his responsibilities. The Committee believes 
that these authorities are commensurate with the NID's 
responsibilities. Accordingly, the NID is accountable for the 
performance of the responsibilities assigned to him. This 
alignment of responsibility, authority, and accountability is 
necessary in order to remedy the current arrangement in which 
the DCI's authorities fall far short of his responsibilities as 
head of the intelligence community. The enumeration of the 
NID's authorities is meant to resolve the problem identified by 
the Commission, that no one is in charge of the intelligence 
community.

            1. Authority To Formulate the Budget
    The NID will be responsible for developing, with advice 
from the heads of elements of the NIP, the budget for the NIP. 
The NID will formulate the content, amount, and distribution of 
the budget for the NIP and present that budget to the President 
for consideration. Upon submission of the President's budget 
request to Congress, the NID and the Deputy NID will testify to 
Congress to defend the budget and will make such officials of 
their staff available to Congress for briefings and to provide 
other information as appropriate. The NID is expected to 
utilize this budget preparation authority in order to effect 
changes, if needed, in component agencies' programs and 
activities. The NID should not merely mechanically compile the 
agencies' budgets but should ensure that the budgets achieve 
integration, prevent unnecessary duplication among agencies, 
and maximize the effectiveness of all of our intelligence 
capabilities.

            2. Authority To Receive the National Intelligence Program's 
                    Appropriation
    The Committee's legislation provides that funds for the NIP 
will be appropriated to the National Intelligence Authority and 
will be under the direct jurisdiction and control of the NID. 
The NID would allocate the appropriated amounts, after 
apportionment by the Office of Management and Budget, directly 
to the heads of Intelligence Community components, consistent 
with his budget request as modified by the classified annexes 
that would accompany appropriations and authorizations. The 
authority to allot NIP appropriations will provide the NID with 
the ability to control and closely monitor the obligation and 
expenditure of NIP funds. For example, the NID will have 
insight into what funds have been obligated and not expended, 
making those funds available in the short-term for application 
to different priorities.

            3. Authority To Transfer Intelligence Funds
    The legislation provides the NID with flexibility to 
reallocate funding after Congress provides annual 
appropriations for the NIP. After approval by the Office of 
Management and Budget, and notification of the appropriate 
congressional committees, the NID may transfer appropriations 
and personnel among components of the NIP. The NID may also 
approve reprogramming of appropriations within NIP components. 
These authorities will help the NID respond to changing events 
by shifting resources to higher priority activities, while 
providing for appropriate notification of Congress.

            4. Authority Regarding the Appointment and Termination of 
                    Senior Intelligence Officials
    The Commission stresses the importance of the NID having 
what the Commission calls ``the ability to hire or fire senior 
managers.'' The Commission states that the NID should ``approve 
and submit nominations to the President'' of the heads of the 
CIA, DIA, FBI Office of Intelligence, NSA, NGA, NRO, the 
Department of Homeland Security's Directorate for Information 
Analysis and Infrastructure Protection (``IA&IP''), and ``other 
national intelligence agencies'' unspecified by the 
Commission.\13\
---------------------------------------------------------------------------
    \13\ Commission report, p. 410.
---------------------------------------------------------------------------
    The Committee recognizes the importance of this authority. 
Using this authority, the NID will be able to set expectations 
and performance metrics for senior intelligence managers as a 
condition for his recommendation of them for appointment or 
nomination. However, the Committee's legislation takes a 
slightly different approach than the Commission.
    The NID is responsible for recommending to the President 
nominees to be the Directors of the NSA, NGA, and NRO. The NID 
is required to seek the concurrence of the Secretary of Defense 
in these recommendations. If the Secretary of Defense does not 
concur, that fact must be made known to the President. The NID 
is responsible for recommending a nominee for CIA Director to 
the President.
    The bill also requires that the relevant department heads 
seek the concurrence of the NID prior to recommending nominees 
for the positions of Under Secretary of Defense for 
Intelligence, Assistant Secretary of Homeland Security for 
Information Analysis, Director of the DIA, and Executive 
Assistant Director for Intelligence of the FBI. If the NID does 
not concur in these recommendations, it must be made known to 
the President.
    The NID is also given the right to recommend to the 
President that the individuals serving in any of the positions 
described in the preceding two paragraphs be terminated. The 
NID must seek the concurrence of the relevant agency head prior 
to making such a recommendation but may make it without the 
concurrence, provided the President is notified of that fact.

            5. Acquisition and Fiscal Authorities
    The legislation establishes for the NID enhanced 
acquisition authority similar to that of the DCI, as head of 
the CIA. It also requires the NID to establish a major system 
acquisition management framework similar to that utilized by 
DoD for defense acquisition programs, and provides that 
ultimately the NID will assume milestone decision authority for 
major systems acquisitions funded by the National Intelligence 
Program (NIP).
    a. The NID's Inherent Acquisition Authority.--As a general 
matter, the U.S. government has inherent contracting authority 
to enter into agreements necessary to procure goods and 
services necessary to its functions. Statutes governing the 
conduct of procurements by executive agencies establish the 
framework for this authority. More explicitly, the creation of 
the NIA as an independent establishment within the executive 
branch places it squarely within applicability of the Federal 
Property and Administrative Services Act of 1949 (FPASA, 41 
U.S.C. Sec. Sec. 251 et seq.). This Act establishes competition 
requirements as well as other procurement procedures and 
requirements. These include the requirements of the Competition 
in Contracting Act of 1984 and the Truth in Negotiations Act, 
both of which amended FPASA. 41 U.S.C. Sec. 252 provides that 
executive agencies shall make purchases and enter into 
contracts in accordance with the provisions of FPASA. The NIA, 
as an independent establishment, is included within the 
definition of executive agency. Further, the Office of Federal 
Procurement Policy Act (41 U.S.C. Sec. Sec. 401 et seq.) 
establishes requirements for the implementation of government 
wide procurement policy (such as the Federal Acquisition 
Regulation) over executive agencies, which include the CIA and, 
by application of law, the new NIA.
    Like the CIA, though, it is anticipated that contingencies 
will arise where provisions of current Federal acquisition law 
could hinder the NID's ability to accomplish the mission of the 
National Intelligence Authority (NIA). Therefore, the NID is 
provided expanded authorities not given to most other agencies 
as described below.
    b. Special Acquisition Authority Similar to CIA.--The 
section provides the NID with special acquisition authority 
similar to the CIA in two specific ways. First, it provides the 
NID with authority identical to some of the authority in what 
is known as the CIA's ``Section Eight'' authority. Next, it 
provides him with what is known as ``impairment authority.''
    The NID has the same flexibility already provided the CIA 
(sec. 8(a) of the CIA Act of 1949, as amended, 50 U.S.C. 
Sec. 403j(a)) for the purposes for which funds may be expended. 
Specifically, the CIA has flexibility to expend funds for 
purposes that may be prohibited or limited for other agencies, 
such as personal services. Thus, similar to the CIA, the NID 
would be authorized to expend sums under contracts the NIA 
awards for these purposes.
    Next, the CIA is among a small number of entities in the 
Federal government for which the application of FPASA 
requirements may be made inapplicable under 40 U.S.C. 
Sec. 113(e) when strict adherence would impair its ability to 
fulfill its mission. Several fundamental federal procurement 
laws, such as the Competition in Contracting Act and the Truth 
in Negotiations Act are amendments to FPASA. With the 
impairment authority, these requirements may be considered 
inapplicable if circumstances warrant. In extending this 
authority to the NIA, the Committee expects the NIA, as with 
the CIA, to conduct procurement activities to the maximum 
extent practicable in accordance with general Federal 
Government procurement statutes and the Federal Acquisition 
Regulation.
    c. Milestone Acquisition Authority.--The legislation 
confers on the NID certain acquisition authorities over NIP-
funded acquisitions of major systems. These authorities are 
modeled on those now exercised by DoD. Specifically, a 
combination of Federal law and DoD policy gives DoD the power 
to exercise what is known as ``milestone authority'' over the 
acquisition programs of all DoD agencies. This means that for 
large procurements (e.g., those in excess of $140 million for 
R&D purposes or $660 million for actual procurement) high-level 
DoD officials independent of the program office developing a 
system approve the entry into the next phase of the acquisition 
cycle (such as from system development and demonstration to 
production), as well as for production and deployment of the 
system. These officials have access to independent assessments 
of program progress such as cost estimates, testing results, 
etc.
    The legislation requires the NID to establish a management 
structure for acquisitions of major systems funded by the NIP. 
A program management plan will be established with cost, 
schedule, and performance goals as well as progress reviews and 
reports to Congress on the development of these programs. The 
section would also require that the NID serve as the exclusive 
milestone decision authority for all programs funded by the 
NIP, including those of other agencies such as DoD, in order to 
ensure strategic focus, interoperability, and any necessary 
uniformity in development. DoD would retain milestone authority 
over NSA, NRO, and NGA until such time that the NID was fully 
prepared to assume it. The NID could also assign milestone 
authority to the Secretary of Defense in particular instances, 
pursuant to a memorandum of understanding.
    The section would also require the NID to prescribe 
guidance on program management plans based on the principles of 
knowledge-based system development established in Defense 
Department acquisition system guidance and espoused in the 
system development ``best practices'' reports of the U.S. 
Government Accountability Office.
    d. Acquisition Powers Report.--The bill requires the NID to 
report in a year as to whether any acquisition authority 
enhancements are needed by NSA and NGA.
    e. GAO Review.--Finally, not later than 2 years after the 
date of enactment of this Act, the Comptroller General shall 
report to the Congress on the extent to which the policies and 
processes adopted for managing major national intelligence 
acquisitions, as defined by the Director, are likely to result 
in successful cost, schedule, and performance outcomes.

            6. Tasking Authority
    The NID is given tasking authorities comparable to--but 
stronger than--those that the DCI or Assistant DCIs currently 
have. The legislation gives the NID tasking authority not just 
for collection but also for analysis. Intelligence analysis 
must be directed to focus on national security priorities. 
Also, as the Commission specifically noted, ``The limited pool 
of critical experts--for example, skilled counterterrorism 
analysts and linguists--is being depleted. * * * The U.S. 
government cannot afford so much duplication of effort. There 
are not enough experienced experts to go around.'' \14\ Under 
the bill, the NID will be empowered to rationalize all assets--
including analysts. The Committee is concerned about issues of 
analytic quality and objectivity and addressed these concerns 
in other sections of the legislation (see section XI below).
---------------------------------------------------------------------------
    \14\ Commission report p. 401.
---------------------------------------------------------------------------
            7. Reorganization Authorities
    Improving intelligence capabilities may require altering or 
consolidating organizational units in order to overcome agency 
stovepipes, remedy unnecessary duplication, and promote 
economies of scale. To this end, the NID is authorized, with 
the approval of the President and after consultation with the 
department, agency, or element concerned, to allocate or 
reallocate functions among the officers of the NIP, and to 
establish, consolidate, alter, or discontinue organizational 
units within the NIP. Prior to such action, the NID shall 
provide notice to Congress, which shall include an explanation 
of the rationale for the action. The authority under this 
section does not extend to any action inconsistent with law, 
and an action may be taken under this authority only with the 
approval of each of the congressional intelligence committees, 
the Senate Committee on Governmental Affairs, and the House 
Committee on Governmental Reform.

                VII. CHANGING ORGANIZATIONAL STRUCTURES

A. The NID

    The NID is to be Presidentially-appointed and Senate-
confirmed. The position of NID is at the Executive Level I pay 
grade, equivalent to that of a department head. The bill does 
not make the NID a member of the cabinet. Members of the 
cabinet generally are heads of executivedepartments who are 
executing policy. The NID plays a different role, which is to support 
policymaking with objective intelligence.
    The NID serves at the pleasure of the President. The 
Committee--like the Commission--rejected giving the NID a fixed 
term. The NID is the President's principal intelligence adviser 
and needs to have the confidence of the President. Testimony 
before the Committee made clear that instituting a fixed term 
for the NID would interfere with if not preclude that 
relationship. Moreover, having the President's confidence is a 
critical element for the NID to be effective in translating his 
authorities into compliance by the intelligence agencies--
particularly when the new structure is in its infancy.
    The bill expressly prohibits the office of the NID from 
being placed in the Executive Office of the President. The 
Commission had advocated doing so, apparently to facilitate the 
development of a strong relationship between the NID and the 
President. However, the location of the NID in the Executive 
Office of the President is irrelevant to the establishment of 
such a relationship. The Committee is concerned that locating 
the NID in the Executive Office of the President might lead to 
the politicization of intelligence. Testimony before the 
Committee supported the Committee's views on this issue. 
Moreover, it appears that the Commission has conceded this 
point.\15\
---------------------------------------------------------------------------
    \15\ Intelligence Reform, hearing before the Senate Select 
Committee on Intelligence, 108th Congress (September 7, 2004) 
(testimony of 9/11 Commission Vice Chairman Lee Hamilton and 
Commissioner John Lehman).
---------------------------------------------------------------------------

B. The NID's Deputies

    The Committee solicited testimony and advice from a wide 
variety of experts both within and without the intelligence 
community regarding how the NID's deputy structure should be 
established in statute. These experts provided the Committee 
with a variety of interesting, though not necessarily 
consistent, approaches. However, one common thread the 
Committee identified was that the NID should be given the 
flexibility to establish a deputy structure consistent with the 
NID's vision for the National Intelligence Authority. The 
Committee adopted a legislative approach that provides such 
flexibility.
    The legislation creates a Principal Deputy NID, to serve in 
the NID's absence. This official will be Senate-confirmed. 
Having such an official is critical to the effectiveness of the 
NID. Indeed, one of the Goldwater-Nichols Act's provisions 
designed to strengthen the chairman of the Joint Chiefs was to 
create the position of the Vice Chairman, to serve in the 
Chairman's absence and to ensure continuity.
    The legislation permits the NID to create up to four 
deputies who are not Senate-confirmed and to determine their 
duties and authorities. Thus the NID will have the flexibility 
to structure top-level management as the NID sees fit.
    The Commission recommended creating three Deputy NIDs with 
line authority over key agencies/components under the NID's 
authority: (1) a Deputy NID for Foreign Intelligence, to head 
the CIA; (2) a Deputy NID for Defense Intelligence, to oversee 
NSA, NGA, and NRO; and (3) a Deputy NID for Homeland 
Intelligence, to address the Department of Homeland Security's 
IA&IP Directorate and the FBI Office of Intelligence. The 
Commission would have made the Undersecretary of Defense for 
Intelligence (USDI) the Deputy NID for Defense Intelligence.
    Testimony before this Committee was unanimous that dual-
hatting the USDI would not work in practice. The USDI would 
have two masters, inside and outside the Department of Defense. 
Moreover, the USDI currently is a DoD policy official and lacks 
line authority over NSA, NGA, and NRO in DoD today; thus the 
Commission's proposal to give the USDI line authority over 
these agencies actually requires strengthening the USDI's 
authorities. Indeed, the Commission no longer supports giving 
the USDI line authority over NSA, NGA, and NRO.
    The Committee also has concerns about the Deputy NID for 
Homeland Intelligence, who would be either the Undersecretary 
of Homeland Security for IA&IP or the head of the FBI Office of 
Intelligence. This formulation leads to the awkward structure 
under which a Department of Homeland Security official has line 
authority over an FBI official, or vice versa.

C. The Office of the NID

    The Commission does not specify what positions should be 
created in the Office of the NID to assist in managing the 
National Intelligence Program. However, the authorities of the 
NID arguably require a basic list of officials common to most 
Executive Branch entities. These officials should not also be 
officials within the intelligence agencies themselves; in 
contrast, today the DCI's general counsel is also the CIA's 
general counsel, leading to an inherent conflict of interest 
when the DCI has to resolve an issue between the CIA and 
another intelligence agency. The officials needed by the NID 
include:
          (1) A general counsel, to advise the NID regarding 
        his or her authorities and to resolve legal disputes 
        among component agencies on issues such as information-
        sharing;
          (2) A comptroller, to act in conjunction with the 
        chief financial officer (CFO) to assist the NID in 
        executing the NIP appropriation;
          (3) A chief information officer, to assist the NID in 
        setting standards for information technology and 
        network architecture;
          (4) A civil rights and civil liberties officer;
          (5) A privacy officer; and
          (6) A CFO.
    (4) It should be noted that the CFO will be subject to the 
Chief Financial Officers Act under title 31 of the U.S. Code. 
As required by the CFO Act, the CFO will oversee all financial 
management activities relating to the NIA's programs and 
operations. The NID will be responsible for development and 
maintenance of an integrated agency accounting and financial 
management system. In addition, the NID will direct and oversee 
the NIA's financialmanagement personnel, activities and 
operations. The Committee believes that including the CFO in the CFO 
Act is in keeping with a growing trend towards emphasizing the 
importance of integrating financial management best practices in agency 
management.
    The legislation also creates an inspector general to 
monitor, inspect, and audit, and, where appropriate, 
investigate activities within the Office of the NID, the NCTC, 
the centers, and the interstices among the elements of the 
intelligence community. Currently, there is no inspector 
general with plenary authority to investigate interagency 
cooperation. Thus there is no inspector general with clear 
authority to investigate the information-sharing problems among 
agencies that contributed to the failure to prevent the 9/11 
attacks. This situation has not been conducive to maximizing 
performance in the intelligence community. The NIA inspector 
general would not have jurisdiction over the internal 
operations of the intelligence agencies and thus would not 
duplicate the activities of their inspectors general.

D. The National Intelligence Authority

    The Office of the NID, the NCTC, and the national 
intelligence centers shall be housed within the National 
Intelligence Authority. In addition, the legislation moves the 
National Intelligence Council into the NIA.
    The Council is currently responsible for coordinating and 
producing national intelligence estimates. The Council will 
continue to do so. National intelligence estimates will 
generally be formulated by analysts from the relevant national 
intelligence center, the Bureau of Intelligence and Research, 
and DIA, as well as other departmental offices with relevant 
expertise. In addition, the drafting of the President's Daily 
Briefing shall be done within the NIA, based in large part on 
input from the national intelligence centers.
    The National Intelligence Director, like the head of any 
other agency in government, will have responsibility for 
managing the personnel of the National Intelligence Authority. 
To assist the NID with these workforce management 
responsibilities, section 163 of the legislation grants the NID 
the authorities currently available to the Director of the CIA 
with respect to CIA personnel.
    The legislation makes clear that employees and applicants 
for employment at the NIA will have the same rights and 
protections under the Authority currently afforded to employees 
of the CIA. Thus, for example, the employees of the NIA, like 
those at the CIA, will have generally the same rights and 
remedies in cases of alleged discrimination on the basis of 
race, color, religion, sex, national origin, age, or 
handicapping condition as employees at other federal agencies, 
including the right to appeal to the EEOC and to federal 
courts.
    The Committee is cognizant, however, that employees at the 
CIA, like most employees throughout the intelligence community, 
do not have external appeal rights to the Merit Systems 
Protection Board or review in court for the majority of adverse 
actions. With respect to adverse actions, the Committee 
believes that it is important that NIA employees receive, at a 
minimum: advance written notice of such action; a reasonable 
opportunity to respond; the opportunity to seek the advice of 
private counsel; an opportunity to obtain specific information 
on which the action is based, provided the receipt of such 
information would not violate the national security interests 
of the United States; and the right to appeal to an independent 
internal panel. The Committee believes it is important that the 
NID consider adoption of the system in place within the CIA, to 
ensure that NIA employees can carry out their duties in the 
interest of the United States with assurance that a fair 
process is available should any unlawful or unfair workplace 
practices occur.

   VIII. CREATING NATIONAL INTELLIGENCE CENTERS TO FUSE INTELLIGENCE 
                     CAPABILITIES AGAINST MISSIONS

    The legislation authorizes the NID to create national 
intelligence centers to provide for unified direction of 
intelligence agencies/components in the NIP to fulfill 
missions. The Commission's recommendation stems from the pre-9/
11 and current situation in which no one below the DCI is 
responsible for how CIA, NSA, and other intelligence agencies 
work together on a specific issue. For example, in the area of 
counterterrorism, as recognized by the Congressional Joint 
Inquiry and the Commission, the DCI's Counterterrorist Center 
is an organ of the CIA and concentrates on human intelligence 
rather than on organizing and integrating the actions of 
agencies with counterterrorism responsibilities across the 
government.
    Senior intelligence officials, including former DCI Tenet, 
have endorsed the concept of integrating intelligence assets in 
a mission-specific orientation.\16\ The legislation does not 
specify the centers' topics; instead, the NID would establish 
the centers on topics reflecting functional and geographic NSC 
priorities--such as counterproliferation, Russia, and East Asia 
& China. If a center is no longer needed, the bill allows the 
NID to terminate a center, subject to Congressional 
notification.
---------------------------------------------------------------------------
    \16\ Larry Kindsvater, ``The Need to Reorganize the Intelligence 
Community,'' in Studies in Intelligence, Vol. 47, no. 1 (2003). 
Kindsvater was subsequently confirmed as the Deputy DCI for Community 
Management. For DCI Tenet's statement, see Law Enforcement and the 
Intelligence Community, hearing before the National Commission on 
Terrorist Attacks Upon the United States, April 14, 2004, p. 20 (``The 
organization around missions where those capabilities are fully 
integrated in whatever structure you want to create I think is the way 
ahead in the future, and that's the way we're moving'').
---------------------------------------------------------------------------
    Among their responsibilities, the centers will provide all-
source analysis of intelligence, identify and propose to the 
NID intelligence collection and analysis requirements, have 
primary responsibility for net assessments and warnings, and 
ensure appropriate officials have access to a variety of 
intelligence assessments. The NID will supervise the work of 
the centers. With their ability to harness the resources of 
entities with differing capabilities and create a unified 
effort tofocus on a particular issue area, the centers will 
improve the intelligence community's ability to respond with speed and 
agility.
    Some criticize the national intelligence centers as 
threatening to drain offices such as the CIA Counterterrorist 
Center of analysts critical for the performance of human 
intelligence. A strength of the CIA Counterterrorist Center is 
indeed its close linkage between analysts and human 
intelligence operators. But there are two basic types of 
analysts in the intelligence community: analysts who provide 
tactical assistance to a collection activity, and analysts who 
conduct strategic analysis. The former, for example, 
concentrate on whether a communications intercept of a 
terrorist referencing (hypothetically) a ``wedding'' refers to 
a real wedding or an attack--and must have a very detailed 
knowledge of that terrorist's life and activities. These types 
of analysts should generally stay within the agencies, such as 
at the Counterterrorist Center, to assist collectors. But a 
number of strategic analysts--who, for example, fuse together 
all sources of information to provide a comprehensive picture 
of al Qaeda's strategy and objectives over the next decade--
should move to the centers in order to be at the focal point at 
which information is consolidated from all sources.
    One option was to have the legislation both mandate that 
the NID create centers on NSC-generated topics and explicitly 
imbue the centers with specific authorities. This approach is 
akin to the Goldwater-Nichols Act, which sought to strengthen 
the combatant commanders vis-a-vis the Military Services by 
explicitly delineating their authorities in a long list. The 
message that Congress sent to the Military Services was clear: 
the combatant commanders are in charge of warfighting. Yet 
ultimately the Committee concluded that mandating that the NID 
create specific centers--rather than authorizing the NID to 
create them pursuant to priorities established by the NSC--
might be too restrictive. Some topics might not require full-
fledged, permanent centers but rather more ad hoc arrangements. 
Thus the legislation does not require the NID to create 
specific centers but authorizes the NID to do so. Given the 
critical role these centers will play in reorganizing how the 
intelligence community addresses critical issues, it is the 
Committee's expectation that the NID will create centers as 
needed expeditiously.
    Each center will be led by a director, who will be 
appointed by the NID and will also serve as the NID's principal 
adviser in that center's area of responsibility. The center's 
director reports to the NID. Each center will be provided a 
professional staff from personnel transferred, assigned, or 
detailed from elements of the intelligence community as 
directed by the NID.
    The NID will designate an agency to provide administrative 
support to each center. However, this provision does not imply 
that such agency will have authority over the center. The 
situation that afflicts the Counterterrorist Center, in which a 
center with intelligence community-wide responsibilities became 
subsumed within the CIA, will be unacceptable for a national 
intelligence center. The national intelligence center is under 
the authority of the NID, not of any agency.
    The National Counterintelligence Executive will also be 
moved to the NIA in order to integrate it into the new 
structure. This entity is similar to a national intelligence 
center.

IX. CREATING THE NATIONAL COUNTERTERRORISM CENTER TO FUSE INTELLIGENCE 
        AND COORDINATING INTERAGENCY STRATEGY AGAINST TERRORISM

    The bill creates a National Counterterrorism Center (NCTC) 
within the National Intelligence Authority, per the 
Commission's recommendation. The NCTC will develop and unify 
strategy for civilian and military counterterrorism efforts; 
effectively integrate counterterrorism intelligence activities 
of the U.S. Government, both inside and outside of the United 
States; and develop interagency counterterrorism plans, i.e. 
plans that involve more than one department, or element of the 
executive branch (unless otherwise directed by the President), 
and include the mission, objectives to be achieved, courses of 
action, coordination of agency operational activities, 
recommendations for operational plans, and assignment of 
departmental or agency responsibilities.
    The Commission's recommendation for an NCTC arises from two 
main findings. First, intelligence agencies are not integrated 
in their efforts against terrorism. Thus the NCTC will have a 
Directorate of Intelligence--in essence, a National 
Intelligence Center which shall have primary responsibility for 
the analysis of terrorism and terrorist organizations from all 
sources of intelligence, whether collected inside or outside 
the United States. Second, the Commission found that 
counterterrorism requires an Executive Branch-wide effort to 
mount joint operations to counter terrorism. Thus, the NCTC 
will have a Directorate of Planning to develop plans, assign 
responsibilities, monitor implementation, and provide reports 
to the NID and the President.

A. Interagency Counterterrorism Planning

    The NCTC's Directorate of Planning will concentrate on 
planning activities that are ``joint,'' meaning that they 
involve more than one agency. Such planning will be at both the 
strategic level, such as ``winning hearts and minds'' in the 
Muslim world, and at a more specific level, such as hunting for 
Bin Ladin. For example, the NCTC will craft plans for dealing 
with an al Qaeda cell--whether to destroy it with military 
force or infiltrate it to acquire leads on Bin Ladin. The NCTC 
will assign agencies responsibilities as outlined in its plans. 
NCTC's plans will be developed utilizing input from personnel 
of other departments and agencies who have expertise in their 
agencies' priorities, functions, assets, and capabilities with 
respect to counterterrorism.
    An analogy for understanding the NCTC's ``interagency 
counterterrorism planning'' is lanes in a highway, with each 
lane symbolizing an agency's expertise (e.g., diplomacy, 
special operations, espionage, and law enforcement). The NCTC 
will not tell each agency how to drive in its lane. But 
effective counterterrorism requires choosing which lane to use 
in a particular situation--meaning which type of activity, and 
thus which agency, should have the lead in aparticular 
situation. The NCTC will select the lane and propose a travel plan but 
will have no authority to order an agency actually to drive. If an 
agency head objected to the NCTC's plan and assignment of 
responsibility, then the issue could be elevated to the President.
    The Committee recognizes that the term ``operational 
planning'' has a specific meaning in the DoD context. 
``Operational planning'' for DoD refers to an arduous process 
to delineating the details of operations--for example, the time 
sequence of deployments of military assets, and where the 
hinges are on a door for purposes of a special operations raid. 
The NCTC can make specific recommendations for operational 
plans. But the legislation makes clear that the NCTC's 
assignments are not binding on agencies. In other words, the 
NCTC lacks authority to direct operations by agencies in the 
Executive Branch and will not be in the military chain of 
command. Agency heads could object to the NCTC's plans, at 
which point the NID could either accede or raise the issue to 
the President. The NCTC will not resolve policy issues but 
instead will elevate policy disputes to the President for 
resolution.

B. The NCTC Director

    The NCTC Director will be Senate-confirmed and the 
equivalent of a Deputy Secretary. The NCTC Director reports to 
the NID regarding the activities of the Directorate of 
Intelligence and to the President and the NID regarding the 
activities of the Directorate of Planning. The Commission's 
report recommended this arrangement, although subsequent 
statements indicated that the Commission favored the NCTC 
director reporting directly to the President regarding 
counterterrorism operations. The justification for this latter 
arrangement apparently was that the NID is an intelligence 
official and therefore should not be involved in advising the 
President on counterterrorism activities across the Executive 
Branch (which frequently may not involve any intelligence 
agencies at all). Ultimately, the Committee determined that 
giving the NCTC director two separate reporting chains, one to 
the President and the other to the NID, could lead to confusion 
and competition between the NID and the NCTC director.
    The NCTC Director will play an active role in selecting key 
counterterrorism officials in the Executive Branch; the head of 
the relevant department or agency must seek the Director's 
concurrence in the selection or recommendation to the President 
for the Director of the CIA Counterterrorist Center, the 
Assistant FBI Director in charge of the Counterterrorism 
Division, the State Department's Ambassador-at-Large for 
Counterterrorism, and any other official designated by the 
President. If the Director does not concur in that selection, 
then the head of the relevant department or agency must inform 
the President of the Director's nonconcurrence.

   X. CONCERNS ADDRESSED IN CREATING A NATIONAL INTELLIGENCE DIRECTOR

    In crafting this legislation, the Committee addressed a 
number of concerns it heard relating to the creation of a 
National Intelligence Director.

A. Intelligence Support to the Warfighter

    Some have expressed the fear that creating a NID with more 
power and control over the national intelligence elements of 
the Defense Department (i.e., NSA, NGA, and NRO) could harm the 
provision of intelligence to the military. The Committee 
carefully considered this concern, with full recognition that 
intelligence is more vital to, and more closely integrated 
into, military operations than ever before. Ensuring that the 
military receives the intelligence that it needs will be one of 
the core responsibilities of the NID. As stated by Acting DCI 
John McLaughlin in his testimony before the committee, 
``everyone in the intelligence community understands that NSA 
and NGA, in particular, both integral parts of the national 
intelligence community, have a vital role to play in supporting 
combat, as does the CIA. And that role would have to be 
preserved, regardless of who they report to or how this 
community is ultimately structured.''
    The committee believes that the NID can and will enhance, 
not detract from, the quality of intelligence provided to the 
military. For example, by providing for a common information 
technology and ensuring that information is rapidly 
disseminated to those who need it, the NID will provide a 
tremendous benefit to the warfighter.
    Nonetheless, the committee did not go as far as some have 
proposed and place NSA, NGA and NRO under the exclusive control 
of the NID. These agencies, as well as DIA, are national 
intelligence and combat support agencies, and the Committee did 
not want to take any action that might weaken the bonds that 
tie them to the military forces they support in that capacity. 
The Committee was also concerned that removing these agencies 
entirely from the control of the Secretary of Defense could 
lead the Defense Department to recreate the intelligence 
capabilities of these agencies within programs controlled by 
the Department, thus leading to unnecessary waste and 
duplication.
    Like the Commission, the Committee concluded that it is not 
necessary to take such a dramatic step in order to achieve the 
goal of a more unified national intelligence effort. The 
Committee believes that a NID empowered to transform 
intelligence agencies into a network will improve the quality 
of intelligence for both the policymaker and the warfighter.

B. A Strong NID

    In the course of holding eight hearings regarding the 
restructuring of the intelligence community, the Committee was 
urged not to create an NID that lacked true power, and that 
served only as an additional layer of bureaucracy. The 
Committee has heeded this warning, and has created an NID that 
has the power to reform the intelligence community, improve the 
quality of analysis, and help ensure joint action. In short, 
the NID will be the strong head the intelligence community has 
lacked.
    Consistent with the 9/11 Commission's recommendations, the 
Committee declined to create a new bureaucratic layer by moving 
intelligence collection agencies into a massive newDepartment 
of Intelligence. The CIA Director will report to the NID, as will the 
NCTC Director and other NIC Directors. However, the heads of other 
elements in the intelligence community will stay within their existing 
chains of command. The desire to preserve clear lines of command also 
caused the Committee to decline to pursue the 9/11 Commission's 
recommendation to create three Deputy NID positions, filled by the CIA 
Director, the Under Secretary of Defense for Intelligence, and the 
Executive Assistant Director for Intelligence of the FBI. The Committee 
heard testimony from a number of witnesses that this ``dual-hatting'' 
structure would be unworkable, and would create unclear lines of 
command.

C. Reorganizing in Time of War

    Finally, critics of reform argue that reorganization should 
not take place in time of war because it would be too 
disruptive. This criticism ignores the history of American 
warfighting, in which significant changes have been made in 
order to ensure victory. The Pentagon was constructed in World 
War II, new technology was developed, and new organizational 
units and tactics were developed to counter the enemy. 
Moreover, this criticism either assumes that the intelligence 
community is already structured appropriately to win the war on 
terrorism--an assumption soundly rejected by the Commission--or 
prioritizes the current structure over the requirements of U.S. 
national security.

      XI. CREATING A FORUM FOR DEPARTMENT-LEVEL DISPUTE RESOLUTION

    The bill establishes a Joint Intelligence Community Council 
to resolve conflicts at the cabinet level. The Joint 
Intelligence Community Council will consist of the National 
Intelligence Director (who will chair the Council), the 
Secretary of State, the Secretary of the Treasury, the 
Secretary of Defense, the Attorney General, the Secretary of 
Energy, the Secretary of Homeland Security, and any other 
officers as the President may designate. The Joint Intelligence 
Community Council shall meet upon the request of the National 
Intelligence Director.
    The Joint Intelligence Community Council will provide a 
critical forum for resolving disputes between entities in the 
intelligence community if differences cannot be resolved at the 
staff level. The Joint Intelligence Community Council ensures 
that there is an established process through which the 
Principals can discuss and resolve these differences on 
intelligence issues. Such a forum is important, because 
disputes that seem irreconcilable on the staff level are often 
easily resolved in face-to-face meetings between Principals.
    The JICC will also serve as an important advisory body to 
the National Intelligence Director, helping to guide decision-
making and issue mid-course corrections. The Joint Intelligence 
Community Council will assist the National Intelligence 
Director in developing and implementing a joint, unified 
national intelligence effort to protect national security by 
advising the National Intelligence Director on establishing 
requirements, developing budgets, financial management, and 
monitoring and evaluating the intelligence community's 
performance, and in ensuring the timely execution of programs, 
policies, and directives established or developed by the 
National Intelligence Director.

     XII. STRENGTHENING THE OBJECTIVITY AND QUALITY OF INTELLIGENCE

    Intelligence is rarely a silver bullet, pointing inexorably 
to a single, wise course of action. But the quality of 
intelligence is critical for ensuring that policymakers--both 
in the Executive Branch and Congress--are in the best position 
possible to make national security decisions. And the quality 
of intelligence does not derive solely from the ability to 
purloin secrets. The enemy's secrets are most useful when they 
are analyzed--put into context of the known and unknown, used 
to illuminate the enemy's actions, capabilities, and 
intentions, and reflected upon from a strategic perspective.
    The Committee is troubled by instances in which the quality 
of intelligence analysis has been substandard, either due to 
politicization of intelligence analysis or poor analytic 
tradecraft. Two prominent examples of politicized intelligence 
are the intelligence given to Congress in support of the Tonkin 
Gulf Resolution of 1964, and intelligence apparently shaded by 
DCI Bill Casey during the Iran-Contra Affair.\17\ And, as the 
Senate Select Committee on Intelligence's recent report makes 
clear, intelligence analysis prior to the current Iraq War was 
deeply flawed.
---------------------------------------------------------------------------
    \17\ George Schultz, Turmoil and Triumph: My Years as Secretary of 
State (Charles Scribner's Sons, 1993), p. 691.
---------------------------------------------------------------------------
    Accordingly, the Committee's legislation places strong 
emphasis on ensuring that intelligence is both objective and 
unbiased. The legislation also ensures that Congress has access 
to the intelligence it needs to support its decisionmaking.

A. Ensuring That Intelligence Is Objective, Independent, and Based on 
        Alternative Views

    The legislation requires that the NID provide the President 
and Congress with national intelligence that is timely, 
objective, independent of political considerations, and which 
has not been shaped to serve policy goals. Indeed, the bill 
makes it clear that the NID is responsible for improving the 
quality of our intelligence analysis. First, the NID is to 
promote and evaluate the utility of national intelligence to 
consumers in the U.S. government. Second, the NID is also to 
ensure that policymakers have access to a variety of 
intelligence assessments and analytical views. The Committee 
has heard repeated testimony about the importance of ensuring a 
diversity of analytical views and believes that the bill makes 
this responsibility clear.
    The Director of the NCTC and directors of other national 
intelligence centers are required to provide the President, 
Congress, and the NID with intelligence that is timely, 
objective, independent of political considerations, and which 
has not been shaped to serve policy goals. The CIA director has 
a similar obligation for any intelligence produced by CIA.
    The National Intelligence Council is required to ensure 
that its intelligence estimates are timely, objective, 
independent of political considerations, and have not been 
shaped to serve policy goals. The Council's products must 
include alternative views held by elements of the intelligence 
community. Indeed, the NID shall ensure that the Council's 
products (1) distinguish within the analysis between 
intelligence, assumptions, and judgments; (2) describe the 
quality and reliability of the intelligence; (3) present and 
explain alternative conclusions, if any; and (4) characterize 
any uncertainties.

B. Ensuring Congressional Access to Intelligence

    The legislation includes several provisions to enhance 
Congress' access to intelligence.
    No officer or agency of the Executive Branch can require 
the NCTC Director to receive permission to testify before 
Congress. In addition, no officer or agency of the Executive 
Branch can require the NCTC Director to submit testimony, 
recommendations, or comments to Congress for review prior to 
submission to Congress if the material includes a statement 
indicating they are the NCTC's views and do not necessarily 
represent the Administration's views.
    The legislation requires that the Congress receive a range 
of analytic products to inform Congress on national security 
issues. The NID, the NCTC Director, and the director of any 
national intelligence center must provide to the Congressional 
intelligence committees and any other committee with 
jurisdiction over the subject matter to which the information 
relates all intelligence assessments, intelligence estimates, 
sense of the intelligence community memoranda, and daily senior 
executive intelligence briefs. Excluded from this list are the 
Presidential Daily Brief and those reports prepared exclusively 
for the President.
    The legislation also provides a mechanism by which Congress 
can receive other intelligence information, such as collection 
data that underlies the analytic reports Congress would 
routinely receive. The NID, NCTC Director, and directors of 
other national intelligence centers shall respond within 15 
days to requests for any intelligence information from the 
Congressional intelligence committees or other committees of 
Congress with jurisdiction over the subject matter to which the 
information relates. The NID, NCTC Director, and directors of 
other national intelligence centers are also required to 
respond to such requests from the Chairman, Vice Chairman, or 
Ranking Member of the Senate or House intelligence committees. 
The NID, NCTC Director, and directors of other national 
intelligence centers are required to provide the requested 
information unless the President certifies that the information 
is not being provided due to a Presidential privilege pursuant 
to the United States Constitution.
    Finally, employees or contractors of the NIA, CIA, DIA, 
NGA, NSA, FBI, and other agencies principally involved in the 
conduct of foreign intelligence or counterintelligence are 
permitted to disclose certain information to Congress without 
reporting it first to the appropriate inspector general. The 
information they may report is information, including 
classified information, that they reasonably believe provides 
direct and specific evidence of a false or inaccurate statement 
to Congress contained in an intelligence report to Congress or 
that intelligence information has been withheld from Congress.

C. Establishment of the Ombudsman of the National Intelligence 
        Authority

    The bill establishes an Ombudsman of the National 
Intelligence Authority. The NIA Ombudsman is modeled after the 
Ombudsman currently established at the Central Intelligence 
Agency. It is intended that the Ombudsman will serve as an 
independent and informal counselor for those who have 
complaints about real or perceived problems of politicization, 
biased reporting, or lack of objective analysis. The Ombudsman 
will also have the authority to monitor the effectiveness of 
measures taken to address these problems. The Ombudsman will 
also have the authority to undertake review of analytic product 
to ensure that analysis is timely, objective, independent of 
political considerations, and based upon all sources available 
to the intelligence community.
    In carrying out these duties, the Ombudsman will be 
authorized to receive complaints, and review analytic products 
produced by the National Intelligence Authority, any element of 
the intelligence community within the National Intelligence 
Program, and to the extent they are involved in the analysis of 
national intelligence, other agencies within the intelligence 
community.
    The bill establishes within the Ombudsman's office an 
Analytic Review Unit. This Unit is intended, subject to the 
supervision of the Ombudsman, to conduct detailed evaluations 
of analysis by the National Intelligence Authority, any element 
of the intelligence community within the National Intelligence 
Program, and to the extent they are involved in the analysis of 
national intelligence, other agencies within the intelligence 
community. The Ombudsman is to provide the Analytic Review Unit 
with a staff who possess the appropriate expertise to carry out 
this work.
    The bill also provides that the Ombudsman may refer to the 
Office of the Inspector General for further investigation 
serious cases of misconduct relating to the politicization of 
intelligence, biased reporting, or lack of objective analysis.

                   XIII. ENSURING INFORMATION-SHARING

    The legislation will require that the President establish 
an information sharing network, to break down the stovepipes 
that currently impede the flow of information. The network, 
modeled on a proposal by a task force of the Markle Foundation 
that was endorsed by the 9/11 Commission, is to consist of 
policies and information technology designed to facilitate and 
promote the sharing of intelligence and homeland security 
information throughout the federal government, with state and 
local agencies and, where appropriate, with the private sector, 
while simultaneously ensuring privacy and civil liberties 
concerns are adequately addressed.
    The bill will give the President responsibility for issuing 
overall guidelines governing the collection, sharing and use of 
intelligence and homeland security information as well as 
guidelines to protect privacy and civil liberties. The Director 
of OMB will be given primary responsibility for implementing 
the new information sharing network, and this official is 
required to appoint a principal officer (who shall have the 
rank of a Deputy Director) to handle the day-to-day 
responsibilities. The OMB Director will be required to submit 
to Congress a detailed enterprise architecture and 
implementation plan within nine months and will have to 
regularly report to Congress on the network's progress. 
Individual agencies involved in the information sharing network 
will also have to submit plans for implementing the network.
    The bill will give the President responsibility for issuing 
overall guidelines governing the collection, sharing and use of 
intelligence and homeland security information as well as 
guidelines to protect privacy and civil liberties. The Director 
of OMB will be given primary responsibility for implementing 
the new information sharing network, and the NID is required to 
appoint a principal officer (who shall have the rank of a 
Deputy Director) to handle the day-to-day responsibilities. The 
OMB Director will be required to submit to Congress a detailed 
enterprise architecture and implementation plan within nine 
months, and individual agencies involved in the information 
sharing network will also have to submit plans for implementing 
the network; both will have to regularly report to Congress on 
their progress.
    In addition, this section of the bill establishes an 
Executive Council on Information Sharing, made up of key 
federal officials, as well as state and local and private-
sector representatives, to work with the OMB Director to 
implement the network and coordinate efforts, and an Advisory 
Board on Information Sharing, made up of outside experts, to 
provide advice and expertise to the President and Executive 
Council.

              XIII. PROTECTING CIVIL LIBERTIES AND PRIVACY

    The National Commission on Terrorist Attacks Upon the 
United States concluded in its recommendations that ``[w]e must 
find ways of reconciling security with liberty, since the 
success of one helps protect the other * * * [t]he choice 
between security and liberty is a false choice, as nothing is 
more likely to endanger America's liberties than the success of 
a terrorist attack at home.'' \18\ The Commission also noted 
that ``[t]his shift of power and authority to the government 
calls for an enhanced system of checks and balances to protect 
the precious liberties that are vital to our way of life.'' 
\19\ In light of this, the Commission recommended that in this 
time of increased and consolidated government authority, there 
should be a board within the executive branch to oversee 
adherence to the guidelines the Commission recommends and the 
commitment of the government to protect civil liberties.
---------------------------------------------------------------------------
    \18\ Commission report, p. 395.
    \19\ Commission report, p. 394.
---------------------------------------------------------------------------
    Testimony received by the Committee during its hearings on 
the Commission report highlighted the importance and need to 
implement this recommend. In his testimony before the Committee 
on July 30, 2004, Lee Hamilton, Vice Chair of the Commission, 
stated, ``[w]e believe that [regarding] the civil liberties, 
you need an oversight board in the Executive Branch as a kind 
of an added check on executive authority, and that's a very 
important board.''
    In light of the Commission recommendations and concerns 
about ensuring privacy and civil liberties concerns are 
appropriately considered, Title II, Subtitle B of the proposed 
legislation creates a Privacy and Civil Liberties Oversight 
Board (``Board'').
    The Board is to have a Chairman and four additional 
members, who are to be appointed by the President with the 
advice and consent of the Senate. Members of the Board are to 
serve fixed, six-year terms, and no more than three of the five 
Board members may be of one political party.
    The bill gives the Board two functions. First, the Board is 
to advise the President and other federal officials at the 
front-end, when they are proposing, making or implementing 
policies related to efforts to protect the Nation against 
terrorism, to ensure that the protection of privacy and civil 
liberties are appropriately considered. Although policy makers 
are required to get the Board's views on proposed policies and 
actions, the Board does not have any veto authority over any 
proposal.
    Second, the Board is to investigate and review government 
actions at the back end--that is, to review the implementation 
of particular government policies to see whether the government 
is acting with appropriate respect for privacy and civil 
liberties and adhering to applicable laws, regulations and 
policies. In conducting investigations, the bill gives the 
Board the authority to obtain documents and access to personnel 
from government agencies and the ability to subpoena documents 
and testimony from those outside the government.
    The bill also requires that the heads of certain federal 
agencies involved in the efforts to protect the Nation from 
terrorism designate at least one senior agency official to 
serve as privacy and civil liberties officers for the agencies. 
These officers' functions mirror those of the Board on an 
agency-specific level: they are to (1) advise the agency in 
appropriately considering privacy and civil liberties concerns 
in the development and implementation of policies related to 
efforts to protect the nation against terrorism; (2) 
investigate and review agency actions and policy implementation 
to ensure that the agency is adequately considering privacy and 
civil liberties in its actions; and (3) ensure that the agency 
has a process for receiving and responding to complaints from 
individuals.

     XIV. PROMOTING AN INTELLIGENCE WORKFORCE FOR THE 21ST CENTURY

    A central theme of the 9/11 Commission's report was the 
need to better combine the resources of government effectively 
to achieve unity of effort,\20\ and the Commission offered 
several recommendations to better marshal the personnel 
resources of the government and of the nation for this effort. 
The creation of a common set of personnel standards within the 
intelligence community should help create a group of 
intelligence professionals better able to collaborate on joint 
projects, and, to accomplish this, the Commission recommended 
that the NID should--
---------------------------------------------------------------------------
    \20\ Commission report, p. 399.

        set personnel policies to establish standards for 
        education and training and facilitate assignments at 
        the national intelligence centers and across agency 
        lines.\21\
---------------------------------------------------------------------------
    \21\ Commission report, p. 414; see also p. 409.

    Moreover, to help transform the culture of the intelligence 
community from a service-specific mind-set to joint, and 
support more integrated operations--including, especially, the 
unified joint commands constituting the proposed NCTC and other 
national intelligence centers--the Commission endorsed the kind 
of approach applied by the Goldwater-Nichols Act. That Act 
established a joint program of joint personnel management for 
military officers (such as requiring military officers to serve 
tours outside of their service in order to win promotion) in 
order to foster a more integrated structure and to improve the 
quality of joint operations.\22\
---------------------------------------------------------------------------
    \22\ Commission report, pp. 403, 408-409.
---------------------------------------------------------------------------
    Testimony at Committee hearings supported and expanded upon 
these points. For example, Max Stier, President and CEO of the 
Partnership for Public Service, reinforced the importance of 
fostering an organizational culture supportive of joint action, 
including through ``programs to improve intelligence training 
and collaboration across agencies and among all levels of 
government'':

          Such provisions recognize that we need not just an 
        organizational change, but a cultural change within the 
        intelligence community if the reforms being considered 
        by the Committee are to succeed. People training 
        together, and training for joint missions with other 
        federal agencies and with other levels of government, 
        will go a long way toward shifting the intelligence 
        workforce toward the `need to share' mindset that is so 
        critical.\23\
---------------------------------------------------------------------------
    \23\ The 9/11 Commission Human Capital Recommendations: A Critical 
Element of Reform, hearing before the Senate Governmental Affairs 
Committee Subcommittee on the Oversight of Government Management, the 
Federal Workforce, and the District of Columbia, 108th Congress 
(September 14, 2004) (testimony of Max Stier, Partnership for Public 
Service).
---------------------------------------------------------------------------

A. The NID's Community-Wide Workforce Responsibilities

    The Committee's bill assigns the NID the primary 
responsibility for establishing new workforce policies for the 
intelligence community that would achieve the improvements in 
integration called for by the Commission. The NID's key 
responsibilities in this area are set forth in section 
112(a)(8) of the bill, which requires the NID to develop and 
implement, in consultation with the rest of the community and 
the affected departments, personnel policies and programs to 
accomplish a number of objectives, to enhance the capacity for 
joint operation, as well as the general quality and effective 
management of the workforce.
    For example, the NID is responsible for establishing 
policies and programs that encourage and facilitate the 
rotation of personnel to the NCTC and to other national 
intelligence centers, as well as between elements of the 
community, and that set standards for education, training, and 
career development. The community-wide policies and programs 
will encourage and facilitate the recruitment and retention of 
individuals who are highly qualified, and will provide for the 
recruitment and training to achieve a workforce that is 
sufficiently diverse for the most effective collection and 
analysis of intelligence. The NID is to make an individual's 
service in more than element of the intelligence community a 
condition of promotion to certain positions, and must include 
the specific personnel-management enhancements set forth in 
section 114 to facilitate and support joint and integrated 
operations. The policies and programs must also generally 
provide for effective human capital management within the 
intelligence community, and must be consistent with the public 
employment principles of merit and fitness.
    In the establishment of any personnel policies, programs, 
and standards for the intelligence community, the Committee 
believes that the NID should ensure an open and transparent 
process that includes consultation with affected agencies and 
personnel at all levels. The NID should provide for 
comprehensive communications strategies that reach out to 
affected agencies and personnel both to gain the benefit of 
their suggestions and experience and to make the process and 
the resulting policies and standards as fair and transparent as 
possible. The Committee also notes the need to provide the 
necessary training for managers to implement new human capital 
policies and practices and urges the NID to be sure such 
training is provided before such policies and practices are 
implemented.

B. Facilitating Joint and Integrated Intelligence Operations

    The Committee agrees with the Commission's finding that the 
Goldwater-Nichols Act of 1986 provides a useful model for 
achieving more integrated operations within the intelligence 
community. Accordingly, section 114 of the bill sets forth 
several specific steps that the NID will undertake to 
facilitate staffing of joint and community-management 
functions. The NID will establish incentives for service at the 
national intelligence centers, the NCTC, and in other community 
management positions. Moreover, personnel assigned or detailed 
to service under the NID must be promoted at rates equal to or 
greater than other personnel. The NID will also establish 
personnel-management mechanisms to facilitate and encourage the 
rotation of personnel through various elements of the 
intelligence community in the course of their careers.

C. The Chief Human Capital Officer of the National Intelligence 
        Authority

    To assist the NID in fulfilling the highly critical and 
complex personnel management functions assigned by the 
legislation, section 129 of the bill requires the NID to 
appoint a Chief Human Capital Officer (CHCO). This provision 
builds on legislation agreed to by this Committee and enacted 
in 2002 as part of the Homeland Security Act, Public Law 107-
296,\24\ requiring the appointment of CHCOs at departments and 
many agencies throughout the government.\25\ The CHCO of the 
National Intelligence Agency established in this legislation 
would advise and assist the NID in exercising his authorities 
and responsibilities with respect to the intelligence community 
workforce as a whole, and would also help in carrying out the 
entire human capital management program at the NIA itself.
---------------------------------------------------------------------------
    \24\ Business Meeting to Consider Substitute Amendment to S. 2452, 
Senate Committee on Governmental Affairs, 107th Cong., July 24-25, 
2002; Congressional Record, pages S8105, S8155, Sept. 3-4, 2002.
    \25\ 5 U.S.C. Sect. 1401-1402.
---------------------------------------------------------------------------
    The Chief Human Capital Officer will look strategically at 
the workforce challenges facing the intelligence community and 
assist the NID with the development of common personnel 
policies and standards critical to the fundamental reform of 
the intelligence community. The CHCO will also assist the NID 
with the selection, training, and development of a highly-
qualified workforce to meet the NIA's strategic needs. The 
Committee is aware that many agencies within the intelligence 
community, such as the CIA, now have appointed Chief Human 
Capital Officers. The Committee strongly encourages the CHCO to 
meet periodically with these individuals and other human 
resource professionals within the intelligence community to 
ensure the alignment of human capital policies with the 
intelligence community's current and future mission needs.

D. Security Clearances

    In recent years, both the number of individuals requiring 
clearances and the number of individuals requiring access to 
higher levels of classified information has increased. The 
complexity of the current process for providing and maintaining 
security clearances is a barrier to the efficient movement of 
both employee and contract personnel who require access to 
information to perform their assigned tasks. The government 
must provide high-quality investigations and timely 
adjudication of security clearances to help meet our 
intelligence needs.
    The Commission recommended that a single agency be made 
responsible for providing and maintaining security clearances, 
insuring uniform standards--including uniform security 
questionnaires and financial report requirements, and 
maintaining a single database. In addition, the Commission 
suggested that the agency could also be responsible for 
administering polygraph tests on behalf of organizations that 
require them.\26\ The Commission made these proposals in the 
context of helping accelerate the process for national security 
appointments during a change in administrations; the Committee 
believes reforms of the process for granting security 
clearances is also important to improve personnel management 
throughout the intelligence community.
---------------------------------------------------------------------------
    \26\ Commission report, p. 422.
---------------------------------------------------------------------------
    Section 115 of the legislation includes a number of 
provisions to address the long-standing problems surrounding 
the security clearance process. The legislation would require 
the President to designate a single federal agency within 45 
days of the date of enactment to be responsible for providing 
and maintaining clearances, and would require the transfer of 
personnelsolely responsible for security clearance 
investigations to help ensure the agency is fully functional within one 
year of the date of enactment.\27\ The Committee expects the agency 
selected to make use of all available resources to help eliminate the 
current backlog. The Committee intends the agency to enter into 
Memoranda of Understanding with agencies carrying out responsibilities 
relating to security clearances or security clearance investigations 
before the date of enactment of this Act. At present, there are 
eighteen non-defense agencies performing security clearance 
investigations.\28\ Client agencies may continue to perform their own 
adjudications and may continue to conduct their own polygraph 
examinations.
---------------------------------------------------------------------------
    \27\ The Committee recognizes recent legislation authorizing the 
transfer of over 1,800 security clearance investigative employees. P.L. 
108-396, Section 906, 117 Stat. 1392, 1561-1563 (2004). As of the date 
of this report, the transfer had not taken place.
    \28\ Briefing by Office of Personnel Management, September 2002.
---------------------------------------------------------------------------
    The legislation would also require the President, acting 
through the NID and in consultation with the agency selected to 
provide and maintain clearances, to establish uniform standards 
and procedures for the access to classified information. The 
standards would apply to both employee and contract personnel. 
The investigative standards should provide meaningful 
information to individuals making the decision whether or not 
to grant a clearance. For example, GAO recently reported that 
less than one-half of one percent of the potential security 
issues identified during an investigation are derived from 
neighborhood checks; however, this information source accounts 
for about 15 percent of the investigative time.\29\
---------------------------------------------------------------------------
    \29\ GAO-04-632, p. 34.
---------------------------------------------------------------------------
    This section would also require reciprocity for clearances 
at the same level among departments, agencies, and elements of 
the executive branch. The Committee believes reciprocity will 
help facilitate assignments at the national intelligence 
centers and across agency lines within the intelligence 
community.
    The agency selected would also be tasked with establishing 
and maintaining a database of all clearances to help ensure 
reciprocity. The establishment and use of a database, which 
should be available to client agencies, will allow clearance 
status to be centrally verified, and prevent needless loss of 
time and resources while security officers verify the clearance 
of individuals outside of the immediate department, whether the 
individual is transferred to a joint assignment or simply needs 
to attend a meeting or have access to a document.
    Finally, in keeping with this broader effort on security 
clearances, the legislation provides that the NID will have 
responsibility with respect to access to Sensitive 
Compartmentalized Information, because section 112(b) of the 
bill specifically provides that the President shall act through 
the NID in setting standards for the grant of access.

E. National Intelligence Reserve Corps

    For the intelligence system to have the agility that the 
current times require, it must have the tools to maintain the 
services of individuals with unique or specialized skills and 
qualifications. To assist the NID in responding this challenge, 
section 116 of the legislation provides the NID discretionary 
authority to establish and train a National Intelligence 
Reserve Corps. The corps would allow for temporary reemployment 
of former employees of the elements of the intelligence 
community to meet emergency mission requirements. As a 
recruitment incentive, former employees who volunteer and are 
selected for the corps would not be subject to a reduction in 
annuity from the Civil Service Retirement and Disability Fund. 
The dual compensation waiver is consistent with the authority 
recently granted to the Department of Defense to hire 
individuals for hard-to-fill positions where the annuitant has 
unique or specialized skills and qualifications.\30\ The 
Committee believes this critical hiring flexibility will help 
address the challenges facing the intelligence community, while 
also ensuring retirements do not leave the NID at a critical 
disadvantage.
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    \30\ 5 U.S.C. Sect. 9902.
---------------------------------------------------------------------------

F. Intelligence Community Scholarship Program

    The intelligence community needs every tool available to 
help recruit and train individuals with the skills critical to 
the community's mission and goals. Shortly after the September 
11 attacks, Robert Mueller, Director of the Federal Bureau of 
Investigation, made a public plea for speakers of Arabic and 
Farsi to translate documents that were in U.S. possession but 
which were left untranslated due to a shortage of employees 
with proficiency in those languages.\31\ The Commission Report 
recommended that the CIA Director should emphasize (1) 
rebuilding the CIA's analytic capabilities; and (2) developing 
a stronger language program, with high standards and sufficient 
financial incentives.\32\ These reports demonstrate that action 
is needed to help intelligence community agencies more 
effectively recruit highly-skilled individuals for positions 
within the intelligence community.
---------------------------------------------------------------------------
    \31\ Richard Colvin and Soraya Nelson, ``FBI Issues Call for 
Translator to Assist Probe,'' in L.A. Times, September 18, 2001.
    \32\ Commission report, p. 415.
---------------------------------------------------------------------------
    To help meet this challenge, section 152 of the legislation 
would require the NID to establish an Intelligence Community 
Scholarship Program, to provide college scholarships to 
students in exchange for service within the intelligence 
community. The legislation would require the scholarships to be 
awarded on a competitive process primarily on the basis of 
academic merit and the needs of intelligence community 
agencies. In addition to the criteria established in the 
legislation, the Committee encourages the NID and intelligence 
community agencies to give special consideration to applicants 
seeking degrees in foreign language, science, and mathematics, 
or a combination of those subjects. The legislation would 
require 10 percent of the scholarships under the Program to set 
aside for individuals who are employees of intelligence 
community agencies on the date of enactment of this Act, 
providing the NID with a tool to enhance the skills of the 
existing intelligence community workforce.

G. Framework for Cross-Disciplinary Education and Training

    Each agency of the intelligence community has training 
elements and activities that seek to give employees trade craft 
and functional skills to better perform their jobs. However, 
there is no cross-agency entity whose goal it is to bring 
together personnel from all the intelligence agencies to 
promote understanding of each other's mission and cultures and 
facilitate cooperation and collaboration. Some elements of the 
federal government have educational institutions to promote 
joint thinking and collaboration. For example, the defense 
community has a robust, successful model in its National 
Defense University, whose mission it is to: ``educate military 
and civilian leaders through teaching, research, and outreach 
in national security strategy, and national resource strategy; 
joint multinational operations; information strategies, 
operations, and resource management; acquisition; and regional 
defense and security studies.'' \33\
---------------------------------------------------------------------------
    \33\ http://www.ndu.edu/info.mission.cfm.
---------------------------------------------------------------------------
    In testimony before the House Permanent Select Committee on 
Intelligence, the CIA testified that it was examining the 
concept of a national intelligence university, similar to the 
various service war colleges and staff schools, stating it 
could be as much a virtual university as an actual campus, as a 
way to better train analysts across the community.\34\ The 
Committee believes the intelligence community would benefit 
from a framework for cross-disciplinary education and training 
to help prepare selected individuals for joint rotations and 
assignments within the intelligence community. To accomplish 
this, section 151 of the legislation requires the National 
Intelligence Director to establish an integrated framework that 
brings together the educational components of the intelligence 
community to promote joint education and training.
---------------------------------------------------------------------------
    \34\ Counterterrorism Analysis and Collection: The Requirement for 
Imagination and Creativity, hearing before House Permanent Select 
Committee on Intelligence, 108th Congress (August 4, 2004) (testimony 
of Assistant Director of Central Intelligence for Analysis and 
Production Mark Lowenthal).
---------------------------------------------------------------------------

                 XV. INTERNAL REFORM AT THE FBI AND CIA

    The 9/11 Commission recognized that structural reform at 
the top-level of the Intelligence Community was merely a 
precursor to, and not a guarantee of, improved performance by 
each intelligence agency. The Commission recommended internal 
reform of the FBI to ensure that its transformation toward 
intelligence-collection and analysis is deep and permanent. 
While obviously limited by the unclassified nature of its 
report, the Commission also recommended that the CIA transform 
its human intelligence capabilities in order to counter 21st 
Century threats. The Committee sought to use its statutory 
power to ensure as much as possible that such internal reforms 
occur.

A. Ensuring the Permanence of FBI Reforms

    The 9/11 Commission stated in its final report that, under 
Director Robert Mueller, the FBI has made significant progress 
in improving its intelligence capabilities. The Commission also 
urged the FBI to fully institutionalize its shift to a 
preventative counterterrorism posture. In accordance with the 
Commission's recommendations, this section of the bill requires 
the FBI to improve its intelligence capabilities by developing 
and maintaining a national intelligence workforce consisting of 
agents, analysts, linguists and surveillance specialists who 
are recruited, trained, and rewarded in a manner consistent 
with the intelligence mission of the Bureau. The FBI Director 
shall carry out a program to enhance the capacity of the FBI to 
recruit and retain individuals with skills relevant to the 
intelligence mission of the Bureau. Also, the Bureau must 
afford its analysts career opportunities commensurate with 
those afforded analysts in other intelligence community 
entities. These requirements are necessary to ensure that the 
FBI creates and sustains a workforce with substantial expertise 
in, and commitment to, the intelligence mission of the FBI.
    The FBI's operational intelligence capabilities will be 
improved because supervisors will be required to become a 
certified intelligence officer. In order to ascend to higher 
level intelligence assignments in the FBI, personnel must 
receive advanced intelligence training, and have held an 
assignment with another element of the intelligence community. 
Field Intelligence Group (FIG) supervisors must report directly 
to a senior manager responsible for intelligence matters, and 
are responsible for fully integrating analysts, agents, 
linguists, and surveillance personnel in the field. (The FBI 
has established FIGs in all 56 of its field offices. The FIG is 
the centralized intelligence component in each field office, 
responsible for intelligence functions. FIG personnel analyze 
and disseminate the intelligence collected in their field 
office). These provisions are necessary to ensure that the FBI 
provides effective leadership and infrastructure to support its 
field intelligence components.
    The Bureau is also directed to expand its secure facilities 
to ensure the successful discharge by the field intelligence 
components of the national security and criminal intelligence 
missions of the FBI.
    The FBI is directed to modify its budget structure, in 
consultation with the Director of the Office of Management and 
Budget, according to the four principle missions of the Bureau: 
(1) Intelligence; (2) Counterterrorism; (3) Criminal 
Enterprises/Federal Crimes; (4) Criminal justice services. This 
modification streamlines the FBI's budget structure, and 
segregates funds according to priorities, which allows for 
greater transparency for those charged with oversight.
    Reporting requirements to Congressional committees of 
jurisdiction relative to the improvement of FBI intelligence 
capabilities are established to provide Congress the 
information it needs to fulfill its oversight role.
    The legislation also allows the FBI to establish an 
intelligence career service for FBI analysts. In consultation 
with the Director of the Office of Personnel Management, the 
FBI Director is given greater flexibility in establishing 
analyst positions and rates of pay. Also, the FBI is placed on 
a more level playing field with other elements of the 
intelligence communitywith respect to analyst position 
classification and pay. This increased pay authority allows the FBI to 
create pay rates to appropriately compensate analysts living in high 
cost of living areas.
    By requiring that any FBI performance management system 
established for intelligence analysts shall have at least one 
level of performance above a retention standard, the Bureau 
must have at least three levels of performance for purposes of 
performance ratings. Currently, the FBI uses a ``pass/fail'' 
rating approach. This provision is consistent with prior GAO 
recommendations to the House Appropriations Committee.
    Reporting requirements to Congressional committees of 
jurisdiction relative to the FBI's use of its new pay and 
performance management system are established to provide 
Congress the information it needs to fulfill its oversight 
role.

B. Reforming the CIA To Develop a 21st Century Human Intelligence 
        Capability

    The Central Intelligence Agency will be led by a Director 
who will report to the National Intelligence Director in the 
performance of those functions which will reside within the 
CIA, which are to: collect intelligence through human sources 
and other appropriate means; correlate, evaluate and 
disseminate intelligence; provide overall direction and 
coordination of the collection of intelligence through human 
sources outside of the United States by other elements of the 
government; and perform such other functions as the President 
may direct. The bill preserves the existing protections of 
civil liberties and prescribes that the CIA shall have no 
police, subpoena or law enforcement powers or internal security 
functions.
    The bill creates a new structure for ensuring coordination 
with foreign governments. The CIA Director will be responsible 
for coordinating relationships between intelligence communities 
here and abroad but will execute these responsibilities under 
the direction of the NID.
    The bill also contains provisions requiring reporting by 
the CIA director on efforts to rebuild the CIA. As noted in the 
Congressional Joint Inquiry and the Commission report, CIA's 
human intelligence capabilities require substantial improvement 
to meet the challenges of the 21st Century.
    Moreover, the CIA ultimately stands to gain, not lose, 
under the current legislation. The Commission noted that the 
DCI currently has three roles: head of the Intelligence 
Community, principal intelligence adviser to the President, and 
head of the CIA. The Commission advocated separating the NID 
from the CIA director, arguing that no person can do these 
three jobs well and that DCIs tend to leave management of the 
Intelligence Community to the side. The conduct of human 
intelligence against the terrorist threat, and the 5-year 
rebuilding of the CIA called for by DCI Tenet in his testimony 
before the Commission, requires an official devoted full-time 
to the task and not at the expense of other duties. And the CIA 
can only benefit from improved information-sharing and 
integration among intelligence agencies.

                      XVI. MONITORING PERFORMANCE

    To enhance transparency and Congressional oversight, not 
later than one year after the date of the enactment of this 
Act, the NID shall submit to Congress a report on the progress 
made in the implementation of this Act, including the 
amendments made by this Act. The report shall include a 
comprehensive description of the progress made, and may include 
such recommendations for additional legislative or 
administrative action as the Director considers appropriate.
    To enhance transparency and Congressional oversight, not 
later than two years after the enactment of the act, the 
Comptroller General of the GAO shall issue an implementation 
progress report and issue interim reports as the Comptroller 
General deems appropriate. These reports are to provide 
Congress with (1) an overall assessment of the progress made in 
the implementation of this Act (and the amendments made by this 
Act), (2) a description of any delays or other short-falls in 
the implementation of this Act that have been identified by the 
GAO, and (3) recommendations for additional legislative or 
administrative action that the Comptroller General considers 
appropriate. Each department, agency, and element of the United 
States Government shall cooperate with the Comptroller General 
in the assessment of the implementation of this Act, and shall 
provide the Comptroller General timely and complete access to 
relevant documents in accordance with section 716 of title 31, 
United States Code.

 XVII. BRIDGING THE FOREIGN/DOMESTIC DIVIDE IN HIGH-LEVEL POLICYMAKING

    The bill merges the Homeland Security Council into the 
National Security Council. The combined body, the National 
Security Council, will now have, in addition to its traditional 
responsibilities overseeing, coordinating, and creating foreign 
and national security policies, the responsibility of assessing 
U.S. objectives, commitments, and risks in the area of homeland 
security, including overseeing and reviewing the homeland 
security policies of the federal government.
    Because terrorist organizations move easily across borders, 
it is important that the creation and coordination of policy 
priorities is not hindered by the foreign/domestic divide. 
Currently, domestic homeland security and intelligence issues 
are overseen by the Homeland Security Council, while the 
National Security Council oversees foreign and national 
security policies. The merger of these bodies will enable the 
National Security Council to synthesize and amplify its ability 
to analyze terrorist threats holistically.
    Both the Homeland Security Council and the National 
Security Council are chaired by the President. The bodies share 
many of the same members. The Homeland Security Council 
includes the Vice President, the Secretary of Homeland 
Security, the Attorney General, the Secretary of Defense, and 
such other individuals as the President may designate. The 
National Security Council's statutory members are the Vice 
President, the Secretary of State, the Secretary of the 
Treasury, the Secretary of Defense, and the Assistant to the 
President for National SecurityAffairs. The Chairman of the 
Joint Chiefs of Staff is the statutory military advisor to the Council, 
and the Director of Central Intelligence is the intelligence advisor to 
the Council. The new National Security Council body will remain the 
same, but will now include the Attorney General and the Secretary of 
Homeland Security as statutory members.

                          XVIII. OTHER MATTERS

    The legislation will take effect 180 days after the date of 
enactment. However, the Committee believes that in order to 
ensure the rapid implementation of this legislation, the 
President should begin acting upon these reforms without delay. 
Accordingly, the President would be authorized to determine 
that the legislation or particular provisions thereof could 
take effect on an earlier date. Upon doing so, the President 
shall (1) notify Congress of the exercise of such authority; 
and (2) publish in the Federal Register notice of the earlier 
effective date or dates involved, including each provision (and 
amendment) covered by such earlier effective date.
    During the implementation phase of this Act, the NID, the 
CIA director, and the Secretary of Defense shall jointly take 
such actions as are appropriate to preserve the intelligence 
capabilities of the United States during the establishment of 
the NIA. The Committee wants to emphasize the importance of 
remaining focused on the country's national security needs 
while intelligence reforms occur.
    The NIP's top-line aggregate appropriation figure will be 
declassified in order to promote public accountability. The 
Commission made this recommendation, in addition to 
recommending that agency-specific levels be declassified. 
Although declassification of the top line would show a trend or 
particular spikes and dips over a period of years, there would 
be no detail as to how funds are being spent or even why a 
change occurred--such as due to inflation or rising salaries. 
The apparent rationale for the Commission's latter 
recommendation is so that the relative allocation of resources 
between human and technical collection can be publicly debated. 
The NID will submit a report to Congress as to whether 
declassifying the top-line appropriations figures for each 
agency in the Intelligence Community would harm national 
security.
    For fiscal year 2005, the legislation authorizes to be 
appropriated such sums as may be necessary to carry out its 
provisions. Speedy appropriation of initial funding will be 
critical as the NID, the NIA, the NCTC, and the National 
Intelligence Centers begin to operate and as the intelligence 
agencies pursue internal reform.

                        III. Legislative History

    Beginning in late July 2004, immediately after the issuance 
of the 9/11 Commission's report, the Committee held a series of 
eight hearings examining the Commission's recommendations and 
the reorganization of the intelligence community. The content 
of these hearings is summarized in the next section.
    Following these hearings, the Committee held a business 
meeting on September 21 and 22, 2004 to consider the National 
Intelligence Reform Act of 2004 as an original bill.
    At the business meeting, the Committee considered 26 
amendments, and adopted 21, as follows:
    Chairman Collins and Ranking Member Lieberman offered a 
substitute amendment. Senators Collins and Lieberman also 
offered a 2nd degree amendment to make technical changes to the 
substitute, which was agreed to by voice vote. The substitute, 
as amended, was then agreed to by voice vote.
    Senator Coleman offered an amendment to require the 
National Intelligence Director to notify the Senate Committee 
on Governmental Affairs and the Homeland Security Committee of 
the House of Representatives when intelligence personnel are 
transferred to or from the Department of Homeland Security. The 
Committee agreed to the amendment by voice vote.
    Senator Durbin offered two amendments that were considered 
en bloc. The first of these amendments modified the Privacy and 
Civil Liberties Oversight Board to provide for fixed, six-year 
terms for Board members, make the Chairman full-time, required 
that Board members have expertise in civil liberties and 
privacy, and provided that no more than three members of the 
Board be members of the same political party. The second 
amendment required that Members of the Board are to appear and 
testify before Congress and provides that reports of the Board 
and of agency privacy and civil liberties officers are to be 
submitted to specific Congressional committees. These 
amendments were agreed to en bloc by voice vote, and staff was 
directed to draft language to ensure that Board members terms 
were staggered.
    Senator Durbin offered an additional amendment to modify 
the standards of review used by the Privacy and Civil Liberties 
Oversight Board in providing advice on proposals to retain or 
enhance a governmental power, including a requirement that the 
Board consider whether the executive branch has met its burden 
of proving that the power is the least restrictive means of 
accomplishing the objective. The Committee did not agree to 
this amendment, by a vote of 6-10.
    Senator Fitzgerald offered an amendment to place the 
National Intelligence Authority under the Chief Financial 
Officers Act of 1990, so as to subject the National 
IntelligenceAuthority to the same financial management 
requirements as other cabinet-level departments and major federal 
agencies. The amendment was agreed to by voice vote.
    Senator Lautenberg offered an amendment to establish a term 
of five years for the National Intelligence Director, with the 
possibility of reappointment, which was modified to provide 
that the National Intelligence Director could be appointed for 
``up to'' five years. Senator Specter offered a second-degree 
amendment to provide that the National Intelligence Director be 
appointed for a 
single 10-year term and could be terminated only for cause. The 
second-degree amendment was not agreed to by a vote of 3-14. 
Senator Lautenberg's amendment, as modified, was not agreed to 
by a vote of 7-10.
    Senator Levin offered 13 amendments. The first of these 
added a Subtitle C ``Independence of Intelligence Agencies'' to 
Title II of the bill, requiring, among other things, that the 
National Intelligence Director be located outside the Executive 
Office of the President; that the National Intelligence 
Director, the Director of the National Counterterrorism Center, 
the CIA Director and all national intelligence center directors 
provide time, objective and independent advice to the President 
and to Congress; that Congress have access to national 
intelligence; and that whistleblowers may under certain 
circumstances report information directly to Congress. A 
Senators Collins and Lieberman offered a second degree 
amendment that made a number of changes to the provisions, 
including exempting certain information prepared exclusively 
for the President from required disclosure to Congress and 
providing that the Ombudsman of the National Intelligence 
Agency may refer serious cases of misconduct relating to the 
politicization of intelligence to the NIA Inspector General for 
investigation rather giving the initial investigative 
responsibility to the Inspector General in the first instance. 
The second degree amendment was agreed to by voice vote, and 
the amendment, as amended, was then agreed to by voice vote.
    Senator Levin's second amendment restricted the NCTC to 
strategic planning. Senators Collins and Lieberman offered a 
second degree amendment that provided, among other things, that 
NCTC was responsible for developing interagency plans. The 
second degree amendment was agreed to by voice vote, and the 
amendment, as amended, was then agreed to by voice vote.
    The third amendment offered by Senator Levin modified the 
NCTC's authority to assign responsibilities for 
counterterrorism operations to eliminate its authority to 
assign responsibilities to specific elements of the Armed 
Forces. The Committee agreed to this amendment by voice vote.
    Senator Levin's fourth and fifth amendment were considered 
en bloc. The fourth amendment provided that the NCTC was to 
report to the President and the National Intelligence Director, 
rather than through the National Security Council, on certain 
counterterrorism matters. The fifth amendment required that the 
President, rather than the National Security Council resolve, 
any disagreements over plans and assignments by NCTC. The 
Committee approved these amendments en bloc, by voice vote.
    Senator Levin's sixth amendment provided that programs ``to 
acquire intelligence for the planning and conduct of military 
operations'' were not to be part of the National Intelligence 
Program. Senators Collins and Lieberman offered a second degree 
amendment that excluded programs ``to acquire intelligence 
principally for the planning and conduct of joint or tactical 
military operations'' by U.S. Armed Forces. The second degree 
amendment was agreed to by the Committee by a vote of 10-6. The 
amendment, as amended, was then agreed to by voice vote.
    The seventh amendment offered by Senator Levin replaced the 
National Intelligence Director's authority to establish and 
approve the requirements and priorities governing the 
collection of national intelligence with the authority to 
coordinate the tasking of intelligence collection. The 
amendment was not agreed to, by a vote of 6-11.
    Senator Levin's eighth amendment was divided into two parts 
for consideration by the Committee. The first part required all 
transfers of personnel or funds by the National Intelligence 
Director to be authorized by law and not exceed applicable 
ceilings in such authorizations. The amendment was modified to 
instead require that all transfers not exceed applicable 
ceilings established in law. The Committee agreed to the Part 1 
of the amendment, as modified, by voice vote. The second part 
of the amendment limited the bill's authorization of 
appropriations to fiscal year 2006 and was modified to limit 
the authorization of appropriations to fiscal year 2005. Part 2 
of the amendment, as modified, was agreed to by voice vote.
    The ninth amendment Senator Levin offered excluded military 
personnel and military personnel funds from the NID's authority 
to transfer funds and personnel. The committee did not agree to 
this amendment, by a vote of 7-10.
    Senator Levin's tenth amendment required the National 
Intelligence Director to consult with affected agencies before 
reprogramming funds. The amendment was agreed to by voice vote.
    Senator Levin's eleventh amendment required that 
appropriated funds were to go the National Intelligence 
Authority and be under the direct jurisdiction of the National 
Intelligence Authority. The amendment was modified to provide 
that the funds be appropriated to the National Intelligence 
Authority but be under the direct jurisdiction of the National 
Intelligence Director. The amendment, as modified, was agreed 
to by the Committee by voice vote.
    Senator Levin's twelfth amendment provided that the 
National Intelligence Authority's certifying official may act 
only to the extent authorized by law. The Committee agreed to 
the amendment by voice vote.
    The final amendment offered by Senator Levin provided that 
where the National Intelligence Director is to recommend to the 
President the termination of individual, the NID is to seek the 
concurrence of the relevant agency or department head and, if 
the agency ordepartment head does not concur, notify the 
President of that fact. The amendment was agreed to by voice vote.
    Senator Pryor offered an amendment to require the 
Comptroller General to submit a comprehensive report to 
Congress on the implementation of the legislation no later than 
two years after the date of enactment. The Committee agreed to 
this amendment by voice vote.
    Senator Shelby offered an amendment to establish an 
Analytic Review Unit with the NIA's Office of Inspector General 
to conduct reviews of analytic products by the NIA or any 
element of the National Intelligence Program or any analysis of 
national intelligence by any element of the intelligence 
community, to ensure that the analysis is timely, objective, 
independent of political considerations, and based upon all 
sources available to the intelligence community. The amendment 
was modified to establish the Analytic Review Unit under the 
NIA Ombudsman. The amendment, as modified, was agreed to by 
voice vote.
    Senator Specter offered an amendment to provide the 
National Intelligence Director with the authority to supervise, 
direct, and control elements of the intelligence community 
performing national intelligence missions, including the CIA, 
NSA, National Geospatial-Intelligence Agency, the National 
Reconnaissance Office, and elements of the Defense Intelligence 
Agency, and to provide that the head of each such element 
report directly to the National Intelligence Director. The 
Committee did not accept the amendment, by a vote of 5-12.
    Senator Voinovich offered three amendments. The first of 
these amendments permits the National Intelligence Director 
with approval of the President, notification to Congress, and 
consultation with the affected department, agency or element, 
allocate or reallocate functions among officers of the National 
Intelligence Program to establish, consolidate, alter, or 
discontinue organizational units within the Program. The 
amendment was modified to provide that this authority does not 
extend to any action inconsistent with law. The amendment, as 
modified, was agreed to by voice vote.
    Senator Voinovich also offered an amendment to designate a 
single federal agency to conduct security clearance 
investigations and to maintain a database to help ensure 
reciprocity among executive branch agencies for clearances. The 
amendment was modified to clarify that agencies that currently 
adjudicate and grant security may continue to do so after the 
underlying investigations are transferred to a central agency; 
that agency personnel whose sole function si to perform 
clearance investigations will be transferred to the agency 
designated to be the central agency for such investigations; 
and to require that these security clearance reforms be fully 
operations within one year. The Committee agreed to the 
amendment, as modified, by voice vote.
    Senator Voinovich's final amendment established a Federal 
Bureau of Investigation Intelligence Career Service. As 
modified, this amendment permits the FBI Director, in 
consultation with the Director of the Office of Personnel 
Management, to establish positions for intelligence analysts, 
to prescribe standards and procedures for establishing and 
classifying such positions, and set pay for such analysts above 
existing pay scales. The Committee agreed to this amendment, as 
modified, by voice vote.
    The Committee ordered that the bill, as amended, be 
reported by a vote of 14-0.

                         IV. Committee Hearings

    On July 30, 2004, the Committee held a hearing entitled, 
``Making America Safer: Examining the Recommendations of the 9/
11 Commisson''. Witnesses included: Thomas Kean, Chairman, 
National Commission on Terrorist Attacks Upon the United 
States; Lee Hamilton, Vice-Chairman, National Commission on 
Terrorist Attacks Upon the United States.
    The Commissioners explained and answered questions 
regarding the 9/11 Commission's central intelligence reform 
recommendations, including its proposals to establish a 
National Intelligence Director, who would have authority over 
all Intelligence Community elements, including authority over 
personnel, security, and information technology, and to create 
a National Counterterrorism Center that would serve as the 
government's central knowledge bank on international terrorism 
and, with personnel drawn from various agencies across the 
government, would conduct joint intelligence and joint 
operational planning. The Commissioners did not support 
creating a domestic intelligence agency, but they noted that 
the FBI needs a specialized and integrated national security 
workforce.
    On August 3, 2004, the Committee held a hearing entitled, 
``Assessing America's Counterterrorism Capabilities''. 
Witnesses included: John Brennan, Director, Terrorist Threat 
Integration Center; John Pistole, Executive Assistant Director 
for Counterterrorism and Counterintelligence, Federal Bureau of 
Investigation; Lieutenant General Patrick Hughes, Assistant 
Secretary for Information Analysis, Department of Homeland 
Security; and Philip Mudd, Deputy Director, Counterterrorist 
Center, Central Intelligence Agency; Philip Zelikow, Executive 
Director, and Christopher Kojm, Deputy Executive Director, of 
the National Commission on Terrorist Attacks Upon the United 
States.
    This hearing focused on the proposal to create a National 
Counterterrorism Center. The first panel, consisting of key 
officials involved in counterterrorism and homeland security 
efforts, testified regarding current interagency efforts and 
relationships in the war on terror, how those relationships 
have changed since 9/11, and how the creation of a National 
Counterterrrorism Center would impact their agencies and 
functions. The second panel, consisting of the top staff 
members of the 9/11 Commission, further explained the 
Commission's proposal to create a National Counterterrorism 
Center.
    On August 16, 2004, the Committee held a hearing entitled, 
``Reorganizing America's Intelligence Community: A View from 
the Inside''. Witnesses included: William Webster, 
JamesWoolsey; and Stansfield Turner. A written statement was submitted 
by Robert Gates. Each of the witnesses was a former Director of Central 
Intelligence. Mr. Webster also formerly served as the Director of the 
Federal Bureau of Investigation.
    These witnesses shared the benefits of their experiences as 
Directors of Central Intelligence and offered their views on 
the creation of a National Intelligence Director, particularly 
with respect to the need for the NID to have enhanced 
authorities with respect to budget and personnel.
    On August 17, 2004, the Committee held a hearing entitled, 
``Voicing a Need for Reform: The Families of 9/11''. Witnesses 
included: Mary Fetchet, Founding Director, Voices of September 
11th, Member, Family Steering Committee; Steven Push, Co-
Founder and Board Member, Families of September 11th; and 
Kristen Breitweiser, Founder and Co-Chairperson, September 11th 
Advocates, Member, Family Steering Committee.
    All three family members testified to the critical need for 
major reform of the Intelligence Community, calling on the 
executive and legislative branches to act promptly. All three 
witnesses strongly supported the creation of a NID and NCTC, as 
recommended by the 9/11 Commission.
    On August 26, 2004, the Committee held a closed hearing 
entitled, ``Reorganizing the Intelligence Community: to What 
Extent Should the National Intelligence Director Have Budget 
Authority and the National Counterterrorism Center Play a Role 
in Operational Planning?''. Witnesses included: Larry 
Kindswater, Deputy Director of Central Intelligence for 
Community Management, Central Intelligence Agency; Stephen 
Cambone, Under Secretary of Defense for Intelligence, U.S. 
Department of Defense; Arthur Cummings, Section Chief, 
International Terrorism Operations Section I, Counterterrorism 
Division, Federal Bureau of Investigation; Norton Schwartz, 
Director for Operations, J-3, Joint Staff, U.S. Department of 
Defense; and CIA Counterterrorism Specialist.
    This hearing focused on budget and operational planning 
issues.
    On September 8, 2004, the Committee held a hearing 
entitled, ``Building an Agile Intelligence Community to Fight 
Terrorism and Emerging Threats''. Witnesses included: Robert 
Mueller III, Director, Federal Bureau of Investigation; and 
John McLaughlin, Acting Director of Central Intelligence, 
Central Intelligence Agency.
    This hearing focused on the need to build an agile and 
flexible intelligence community that can rapidly respond to 
emerging threats. As heads of two agencies with primary 
responsibility for collecting intelligence domestically and 
overseas, these witnesses provided the Committee with their 
perspectives regarding the current state of the intelligence 
community, improvements that have been made since 9/11 in areas 
such as interagency cooperation and information sharing, and 
how the creation of a National Intelligence Director and 
National Counterterrorism Center can build upon that progress. 
Director Mueller testified regarding the numerous improvements 
made by the FBI since 9/11 in collecting, analyzing and 
distributing intelligence, and he identified three principles 
that should guide any attempt to reform the intelligence 
community: (1) providing analysts transparency into sourcing, 
(2) maintaining the operational chain of command, i.e., the NID 
and the NCTC chief should not have operational authority over 
the FBI or other agencies, and (3) the importance of protecting 
civil liberties. Acting DCI McLaughlin emphasized the 
importance of giving the NID real authority and direct access 
to analysts and other experts, particularly at the CIA.
    On September 13, 2004, the Committee held a hearing 
entitled, ``Ensuring the U.S. Intelligence Community Supports 
Homeland Defense and Departmental Needs''. Witnesses included: 
Colin Powell, Secretary of State; and Tom Ridge, Secretary of 
the Department of Homeland Security
    This hearing focused on the needs of departmental consumers 
of intelligence. Both Secretary Powell and Secretary Ridge 
supported the creation of a strong National Intelligence 
Director with strong budget, personnel and other authorities. 
Both witnesses affirmed that a strong NID would improve the 
quality of the intelligence they receive. Both witnesses also 
supported the concept of a cabinet-level joint intelligence 
community council. Both witnesses opposed the concept of dual-
hatting.
    On September 14, 2004, the Committee's Subcommittee on 
Oversight of Government Management, the Federal Workforce and 
the District of Columbia, chaired by Senator Voinovich, held a 
hearing entitled, ``9/11 Commission Human Capital 
Recommendations: A Critical Element of Reform''. Witnesses 
included: Fred Fielding, Commissioner, National Commission on 
Terrorist Attacks upon the United States, Jamie Gorelick, 
Commissioner, National Commission on Terrorist Attacks Upon the 
United States; Mark Bullock, Assistant Director of 
Administrative Services, Federal Bureau of Investigation, John 
Turnicky, Special Assistant to the DCI for Security, Central 
Intelligence Agency; Chris Mihm, Managing Director, Strategic 
Issues, U.S. Government Accountability Office; Paul Light, 
Senior Fellow, The Brookings Institution; Morgan Kinghorn, 
President, National Academy of Public Administration; Doug 
Wagoner, Chairman, Security Clearance Task Group, Information 
Technology Association of America; and Max Stier, President, 
Partnership for Public Service.
    This hearing focused on personnel issues related to the 
reform of the intelligence community recommended by the 9/11 
Commission, including the need to streamline the presidential 
appointments process, to improve the security clearance system, 
to develop a specialized national security and intelligence 
workforce at the FBI and to set personnel standards across the 
intelligence community.

                     V. Section-by-Section Analysis


Section 1. Short Title; Table of Contents

Section 2. Definitions

     Adds the National Intelligence Authority (NIA) to 
the membership of the ``intelligence community.''
     Defines ``national intelligence'' as intelligence 
that pertains to the interests of more than one department or 
agency, excluding counterintelligence or law enforcement 
activities conducted by the FBI except as agreed between the 
National Intelligence Director (NID) and the FBI Director.
     Defines the ``National Intelligence Program'' to 
include: (i) all national intelligence programs, projects, and 
activities of the intelligence community; (ii) all programs, 
projects and activities of the NIA, CIA, NSA, NGA, NRO, the DHS 
Office of Information Analysis, and the FBI Office of 
Intelligence, whether or not they pertain to national 
intelligence; and (iii) any other program, project, or activity 
relating to national intelligence unless the NID and head of 
the department, agency, or element concerned determine 
otherwise. Except as provided under (ii), the NIP excludes any 
program, project, or activity of the military (including those 
of the Defense Intelligence Agency not under the National 
Foreign Intelligence Program) that acquire intelligence 
principally to support tactical or joint military operations.

                TITLE I--NATIONAL INTELLIGENCE AUTHORITY


              Subtitle A--National Intelligence Authority


Section 101. National Intelligence Authority

     Creates the National Intelligence Authority as an 
independent establishment in the Executive Branch, composed of 
the Office of the NID, the Inspector General of the NIA, the 
Ombudsman of the NIA, the National Counterterrorism Center 
(NCTC), national intelligence centers established by the NID, 
and other entities established by law, the President, or the 
NID.
     Provides that the primary missions of the National 
Intelligence Authority are: (1) to unify and strengthen the 
efforts of the intelligence community; (2) to ensure that such 
efforts are jointly organized around intelligence missions 
rather than collection disciplines; (3) to provide for the 
operation of the NCTC and national intelligence centers; (4) to 
eliminate barriers that impede counterterrorism activities 
between foreign intelligence activities abroad and 
domestically, while ensuring the protection of civil liberties; 
and (5) to establish clear responsibility and accountability 
for counterterrorism and other national security intelligence 
matters.
     Provides that the National Intelligence Authority 
shall have a seal.

Section 102. National Intelligence Director

     The NID is nominated by the President and 
confirmed by the Senate. The NID is prohibited from 
simultaneously serving in any capacity in any other element of 
the intelligence community.
     The NID shall (1) serve as the head of the 
intelligence community; (2) act as the President's principal 
intelligence adviser; (3) serve as the head of the National 
Intelligence Authority; and (4) direct and oversee the National 
Intelligence Program.

     Subtitle B--Responsibilities and Authorities of the National 
                         Intelligence Director


Section 111. Provision of National Intelligence

     The NID is responsible for providing timely and 
objective national intelligence to: (1) the President; (2) the 
heads of other executive departments and agencies; (3) the 
Chairman of the Joint Chiefs of Staff and senior military 
commanders; (4) the U.S. House and Senate, and the committees 
thereof; and (5) such other persons or entities as the 
President shall direct.

Section 112. Responsibilities of National Intelligence Director

     The NID shall determine the annual budget for 
intelligence and intelligence-related activities by: (1) 
providing to the heads of the departments containing agencies 
or elements within the intelligence community and that have one 
or more programs, projects, or activities within the NIP, and 
to the heads of such agencies and elements, guidance for 
development of the NIP budget pertaining to such agencies or 
elements; (2) developing and presenting to the President an 
annual budget for the NIP after consultation with the heads of 
those agencies or elements, and the heads of their respective 
departments, (3) providing budget guidance to each element of 
the intelligence community that does not have one or more 
program, project, or activity within the NIP regarding the 
intelligence activities of such element; and (4) participating 
in the development by the Secretary of Defense of the annual 
budgets for the military intelligence programs, projects, and 
activities not included in the NIP.
     The NID shall manage and oversee the National 
Intelligence Program, including by executing funds, 
reprogramming funds, and transferring funds and personnel under 
the NIP.
     The NID shall establish requirements and 
priorities for collection, analysis, and dissemination of 
national intelligence by elements of the intelligence 
community. The NID shall also establish collection and analysis 
requirements for the intelligence community, determine 
collection and analysis priorities, issue and manage collection 
and analysis tasking, and resolve conflicts in the tasking of 
elements of the intelligence community within the National 
Intelligence Program, except as otherwise agreed with the 
Secretary of Defense pursuant to the direction of the 
President. Furthermore, the NID shall provide advisory tasking 
on the collection of intelligence to elements of the government 
not part of the intelligence community.
     The NID shall oversee and manage the NCTC, and 
establish, oversee, and manage National Intelligence Centers.
     The NID shall also establish requirements and 
priorities for collection of intelligence under the Foreign 
Intelligence Surveillance Act (FISA) and assist the Attorney 
General in ensuring that intelligence derived from FISA 
operations is disseminated, but the NID has no authority to 
direct or undertake FISA operations except as otherwise 
authorized by statute or Executive order.
     In consultation with the heads of the other 
elements of the intelligence community, and the heads of their 
respective departments, the NID shall develop personnel 
policies and programs for the intelligence community that: (1) 
encourages and facilitates assignments and details to the NCTC 
and national intelligence centers, and between other elements 
of the intelligence community; (2) sets standards for 
education, training, and career development; (3) encourages the 
recruitment and retention of high-quality individuals; (4) 
ensures that intelligence personnel are sufficiently diverse; 
(5) makes service in more than one element of the intelligence 
community a condition for promotion; (6) effectively manages 
intelligence community personnel who are trained in community-
wide matters; (7) provides for effective management of human 
capital within the intelligence community; (8) is consistent 
with public employment principles of merit and fitness; and (9) 
includes the enhancements required under section 114.
     The NID shall promote and evaluate the utility of 
national intelligence to consumers in the U.S. Government.
     The NID shall ensure that appropriate officials 
have access to a variety of intelligence assessments and 
analytical views.
     The NID shall: (1) protect intelligence sources 
and methods; (2) establish reporting guidelines that maximize 
the dissemination of information while protecting sources and 
methods; and (3) establish requirements and procedures for: (a) 
the classification of information; (b) access to classified 
information; and (c) dissemination of classified information. 
The President acting through the NID shall establish and 
implement uniform standards and procedures for granting access 
to sensitive compartmented information.
     The NID shall develop, in consultation with the 
heads of relevant departments and agencies, an integrated 
communications network that provides interoperable 
communications capabilities within the intelligence community 
and with other entities or persons the NID determines 
appropriate.
     The NID shall establish standards for information 
technology and communications for the intelligence community.
     The NID shall ensure that the intelligence 
community makes efficient and effective use of open-source 
information and analysis.
     The NID shall ensure compliance by the 
intelligence community with all laws, regulations, and 
policies, including those applicable to protecting civil rights 
and civil liberties.
     The NID shall eliminate waste and unnecessary 
duplication within the intelligence community and perform other 
functions as directed by the President.
     The NID shall, in consultation with the heads of 
relevant departments and agencies, direct and coordinate the 
performance by the elements of intelligence community within 
the NIP of such services that are of common concern which the 
NID determines can be more efficiently performed in a 
consolidated manner, including research and development.
     The NID may prescribe regulations relating to the 
discharge and enforcement of the responsibilities under this 
section.
     The NID shall perform such other functions as the 
President may direct.

Section 113. Authorities of National Intelligence Director

     The NID shall have access to all national 
intelligence, unless otherwise directed by the President.
     The NID shall determine the annual budget for 
intelligence and intelligence-related activities by: (1) 
providing to the heads of the departments containing agencies 
or elements within the intelligence community and that have one 
or more programs, projects, or activities within the NIP, and 
to the heads of such agencies and elements, guidance for 
development of the NIP budget pertaining to such agencies or 
elements; (2) developing and presenting to the President an 
annual budget for the NIP after consultation with the heads of 
agencies or elements, and the heads of their respective 
departments, including, in furtherance of such budget, the 
review, modification, and approval of budgets of the agencies 
or elements of the intelligence community with one or more 
programs, projects, or activities within the NIP utilizing the 
budget authorities in subsection (c)(1); (3) providing guidance 
on the development of annual budgets for each element of the 
intelligence community that does not have any program, project, 
or activity within the NIP utilizing the budget authorities in 
subsection (c)(2); (4) participating in the development by the 
Secretary of Defense of the annual budget for military 
intelligence programs and activities outside the NIP; (4) 
receiving the appropriations for the NIP as specified in 
subsection (d) and allotting and allocating funds to agencies 
and elements of the intelligence community; and (5) managing 
and overseeing the execution by the agencies or elements of the 
intelligence community, and, if necessary, the modification of 
the annual budget for the NIP, including directing the 
reprogramming and transfer of funds, and the transfer of 
personnel, among and between elements of the intelligence 
community within the NIP utilizing the authorities in 
subsections (f) and (g).
     In developing the annual National Intelligence 
Program budget, the NID shall coordinate, prepare, and present 
to the President an annual budget for elements of the 
intelligence community that are within the National 
Intelligence Program, in consultation with the heads of such 
elements. The NID shall approve budget submissions from such 
elements, and may require modifications to meet NID priorities, 
before approving such budgets for submission to the President.
     Regarding elements of the intelligence community 
not within the National Intelligence Program, the NID shall 
provide guidance for the development of their budgets. The 
heads of such components, and the heads of their respective 
departments, shall coordinate closely with the NID before 
submitting their budgets to the President.
     Any amounts appropriated or otherwise made 
available to the National Intelligence Program shall be 
appropriated to the NIA and under the NID's direct 
jurisdiction. The NID shall manage and oversee the execution of 
National Intelligence Program funds by any intelligence 
community element which receives such funds.
     The Secretary of the Treasury shall, in 
consultation with the NID, establish accounts for the funds 
under the jurisdiction of the NID.
     National Intelligence Program funds may not be 
reprogrammed or transferred by an element of the intelligence 
community without NID approval. Department heads shall consult 
with the NID before reprogramming non-National Intelligence 
Program funds of departmental entities within the intelligence 
community. The NID shall consult with the affected department 
head prior to reprogramming funds of an element of the 
intelligence community within the NIP. The NID shall consult 
with the appropriate committees of Congress regarding 
modifications of existing procedures to expedite the 
reprogramming of funds within the NIP, including procedures for 
notifying Congress of department or agency objections to a 
reprogramming by the NID.
     With the approval of the Office of Management and 
Budget and after consultation with the affected department or 
agency, the NID may (1) transfer or reprogram funds from one 
intelligence community element funded by the National 
Intelligence Program to another; (2) review, and approve or 
disapprove, any proposal to transfer or reprogram funds from 
non-NIP appropriations to NIP appropriations; (3) in accordance 
with procedures developed by the NID, transfer personnel of an 
element of the intelligence community funded by the NIP to 
another element of the intelligence community; and (4) in 
accordance with procedures developed by the NID and the heads 
of the departments and agencies concerned, transfer personnel 
of an element of the intelligence community funded outside the 
NIP to another element of the intelligence community. The NID 
may only make such a transfer if the funds or personnel are 
being transferred to a higher priority, the funds are not being 
transferred to the NID Reserve for Contingencies, and the 
transfer does not exceed applicable ceilings established in 
law. The NID shall notify the Appropriations Committees of the 
House and theSenate, Senate Select Committee on Intelligence, 
and the House Permanent Select Committee on Intelligence of all 
transfers. In addition, the NID shall notify the Armed Services 
Committees of transfers involving Defense Department personnel; the 
Judiciary Committees of transfers involving FBI personnel; and the 
Senate Committee on Governmental Affairs and the House Committee on 
Homeland Security of transfers involving Department of Homeland 
Security personnel.
     The NID shall establish information-technology 
standards for the intelligence community, develop an integrated 
information technology network, maintain an inventory of 
critical information technology and eliminate duplication, 
establish contingency plans regarding information technology, 
and shall take necessary actions to ensure information-sharing 
among the elements of the intelligence community.
     The NID shall oversee and direct the Director of 
the Central Intelligence Agency in coordinating the 
relationships between elements of the intelligence community 
and their counterparts in foreign governments on all matters 
relating to national security intelligence or involving 
intelligence acquired through clandestine means.
     The NID shall establish and maintain within the 
intelligence community an effective and efficient open source 
information capability.
     The head of each element of the intelligence 
community shall promptly provide the NID such information as 
the NID may request to facilitate the NID's authorities and 
responsibilities, except as otherwise directed by the 
President.

Section 114. Enhanced Personnel Management

     The NID shall prescribe regulations to provide 
incentives (e.g., bonuses) for intelligence community personnel 
to serve on the staffs of the NCTC, national intelligence 
centers, and other community-management positions.
     The NID shall ensure that intelligence personnel 
who are assigned or detailed for service under the NID shall be 
promoted at rates equivalent to or better than personnel who 
did not serve in such capacities.
     The NID shall prescribe mechanisms to facilitate 
the personnel rotation across the intelligence community in 
order to facilitate the widest possible understanding of the 
variety of intelligence requirements, methods, and disciplines. 
Such mechanisms may include: (1) establishing a special 
occupational category for intelligence personnel who wish to 
serve in more than one element of the intelligence community; 
(2) providing awards for such service; and (3) establishing 
requirements for education, training, service, and evaluation 
for such service. It is the sense of Congress that such 
mechanisms should seek to duplicate joint officer management 
policies established by the Goldwater-Nichols Department of 
Defense Reorganization Act of 1986.

Section 115. Security Clearances

     Requires the President, in consultation with the 
NID and others, to establish, and ensure the implementation of, 
uniform standards and procedures for access to classified 
information for both employees and contract personnel and to 
ensure reciprocity among executive branch agencies for 
clearances. Under (b), the section requires the President to 
designate a single federal agency to be responsible for 
providing and maintaining clearances. The agency selected would 
be tasked with establishing and maintaining a database of all 
clearances.

Section 116. National Intelligence Reserve Corps

     The NID may provide for the establishment and 
training of a National Intelligence Reserve Corps for the 
temporary reemployment on a voluntary basis of former 
intelligence community employees during times of emergency.

Section 117. Appointment and Termination of Certain Officials 
        Responsible for Intelligence-Related Activities

     The NID shall recommend to the President an 
individual to fill a vacancy in the position of CIA Director.
     The NID shall obtain the concurrence of the 
Secretary of Defense before recommending to the President an 
individual to fill a vacancy in the position of Director of the 
National Security Agency; Director of the National 
Reconnaissance Office; or Director of the National Geospatial-
Intelligence Agency. If the Defense Secretary does not concur 
in the recommendation, the NID may still make the 
recommendation, but must include with the recommendation a 
statement that the Secretary does not concur.
     The head of the appropriate department or agency 
shall obtain the concurrence of the NID before appointing or 
recommending to the President for appointment the Under 
Secretary of Defense for Intelligence; the Director of the 
Defense Intelligence Agency; the Assistant Secretary of 
Homeland Security for Information Analysis; and the Executive 
Assistant Director for Intelligence of the FBI. If the NID does 
not concur, the secretary or agency head may appoint or 
recommend the official for appointment, but must notify the 
President of the lack of concurrence.
     The NID may recommend any official covered by this 
section for termination to the President or head of the 
appropriate department or agency. The NID must seek the 
concurrence of the head of the affected department or agency. 
If there is no concurrence, the NID may still make the 
recommendation, but must notify the President of the lack of 
concurrence.

Section 118. Reserve for Contingencies of the National Intelligence 
        Director

     This section establishes a Reserve for 
Contingencies of the NID consisting of amounts appropriated to, 
transferred to, or deposited in the Reserve to be used for 
purposes as are provided for by law. All unobligated balances 
of the CIA Reserve for Contingencies shall be transferred to 
this fund on the date of enactment.

        Subtitle C--Office of the National Intelligence Director


Section 121. Office of the National Intelligence Director

     There is within the National Intelligence 
Authority, an Office of the National Intelligence Director with 
the function of helping the NID in carrying out the duties and 
responsibilities of the NID. The Office of the NID shall have a 
professional staff that includes transferred elements of the 
Community Management Staff.
     The Office of the NID consists of the Principal 
Deputy NID; any other Deputy NID appointed under Sec. 122(b); 
the National Intelligence Council; the General Counsel of the 
NIA; the Intelligence Comptroller; the Office for Civil Rights 
and Civil Liberties of the NIA; the Privacy Officer of the NIA; 
the Chief Information Officer of the NIA; the Chief Human 
Capital Officer of the NIA; the Chief Financial Officer of the 
NIA; the National Counterintelligence Executive; and such other 
offices and officials as may be established by law or the NID 
may establish or designate. The National Intelligence Council 
and the National Counterintelligence Executive currently exist 
and are being transferred to the Office of the NID.
     As of October 1, 2006 the Office of the NID may 
not co-locate with any other element of the intelligence 
community.

Section 122. Deputy National Intelligence Directors

     There is a Principal Deputy NID recommended by the 
NID and appointed by the President with the advice and consent 
of the Senate, who may not serve in any other capacity in any 
other element of the intelligence community. This official 
shall assist the NID in carrying out the duties and 
responsibilities of the NID, and shall act for the NID during 
an absence or vacancy.
     There shall be not more than four Deputy NIDs, all 
of whom shall be appointed by the President. The Deputy NIDs 
shall be recommended by the NID to the President and shall have 
such duties, responsibilities, and authorities as assigned by 
the NID or as specified by law.

Section 123. National Intelligence Council

     The National Intelligence Council shall be 
composed of senior intelligence community analysts and 
substantive experts from the public and private sector who 
shall be appointed by, report to, and serve at the pleasure of 
the NID.
     The Council shall produce national intelligence 
estimates, including alternative views held by elements of the 
intelligence community; evaluate community-wide collection and 
production of intelligence; and otherwise assist the NID in 
carrying out the NID's responsibilities under Sec. 111.
     The NID shall ensure that each national 
intelligence estimate (1) states separately and distinguishes 
between the intelligence underlying such estimate and the 
assumptions and judgments of analysts with respect to such 
intelligence and estimate; (2) describes the quality and 
reliability of the intelligence underlying such estimate; (3) 
presents and explains alternative conclusions, if any, with 
respect to the intelligence underlying such estimate and such 
estimate; and (4) characterizes the uncertainties, if any, and 
the confidence in such estimate.
     The Council has the authority to contract. In 
addition, its staff shall be provided by the NID and support 
shall be provided as appropriate by the heads of the elements 
of the intelligence community.

Section 124. General Counsel of the National Intelligence Authority

     The General Counsel of the NIA shall be appointed 
by the President from civilian life with the advice and consent 
of the Senate. This official is the chief legal officer of the 
NIA and shall perform such functions as the NID shall 
prescribe. An official serving in this position may not also 
serve as General Counsel of any other department, agency, or 
element of the United States government.

Section 125. Intelligence Comptroller

     The NID shall appoint an Intelligence Comptroller 
from civilian life who shall report directly to the NID. This 
official shall assist the NID in preparing and executing the 
budget of the NIP; assist the NID in participating in the 
Defense Secretary's annual budget for military intelligence and 
activities outside of theNIP; provide unfettered access to the 
NID to financial information under the NIP; and perform other duties as 
may be prescribed by the NID or specified by law.

Section 126. Officer for Civil Rights and Civil Liberties of the 
        National Intelligence Authority

     The President shall appoint an Officer for Civil 
Rights and Civil Liberties of the National Intelligence 
Authority who shall report directly to the NID.
     This official shall assist the NID in ensuring 
that the protection of civil rights and civil liberties is 
appropriately incorporated in the policies and procedures 
developed for and implemented by the NIA, those regarding the 
relationships among the elements of the intelligence community 
within the NIP, and those regarding the relationships between 
the elements of the intelligence community within the NIP and 
the other elements of the intelligence community. This official 
shall also oversee compliance by the NIA with the Constitution 
and all laws and rules relating to civil rights and civil 
liberties regarding the same.
     This official shall also review, investigate, and 
assess complaints and other information regarding possible 
abuses of civil rights or civil liberties in the administration 
of the NIA and in relationships among the elements of the 
intelligence community within the NIP or between those elements 
and non-NIP elements, unless the NIA's IG determines that the 
IG can better review the matter.
     This official shall coordinate with the NIA 
Privacy Officer and perform such other duties and may be 
prescribed the NID or specified by law.

Section 127. Privacy Officer of the National Intelligence Authority

     The NID shall appoint a Privacy Officer of the 
NIA. This official shall have primary responsibility for the 
privacy policy of the NIA and shall coordinate with the NIA 
Officer for Civil Rights and Civil Liberties.

Section 128. Chief Information Officer of the National Intelligence 
        Authority

     The NID shall appoint a Chief Information Officer 
of the NIA. The NIA CIO shall assist the NID in developing and 
implementing an integrated communications network that provides 
interoperable communications capabilities among all elements of 
the intelligence community.

Section 129. Chief Human Capital Officer of the National Intelligence 
        Authority

     The NID shall appoint a Chief Human Capital 
Officer to assist the NID with the development and 
implementation of workforce management strategies for the 
intelligence community.

Section 130. Chief Financial Officer

     There is a Chief Financial Office of the National 
Intelligence Authority, who shall be designated by the 
President in consultation with the NID.

Section 131. National Counterintelligence Executive

     This position is moved to the Office of the 
National Intelligence Director. The National 
Counterintelligence Executive serves as the head of national 
counterintelligence for the United States government; chairs 
the National Counterintelligence Policy Board; and heads the 
Office of the National Counterintelligence Executive (also 
moved to the Office of the NID).

   Subtitle D--Additional Elements of National Intelligence Authority


Section 141. Inspector General of the National Intelligence Authority

     This section is structured similarly to 50 U.S.C. 
Sec. 403q, which creates the CIA's Inspector General. This 
section gives the Inspector General of the NIA authorities over 
the NIA that largely track the CIA Inspector General's 
authorities over the CIA. The significant difference between 
the two is that this section gives the NIA Inspector General 
the authority to initiate and conduct independent 
investigations, inspections, and audits relating to the 
relationships among the elements of the intelligence community 
within the National Intelligence Program, and between those 
elements and the other elements of the intelligence community. 
By contrast, the CIA Inspector General's authorities do not 
extend to the relationships between elements of the 
intelligence community; instead, they focus on the CIA.
     Section 141(a) establishes an Office of the 
Inspector General within the NIA.
     Section 141(b) establishes the purposes of the 
OIG, which include creating an objective and effective office 
to conduct independent investigations, inspections, and audits; 
providing a means to keep the NID fully informed of problems 
and deficiencies; and ensuring that the congressional 
intelligence committees are kept informed.
     Section 141(c) provides that the head of the OIG 
shall be the Inspector General of the NIA and that the 
Inspector General shall be appointed by the President with the 
advice and consent of the Senate. This section also requires 
that the IG be selected without regard to political affiliation 
and solely on the basis of integrity, compliance with the 
security standards, and prior experience in the field of 
intelligence or national security as well as on a demonstrated 
ability in accounting, financial analysis, law, management 
analysis, public administration, or auditing. This section also 
requires that the IG report directly to the NID. This section 
states that the IG may only be removed by the President and 
that the President must submit the reasons for such removal to 
the congressional intelligence committees.
     Section 141(d) establishes the duties and 
responsibilities of the IG including providing policy direction 
for, and to plan, conduct, and coordinate independently, the 
investigations, inspections, and audits relating to the 
programs and operations of the NIA; keeping the NID informed of 
violations of law, regulations, civil liberties, privacy, 
fraud, and other deficiencies; taking due regard for the 
protection of intelligence sources and methods in the 
preparation of reports; and complying with generally accepted 
government auditing standards.
     Section 141(e) allows the NID to prohibit the IG 
from initiating or carrying out an investigation, inspection, 
or audit if the NID determines it is vital to national 
security, but requires the NID to submit to the intelligence 
committees the reasons for the prohibition and allows the IG to 
submit any relevant comments to the intelligence committees.
     Section 141(f) requires that the IG have direct 
and prompt access to the NID; any employee or contractor; and 
any other element of the intelligence community within the 
National Intelligence Program. This section also requires that 
the IG have access to all relevant records, reports, audits, 
reviews, and other documents. The IG is also authorized to 
receive and investigate complaints or information from any 
person concerning violations of law, rules, regulations, 
mismanagement, waste, abuse, and substantial danger to public 
health and safety. Requires the IG not to disclose the identity 
of such an employee, without consent, and restricts reprisals 
against an employee for making a complaint to the IG. This 
section provides the IG with subpoena authority and establishes 
guidelines for the use of the authority.
     Section 141(g) requires that the IG be provided 
appropriate office space and supplies; allows the IG to appoint 
and employ staff; and allows the IG to request information and 
assistance from any department, agency, or other element of the 
government, with the concurrence of the NID.
     Section 141(h) establishes a semi-annual reporting 
requirement by the IG to the NID, who in turn would be required 
to transmit the reports to the congressional intelligence 
committees together with any comments of the NID. The section 
also requires the IG to immediately report to the NID any 
serious or flagrant problems, abuses, or deficiencies and 
requires the NID to transmit those reports to the intelligence 
committees. The section also establishes additional reporting 
requirements in certain circumstances, such as when a matter is 
referred to Justice because of possible criminal conduct, an 
investigation should focus on a person who is Senate-confirmed, 
and when the IG is unable to resolve differences with the NID. 
The section also establishes procedures employees may follow 
prior to making any reports directly to the Congress.
     Section 141(i) requires the NID to establish a 
separate budget account for the OIG.

Section 142. Ombudsman of the National Intelligence Authority

     This section creates an Ombudsman in the National 
Intelligence Authority, appointed by the NID, who will have the 
authority to: (i) counsel, arbitrate, offer recommendations on, 
and initiate investigations into problems of politicization, 
biased reporting, or the lack of objective analysis within the 
NIA or any element of the National Intelligence Program; (ii) 
monitor the effectiveness of measures taken in response to such 
problems; and (iii) conduct reviews of the analytic products of 
the NIA or any element of the intelligence community within the 
NIP, or of any analysis of national intelligence by any element 
of the intelligence community. This office is patterned after 
the CIA Ombudsman.
     There shall be an Analytic Review Unit within the 
Office of the Ombudsman which shall assist in the performance 
of the duties of the Ombudsman, including by conducting 
detailed evaluations of intelligence by the National 
Intelligence Council, the elements of the intelligence 
community within the NIP, and, to the extent involving the 
analysis of national intelligence, other elements of the 
intelligence community.
     The Ombudsman shall, unless otherwise directed by 
the President, have access to all analytic products, field 
reports, and raw intelligence of any element of the 
intelligence community and to any reports or other material of 
an Inspector General that might be pertinent.
     This official will provide the NID and the 
congressional intelligence committees with an annual report 
that includes an assessment of the current level of 
politicization, biased reporting, or the lack of objective 
analysis within the NIA, any element of the intelligence 
community within the NIP, or any analysis ofnational 
intelligence by an element of the intelligence community. The report 
shall also include suggestions for remedial measures and the 
effectiveness of remedial measures taken.
     In addition to carrying out activities under this 
section, the Ombudsman of the NIA may refer serious cases of 
misconduct related to politicization of intelligence 
information, biased reporting, or lack of objective analysis 
within the intelligence community to the Inspector General of 
the NIA for investigation.

Section 143. National Counterterrorism Center

     The NCTC is created within the NIA and shall be 
headed by a Director appointed with the advice and consent of 
the Senate, who may not simultaneously serve in any other 
capacity in the intelligence community. The primary missions of 
the NCTC shall be to unify strategy for civilian and military 
counterterrorism efforts, integrate counterterrorism 
intelligence activities both inside and outside of the United 
States, and ensure that the collection of counterterrorism 
intelligence and the conduct of counterintelligence operations 
are informed by the analysis of all-source information. Another 
primary mission of the NCTC shall be to develop interagency 
counterterrorism plans that include the mission, objectives to 
be achieved, course of action, coordination of agency 
operational activities, recommendations for operational plans, 
and assignment of departmental or agency responsibilities.
     The NCTC Director reports to the NID on the budget 
and programs of the NCTC and the activities of the NCTC 
Directorate of Intelligence. The Director of the NCTC reports 
to the President and the NID on the planning and progress of 
joint counterterrorism operations.
     At the direction of the President, the NSC, and 
the NID, the Director of the NCTC shall: (1) serve as the 
principal adviser to the President on joint counterterrorism 
operations; (2) provide unified strategic direction for 
civilian and military counterterrorism efforts and for the 
effective integration and deconfliction of counterterrorism and 
intelligence and operations across agency boundaries, inside 
and outside of the United States; (3) advise the President on 
the extent to which agency and departmental counterterrorism 
program recommendations and budget proposals conform to 
priorities established by the President and the NSC; (4) concur 
in, or advise the President on, the selection of personnel to 
head operating entities specified in (f) with principal 
missions relating to counterterrorism; and (5) perform such 
other duties as the NID may prescribe.
     The NCTC Director has the right to concur in the 
appointment, or in the recommendation to the President (as the 
case may be), of the Director of the CIA's Counterterrorism 
Center; the Assistant Director of the FBI's Counterterrorism 
Division; the State Department's Coordinator for 
Counterterrorism; and the heads of other entities so designated 
that have principle missions relating to counterterrorism. If 
the Department head making the appointment or recommendation 
does not accept the NCTC Director's recommendation, the 
appointment or recommendation may still go forward, but the 
NCTC Director's objection must be passed along to the 
President.
     The NCTC shall have a Directorate of Intelligence, 
which will include the Terrorist Threat Integration Center 
(transferred to the DI under Sec. 323). The Directorate shall 
have primary responsibility for analysis of terrorism and 
terrorist organizations for all sources, whether collected 
inside or outside the United States. The Directorate shall be 
the primary repository for all-source information on suspected 
terrorists, their organizations, and their capabilities; 
propose intelligence collection requirements for action by 
elements of the intelligence community inside and outside the 
United States; have primary responsibility for net assessments 
and warnings about terrorist threats, which assessments and 
warnings shall be based on a comparison of terrorist intentions 
and capabilities with assessed national vulnerabilities and 
countermeasures; and perform such other duties and functions as 
the NCTC Director may prescribe.
     The NCTC shall have a Directorate of Planning with 
the primary responsibility for developing interagency 
counterterrorism plans. The Directorate shall provide guidance 
and develop strategy and interagency plans based on policy 
objectives and priorities established by the NSC; develop 
interagency plans utilizing input from personnel in other 
departments and agencies with expertise; assign 
responsibilities for counterterrorism operations to departments 
and agencies; monitor the implementation of operations so 
assigned and update interagency plans as necessary; report to 
the President and the NID on the compliance with such plans; 
and perform such other duties and functions as the NCTC 
Director may prescribe.
     The Directorate of Planning may not direct the 
execution of operations that it assigns.
     The NID may appoint deputy directors for the NCTC 
as appropriate. In order to provide a professional staff for 
the NCTC, the NID may establish positions in the excepted 
service as appropriate. The NID shall ensure that the 
analytical staff of the NCTC is comprised of experts from the 
intelligence community and elsewhere as appropriate. In order 
to do so, the NID shall specify the transfers, assignments, and 
details of personnel funded within the NIP; for personnel not 
funded within the NIP, the NID shall request such transfers, 
assignments, and details from the relevant department head, who 
shall, to the extent practicable, approve the request. This 
staff will be under the authority, direction, and control of 
the NCTC Director.
     The NID shall ensure that the NCTC staff has 
access to all relevant databases maintained by elements of the 
intelligence community.
     Other agencies shall support and assist the NCTC, 
including by implementation of plans developed by the NCTC. If 
there is a disagreement on the implementation of such a plan 
between the NCTC Director and the head of an affected 
department or agency, then the NCTC may either accede to the 
head of the department or agency or notify the President of the 
necessity of resolving the disagreement.

Section 144. National Intelligence Centers

     The NID may establish within the NIA one or more 
centers to address intelligence priorities established by the 
NSC. Each center shall be assigned an area of intelligence 
responsibility.
     The NID shall assign lead responsibility for 
administrative support for each center to an element of the 
intelligence community. The NID shall determine the structure 
and size of each center and shall notify Congress before the 
establishment of a center.
     Each center shall be headed by a Director 
appointed by the NID, who shall serve as the principal advisor 
to the NID on intelligence matters within the area of 
intelligence responsibility assigned to that center. The 
Director shall also manage the operations of the center; 
coordinate administrative support for the center; submit budget 
and personnel requests for the center to the NID; seek such 
assistance as necessary and needed to fulfill the mission of 
the center; and advise the NID of the center's information 
technology, personnel, and other requirements.
     Each center shall, in its area of responsibility, 
have primary responsibility for providing all-source analysis 
of intelligence; have primary responsibility for identifying 
and proposing to the NID intelligence collection and analysis 
requirements; have primary responsibility for net assessments 
and warnings; ensure that appropriate officials have access to 
a variety of intelligence assessments and analytical views; and 
perform such other duties as the NID shall specify.
     The NID shall ensure that the centers and other 
elements of the intelligence community engage in appropriate 
information sharing to facilitate the activities of the 
centers. The Directors of the centers shall report to the NID 
regarding their activities and coordinate with the Principal 
Deputy NID regarding such activities.
     In order to provide a professional staff for a 
center, the NID may establish positions in the excepted service 
as appropriate. The NID shall specify the transfers, 
assignments, and details of personnel funded within the NIP; 
for personnel not funded within the NIP, the NID shall request 
such transfers, assignments, and details from the relevant 
department head, who shall, to the extent practicable, approve 
the request. This staff will be under the authority, direction, 
and control of the Director of the center.
     The NID may terminate a center if the NID 
determines that the center is no longer required to meet an 
intelligence priority established by the NSC. The NID must 
notify Congress before carrying out such termination.

 Subtitle E--Education and Training of Intelligence Community Personnel


Section 151. Framework for Cross-Disciplinary Education and Training

     This section requires the NID to establish a 
framework that brings together the educational components of 
the intelligence community to promote a more effective and 
productive intelligence community through joint and cross-
disciplinary education and joint training.

Section 152. Intelligence Community Scholarship Program

     This section requires the NID to develop a 
scholarship program under which intelligence community agencies 
would provide college scholarships to students in exchange for 
future service at the agency. The provision reserves 10 percent 
of the scholarships for intelligence community employees as an 
additional means for training.

 Subtitle F--Additional Authorities of National Intelligence Authority


Section 161. Use of Appropriated Funds

     If specifically authorized to dispose of real 
property, the NID shall exercise such authority in compliance 
with subchapter IV of chapter 5 of title 40, United States 
Code; the NID shall deposit proceeds from such disposal in the 
Treasury. Gifts or donations of services or property of or for 
the NIA shall only be accepted if permitted by an 
appropriations act.

Section 162. Acquisitions and Fiscal Authorities

     This section provides that the NID shall have 
acquisition authority similar to that of the Director of 
Central Intelligence, as head of the CIA. It also provides that 
the NID shall have milestone decision authority for 
acquisitions of major systems funded by the NIP and requires 
that the NID establish a major system acquisition management 
framework similar to that utilized by DOD for defense 
acquisition programs. This provides the NID with management 
authority over acquisition programs funded by the NIA even if 
those programs are conducted by other agencies such as DOD.

Section 163. Personnel Matters

     This section grants the NID the same personnel 
authorities over NIA employees that the DCI has over CIA 
personnel. The provision makes clear that employees and 
applicants for employment of the NIA have the same rights and 
protections as CIA employees.

Section 164. Ethics Matters.

     This section makes conforming amendments to the 
Ethics in Government Act and other for the NIA.

        TITLE II--OTHER IMPROVEMENTS OF INTELLIGENCE ACTIVITIES


          Subtitle A--Improvements of Intelligence Activities


Section 201. Availability to Public of Certain Intelligence Funding 
        Information

     This section requires the President and Congress 
to disclose to the public the top line budget authorization and 
appropriation figures for the National Intelligence Program. 
This section also directs the NID to study the feasibility of 
disclosing such aggregate information for each element of the 
intelligence community and to submit a report to Congress on 
the results within 180 days.

Section 202. Merger of Homeland Security Council Into National Security 
        Council

     This section merges the Homeland Security Council 
into the National Security Council.

Section 203. Joint Intelligence Community Council

     This section establishes the Joint Intelligence 
Community Council, which consists of the NID (who shall chair 
the Council), the Secretary of State, the Secretary of the 
Treasury, the Secretary of Defense, the Attorney General, the 
Secretary of Energy, the Secretary of Homeland Security, and 
such other officers as the President may designate. The JICC 
shall meet upon the request of the NID.
     The JICC shall assist the NID in developing and 
implementing a joint, unified national intelligence effort to 
protect national security by (i) advising the NID on 
establishing requirements, developing budgets, financial 
management, and monitoring and evaluating the intelligence 
community's performance; and (ii) ensuring the timely execution 
of programs, policies, and directives established or developed 
by the NID.

Section 204. Improvement of Intelligence Capabilities of the Federal 
        Bureau of Investigation

     Section 204 of the bill acknowledges that the 
National Commission on Terrorist Attacks Upon the United States 
stated in its final report that, under Director Robert Mueller, 
the FBI has made significant progress in improving its 
intelligence capabilities. The Commission also urged the FBI to 
fully institutionalize the shift to a preventative 
counterterrorism posture. In order to continue to improve the 
intelligence capabilities of the Bureau, the FBI is required to 
develop and maintain a national intelligence workforce 
consisting of agents, analysts, linguists, and surveillance 
specialists who are recruited, trained, and rewarded in a 
manner consistent with the intelligence mission of the Bureau. 
This section of the bill also requires agents to be trained in 
criminal justice and national intelligence matters, and 
requires that agents be given the opportunity to be assigned 
intelligence responsibilities early in their career. In 
addition, the FBI Director shall establish career positions in 
intelligence matters for agents and analysts, and afford agents 
and analysts of the Bureau the opportunity to work in the 
career specialty selected by such agents and analysts over 
their entire career with the Bureau. The FBI Director shall 
carry out a program to enhance the capacity of the FBI to 
recruit and retain individuals with skills relevant to the 
intelligence mission of the Bureau. The Bureau should also 
afford its analysts career opportunities commensurate with 
those afforded analysts in other intelligence community 
entities.
     This section also directs the FBI to ensure that 
each operational intelligence supervisor be a certified 
intelligence officer. The Director shall ensure that the 
successful discharge of advanced training courses, and of one 
or more assignments to another element of the intelligence 
community, is a precondition to advancement to higher level 
intelligence assignments in the Bureau. FieldIntelligence Group 
(FIG) supervisors must report directly to a senior manager responsible 
for intelligence matters, and must ensure the integration of analysts, 
agents, linguists, and surveillance personnel in the field.
     The Bureau is also directed to expand its secure 
facilities to ensure the successful discharge by the field 
intelligence components of the national security and criminal 
intelligence missions of the FBI.
     The bill directs the FBI to modify its budget 
structure, in consultation with the Director of the Office of 
Management and Budget, according to the four principal missions 
of the Bureau: (1) Intelligence; (2) Counterterrorism and 
counterintelligence; (3) Criminal Enterprises/Federal Crimes; 
(4) Criminal justice services.
     Not later than 180 days after the enactment of 
this Act, the FBI is required to submit to Congress a report 
detailing the Bureau's progress in carrying out the 
requirements of Section 204. The Bureau is also required to 
include in each annual program review of the FBI submitted to 
Congress a report on the progress made by each field office in 
implementing national program priorities. Not later than 180 
days after the enactment of this Act, and annually thereafter, 
the FBI shall submit a report to Congress assessing the 
qualifications, status, and roles of FBI analysts. 
Additionally, not later than 180 days after the enactment of 
this act, and annually thereafter, the FBI shall submit a 
report to Congress detailing the Bureau's progress in 
implementing information-sharing principles.

Section 205. Federal Bureau of Investigation Intelligence Career 
        Service

     Section 205 of the bill establishes an 
intelligence career service for Federal Bureau of Investigation 
analysts. The FBI Director, in consultation with the Director 
of the Office of Personnel Management, may establish positions 
for intelligence analysts, without regard to chapter 51 of 
title 5, United States Code. The Director shall prescribe 
procedures for establishing and classifying such positions, and 
may fix the rate of pay for such positions, without regard to 
subchapter III of chapter 53 of title 5, United States Code, as 
long as the rate of pay is not greater than the rate of pay 
payable for level IV of the Executive Schedule.
     The bill requires that any performance management 
system established for intelligence analysts have at least one 
level of performance above a retention standard.
     Not less than sixty days before the date of 
implementation of authorities granted under this section, the 
FBI Director shall submit an operating plan describing the 
Director's intended use of the authorities to: (1) the 
Committees on Appropriations of the Senate and the House of 
Representatives; (2) the Committee on Governmental Affairs of 
the Senate; (3) the Committee on Government Reform of the House 
of Representatives; (4) the congressional intelligence 
committees; and (5) the Committees on the Judiciary of the 
Senate and the House of Representatives.
     Also, no later than December 31, 2005, and 
annually thereafter for four years, the FBI Director shall 
submit an annual report of the use of the permanent authorities 
provided under this section during the preceding fiscal year 
to: (1) the Committees on Appropriations of the Senate and the 
House of Representatives; (2) the Committee on Governmental 
Affairs of the Senate; (3) the Committee on Government Reform 
of the House of Representatives; (4) the congressional 
intelligence committees; and (5) the Committees on the 
Judiciary of the Senate and the House of Representatives.

Section 206. Information Sharing

     Consistent with the 9/11 Commission Report and 
reports issued by the Markle Foundation's Task Force on 
National Security in the Information Age, the legislation 
mandates that the President create an information network that 
can be accessed, and to which contributions can be made, by 
various, federal, state, tribal and local, and private sector 
entities.
     Sections 206(a) and (b) include definitions and 
findings.
     Section 206(c) requires the President to establish 
a trusted information network and secure information sharing 
environment (the ``Network'') to promote the sharing of 
intelligence and homeland security information in a manner 
consistent with national security and the protection of privacy 
and civil liberties. The section outlines the required 
attributes of the Network, including that it be decentralized 
and allow information sharing horizontally across agencies, 
vertically between levels of government and, as appropriate, 
with the private sector; build on existing systems 
capabilities; incorporate protections for privacy and civil 
liberties; and, to enhance accountability and facilitate 
oversight, employ authentication, access controls, audit 
capabilities and other mechanisms.
     Section 206(d) requires that within 90 days, that 
the Director of OMB, in consultation with the Executive Council 
established below, (1) submit to the President and Congress a 
description of the technological, legal, and policy issues 
presented by creation of the Network and how these will be 
addressed; (2) establish electronic directory services to 
assist in locating relevant people and information; and (3) 
conduct a baseline review of current federal agency information 
sharing capabilities.
     Section 206(e) requires that, within 180 days, the 
President (1) issue guidelines for acquiring, accessing, 
sharing, and using terrorism information; (2) issue guidelines 
to protect privacy and civil liberties in the development and 
use of the Network; (3) require federal agencies to promote a 
culture of information sharing through greater incentives and 
reduced disincentives for information sharing.
     Section 206(f) requires that, within 270 days, the 
Director of OMB, in consultation with the Executive Council, 
prepare and submit to the President and Congress an Enterprise 
Architecture and Implementation plan. The plan is to include a 
description of the functions, capabilities and resources of the 
proposed Network; a delineation of the roles of the federal 
agencies that are to participate in the development of the 
Network; a description of the system design that will meet the 
technological requirements to link and enhance existing 
networks; an enterprise architecture; a description of how 
privacy and civil liberties will be protected in the design and 
implementation of the Network; a plan and time line for the 
development and implementation of the Network; budgetary 
requirements; and proposals for any legislation that the 
Director of OMB believes to be necessary to implement the 
Network.
     Section 206(g) gives the Director of OMB the 
responsibility, in consultation with the Executive Council, for 
implementing and managing the Network; developing policies and 
guidelines to foster the development and proper operation of 
the Network; and assisting, monitoring and assessing the 
implementation of the Network by individual departments and 
agencies. It also requires that the Director, within 30 days, 
appoint an official, with the equivalent of Deputy Director 
rank, whose primary responsibility will be to carry out the 
day-to-day duties of the OMB Director with respect to 
information sharing.
     Section 206(h) establishes an Executive Council on 
Information Sharing. The Executive Council is to be chaired by 
the Director of OMB and made up of key federal officials 
(including officials from the NIA, DHS, DoD, DOJ, the State 
Department) and state, local, and tribal officials, and 
individuals from private or nonprofit entities that own or 
operate critical infrastructure, to be appointed by the 
President. The Council is to assist the Director of OMB in his 
responsibilities with respect to the Network; ensure that there 
is coordination among Network participants; review ongoing 
policy, legal and technology issues; and establish a dispute 
resolution process to resolve disagreements among agencies 
about whether particular information is to be shared and in 
what manner.
     Section 206(i) establishes an Advisory Board on 
Information Sharing. The Advisory Board is to be made up of no 
more than 15 members with significant experience or expertise 
in policy, technical and operational matters, to be appointed 
by the President from outside the federal government. The Board 
is to advise the President and the Executive Council on policy, 
technical, and management issues related to the design and 
implementation of the Network.
     Section 206(j) requires the President, through the 
Director of OMB, to report semiannually to Congress on the 
state of the Network. The report is to include a general 
progress report on implementation of the Network, as well as 
information on how the Network is performing with respect to a 
variety of specific considerations.
     Section 206(k) requires the head of each agency 
participating in the Network to ensure (1) full agency 
compliance with Network guidelines and procedures; (2) the 
provision of activities resources to support operation of and 
participation in the Network; and (3) full agency cooperation 
in the development of the Network and in the management and 
acquisition of information technology consistent with 
applicable law.
     Section 206(l) requires each agency participates 
in the Network to submit to OMB within one year, reports that 
include the agency's strategic plan, objective performance 
measures, and budgetary requirements for implementing the 
Network within the agency and increasing information sharing. 
Requires annual agency reports thereafter assessing the 
agency's progress in complying with the Network's requirements 
and outlining the agency's future plans for Network 
implementation.
     Requires that, within one year after enactment of 
the Act and periodically thereafter, the Comptroller General 
review and evaluate the implementation of the Network to 
determine the extent of compliance with the Network's 
requirements and to assess the effectiveness of the Network 
both in improving information sharing and in protecting civil 
liberties; the Comptroller General is to report to Congress on 
his findings. Also directs the Inspectors General of relevant 
federal agencies to, at their discretion, conduct audits or 
investigations to assess their agencies' effectiveness in 
improving information sharing and complying with the Network's 
requirements.
     Section 206 (n) Authorizes $50 million to the 
Director of OMB for FY2005; authorizes such sums as are 
necessary thereafter, to be allocated in accordance with the 
system design and implementation plan required by the Act.

                Subtitle B--Privacy and Civil Liberties


Section 211. Privacy and Civil Liberties Oversight Board

     Section 211(a) establishes the Privacy and Civil 
Liberties Oversight Board within the Executive Office of the 
President.
     Section 211(b) sets out congressional findings 
that in the war on terrorism, the Government may need 
additional powers, and that this shift in power calls for an 
enhanced system of checks and balances to protect civil 
liberties.
     Section 211(c) states that the purposes of the 
Board are to analyze and review actions the executive branch 
takes to protect the Nation from terrorism, and ensure that 
liberty concerns are appropriately considered in the 
development and implementation of laws, regulations, and 
policies related to efforts to protect the Nation against 
terrorism.
     Section 211(d) establishes the functions of the 
Board which include advice and counsel, oversight, and 
interaction with department and agency privacy and civil 
liberties officers. Under the advice and counsel role, Section 
211(d) directs the Board to review proposed legislation, 
regulations, and policies, including those related to 
information sharing, review the implementation of legislation, 
regulations, and policies, and advise the President, 
departments, and agencies. In providing advice regarding 
proposals to retain or enhance a governmental power, the Board 
is directed to consider whether the relevant department or 
agency has explained that the power actually materially 
enhances security; that there is adequate supervision of the 
use by the executive branch of the power to ensure protection 
of privacy and civil liberties; and that there are adequate 
guidelines and oversight to properly confine its use. Under its 
oversight role, the Board is directed to continually review the 
regulations, policies, and procedures of departments and 
agencies to ensure privacy and civil liberties are protected 
and review the information sharing practices of departments and 
agencies. Section 211(d) also requires the Board to review and 
assess reports from department and agency privacy and civil 
liberties officers, make recommendations to them, and, when 
appropriate, coordinate their activities on relevant 
interagency matters. It also requires members of the Board to 
appear and testify before Congress upon request.
     Section 211(e) establishes reporting requirements. 
It requires the Board to receive reports from the department 
and agency privacy and civil liberties officers, and 
periodically submit reports of its activities to the President 
and the appropriate committees of Congress, including the 
Senate Committee on Governmental Affairs, the House Committee 
on Government Reform, the Committees on the Judiciary, and the 
Committees on Intelligence. This section also requires that the 
reports shall be unclassified to the greatest extent possible, 
with a classified annex where necessary.
     Section 211(f) requires the Board to ensure the 
public is informed by making its reports available to the 
public to the greatest extent consistent with the protection of 
classified information, and holding public hearings, as 
appropriate.
     Section 211(g) authorizes the Board to have access 
to relevant records of departments and agencies, to interview 
personnel of departments and agencies, to request information 
or assistance from any State, tribal, or local government, and 
to require, by subpoena issued at the direction of a majority 
of the Board, persons to produce relevant information. This 
section also establishes enforcement mechanisms for its 
subpoena authority.
     Section 211(h) establishes the membership of the 
Board, which shall include a full-time chairman and four 
additional members, who would be presidentially-appointed and 
Senate-confirmed for 6-year fixed terms. The members of the 
Board are required to be selected solely on the basis of their 
professional qualifications, achievements, public stature, 
expertise in civil liberties and privacy, and relevant 
experience and members may not be an official, officer, or 
employee of the Federal government in another capacity. This 
section also requires that no more than three members of the 
Board be members of the same political party. This section also 
establishes procedures for meetings and quorums.
     Section 211(i) establishes the compensation and 
travel expenses of the Board members.
     Section 211(j) establishes procedures for the 
appointment and compensation of staff, provides for the use of 
detailees, and authorizes the Board to procure consultant 
services.
     Section 211(k) directs the appropriate departments 
and agencies to cooperate with the Board to ensure an 
expeditious process for appropriate security clearances.
     Section 211(l) provides that, for the purposes of 
the Federal Advisory Committee Act, the Board shall be treated 
like an agency, not an advisory committee.

Section 212. Privacy and Civil Liberties Officers

     Section 212(a) requires agency and department 
heads of Justice, Defense, State, Treasury, Health and Human 
Services, Homeland Security, National Intelligence, and the 
Central Intelligence Agency and any other department or agency 
indicated by the Board to designate not less than one senior 
officer to assist the head of the respective department or 
agency in appropriately considering privacy and civil liberties 
concerns, to periodically investigate and review agency 
actions, policies, and procedures, and to ensure that the 
department or agency has adequate procedures to receive, 
investigate, respond to, and redress complaints from 
individuals who allege violations of their privacy or civil 
liberties. In providing advice regarding proposals to retain or 
enhance a governmental power, the privacy and civil liberties 
officers are directed to consider whether the relevant 
department or agency has explained that the power actually 
materially enhances security; that there is adequate 
supervision of the use by the executive branch of the power to 
ensure protection of privacy and civil liberties; and that 
there are adequate guidelines and oversight to properly confine 
its use.
     Section 212(b) provides an exception to (a) where 
the privacy or civil liberties officer within a department or 
agency has already been statutorily created.
     Section 212(c) provides that privacy and civil 
liberties officers report directly to the head of the 
department or agency and that they coordinate their activities 
with the appropriate Inspector General.
     Section 212(d) requires the head of each 
department or agency to ensure that each privacy and civil 
liberties officer has the necessary information, material, and 
resources to fulfill their functions, is advised of proposed 
policy changes, is consulted, and is provided appropriate 
access to personnel and material.
     Section 212(e) prohibits reprisals against 
employees for making a complaint or for disclosing information 
to a privacy or civil liberties officer, or to the Privacy and 
Civil Liberties Oversight Board, but provides no new personnel 
rights or causes of action.
     Section 212(f) establishes quarterly reporting 
requirements for the privacy and civil liberties officers on 
their activities.
     Section 212(g) requires that the privacy and civil 
liberties officers make their reports available to the public 
to the greatest extent consistent with the protection of 
classified information and otherwise inform the public of their 
activities.
     Section 212(h) makes clear that the provisions 
under this section shall not be construed to limit or supplant 
other authorities provided by law to privacy and civil 
liberties officers.

           Subtitle C--Independence of Intelligence Agencies


Section 221. Independence of the National Intelligence Director

     This section requires that the NID not be based in 
the Executive Office of the President. It also provides that 
the NID shall provide the President and Congress with national 
intelligence that is timely, objective, independent of 
political considerations, and which has not been shaped to 
serve policy goals.

Section 222. Independence of Intelligence

     The Director of the NCTC and director of other 
national intelligence centers are required to provide the 
President, Congress, and the NID with intelligence that is 
timely, objective, independent of political considerations, and 
which has not been shaped to serve policy goals. The CIA 
Director is required to ensure that the intelligence produced 
by the CIA is objective, independent of political 
considerations, and has not been shaped to serve policy goals. 
The National Intelligence council is required to ensure that 
its intelligence estimates are timely, objective, independent 
of political considerations, and have not been shaped to serve 
policy goals.

Section 223. Independence of National Counterterrorism Center

     No officer or agency of the executive branch can 
require the NCTC Director to receive permission to testify 
before Congress and no officer or agency of the executive 
branch can require the NCTC Director to submit testimony, 
recommendations, or comments to Congress for review prior to 
submission to Congress if the testimony, recommendations, or 
comments include a statement indicating they are the views of 
the NCTC, and do not necessarily represent the Administration's 
views.

Section 224. Access of Congressional Committees to National 
        Intelligence

     The NID, the NCTC Director and the Director of any 
national intelligence center must provide to the Congressional 
intelligence committees and any other committee with 
jurisdiction over the subject matter to which the information 
relates all intelligence assessments, intelligence estimates, 
sense of the intelligence community memoranda, and daily senior 
executive intelligence briefs, other than the Presidential 
Daily Brief and those reports prepared exclusively for the 
President.
     The NID, NCTC Director and director of other 
national intelligence centers are also required to respond 
within 15 days to requests for any intelligence assessment, 
report, estimate, or other intelligence information from the 
Congressional intelligence committees or other committees of 
Congress with jurisdiction over the subject matter to which the 
information relates. The NID, NCTC Director, and director of 
other national intelligence centers are also required to 
respond to such requests from the Chairman, Vice Chairman, or 
Ranking Member of the Senate or House intelligence committees. 
The NID, NCTC Director, and director of other national 
intelligence centers are required to provide the requested 
information unless the President certifies that the information 
is not being provided because the President is asserting a 
privilege pursuant to the United States Constitution.

Section 225. Communications with Congress

     Employees or contractors for the National 
Intelligence Authority, CIA, DIA, NGA, NSA, FBI, and other 
agencies principally involved in the conduct of foreign 
intelligence or counterintelligence are permitted to disclose 
certain information to Congress without reporting it first to 
the appropriate inspector general. The information they may 
report is information, including classified information, the 
employee reasonably believes provides direct and specific 
evidence of a false or inaccurate statement to Congress 
contained in, or withheld from Congress any intelligence 
information material to, any intelligence assessment, report, 
or estimate. Such a disclosure may be made to a member of a 
committee of Congress having primary responsibility for 
oversight of the agency to which the information relates and 
who is authorized to receive information of the type disclosed, 
other members of Congress authorized to receive information of 
the type disclosed, or an employee of Congress with the 
appropriate clearance and who is authorized to receive 
information of the type disclosed.

  TITLE III--MODIFICATIONS OF LAWS RELATING TO INTELLIGENCE COMMUNITY 
                               MANAGEMENT


              Subtitle A--Conforming and Other Amendments


Section 301. Restatement and Modification of Basic Authority on the 
        Central Intelligence Agency

     Makes technical and conforming amendments 
establishing the Central Intelligence Agency as an independent 
agency. This section also creates the position of the Director 
of the Central Intelligence Agency, appointed by the President 
and confirmed by the Senate. The Director of the CIA reports to 
the NID regarding his or her activities.
     The Director of the CIA shall (1) serve as the 
head of the CIA; (2) collect intelligence through human sources 
and by other appropriate means, except that the Director of the 
CIA shall have no police, subpoena, or law enforcement powers 
or internal security functions; (3) correlate and evaluate 
intelligence related to the national security and provide 
appropriate dissemination of such intelligence; (4) provide 
overall direction for and coordination of the collection of 
national intelligence outside the United States through human 
sources by elements of the intelligence community authorized to 
undertake such collection and, in coordination with other 
departments, agencies, or elements of the United States 
Government which are authorized to undertake such collection, 
ensure that the most effective use is made of resources and 
that appropriate account is taken of the risks to the United 
States and those involved in such collection; and (5) perform 
such other functions and duties pertaining to intelligence 
relating to the national security as the President or the NID 
may direct.
     Notwithstanding the provisions of any other law, 
the Director of the CIA may, in the discretion of the Director, 
terminate the employment of any officer or employee of the CIA 
whenever the Director considers the termination of employment 
of such officer or employee necessary or advisable in the 
interests of the United States.
     The Director of the CIA shall, in accordance with 
standards developed by the Director in consultation with the 
NID: (1) enhance the analytic, human intelligence and other 
capabilities of the CIA; (2) develop and maintain an effective 
language program within the CIA; (3) emphasize the hiring of 
personnel of diverse backgrounds for purposes of improving the 
capabilities of the CIA; (4) establish and maintain effective 
relationships between human intelligence and signals 
intelligence within the CIA at the operational level; and (5) 
achieve a more effective balance within the CIA with respect to 
unilateral operations and liaison operations. The CIA Director 
shall, not later than 180 days after the effective date of this 
section, and annually thereafter, submit to the NID and the 
congressional intelligence committees a report setting forth: 
(A) a strategy for improving the conduct of analysis (including 
strategic analysis) by the CIA, and the progress in 
implementing the strategy; (B) a strategy for improving the 
human intelligence and other capabilities of the CIA, and the 
progress in implementing the strategy; (C) in conjunction with 
the Director of the NSA, a strategy for achieving integration 
between signals and human intelligence capabilities, and the 
progress in implementing the strategy; (D) metrics and 
milestones for measuring progress in the implementation of each 
such strategy.

Section 302. Conforming Amendments Relating to Roles of National 
        Intelligence Director and Director of the Central Intelligence 
        Agency

     Makes technical and conforming amendments.

Section 303. Other Conforming Amendments

     Makes technical and conforming amendments.

Section 304. Modifications of Foreign Intelligence and 
        Counterintelligence Under National Security Act of 1947

     Makes technical and conforming amendments.

Section 305. Elements of Intelligence Community Under National Security 
        Act of 1947

     Makes technical and conforming amendments.

Section 306. Redesignation of National Foreign Intelligence Program as 
        the National Intelligence Program

     Makes technical and conforming amendments.

Section 307. Conforming Amendments on Coordination of Budgets of 
        Elements of the Intelligence Community within the Department of 
        Defense

     Makes technical and conforming amendments.

Section 308. Repeal of Superseded Authorities

     Makes technical and conforming amendments.

Section 309. Clerical Amendments to National Security Act of 1947

     Makes technical and conforming amendments.

Section 310. Modification of Authorities Relating to National 
        Counterintelligence Executive

     The Office of the National Counterintelligence 
Executive is moved to the Office of the NID. This section also 
makes other technical amendments.

Section 311. Conforming Amendment to Inspector General Act of 1978

     Makes technical and conforming amendments.

Section 312. Conforming Amendments Relating to Chief Financial Officer 
        of the National Intelligence Authority

     Makes technical and conforming amendments.

                 Subtitle B--Transfers and Terminations


Section 321. Transfer of Office of Deputy Director of Central 
        Intelligence for Community Management

     This section transfers the DCI's Community 
Management Staff to the Office of the NID.

Section 322. Transfer of National Counterterrorism Executive

     This office is transferred to the Office of the 
NID.

Section 323. Transfer of Terrorist Threat Integration Center

     This office is transferred to the NCTC.

Section 324. Termination of Certain Positions Within the Central 
        Intelligence Agency

     This section terminates the positions of (1) 
Deputy Director of Central Intelligence for Community 
Management; (2) Assistant Director of Central Intelligence for 
Collection; (3) Assistant Director of Central Intelligence for 
Analysis and Production; and (4) Assistant Director of Central 
Intelligence for Administration.

                  Subtitle C--Other Transition Matters


Section 331. Executive Schedule Matters

     This section sets the pay for the following 
individuals according to the Executive Schedule:
    NID--Level I.
    NCTC Director and Deputy NIDs--Level II.
    Director of the Central Intelligence Agency--Level III.

Section 332. Preservation of Intelligence Capabilities

     This directs the NID, DCI, and the Secretary of 
Defense to take appropriate actions to preserve the 
intelligence capabilities during the establishment of this act.

Section 333. Reorganization

     This section provides the National Intelligence 
Director the authority (with the approval of the President and 
after consultation with the departments or agencies concerned) 
to allocate or reallocate functions among the officers of the 
NIP and establish, consolidate, alter, or discontinue 
organizational units within the NIP. Any use of this authority 
would have to be consistent with the law. The NID shall also 
provide notice to Congress, including the rationale for the 
action, and then have the reorganization plan approved by the 
intelligence and government operations committees in both the 
Senate and House of Representatives.

Section 334. National Intelligence Director Report on Implementation of 
        Intelligence Community Reform

     This section requires the NID to report to 
Congress on the implementation of this act one year after the 
date of its enactment.

Section 335. Comptroller General Reports on Implementation of 
        Intelligence Community Reform

     This section requires the Comptroller General of 
the GAO to issue an implementation progress report two years 
after the enactment of the act and issue interim reports as he 
finds appropriate. These reports are to provide Congress with 
(1) an overall assessment of the progress made in the 
implementation of this Act (and the amendments made by this 
Act), (2) a description of any delays or other short-falls in 
the implementation of this Act that have been identified by the 
GAO, and (3) recommendations for additional legislative or 
administrative action that the Comptroller General considers 
appropriate.

Section 336. General References

     Makes technical and conforming amendments.

                       Subtitle D--Effective Date


Section 341. Effective Date

     This Act will take effect 180 days after its 
enactment, unless the President provides that one or more 
provisions of this Act shall take effect earlier.

                       Subtitle E--Other Matters


Section 351. Severability

     This section is a standard severability clause.

Section 352. Authorization of Appropriations

     This authorizes appropriations for FY 2005 to 
carry out this act.

                   VI. Estimated Cost of Legislation

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 24, 2004.
Hon. Susan M. Collins,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Madam Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2840, the National 
Intelligence Reform Act of 2004.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Raymond J. 
Hall.
            Sincerely,
                                         Elizabeth Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

S. 2840--National Intelligence Reform Act of 2004

    Summary: S. 2840 would establish the National Intelligence 
Authority (NIA) to unify and strengthen intelligence activities 
of the U.S. government, including foreign intelligence and 
counterintelligence activities. The legislation would transfer 
some existing organizations, specifically the Office of the 
Deputy Director of Central Intelligence for Community 
Management and the Terrorist Threat Integration Center, to the 
NIA. S. 2840 also would establish a National Counterterrorism 
Center and one or more national intelligence centers within the 
NIA. Finally, the legislation would direct the President to 
establish a ``trusted information network'' to promote sharing 
of intelligence and homeland security information among all 
relevant federal departments, state and local authorities, and 
relevant private-sector entities, and to establish a national 
intelligence reserve corps.
    CBO estimates that implementing S. 2840 would cost about 
$700 million over the 2005-2009 period, assuming appropriation 
of the necessary amounts. That total does not include the costs 
associated with implementing provisions dealing with the 
national intelligence reserve corps. CBO cannot predict when a 
national emergency would occur, but costs for the proposed 
reserve corps would likely be insignificant in most years. 
Enacting S. 2840 would not affect direct spending or receipts.
    S. 2840 contains intergovernmental and private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA), 
but CBO expects the cost of complying with those mandates would 
be small and well below the thresholds established in that act 
($60 million for intergovernmental mandates and $120 million 
for private-sector mandates in 2004, adjusted annually for 
inflation).
    Estimated cost to the Federal Government: The following 
table summarizes the estimated net budgetary impact of 
establishing the National Intelligence Authority (including the 
costs of building a new headquarters facility to house the NIA 
and administering the organization) and implementing certain 
activities authorized by the bill. The costs of this 
legislation fall within budget functions 050 (national defense) 
and 750 (administration of justice).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2005     2006     2007     2008     2009
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Create the National Intelligence Authority:
    Estimated Authorization Level..................................       15      210       50       80       60
    Estimated Outlays..............................................       10       35       80      135      130
Establish Information-Sharing Network:
    Estimated Authorization Level..................................       50       51       52       53       54
    Estimated Outlays..............................................       25       50       52       53       54
Other Authorizations \1\:
    Estimated Authorization Level..................................       10       15       15       15       15
    Estimated Outlays..............................................       10       15       15       15       15
Total Changes:
    Estimated Authorization Level..................................       75      276      117      148      129
    Estimated Outlays..............................................       45      100      147      203      199
----------------------------------------------------------------------------------------------------------------
\1\ The estimate does not include the costs associated with establishing the national intelligence reserve
  corps. Any such costs would be insignificant in most years and CBO has no basis for predicting when a national
  emergency would occur.

    Basis of estimate: CBO estimates that implementing S. 2840 
would cost about $700 million over the 2005-2009 period, 
assuming appropriation of the necessary funds. These costs are 
in addition to those that would be incurred by the Office of 
the Deputy Director of Central Intelligence for Community 
Management and the Terrorist Threat Integration Center under 
current law. The estimated costs include expenses to establish, 
house, and administer the new intelligence authority, carry out 
new information-sharing activities in 2005 specifically 
authorized in the bill, and implement other specified programs, 
such as improving intelligence training programs and 
establishing a scholarship program. The estimate does not 
include the costsassociated with establishing the national 
intelligence reserve corps. Any such costs would be insignificant in 
most years, and CBO has no basis for predicting when a national 
emergency would occur.
    For purposes of this estimate, CBO assumes that the bill 
will be enacted by the end of the calendar year and that 
necessary funds will be appropriated for each fiscal year. The 
estimated costs of implementing the bill are based on limited 
information obtained about the affected organizations and on 
the staffing levels and administrative expenses of other 
federal agencies.

Create the National Intelligence Authority

    CBO estimates that establishing, housing, and administering 
the new authority would cost about $390 million over the 2005-
2009 period.
    Costs for New NIA Staff and Interim Office Space. The bill 
would transfer the Office of the Deputy Director of Central 
Intelligence for Community Management (identified as the 
Intelligence Community Management Account within the budget) 
and the Terrorist Threat Integration Center (TTIC) to the NIA.
    The Intelligence Community Management Account (ICMA) was 
established by Congressional direction to provide resources 
that directly support the Director of the Central Intelligence 
Agency (CIA) and the intelligence community as a whole in 
coordinating cross-program activities. Because part of its 
budget is classified, CBO does not know the overall size of 
this organization. Unclassified budgets for the ICMA indicate 
that the office has a staff of about 300 people who develop the 
National Foreign Intelligence Program budget, oversee research 
and development activities, and develop intelligence plans and 
requirements, but the Congress also authorizes and appropriates 
funds for additional staff in the classified portion of the 
intelligence budget.
    Similarly, CBO has no budget information on the TTIC, but 
public information released by the White House indicates that 
the center opened in May 2004 with a staff of about 60 people 
working alongside the counterterrorism offices of the Federal 
Bureau of Investigation and the CIA. That same information 
indicates that the Administration expects to eventually staff 
the TTIC with between 200 and 300 people to serve as the hub 
for all intelligence regarding terrorist threats.
    CBO expects that the NIA will require additional staff to 
perform its authorized functions above the staff transferred 
from the ICMA and the planned staff for the TTIC. Because much 
of the detailed information regarding the organization, 
staffing levels, and budgets of the intelligence community are 
classified at a level above clearances held by CBO employees, 
CBO has used information about staff requirements from similar 
organizations within the Department of Defense, the Department 
of Homeland Security, and other federal agencies to attempt to 
estimate the number of additional staff that might be needed by 
the NIA. Based on that analysis, CBO estimates that the NIA 
might need to hire around 300 new staff including appointees 
such as principal and deputy directors, key managers such as a 
general counsel and an inspector general, personnel to perform 
administrative functions such as policy development and budget 
and finance activities, and personnel for the National 
Counterterrorism Center and one or more national intelligence 
centers. CBO expects that many of these new hires would be 
staff transferred from other organizations within the 
intelligence community but that those other organizations would 
eventually fill many of the vacated positions within their 
organizations over about four years following enactment of this 
legislation.
    Based on information about the staffing levels and costs 
for the administrative offices of the Department of Defense, 
the Department of Homeland Security, and other agencies, CBO 
estimates that the personnel and related expenses to provide 
centralized leadership, coordination, and support and 
analytical services for the National Intelligence Authority 
would eventually cost around $45 million annually, but that 
costs would be much lower in the first few years as positions 
are filled. CBO estimates that such costs would be minimal in 
the first year and total about $130 million over the 2005-2009 
period.
    Section 121 would prohibit the Office of the National 
Intelligence Director from being co-located with any other 
element of the intelligence community after October 1, 2006. 
Until that time, CBO assumes that the director's office and 
associated staff would occupy the space currently used by the 
Intelligence Community Management staff. After October 1, 2006, 
CBO assumes that the office would move to new office space in a 
building owned by the General Services Administration (GSA) 
until a new building can be built for its use. CBO estimates 
that initially GSA would need to renovate and furnish office 
space for the NIA staff. (After 2009, CBO expects that these 
positions would be relocated to the new permanent NIA 
headquarters.) CBO estimates that the GSA rental payments would 
reach nearly $20 million a year and total about $40 million 
over the 2007-2009 period. Additional costs to purchase 
computers, network equipment, and supplies in the first few 
years following the relocation into the GSA-owned building also 
would be significant. CBO estimates that those costs would 
total $30 million over the 2007-2009 period.
    Design, Construct, and Maintain a New Federal Building. As 
mentioned earlier, section 121 would prohibit the Office of the 
National Intelligence Director from being co-located with any 
other element of the intelligence community after October 1, 
2006. Although the NIA could choose to buy or lease an existing 
building, CBO assumes that GSA would construct a new building 
on land already owned by the federal government to serve as the 
headquarters of the NIA because of the need for a building that 
meets Level-V security standards and the mission of the new 
authority.
    Based on information provided by GSA about recent federal 
office building projects. CBO estimates that planning and 
design of the new headquarters would cost $15 million over the 
2005-2006 period, and that constructing the facility to house 
NIA employees would cost about $175 million over the 2006-2009 
period. (An additional $20 million in spending would occur in 
2010 to complete construction of the new building.) CBO assumes 
that the headquarters would be located on property already 
owned by the federal government in the Washington, D.C., area. 
If GSA had to buy land for the building site, costs would be 
higher. CBO assumes that construction of the new facility would 
not start until sometime in late 2006 and would be completed 
after 2009. Therefore, CBO estimates that no costs associated 
with furnishing, equipping, and maintaining the new space would 
be incurred during the 2005-2009 period nor would there be 
costs to relocate NIA staff from the interim offices to the new 
headquarters over that period.

Other Program Authorizations

    S. 2840 would authorize the President and the NIA to 
initiate or enhance several programs within the intelligence 
community. Based on information from the Administration and on 
the costs of other similar efforts, CBO estimates that those 
efforts would cost about $35 million in 2005 and total $305 
million over the 2005-2009 period, subject to appropriation of 
the necessary amounts.
    Information Sharing. Section 206 would direct the President 
to establish a ``trusted information network'' to promote 
sharing of intelligence and homeland security information among 
all relevant federal departments, state and local authorities, 
and relevant private-sector entities. That section also would 
create an executive council chaired by the Director of the 
Office of Management and Budget to implement and manage the 
network and create an advisory board to advise the President 
and the executive council on policy, technical, and management 
issues related to the design and operation of the network. 
Finally, the section would authorize the appropriation of $50 
million in fiscal year 2005 and such sums as may be necessary 
for each subsequent year for this effort. For this estimate, 
absent an understanding of the information networks in place 
today within the intelligence community, the requirements for 
establishing such an information-sharing network, and the 
timelines needed to do so, CBO has projected the $50 million 
authorized for 2005 over the 2006-2009 period with annual 
adjustments for anticipated inflation. Thus, CBO estimates 
implementing this section would cost about $235 million over 
the 2005-2009 period. CBO notes that the Department of Defense 
recently completed the purchase of equipment for upgrading 
their intelligence network to improve the sharing of national 
security intelligence, surveillance and reconnaissance, and 
command and control information sharing at a cost of nearly $1 
billion.
    National Intelligence Reserve Corps. Section 116 would 
allow the NIA to establish a national intelligence reserve 
corps consisting of former employees of the intelligence 
community who would be eligible for temporary reemployment 
during period of national emergency. Under the bill, the total 
number of personnel in this reserve corps could not exceed 200 
individuals. Members of the reserve corps would receive 
transportation and per diem when participating in any training, 
and members who are retired federal employees would be allowed 
to collect both pay and retirement benefits during the period 
of reemployment. CBP cannot predict when a national emergency 
might occur. In most years, CBO expects that the cost 
associated with reserve corps would be insignificant--mostly 
covering a limited training time and per diem and 
transportation. Even in an emergency, if all members of the 
reserve corps were reemployed for six months, the costs would 
total only about $10 million.
    Improving Intelligence Capabilities of the Federal Bureau 
of Investigation (FBI). Section 204 would direct the Director 
of the FBI to continue to improve the intelligence capabilities 
of the bureau and to develop and maintain a national 
intelligence workforce within the FBI. Today, the FBI spends 
about $30 million on counterterrorism training. Since 2002, 
more than 1,500 agents have been added to the bureau's staff to 
meet the counterterrorism mission, an increase of about 20 
percent. In addition, since the events of September 11, 2001, 
the FBI has partnered with other intelligence agencies to 
provide training in counterterrorism and counterintelligence to 
its staff, and it plans to increase that training in the 
future. Assuming that implementation of this section would 
result in more training than currently planned, CBO estimates 
that the cost for this additional training would total $3 
million in 2005 and almost $30 million over the 2005-2009 
period, a 20 percent increase over current spending levels.
    Privacy and Civil Liberties Oversight Board. Section 211 
would establish a Privacy and Civil Liberties Oversight Board 
within the Executive Office of the President to advise the 
President and Executive Branch on privacy concerns while 
implementing new legislation. Based on the budgets of other 
advisory panels, CBO estimates that the costs to operate this 
panel would be about $1 million in 2005 and would total $10 
million over the 2005-2009 period.
    Intelligence Community Scholarship Program. Section 152 
would authorize the NIA Director to establish a scholarship 
program for individuals designed to recruit and prepare 
students for civilian careers in the intelligence community to 
meet the critical needs of the intelligence community agencies. 
Assuming that the NIA would provide about 300 scholarships each 
year, CBO estimates that the costs of these scholarships would 
average about $6 million a year and total about $30 million 
over the 2005-2009 period.
    Security Clearances. Section 115 would establish uniform 
procedures throughout the federal government for granting 
security clearances and establish a single agency for 
conducting all security clearance investigations. Currently, 
the Office of Personnel Management (OPM) conducts the 
investigations for 60 percent of the clearances granted by the 
federal government. By early next year, that figure will grow 
to 90 percent when it takes over the investigations for the 
Department of Defense. Assuming that the resources for the 20 
agencies for which OPM does not currently conduct 
investigations are transferred to OPM, CBO estimates that there 
would be no change in overall government spending if this 
provision is enacted.
    Intergovernmental and private-sector impact: This bill 
would impose both intergovernmental and private-sector mandates 
because it would create two new federal entities with the power 
to subpoena information. State, local, and tribal governments, 
and entities in the private sector, if subpoenaed by the 
Inspector General of the National Intelligence authority or the 
Privacy and Civil Liberties Oversight Board, would be required 
to provide testimony, documents, or other evidence. CBO expects 
that the Inspector General and the Oversight Board would use 
their subpoena power sparingly and that the costs to comply 
with such subpoenas would not be significant. CBO estimates 
that the costs to public and private entities would be small 
and well below the annual thresholds established in UMRA ($60 
million for intergovernmental mandates and $120 million for 
private-sector mandates in 2004, adjusted annually for 
inflation).
    The remaining provisions of the bill contain no mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments, or entities in the private sector.
    Estimate Prepared by: Federal Costs: Raymond J. Hall; 
Impact on State, Local, and Tribal Governments: Melissa 
Merrill; and Impact on the Private Sector: David Arthur.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                  VII. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill. The enactment of 
this legislation will result in intergovernmental and private-
sector mandates as defined in the Unfunded Mandates Reform Act 
(UMRA), but the Congressional Budget Office expects the cost of 
complying with those mandates would be small and well below the 
thresholds established in that act ($60 million for 
intergovernmental mandates and $120 million for private-sector 
mandates in 2004, adjusted annually for inflation.)

                         VIII. ADDITIONAL VIEWS

                              ----------                              


            ADDITIONAL VIEWS OF SENATORS SPECTER AND SHELBY

    We believe that the National Intelligence Reform Act of 
2004 (S. 2840 favorably reported from the Government Affairs 
Committee, includes several important provisions, particularly 
the creation of a National Intelligence Director (NID) with 
strong budget authority. The budget authority contained in S. 
2840, if retained following Senate floor action and conference 
committee, would place the newly-created NID in a stronger 
posture vis-a-vis the intelligence community entities than 
exists under current law and practice.
    However, S. 2840 does not give the NID additional 
authorities that will be required to provide the unity of 
leadership and accountability necessary for meaningful 
intelligence reform. In particular, we believe strongly that 
the NID must have day-to-day operational control of all 
elements of the Intelligence Community performing national 
missions (including the Central Intelligence Agency, National 
Reconnaissance Office, National Security Agency, and National 
Geospatial-Intelligence Agency).
    We believe that clear lines of authority between the NID 
and our national intelligence agencies, extending beyond 
budgetary control, are critical to our success in countering 
21st century national security threats. To fulfill the historic 
intent of the National Security Act of 1947, the Congress must 
provide the NID--as head of the intelligence community--the 
additional authorities necessary to match the position's 
responsibilities and to ensure accountability. This additional 
authority and responsibility will eliminate any uncertainty 
that the NID is in charge and is accountable.
    As such, even if S. 2840 were to be presented to the 
President in its current form, its failure to provide for NID 
day-to-day supervision, direction and control over the major 
national intelligence entities represents a significant 
inadequacy and would provide insufficient authority to address 
the escalating cycle of intelligence failures that our 
intelligence community has suffered over the past decade. 
Alternatively, if the budgetary authority currently contained 
in S. 2840 is weakened prior to presentment, we fear that the 
NID will be left with meaningless control over the intelligence 
community and the country will be far less secure as a result.

                                   Arlen Spector.
                                   Richard Shelby.

                   ADDITIONAL VIEWS OF SENATOR LEVIN

    Today, the greatest threats facing our national security 
come from terrorists. We are less likely to be attacked by 
nations and armies with tanks and missiles, and more likely to 
be attacked by terrorists with bombs hidden in trucks or 
strapped to their bodies. Since terrorists are not deterred by 
the threat of their own destruction, and because terrorist 
networks are so diffuse, accurate intelligence is absolutely 
essential to preventing attacks.
    The release of the 9/11 Commission Report has fueled a 
debate about how our intelligence community should be reformed 
to better respond to this threat. This is a debate we need to 
have and the country is indebted to the 9/11 Commission for its 
work in setting us on the course toward reform. Chairman 
Collins and Ranking Member Lieberman also deserve tremendous 
credit for their tireless work in leading this undertaking at 
the Governmental Affairs Committee. They have approached 
Intelligence Community reform with the seriousness and sense of 
urgency the subject demands. The Committee reported bill 
reflects their commendable efforts. The Senate Select Committee 
on Intelligence (SSCI) and the Senate Armed Services Committee 
have also held a number of hearings on intelligence failures 
and have built a strong record for reform.
    The Governmental Affairs Committee bill is based, in 
significant ways on the recommendations of the 9/11 Commission. 
We need to consider carefully the recommendations of the 9/11 
Commission and take action to correct the deficiencies they 
identified which impaired our ability to detect and act against 
those terrorists. At the same time, we should be mindful that 
these issues are complex. We should take the time necessary to 
understand all of the issues and develop reforms.

          THE NEED FOR INDEPENDENT AND OBJECTIVE INTELLIGENCE

    The Commission's report provided us many useful 
recommendations for improving the structure of our intelligence 
agencies. But, in taking on structural reform, we must not lose 
sight of the fundamental problem that was demonstrated not by 
the pre-9/11 intelligence failures but by the pre-Iraq War 
intelligence failures.
    The massive intelligence failures before the Iraq War were 
of a totally different kind from the 9/11 failures. As 
described in the bipartisan 500-page SSCI report, to a 
significant degree, the failures were the result of the CIA 
shaping and manipulating intelligence. The CIA interpreted and 
communicated intelligence information in manner intended to, in 
my opinion, and for no other discernible purpose than to, tell 
the administration what it thought the administration wanted to 
hear about Iraq possessing weapons of mass destruction and, at 
one crucial moment, about Iraq having a close relationship with 
al-Qaeda. The scope and seriousness of this problem of 
manipulated intelligence to serve policy goals cannot be 
overstated. At the same time, there is no evidence that a lack 
of DCI authority over intelligence budgets or personnel 
contributed to those failures.
    The problem of manipulated and politicized intelligence is 
not new. Forty years ago, Secretary of Defense McNamara invoked 
classified communications intercepts to support passage of the 
Gulf of Tonkin Resolution, which was used by President Johnson 
as the legislative foundation for expanding the war against 
Vietnam.
    According to John Prados, an analyst at the National 
Security Archive, Secretary McNamara used the intercepts as a 
``trump card during the 1964 hearings to silence doubters.'' 
According to Prados, McNamara told Congress that ``intelligence 
reports from a highly classified and unimpeachable source 
reported that North Vietnam was making preparation to attack 
our destroyers,'' and later that ``the attack was underway,'' 
and finally that ``the North Vietnamese lost two ships in the 
engagement.''
    The intercepts later proved dubious, but President Johnson 
had already made the decision to escalate the conflict. 
Intelligence was misused to support the Gulf of Tonkin 
Resolution, and in turn, to support the President's decision.
    Director of Centeral Intelligence William Casey heavily 
manipulated intelligence during the Iran-Contra period. The 
bipartisan Iran Contra Report set forth the evidence that 
Director Casey ``misrepresented or selectively used available 
intelligence to support the policy he was promoting.''
    History repeated itself with the pre-war Iraq intelligence. 
Before the war, top administration officials asserted that 
Saddam Hussein had weapons of mass destruction and had links to 
the al Qaeda terrorists who had attacked us on 911. For 
instance, in December 2001 Vice President Cheney said:

        * * * it's been pretty well confirmed that [9/11 al-
        Qaeda hijacker Mohammad Atta] did go to Prague and he 
        did meet with a senior official of the Iraqi 
        intelligence service in Czecholslovakia last April, 
        several months before the attack.--(Vice President 
        Cheney, Meet the Press, December 9, 2001)

    The President himself said in March of 2002: ``[Saddam 
Hussein] possesses the world's most dangerous weapons.'' 
(President Bush, Press Conference, March 22, 2002)
    The Vice President in August of 2002 stated the following:

          But we know that Saddam has resumed his efforts to 
        acquire nuclear weapons. Many of us are convinced that 
        Saddam will acquire nuclear weapons fairly soon.--(Vice 
        President Cheney, Speech to the VFW's 103rd National 
        Convention, August 26, 2002)

    National Security Advisor Rice said the following on 
September 8, 2002:

          We do know that there have been shipments going * * * 
        into Iraq, for instance, of aluminum tubes that really 
        are only suited to--high-quality aluminum tools that 
        are only really suited for nuclear weapons programs, 
        centrifuge programs.--(National Security Advisor Rice, 
        Late Edition, September 8, 2002)

    A few weeks later, Secretary of Defense Rumsfeld said that:

          Very likely all they need to complete a weapon is 
        fissile materials--and they are, at this moment, 
        seeking that material--both from foreign sources and 
        the capability to produce it indigenously.--(Secretary 
        Rumsfeld, Testimony Before the Senate Armed Services 
        Committee, September 19, 2002)

    On September 19th, the President again said that Iraq has 
WMD (President Bush, Remarks at OHS Complex, September 19, 
2002), and before the Senate Armed Services Committee on the 
same day, Secretary Rumsfeld said that Saddam Hussein ``has, at 
this moment, stockpiles of chemical and biological weapons, and 
is pursuing nuclear weapons.''
    A week later President Bush made the unqualified link 
between al-Qaeda and Saddam Hussein when he said ``you can't 
distinguish between al-Qaeda and Saddam when you talk about the 
war on terror.'' (President Bush, Photo Opportunity, September 
25, 2002)
    These leadership statements leading up to and including 
September 2002, were unqualified, unconditional and certain. 
The qualificiations and more cautious words in Intelligence 
Community reports, estimates and findings on these subjects 
were ignored by the Administration. The Intelligence Community 
began to manipulate and shape the intelligence to reflect and 
support the certainty of the administration's public 
statements.
    In July 2004, the Senate Select Committee on Intelligence 
issued a 500-page unanimous report setting out dozens of 
instances where the CIA or its leaders made statements about 
Iraq's WMD and, to a lesser extent, links to al-Qaeda which 
were significantly more certain than the underlying 
intelligence reporting and than their earlier findings.
    The key finding and the first overall conclusion of the 
SSCI report is that ``Most of the major key judgments in the 
Intelligence Community's October 2002 National Intelligence 
Estimate (NIE), Iraq's Continuing Programs for Weapons of 
MassDestruction, either overstated or were not supported by, the 
underlying intelligence reporting.''
    And relative to the alleged relationship between Saddam 
Hussein and al-Qaeda, the following event is illustrative of 
the CIA shaping intelligence in that area too. President Bush 
said on September 28, 2002, that ``each passing day could be 
the one on which the Iraqi regime gives anthrax or VX nerve gas 
or someday a nuclear weapon to a terrorist group,'' On October 
7, DCI Tenet sent a letter declassifying CIA intelligence which 
indicated Iraq was unlikely to provide WMD to terrorists or al 
Qaeda, and called such a move an ``extreme step,'' a very 
different perspective from that of the President. But the very 
next day, Tenet told the New York Times that there was ``no 
inconsistency'' between the views in the letter and the 
President's views on the subject. His statement was flatly 
incorrect, but his effort to minimize the inconsistency was an 
attempt to support the Administration.
    There are many other examples. On February 11, 2003, DCI 
Tenet publicly stated, as though it were fact, that Iraq ``has 
provided training in poisons and gases to two al-Qaida 
associates.'' However, in his then-classified testimony from 
September 17, 2002, which was consistent with the underlying 
intelligence, Director Tenet had said that the information on 
training was ``from sources of varying reliability.'' The 
underlying intelligence also acknowledged that the information 
was ``at times contradictory.'' As the Intelligence Committee 
report makes clear, Tenet's public testimony could lead people 
to believe incorrectly ``that the CIA believed the training had 
definitely occurred.''
    At a hearing in February of this year, I asked Director 
Tenet about the alleged meeting between 9/11 hijacker Mohammed 
Atta and an Iraqi intelligence officer in Prague in April 2001. 
He told me that the CIA had ``not gathered enough evidence to 
conclude that it happened'' and that ``I don't know that it 
took place. I can't say that it did.'' What he neglected to say 
was that the CIA did not believe the meeting had happened, a 
fact he finally acknowledged publicly in July, when he wrote 
that the CIA was ``increasingly skeptical that such a meeting 
occurred,'' and that there was an ``absence of any credible 
information that the April 2001 meeting occurred.'' The SSCI 
report notes that the ``CIA judged that other evidence [besides 
the one Czech report] indicated that these meetings likely 
never occurred.''
    In all of these cases, and many others, where public 
statements of the CIA varied from the classified intelligence 
in the lead-up to the war, the Iraqi threat became clearer and 
more dire and the presence of WMD more certain. In public 
statements and reports, the CIA had become effectively a 
political arm of the White House.
    According to Bob Woodward's book, Plan of Attack, after the 
Intelligence Community's case regarding Iraqi WMD was presented 
to the President in the Oval Office on December 21st, 2002:

          Bush turned to Tenet. ``I've been told all this 
        intelligence about having WMD and this is the best 
        we've got?''
          From the end of one of the couches in the Oval 
        Office, Tenet rose up, threw his arms in the air. 
        ``It's a slam-dunk case!'' the director of central 
        intelligence said.
          Bush pressed. ``George, how confident are you?''
          Tenet, a basketball fan who attended as many home 
        games of his alma mater Georgetown University as 
        possible, leaned forward and threw his arms up again. 
        ``Don't worry, it's a slam dunk!''

    As we know now--and as Director Tenet should have known 
then--the case was anything but a slam dunk.
    Many experts, including many of the witnesses that have 
appeared before the Governmental Affairs Committee, the Senate 
Select Committee on Intelligence and the Senate Armed Services 
Committee during hearings on Intelligence Community reform, 
have commented on the importance of promoting the independence 
of our intelligence agencies and the objectivity of 
intelligence analysis by insulating it from political pressure.
    In his memoir Turmoil and Triumph, Former Secretary of 
State George Shultz said:

          The CIA should have nothing to do with policy. You 
        have to keep objectivity in analyses and;
          The DCI should not be part of the policy process; 
        heavy involvement can't help but influence you. In the 
        policy business you develop a bias. The CIA should be 
        objective, and if it is not, that means what you say 
        must be discounted.

    The Iran Contra Committee concluded that: ``The gathering, 
analysis, and reporting of intelligence should be done in such 
a way that there can be no question that the conclusions are 
driven by the actual facts, rather than by what a policy 
advocate hopes these facts will be.''
    Judge William Webster, former head of the CIA, said the 
following before the Senate Governmental Affairs Committee on 
August 16, 2004:

          With respect to relations with the president, while 
        the leader of the intelligence community must be the 
        principal advisor on intelligence to the president, he 
        must work hard--very hard--to avoid either the reality 
        or the perception that intelligence is being framed--
        read ``spun''--to support a foreign policy of the 
        administration. * * * The head of the intelligence 
        community does not need to be located in the White 
        House, and to avoid these problems I believe he should 
        not be.

    In an August 18, 2004 Senate Select Committee on 
Intelligence hearing on Intelligence Community reform, Former 
chief weapons inspector David Kay put it this way:

          Intelligence must serve the nation and speak truth to 
        power even if in some cases elected leaders chose, as 
        is their right, to disagree with the intelligence with 
        which they are presented. This means that intelligence 
        should not be part of the political apparatus or 
        process.
          That is, I think, if you move forward on NID 
        legislation, is going to be the hardest thing to 
        communicate, that the NID must serve the nation and the 
        national security objectives of the nation and he 
        serves, whoever is the president, best by giving him 
        the unvarnished truth, which will often not be 
        welcomed.

    At that same hearing, Retired General Charles Boyd told the 
Committee of the enormous pressure that political appointees 
are under ``to give the president what he wants rather than 
what he doesn't want, but needs.'' Rather than seeking a 
special and close relationship to the president, Boyd suggests 
that the standard for an intelligence director ``ought to be 
his distance from the president, his independence of the 
president, his professionalism, and be respected as such.''
    And on September 21, 2004, eleven former government 
officials convened by the Center for Strategic and 
International Studies (CSIS), issued nine ``Guiding Principles 
for Intelligence Reform.'' The CSIS group included six former 
Senators; two former secretaries of Defense and one Deputy 
Secretary of Defense; a former Director of Central 
Intelligence; and two former secretaries of State (one of whom 
was also the National Security Advisor). In words of the CSIS 
11: ``When intelligence and policy are too closely tied, the 
demands of policymakers can distort intelligence and 
intelligence analysts can hijack the policy development 
process. It is crucial to ensuring this separation that the 
Intelligence Community leader have no policy role. * * * A 
single individual with the last word on intelligence and a say 
in policy as well could be a dangerously powerful actor in the 
national security arena--using intelligence to advocate for 
particular policy positions, budget requests, or weapons 
systems that others lacked the knowledge to challenge.''
    I share these concerns about the independence of our 
intelligence professional and the objectivity of intelligence 
information and I was pleased that, during consideration of 
intelligence reform legislation, the Governmental Affairs 
Committee adopted an amendment I offered to help assure that 
the New National Intelligence Director will be independent and 
produce objective intelligence.
    The amendment creates a new title, the purpose of which is 
to promote the independence of the National Intelligence 
Director (NID) and the objectivity of intelligence. The 
amendment states explicitly that the NID is outside the 
Executive Office of the President and away from the politics 
and policy debates of that office. This is a provision that was 
supported by several witnesses who apeared before the GAC 
including former DCI's Judge William Webster and Robert Gates.
    The title also requires that the NID, the National 
Counterterroism Center (NCTC), the National Intelligence 
Council, the Central Intelligence Agency, and other any 
intelligence center created by the NID, provide the President 
and Congress with intelligence information that is timely, 
objective, independent of political considerations and not 
shaped to serve policy goals.
    The title promotes the independence of the NCTC by stating 
that the Director cannot be forced to ask for permission to 
testify before Congress or to seek prior approval of 
Congressional testimony or comments. This is based on authority 
that exists for other executive branch agencies, including the 
Securities and Exchange Commission, the Office of the 
Comptroller of the Currency, and the Federal Reserve, among 
others. This provision will help ensure Congress has access to 
the unvarnished truth.
    There are times when members of Congress, even members of 
the intelligence Committees, are not provided timely access, or 
any access at all, to the intelligence information they need. 
The title seeks to remedy that by requiring that Congress have 
access to intelligence reports, assessments and estimates. It 
specifies that some of these documents must come to the 
Intelligence Committees as a matter of course and that those 
that do not automatically come to the Committee must be made 
available upon request of the Chairman or Vice Chairman, with 
the exception of information for which the President asserts a 
Constitutionally based privilege.
    The first overall conclusion of the SSCI report is that 
``Most of the major key judgments in the Intelligence 
Community's October 2002 National Intelligence Estimate (NIE), 
Iraq's Continuing Programs for Weapons of Mass Destruction, 
either overstated or were not supported by, the underlying 
intelligence reporting.'' The title explicitly permits 
Intelligence Community employees to come directly to Congress 
with information, even if it is classified information, that 
provides direct and specific evidence of a false statement to 
Congress or a withholding of information from Congress in any 
intelligence assessment, report or estimate.
    In my additional views to the SSCI report on intelligence 
failures in Iraq, I noted that the CIA Ombudsmen said that he 
felt the ``hammering'' by the Administration on Iraq 
intelligence was harder than he had previously witnessed in his 
32-year career with the agency. My amendment addreses such 
situations by adding a provision to the bill, permitting the 
National Intelligence Authority Ombudsman to refer serious 
cases of misconduct related to politicized intelligence and 
biased reporting to the National Intelligence Authority 
Inspector General for investigation.
    One important proposal that could not be included in my 
amendment but that I am pleased Chairman Collins and Ranking 
Member Lieberman support was a change in the rules that govern 
the Senate Select Committee on Intelligence. The proposal is 
based on the experience of the Governmental Affairs Committee's 
Permanent Subcommittee on Investigations (PSI) where the 
Subcommittee Chairman and Ranking Member have unique 
authorities to initiate inquiries and conduct investigations. 
The PSI has a long tradition of conducting successful 
bipartisan investigations and the authorities vested in the 
Chairman and Ranking Member have a lot to do with this track 
record. Providng similar authorities to the Chairman and Vice-
Chairman of the Senate Select Committee on Intelligence improve 
oversight of the intelligence community. Enhanced Congressional 
oversight was a primary recommendation of the 9/11 Commission.
    The bottom line is that terrorism is our number one threat 
and intelligence is our most essential tool to deal with that 
threat. Before we simply create a stronger National 
Intelligence Director we must take steps to ensure that the 
person serving in that position, indeed our entire Intelligence 
Community, are better equipped to provide objective, 
independent intelligence analyses. A National Intelligence 
Director must not be a more powerful ``yes man'' for the 
Administration in power. Our security depends on objective, 
independently arrived at intelligence.

                 MILITARY PERSONNEL TRANSFER AUTHORITY

    I have a number of reservations about some provisions of 
the GAC bill because they could potentially make us less secure 
by needlessly confounding our military capability to fight the 
war on terror or any other war.
    For example, the bill would grant authority for the NID to 
move military personnel within the agencies and activities that 
fall within the NID's jurisdiction, the National Intelligence 
Program (NIP).
    However, while the bill places all of the activities, 
including budget execution activities, of the National Security 
Agency (NSA), the National Reconnaissance Office (NRO), and the 
National Geospatial-Intelligence Agency (NGA)--combat support 
agencies of the Department of Defense--within the NIP and under 
the NID's jurisdiction, the day-to-day operations of these 
agencies are left within the Department of Defense. These 
agencies, as well as the Defense Intelligence Agency and the 
military departments, employ thousands of military personnel 
who provide direct daily support to the military for 
operations, in places such as the Joint Staff in the Pentagon 
and the combatant commands that are responsible for directing 
combat and counterterrorist operations in the field.
    Providing personnel transfer authority to the NID in these 
circumstances could inadvertently result in the transfer of 
military personnel who are providing critical support to 
military (including counterterrorist) operations, and thus in 
the loss of critical support to those operations. Unilateral 
personnel moves by the NID could potentially hamper our 
military forces' ability to fighter terrorism on the front 
lines overseas. It is not enough to require consultation, as 
the bill provides, the National Intelligence Director should be 
required to obtain the concurrence of the heads of departments 
and agencies from which personnel might be transferred.
    Furthermore, military personnel have their own unique 
career path procedures and requirements. It is possible that if 
a member of the military is transferred out of their assigned 
agency and into a different assignment, it could detract from 
their career path options. So we must be careful not to 
establish a personnel transfer authority that would 
inadvertently either diminish the ability of our armed forces 
to fight terrorists, or to impede military personnel in their 
normal career paths.

    ESTABLISHING INTELLIGENCE COLLECTION REQUIREMENTS AND ANALYSIS 
                               PRIORITIES

    There is language in this bill that would assign the 
responsibility to the NID to ``establish the requirements and 
priorities to govern the collection, analysis and dissemination 
of national intelligence,'' and to ``establish collection and 
analysis requirements for the intelligence community, determine 
collection and analysis priorities, manage collection and 
analysis tasking * * *'' This language poses several potential 
problems in terms of independence and objectivity of 
intelligence.
    First, with respect to tasking collection of intelligence, 
the 9/11 Commission Report notes that the NID should support 
the consumers of intelligence (the customers), such as the 
President and the Secretaries of Defense, State, Homeland 
Security and the Attorney General. The ``customers'' should set 
requirements, not the ``provider'' (the NID). If the NID 
``establishes requirements'' for collection of intelligence, 
that suggests that the members of the Intelligence Community 
would not be able to establish their own collection 
requirements, based on their assigned tasks and missions, and 
with the NID serving as the arbiter of which collection 
priorities will be met where there are inadequate resources. 
That is how collection tasking is now managed on an interagency 
basis, with a senior Director of Central Intelligence 
representative chairing the collection tasking meetings. It is 
a system that appears to work well.
    Second, with respect to establishing the requirements and 
priorities for analysis, and managing the tasking of analysis, 
this may have an inadvertent and undesirable outcome. Vesting 
in the NID the authority to manage analysis tasking would give 
the NID the power to stifle components of the intelligence 
community from providing alternative analysis when that 
analysis doesn't conform to the accepted view. The NID could 
assign a multitude of analytic tasks, give them high priority 
and effectively preclude an intelligence component from 
conducting competitive analysis that it believes is important 
and which provides alternative views, such as the Department of 
Energy intelligence offices analyzing the intended use of 
aluminum tubes that Iraq was trying to acquire; or the National 
Air and Space Intelligence Center analyzing the IraqiUnmanned 
Aerial Vehicle program; or the State Department's Bureau of 
Intelligence and Research analyzing claims that Iraq was trying to 
obtain uranium from Africa. This authority, as stated, could lead to 
more ``group think'' and have a chilling effect on competitive analysis 
which all agree is so critical to objective intelligence.
    The group of former government officials convened by CSIS 
made a number of relevant comments in this regard: ``The best 
analysis emerges from a competitive environment where different 
perspectives are welcomed and alternative hypotheses are 
encouraged. Intelligence reform must institutionalize these 
traits in the analytical process. To preserve their 
independence, analysts must be insulated from policy and 
political pressure.'' They also, most perceptively observed 
that: ``Intelligence Community reform must not rob Cabinet 
secretaries of their own ability to assess intelligence by 
centralizing the bulk of assessment resources; the secretaries 
must be able to turn to their own analysts for independent 
perspective and be able to task the Intelligence Community 
leader for input to the policymaking process.''

            DEFINITION OF THE NATIONAL INTELLIGENCE PROGRAM

    There is no perfectly clear line between ``national'' 
intelligence and intelligence that supports joint military 
operations or otherwise supports military requirements. Some 
``national'' systems provide essential support to the military, 
and some military systems provide intelligence for national 
needs. The military is the largest consumer and producer of 
intelligence, and it has needs for intelligence on a 24-hour 
basis to support military operations around the world. The 
challenge in reforming the Intelligence Community is to ensure 
that the needs of national customers and military customers are 
both met adequately. This bill consolidates the bulk of the 
intelligence assets under the National Intelligence Director in 
a way that may make it difficult to ensure adequate 
intelligence support to the military. As the CSIS 11 stated, 
``Any successful intelligence reform must respect the 
military's need to maintain a robust organic tactical 
intelligence capability and to have rapid access to national 
intelligence assets and information.''
    The bill reported by the Committee contains a definition of 
the National Intelligence Program (NIP) that may not meet this 
test, and thus may have harmful unintended consequences. The 
underlying draft bill said that any program, project or 
activity of the military departments (namely, the Army, Navy, 
Air Force and Marines) to acquire intelligence ``solely'' for 
the planning and conduct of ``tactical'' military operations 
were not part of the NIP.
    That definition was too narrow because it did not include 
any activities of the Defense Intelligence Agency (since it is 
not a military department), and because numerous military 
intelligence activities--like those of the Joint Military 
Intelligence Program--are not ``solely'' for ``tactical'' 
military operations. By excluding such activities from the 
definition, they would have been included in the National 
Intelligence Program, even though they might support military 
operations 90 percent of the time.
    That language was changed in committee to broaden the 
definition of what is not included in the NIP, so that more 
elements of the Joint Military Intelligence Program that are 
run by either the military departments or the Defense 
Intelligence Agency, are not included within the National 
Intelligence Program. By adopting this change, the Committee 
took an important step in the right direction.
    However, I am concerned that, by continuing to include 
those Defense Intelligence Agency programs which happen to be 
funded through the National Foreign Intelligence Program, the 
bill still may go too far in providing the NID control over 
intelligence programs and activities that support primarily 
military operations, and placing them outside the effective 
control of the military and the Defense Department.
    I intend to work with the Senate to address these and other 
concerns when the Senate considers this legislation.
    We all share a common objective: to improve our 
intelligence system so that it enhances our national security. 
While we want to establish a strong manager of the Intelligence 
Community, we should not do so at the expense of needed 
intelligence support to the military forces that are fighting 
the war against terrorists both overseas and here at home.
                                                        Carl Levin.

                      IX. Changes to Existing Law

    Pursuant to the requirements of paragraph 12 of rule XXVI 
paragraph 12 of the Standing Rules of the Senate, the following 
provides a print of the statutes, or the part or section 
thereof, to be amended or replaced (existing law proposed to be 
omitted is indicated by brackets, new material is printed in 
italic, and existing law in which no change is proposed is 
shown in roman):

             TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES

                          PART III--EMPLOYEES

                     Subpart D--Pay and Allowances

                    CHAPTER 53--PAY RATES AND SYSTEMS

               Subchapter II--Executive Schedule Pay Rates

Sec. 5312. Positions at level I

    Level I of the Executive Schedule applies to the following 
positions for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2 [2 USCS Sec. Sec. 351 et seq.], as adjusted by section 
5318 of this title:
    Secretary of State.
    Secretary of the Treasury.
    Secretary of Defense.
    Attorney General.
    Secretary of the Interior.
    Secretary of Agriculture.
    Secretary of Commerce.
    Secretary of Labor.
    Secretary of Health and Human Services.
    Secretary of Housing and Urban Development.
    Secretary of Transportation.
    United States Trade Representative.
    Secretary of Energy.
    [(15)] Secretary of Education.
    Secretary of Veterans Affairs.
    Secretary of Homeland Security.
    Director of the Office of Management and Budget.
    Commissioner of Social Security, Social Security 
Administration.
    Director of National Drug Control Policy.
    Chairman, Board of Governors of the Federal Reserve System.
    National Intelligence Director.

Sec. 5313. Positions at level II

    Level II of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2 [2 USCS Sec. Sec. 351 et seq.], as adjusted by section 
5318 of this title:
    [Director of Central Intelligence.]
    Deputy National Intelligence Directors (5).
    Director of the National Counterterrorism Center.

Sec. 5314. Positions at level III

    Level III of the Executive Schedule applies to the 
following positions, for which the annual rate of basic pay 
shall be the rate determined with respect to such level under 
chapter 11 of title 2:
    [Deputy Directors of Central Intelligence (2).]
    Director of the Central Intelligence Agency

           *       *       *       *       *       *       *


Sec. 5315. Positions at level IV

    Level IV of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2 [2 USCS Sec. Sec. 351 et seq.], as adjusted by section 
5318 of this title:
    [Assistant Directors of Central Intelligence (3).]

           *       *       *       *       *       *       *


           Subpart F--Labor-Management and Employee Relations

             CHAPTER 73--SUITABILITY, SECURITY, AND CONDUCT

                  Subchapter III--Political Activities

Sec. 7323. Political activity authorized; prohibitions

           *       *       *       *       *       *       *


    (b)(1) An employee of the Federal Election Commission 
(except one appointed by the President, by and with the advice 
and consent of the Senate), may not request or receive from, or 
give to, an employee, a Member of Congress, or an officer of a 
uniformed service a political contribution.
    (2)(A) No employee described under subparagraph (B) (except 
one appointed by the President, by and with the advice and 
consent of the Senate), may take an active part in political 
management or political campaigns.
    (B) The provisions of subparagraph (A) shall apply to--
          (i) an employee of--
                  (I) the Federal Election Commission or the 
                Election Assistance Commission;
                  (II) the Federal Bureau of Investigation;
                  (III) the Secret Service;
                  (IV) the Central Intelligence Agency;
                  (V) the National Security Council;
                  (VI) the National Security Agency;
                  (VII) the Defense Intelligence Agency;
                  (VIII) the Merit Systems Protection Board;
                  (IX) the Office of Special Counsel;
                  (X) the Office of Criminal Investigation of 
                the Internal Revenue Service;
                  (XI) the Office of Investigative Programs of 
                the United States Customs Service;
                  (XII) the Office of Law Enforcement of the 
                Bureau of Alcohol, Tobacco, and Firearms; [or]
                  (XIII) the National Imagery and Mapping 
                Agency [National Geospatial-Intelligence 
                Agency]; or
                  (XIV) the National Intelligence Authority; or
          (ii) a person employed in a position described under 
        section 3132(a)(4), 5372, 5372a, or 5372b of title 5, 
        United States Code.

           *       *       *       *       *       *       *


              Subchapter IV--Foreign Gifts and Decorations


Sec. 7342. Receipt and disposition of foreign gifts and decorations

           *       *       *       *       *       *       *


    (f)(1) Not later than January 31 of each year, each 
employing agency or its delegate shall compile a listing of all 
statements filed during the preceding year by the employees of 
that agency pursuant to subsection (c)(3) and shall transmit 
such listing to the Secretary of State who shall publish a 
comprehensive listing of all such statements in the Federal 
Register.
    (2) Such listings shall include for each tangible gift 
reported--
          (A) the name and position of the employee;
          (B) a brief description of the gift and the 
        circumstances justifying acceptance;
          (C) the identity, if known, of the foreign government 
        and the name and position of the individual who 
        presented the gift;
          (D) the date of acceptance of the gift;
          (E) the estimated value in the United States of the 
        gift at the time of acceptance; and
          (F) disposition or current location of the gift.
    (3) Such listings shall include for each gift of travel or 
travel expenses--
          (A) the name and position of the employee;
          (B) a brief description of the gift and the 
        circumstances justifying acceptance; and
          (C) the identity, if known, of the foreign government 
        and the name and position of the individual who 
        presented the gift.
    (4)(A) In transmitting such listings for the Central 
Intelligence Agency, the [Director of Central Intelligence] 
Director of the Central Intelligence Agency may delete the 
information described in subparagraphs (A) and (C) of 
paragraphs (2) and (3) if the Director certifies in writing to 
the Secretary of State that the publication of such information 
could adversely affect United States intelligence sources.
    (B) In transmitting such listings for the National 
Intelligence Authority, the National Intelligence Director may 
delete the information described in subparagraphs (A) and (C) 
of paragraphs (2) and (3) if the Director certifies in writing 
to the Secretary of State that the publication of such 
information could adversely affect United States intelligence 
sources.

           *       *       *       *       *       *       *


                           TITLE 5--APPENDIX

                     INSPECTOR GENERAL ACT OF 1978


Sec. 8H. Additional provisions with respect to Inspectors General of 
                    the intelligence community

    (a)(1)(A) An employee of the Defense Intelligence Agency, 
the National Imagery and Mapping Agency [National Geospatial-
Intelligence Agency], the National Reconnaissance Office, or 
the National Security Agency, or of a contractor of any of 
those Agencies, who intends to report to Congress a complaint 
or information with respect to an urgent concern may report the 
complaint or information to the Inspector General of the 
Department of Defense (or designee).
    (B) An employee of the Federal Bureau of Investigation, or 
of a contractor of the Bureau, who intends to report to 
Congress a complaint or information with respect to an urgent 
concern may report the complaint or information to the 
Inspector General of the Department of Justice (or designee).
    (C) Any other employee of, or contractor to, an executive 
agency, or element or unit thereof, determined by the President 
under section 2302(a)(2)(C)(ii) of title 5, United States Code, 
to have as its principal function the conduct of foreign 
intelligence or counterintelligence activities, who intends to 
report to Congress a complaint or information with respect to 
an urgent concern may report the complaint or information to 
the appropriate Inspector General (or designee) under this Act 
[5 USCS Appx. Sec. Sec. 1 et seq.] or section 17 of the Central 
Intelligence Agency Act of 1949 [50 USCS Sec. 403q].
    (D) An employee of the National Intelligence Authority, an 
employee of an entity other than the Authority who is assigned 
or detailed to the Authority, or of a contractor of the 
Authority, who intends to report to Congress a complaint or 
information to the Inspector General of the National 
Intelligence Authority in accordance with section 141(h)(5) of 
the National Intelligence Reform Act of 2004.

           *       *       *       *       *       *       *


                    ETHICS IN GOVERNMENT ACT OF 1978


    TITLE I--FINANCIAL DISCLOSURE REQUIREMENTS OF FEDERAL PERSONNEL

Sec. 105. Custody of and public access to reports

    (a) Each agency, each supervising ethics office in the 
executive or judicial branch, the Clerk of the House of 
Representatives, and the Secretary of the Senate shall make 
available to the public, in accordance with subsection (b), 
each report filed under this title [5 USCS Appx. Sec. Sec. 101 
et seq.] with such agency or office or with the Clerk or the 
Secretary of the Senate, except that--
          (1) this section does not require public availability 
        of a report filed by any individual in the National 
        Intelligence Authority, the Central Intelligence 
        Agency, the Defense Intelligence Agency, the National 
        Imagery and Mapping Agency [National Geospatial-
        Intelligence Agency], or the National Security Agency, 
        or any individual engaged in intelligence activities in 
        any agency of the United States, if the President finds 
        or has found that, due to the nature of the office or 
        position occupied by such individual, public disclosure 
        of such report would, be [by] revealing the identity of 
        the individual or other sensitive information, 
        compromise the national interest of the United States; 
        and such individuals may be authorized, notwithstanding 
        section 104(a) [5 USCS Appx. Sec. 104(a)], to file such 
        additional reports as are necessary to protect their 
        identity from public disclosure if the President first 
        finds or has found that such filing is necessary in the 
        national interest; and

           *       *       *       *       *       *       *


                       TITLE 6--DOMESTIC SECURITY

               CHAPTER 1--HOMELAND SECURITY ORGANIZATION


                  [NATIONAL HOMELAND SECURITY COUNCIL]

[Sec. 491. National Homeland Security Council

    [There is established within the Executive Office of the 
President a council to be known as the ``Homeland Security 
Council'' (in this title [6 USCS Sec. Sec. 491 et seq.] 
referred to as the ``Council'').

[Sec. 492. Function

    [The function of the Council shall be to advise the 
President on homeland security matters.

[Sec. 493. Membership

    [The members of the Council shall be the following:
          [(1) The President.
          [(2) The Vice President.
          [(3) The Secretary of Homeland Security.
          [(4) The Attorney General.
          [(5) The Secretary of Defense.
          [(6) Such other individuals as may be designated by 
        the President.

[Sec. 494. Other functions and activities

    [For the purpose of more effectively coordinating the 
policies and functions of the United States Government relating 
to homeland security, the Council shall--
          [(1) assess the objectives, commitments, and risks of 
        the United States in the interest of homeland security 
        and to make resulting recommendations to the President;
          [(2) oversee and review homeland security policies of 
        the Federal Government and to make resulting 
        recommendations to the President; and
          [(3) perform such other functions as the President 
        may direct.

[Sec. 495. Staff composition

    [The Council shall have a staff, the head of which shall be 
a civilian Executive Secretary, who shall be appointed by the 
President. The President is authorized to fix the pay of the 
Executive Secretary at a rate not to exceed the rate of pay 
payable to the Executive Secretary of the National Security 
Council.

[Sec. 496. Relation to the National Security Council

    [The President may convene joint meetings of the Homeland 
Security Council and the National Security Council with 
participation by members of either Council or as the President 
may otherwise direct.]

           *       *       *       *       *       *       *


                TITLE 18--CRIMES AND CRIMINAL PROCEDURE

                    PART III--PRISONS AND PRISONERS

                        CHAPTER 307--EMPLOYMENT


Sec. 4124. Purchase of prison-made products by Federal departments

    Other provisions: Purchases by Central Intelligence Agency 
of products of Federal Prison Industries. Act Dec. 13, 2003, 
P.L. 108-177, Title IV, Sec. 404, 117 Stat. 2632, provides: 
``Notwithstanding section 4124 of title 18, United States Code, 
purchases by the Central Intelligence Agency from Federal 
Prison Industries shall be made only if the [Director of 
Central Intelligence] Director of the Central Intelligence 
Agency determines that the product or service to be purchased 
from Federal Prison Industries best meets the needs of the 
Agency.''.

                           TITLE 18--APPENDIX

                 CLASSIFIED INFORMATION PROCEDURES ACT


Sec. 9. Security procedures

    (a) Within one hundred and twenty days of the date of the 
enactment of this Act [enacted Oct. 15, 1980], the Chief 
Justice of the United States, in consultation with the Attorney 
General, the [Director of Central Intelligence] National 
Intelligence Director, and the Secretary of Defense, shall 
prescribe rules establishing procedures for the protection 
against unauthorized disclosure of any classified information 
in the custody of the United States district courts, courts of 
appeal, or Supreme Court. Such rules, and any changes in such 
rules, shall be submitted to the appropriate committees of 
Congress and shall become effective forty-five days after such 
submission.

           *       *       *       *       *       *       *


               TITLE 28--JUDICIARY AND JUDICIAL PROCEDURE

                     PART II--DEPARTMENT OF JUSTICE

                    CHAPTER 31--THE ATTORNEY GENERAL


Sec. 519. Supervision of litigation

    Except as otherwise authorized by law, the Attorney General 
shall supervise all litigation to which the United States, an 
agency, or officer thereof is a party, and shall direct all 
United States attorneys, assistant United States attorneys, and 
special attorneys appointed under section 543 of this title in 
the discharge of their respective duties.
    Other provisions: Intelligence and national security 
aspects of espionage prosecutions. Act Dec. 13, 2003, P.L. 108-
177, Title III, Subtitle C, Sec. 341(b), 117 Stat. 2616, 
provides: ``The Attorney General, acting through the Office of 
Intelligence Policy and Review of the Department of Justice, 
and in consultation with the [Director of Central Intelligence] 
National Intelligence Director, acting through the Office of 
the National Counterintelligence Executive, shall establish 
policies and procedures to assist the Attorney General in the 
consideration of intelligence and national security-related 
equities in the development of charging documents and related 
pleadings in espionage prosecutions.''.

           *       *       *       *       *       *       *


                      TITLE 31--MONEY AND FINANCE

                          SUBTITLE I--GENERAL


               CHAPTER 9--AGENCY CHIEF FINANCIAL OFFICERS


Sec. 901. Establishment of agency Chief Financial Officers

           *       *       *       *       *       *       *


    (b) (1) The agencies referred to in subsection (a)(1) are 
the following:
    (A) The Department of Agriculture.
    (B) The Department of Commerce.
    (C) The Department of Defense.
    (D) The Department of Education.
    (E) The Department of Energy.
    (F) The Department of Health and Human Services.
    (G) The Department of Housing and Urban Development.
    (H) The Department of the Interior.
    (I) The Department of Justice.
    (J) The Department of Labor.
    (K) The Department of State.
    (L) The Department of Transportation.
    (M) The Department of the Treasury.
    (N) The Department of Veterans Affairs.
    (O) The Environmental Protection Agency.
    (P) The National Aeronautics and Space Administration.
    (Q) The National Intelligence Authority.

           *       *       *       *       *       *       *


            TITLE 40--PUBLIC BUILDINGS, PROPERTY, AND WORKS

        Subtitle I--Federal Property and Administrative Services


                           CHAPTER 1--GENERAL


                          Subchapter II--Scope


Sec. 113. Limitations

           *       *       *       *       *       *       *


          (18) the Secretary of the Interior with respect to 
        procurement for program operations under the Bonneville 
        Project Act of 1937 (16 U.S.C. 832 et seq.); [or]
          (19) the Secretary of State with respect to the 
        furnishing of facilities in foreign countries and 
        reception centers within the United States[.]; or
          (20) the National Intelligence Director.

                   TITLE 50--WAR AND NATIONAL DEFENSE

                     CHAPTER 15--NATIONAL SECURITY


Sec. 401 note

                            TABLE OF CONTENTS

               TITLE I--COORDINATION FOR NATIONAL SECURITY

Sec. 101. National Security Council

                  JOINT INTELLIGENCE COMMUNITY COUNCIL

    Sec. 101A. (a) Joint Intelligence Community Council.--
    (b) Membership.--The Joint Intelligence Community Council 
shall consist of the following:
          (1) The National Intelligence Director, who shall 
        chair the Council.
          (2) The Secretary of State.
          (3) The Secretary of the Treasury.
          (4) The Secretary of Defense.
          (5) The Attorney General.
          (6) The Secretary of Energy.
          (7) The Secretary of Homeland Security.
          (8) Such other officers of the United States 
        Government as the President may designate from time to 
        time.
    (c) Functions.--The Joint Intelligence Community Council 
shall assist the National Intelligence Director in developing 
and implementing a joint, unified national intelligence effort 
to protect national security by--
          (1) advising the Director on establishing 
        requirements, developing budgets, financial management, 
        and monitoring and evaluating the performance of the 
        intelligence community, and on such other matters as 
        the Director may request; and
          (2) ensuring the timely execution of programs, 
        policies, and directives established or developed by 
        the Director.
    (d) Meetings.--The Joint Intelligence Community Council 
shall meet upon the request of the National Intelligence 
Director.

[Sec. 102. Office of the Director of Central Intelligence]
[Sec. 102A. Central Intelligence Agency.]
[Sec. 103. Responsibilities of the Director of Central Intelligence.]
[Sec. 104. Authorities of the Director of Central Intelligence.]

                      CENTRAL INTELLIGENCE AGENCY

    Sec. 102. (a) Central Intelligence Agency.--
    (b) Function.--The function of the Central Intelligence 
Agency is to assist the Director of the Central Intelligence 
Agency in carrying out the responsibilities specified in 
section 103(d).

              DIRECTOR OF THE CENTRAL INTELLIGENCE AGENCY

    Sec. 103. (a) Director of the Central Intelligence 
Agency.--There is a Director of the Central Intelligence Agency 
who shall be appointed by the President, by and with the advice 
and consent of the Senate.
    (b) Supervision.--The Director of the Central Intelligence 
Agency shall report to the National Intelligence Director 
regarding the activities of the Director of the Central 
Intelligence Agency.
    (c) Duties.--The Director of the Central Intelligence 
Agency shall--
          (1) serve as the head of the Central Intelligence 
        Agency; and
          (2) carry out the responsibilities specified in 
        subsection (d).
    (d) Responsibilities.--The Director of the Central 
Intelligence Agency shall--
          (1) collect intelligence through human sources and by 
        other appropriate means, except that the Director of 
        the Central Intelligence Agency shall have no police, 
        subpoena, or law enforcement powers or internal 
        security functions;
          (2) correlate and evaluate intelligence related to 
        the national security and provide appropriate 
        dissemination of such intelligence;
          (3) provide overall direction for and coordination of 
        the collection of national intelligence outside the 
        United States through human sources by elements of the 
        intelligence community authorized to undertake such 
        collection and, in coordination with other departments, 
        agencies, or elements of the United States Government 
        which are authorized to undertake such collection, 
        ensure that the most effective use is made of resources 
        and that appropriate account is taken of the risks to 
        the United States and those involved in such 
        collection; and
          (4) perform such other functions and duties 
        pertaining to intelligence relating to the national 
        security as the President or the National Intelligence 
        Director may direct.
    (e) Termination of Employment of CIA Employees.--
          (1) Notwithstanding the provisions of any other law, 
        the Director of the Central Intelligence Agency may, in 
        the discretion of the Director, terminate the 
        employment of any officer or employee of the Central 
        Intelligence Agency whenever the Director considers the 
        termination of employment of such officer or employee 
        necessary or advisable in the interests of the United 
        States.
          (2) Any termination of employment of an officer or 
        employee under paragraph (1) shall not affect the right 
        of the officer or employee to seek or accept employment 
        in any other department, agency, or element of the 
        United States Government if declared eligible for such 
        employment by the Office of Personnel Management.
    (f) Coordination With Foreign Governments.--Under the 
direction of the National Intelligence Director and in a manner 
consistent with section 207 of the Foreign Service Act of 1980 
(22 U.S.C. 3927), the Director of the Central Intelligence 
Agency shall coordinate the relationships between elements of 
the intelligence community and the intelligence or security 
services of foreign governments on all matters involving 
intelligence related to the national security or involving 
intelligence acquired through clandestine means.

[Sec. 105. Responsibilities of the Secretary of Defense pertaining to 
          the National Foreign Intelligence Program.]
Sec. 105. Responsibilities of the Secretary of Defense pertaining to the 
          National Intelligence Program.
     * * * * * * *
[Sec. 114. Additional annual reports from the Director of Central 
          Intelligence.]
Sec. 114. Additional annual reports from the National Intelligence 
          Director.
     * * * * * * *

           TITLE V--ACCOUNTABILITY FOR INTELLIGENCE ACTIVITIES

[[Sec. 506. Specificity of National Foreign Intelligence Program budget 
          amounts for counterterrorism, counterproliferation, 
          counternarcotics, and counterintelligence.]
Sec. 506. Specificity of National Intelligence Program budget amounts 
          for counterterrorism, counterproliferation, counternarcotics, 
          and counterintelligence.
     * * * * * * *

Sec. 401a. Definitions

    As used in this Act:
          (1) The term ``intelligence'' includes foreign 
        intelligence and counterintelligence.
          (2) The term ``foreign intelligence'' means 
        information relating to the capabilities, intentions, 
        or activities of foreign governments or elements 
        thereof, foreign organizations, [or foreign persons, or 
        international terrorist activities] foreign persons, or 
        international terrorists.
          (3) The term ``counterintelligence'' means 
        information gathered, and activities conducted, to 
        protect against espionage, other intelligence 
        activities, sabotage, or assassinations conducted by or 
        on behalf of foreign governments or elements thereof, 
        foreign organizations, [or foreign persons, or 
        international terrorist activities] foreign persons, or 
        international terrorists.
          (4) The term ``intelligence community'' includes the 
        following--
                  [(A) the Office of the Director of Central 
                Intelligence, which shall include the Office of 
                the Deputy Director of Central Intelligence, 
                the National Intelligence Council (as provided 
                for in section 105(b)(3) [50 USCS Sec. 403-5]), 
                and such other offices as the Director may 
                designate;]
                  (A) the National Intelligence Authority,
                  (B) the Central Intelligence Agency;
                  (C) the National Security Agency;
                  (D) the Defense Intelligence Agency;
                  (E) the National Geospatial-Intelligence 
                Agency;
                  (F) the National Reconnaissance Office;
                  (G) other offices within the Department of 
                Defense for the collection of specialized 
                national intelligence through reconnaissance 
                programs;
                  (H) the intelligence elements of the Army, 
                the Navy, the Air Force, the Marine Corps, the 
                Federal Bureau of Investigation, and the 
                Department of Energy[, and the Coast Guard];
                  (I) the Bureau of Intelligence and Research 
                of the Department of State;
                  (J) the Office of Intelligence and Analysis 
                of the Department of the Treasury;
                  (K) the elements of the Department of 
                Homeland Security concerned with the [analyses 
                of foreign intelligence information] analysis 
                of intelligence information, including the 
                Office of Intelligence of the Coast Guard; and
                  (L) such other elements of any [other] 
                department or agency as may be designated by 
                the President, or designated jointly by the 
                [Director of Central Intelligence] National 
                Intelligence Director and the head of the 
                department or agency concerned, as an element 
                of the intelligence community.
          (5) The terms ``national intelligence'' and 
        ``intelligence related to the national security''--
                  (A) each refer to intelligence which pertains 
                to the interests of more than one department or 
                agency of the Government; and
                  (B) do not refer to counterintelligence or 
                law enforcement activities conducted by the 
                Federal Bureau of Investigation except to the 
                extent provided for in procedures agreed to by 
                the [Director of Central Intelligence] National 
                Intelligence Director and the Attorney General, 
                or otherwise as expressly provided for in this 
                title.
          [(6) The term ``National Foreign Intelligence 
        Program'' refers to all programs, projects, and 
        activities of the intelligence community, as well as 
        any other programs of the intelligence community 
        designated jointly by the Director of Central 
        Intelligence and the head of a United States department 
        or agency or by the President. Such term does not 
        include programs, projects, or activities of the 
        military departments to acquire intelligence solely for 
        the planning and conduct of tactical military 
        operations by United States Armed Forces.]
          [(7)] (6) The term ``congressional intelligence 
        committees'' means--
                  (A) the Select Committee on Intelligence of 
                the Senate; and
                  (B) the Permanent Select Committee on 
                Intelligence of the House of Representatives.

                   COORDINATION FOR NATIONAL SECURITY

Sec. 402. National Security Council

    (a) Establishment; Presiding Officer; Functions; 
Composition.--There is hereby established a council to be known 
as the National Security Council (hereinafter in this section 
referred to as the ``Council'').
    The President of the United States shall preside over 
meetings of the Council: Provided, That in his absence he may 
designate a member of the Council to preside in his place.
    The function of the Council shall be to advise the 
President with respect to the integration of domestic, foreign, 
and military policies relating to the national security so as 
to enable the military services and the other departments and 
agencies of the Government to cooperate more effectively in 
matters involving the national security.
    The Council shall be composed of--
          (1) the President;
          (2) the Vice President;
          (3) the Secretary of State;
          (4) the Secretary of Defense;
          [(5) the Director for Mutual Security;
          [(6) the Chairman of the National Security Resources 
        Board; and]
          (5) the Attorney General;
          (6) the Secretary of Homeland Security; and
          (7) The Secretaries and Under Secretaries of other 
        executive departments and of the military departments, 
        the Chairman of the Munitions Board, and the Chairman 
        of the Research and Development Board, when appointed 
        by the President by and with the advice and consent of 
        the Senate, to serve at his pleasure.
    (b) Additional Functions.--In addition to performing such 
other functions as the President may direct, for the purpose of 
more effectively coordinating the policies and functions of the 
departments and agencies of the Government relating to the 
national security, it shall, subject to the direction of the 
President, be the duty of the Council--
          (1) to assess and appraise the objectives, 
        commitments, and risks of the United States in relation 
        to our actual and potential military power, in the 
        interest of national security, for the purpose of 
        making recommendations to the President in connection 
        therewith; [and]
          (2) to consider policies on matters of common 
        interest to the departments and agencies of the 
        Government concerned with the national security, and to 
        make recommendations to the President in connection 
        therewith[.];
          (3) assess the objectives, commitments, and risks of 
        the United States in the interests of homeland security 
        and make recommendations to the President based on such 
        assessments;
          (4) oversee and review the homeland security policies 
        of the Federal Government and make recommendations to 
        the President based on such oversight and review; and
          (5) perform such other functions as the President may 
        direct.

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Sec. 402. National Security Council

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    (h) Committee on Foreign Intelligence.--
          (1) There is established within the National Security 
        Council a committee to be known as the Committee on 
        Foreign Intelligence (in this subsection referred to as 
        the ``Committee'').
          (2) The Committee shall be composed of the following:
                  (A) The [Director of Central Intelligence] 
                National Intelligence Director.

           *       *       *       *       *       *       *

          (5) The Committee shall submit each year to the 
        Council and to the [Director of Central Intelligence] 
        National Intelligence Director a comprehensive report 
        on its activities during the preceding year, including 
        its activities under paragraphs (3) and (4).

           *       *       *       *       *       *       *

    (i) Committee on Transnational Threats.--
          (1) There is established within the National Security 
        Council a committee to be known as the Committee on 
        Transnational Threats (in this subsection referred to 
        as the ``Committee'').
          (2) The Committee shall include the following 
        members:
                  (A) The [Director of Central Intelligence] 
                National Intelligence Director.

           *       *       *       *       *       *       *

    (j) Participation by Director of Central Intelligence.--The 
[Director of Central Intelligence] National Intelligence 
Director (or, in the Director's absence, the Deputy Director of 
Central Intelligence) may, in the performance of the Director's 
duties under this Act and subject to the direction of the 
President, attend and participate in meetings of the National 
Security Council.

           *       *       *       *       *       *       *

    (j) Participation by Director of Central Intelligence.--The 
Director of Central Intelligence (or, in the Director's 
absence, the [Deputy Director of Central Intelligence] 
Principal Deputy National Intelligence Director) may, in the 
performance of the Director's duties under this Act and subject 
to the direction of the President, attend and participate in 
meetings of the National Security Council.

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Sec. 402b. National Counterintelligence Executive

    (a) Establishment.--
          (1) There shall be a National Counterintelligence 
        Executive, who shall be appointed by the President.
          (2) It is the sense of Congress that the President 
        should seek the views of the Attorney General, 
        Secretary of Defense, and [Director of Central 
        Intelligence] National Intelligence Director, and 
        Director of the Central Intelligence Agency in 
        selecting an individual for appointment as the 
        Executive.
    (b) Component of Office of National Intelligence 
Director.--The National Counterintelligence Executive is a 
component of the Office of the National Intelligence Director 
under subtitle C of the National Intelligence Reform Act of 
2004.
    [(b)] (c) Mission.--The mission of the National 
Counterintelligence Executive shall be to serve as the head of 
national counterintelligence for the United States Government.
    [(c)] (d) Duties.--Subject to the direction and control of 
the President, the duties of the National Counterintelligence 
Executive are as follows:
          (1) To carry out the mission referred to in 
        subsection (b).
          (2) To act as chairperson of the National 
        Counterintelligence Policy Board under section 811 of 
        the Counterintelligence and Security Enhancements Act 
        of 1994 (title VIII of Public Law 103-359; 50 U.S.C. 
        402a), as amended by section 903 of this Act.
          (3) To act as head of the Office of the National 
        Counterintelligence Executive under section 904 [50 
        U.S.C. Sec. 402c].
          (4) To participate as an observer on such boards, 
        committees, and entities of the executive branch as the 
        President considers appropriate for the discharge of 
        the mission and functions of the Executive and the 
        Office of the National Counterintelligence Executive 
        under section 904 [50 U.S.C. Sec. 402c].
          (5) To perform such other duties as may be provided 
        under section 131(b) of the National Intelligence 
        Reform Act of 2004.

           *       *       *       *       *       *       *


Sec. Sec. 402c. Office of the National Counterintelligence Executive

    (a) Establishment.--There shall be an Office of the 
National Counterintelligence Executive.
    (b) Head of Office.--The National Counterintelligence 
Executive shall be the head of the Office of the National 
Counterintelligence Executive.
    (c) Location of Office.--The Office of the National 
Counterintelligence Executive shall be located in the [Office 
of the Director of Central Intelligence] Office of the National 
Intelligence Director.

           *       *       *       *       *       *       *

    (e) Functions.--Subject to the direction and control of the 
National Counterintelligence Executive, the functions of the 
Office of the National Counterintelligence Executive shall be 
as follows:
          (1) National threat identification and prioritization 
        assessment.--Subject to subsection (f), in consultation 
        with appropriate department and agencies of the United 
        States Government, and private sector entities, to 
        produce on an annual basis a strategic planning 
        assessment of the counterintelligence requirements of 
        the United States to be known as the National Threat 
        Identification and Prioritization Assessment.
          (2) National counterintelligence strategy.--Subject 
        to subsection (f), in consultation with appropriate 
        department and agencies of the United States 
        Government, and private sectorentities, and based on 
the most current National Threat Identification and Prioritization 
Assessment under paragraph (1), to produce on an annual basis a 
strategy for the counterintelligence programs and activities of the 
United States Government to be known as the National 
Counterintelligence Strategy.
          (3) Implementation of national counterintelligence 
        strategy.--To evaluate on an ongoing basis the 
        implementation of the National Counterintelligence 
        Strategy and to submit to the President periodic 
        reports on such evaluation, including a discussion of 
        any shortfalls in the implementation of the Strategy 
        and recommendations for remedies for such shortfalls.
          (4) National counterintelligence strategic 
        analyses.--As directed by the [Director of Central 
        Intelligence] National Intelligence Director and in 
        consultation with appropriate elements of the 
        departments and agencies of the United States 
        Government, to oversee and coordinate the production of 
        strategic analyses of counterintelligence matters, 
        including the production of counterintelligence damage 
        assessments and assessments of lessons learned from 
        counterintelligence activities.
          (5) National counterintelligence program budget.--In 
        consultation with the [Director of Central 
        Intelligence] National Intelligence Director--

           *       *       *       *       *       *       *

    (h) Support.--
          (1) The Attorney General, Secretary of Defense, and 
        [Director of Central Intelligence] National 
        Intelligence Director may each provide the Office of 
        the National Counterintelligence Executive such support 
        as may be necessary to permit the Office to carry out 
        its functions under this section.
          (2) Subject to any terms and conditions specified by 
        the [Director of Central Intelligence] National 
        Intelligence Director, the Director may provide 
        administrative and contract support to the Office as if 
        the Office were an element of the Central Intelligence 
        Agency.

           *       *       *       *       *       *       *

    (l) Oversight by Congress.--The location of the Office of 
the National Counterintelligence Executive within the [Office 
of the Director of Central Intelligence] Office of the National 
Intelligence Director shall not be construed as affecting 
access by Congress, or any committee of Congress, to--
          (1) any information, document, record, or paper in 
        the possession of the Office; or
          (2) any personnel of the Office.
    (m) Construction.--Nothing in this section shall be 
construed as affecting the authority of the [Director of 
Central Intelligence] National Intelligence Director, the 
Director of the Central Intelligence Agency, the Secretary of 
Defense, the Secretary of State, the Attorney General, or the 
Director of the Federal Bureau of Investigation as provided or 
specified under the National Security Act of 1947 or under 
other provisions of law.

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Sec. 403. Office of the Director of Central Intelligence

           *       *       *       *       *       *       *


    Other provisions:
    ``(b) Pilot Project To Promote Equality of Employment 
Opportunities for Women and Minorities Throughout the 
Intelligence Community Using Innovative Methodologies.--The 
[Director of Central Intelligence] National Intelligence 
Director shall carry out a pilot project under this section to 
test and evaluate alternative, innovative methods to promote 
equality of employment opportunities in the intelligence 
community for women, minorities, and individuals with diverse 
ethnic and cultural backgrounds, skills, language proficiency, 
and expertise.

           *       *       *       *       *       *       *

    ``(a) Report.--As soon as possible, but not later than one 
year after the date of the enactment of this Act, the [Director 
of Central Intelligence] National Intelligence Director shall 
submit to the appropriate committees of Congress a report on 
the intelligence lessons learned as a result of Operation Iraqi 
Freedom, including lessons relating to the following:
          ``(1) The tasking, collection, processing, 
        exploitation, analysis, and dissemination of 
        intelligence.
          ``(2) The accuracy, timeliness, and objectivity of 
        intelligence analysis.
          ``(3) The intelligence support available to 
        policymakers and members of the Armed Forces in combat.
          ``(4) The coordination of intelligence activities and 
        operations with military operations.
          ``(5) The strengths and limitations of intelligence 
        systems and equipment.
          ``(6) Such other matters as the Director considers 
        appropriate.

           *       *       *       *       *       *       *

    ``(f) Diversity Plan.--
          ``(1) Not later than February 15, 2004, the Director 
        of Central Intelligence shall submit to Congress a 
        report which describes the plan of the Director, 
        entitled the `DCI Diversity Strategic Plan', and any 
        subsequent revision to that plan, to increase diversity 
        of officers and employees in the intelligence 
        community, including the short- and long-term goals of 
        the plan. The report shall also provide a detailed 
        description of the progress that has been made by each 
        element of the intelligence community in implementing 
        the plan.
          ``(2) In implementing the plan, the [Director] 
        National Intelligence Director shall incorporate 
        innovative methods for recruitment and hiring that the 
        Director has determined to be effective from the pilot 
        project carried out under this section.

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Sec. 403-3. Responsibilities of the Director of Central Intelligence

           *       *       *       *       *       *       *


    Other provisions:
    Identification of constituent components of base 
intelligence budget. Act Oct. 14, 1994, P.L. 103-359, Title VI, 
Sec. 603, 108 Stat. 3433, provides: ``The Director of Central 
Intelligence shall include the same level of budgetary detail 
for the Base Budget that isprovided for Ongoing Initiatives and 
New Initiatives to the Permanent Select Committee on Intelligence of 
the House of Representatives and the Select Committee on Intelligence 
of the Senate in the congressional justification materials for the 
annual submission of the National Foreign Intelligence Program of each 
fiscal year.''.
    Periodic reports on expenditures. Act Oct. 11, 1996, P.L. 
104-293, Title VIII, Sec. 807(c), 110 Stat. 3480, provides: 
``Not later than January 1, 1997, the Director of Central 
Intelligence and the Secretary of Defense shall prescribe 
guidelines to ensure prompt reporting to the Director and the 
Secretary on a periodic basis of budget execution data for all 
national, defense-wide, and tactical intelligence 
activities.''.
    Database program tracking. Act Oct. 11, 1996, P.L. 104-293, 
Title VIII, Sec. 807(d), 110 Stat. 3481, provides: ``Not later 
than January 1, 1999, the Director of Central Intelligence and 
the Secretary of Defense shall develop and implement a database 
to provide timely and accurate information on the amounts, 
purposes, and status of the resources, including periodic 
budget execution updates, for all national, defense-wide, and 
tactical intelligence activities.''.
    Standards for spelling of foreign names and places and for 
use of geographic coordinates. Act Nov. 20, 1997, P.L. 105-107, 
Title III, Sec. 309, 111 Stat. 2253, provides:
    ``(a) Survey of Current Standards.--
          ``(1) Survey.--The Director of Central Intelligence 
        shall carry out a survey of current standards for the 
        spelling of foreign names and places, and the use of 
        geographic coordinates for such places, among the 
        elements of the intelligence community.
          ``(2) Report.--Not later than 90 days after the date 
        of enactment of this Act, the Director shall submit to 
        the congressional intelligence committees a report on 
        the survey carried out under paragraph (1). The report 
        shall be submitted in unclassified form, but may 
        include a classified annex.
    ``(b) Guidelines.--
          ``(1) Issuance.--Not later than 180 days after the 
        date of enactment of this Act, the Director shall issue 
        guidelines to ensure the use of uniform spelling of 
        foreign names and places and the uniform use of 
        geographic coordinates for such places. The guidelines 
        shall apply to all intelligence reports, intelligence 
        products, and intelligence databases prepared and 
        utilized by the elements of the intelligence community.
          ``(2) Basis.--The guidelines under paragraph (1) 
        shall, to the maximum extent practicable, be based on 
        current United States Government standards for the 
        transliteration of foreign names, standards for foreign 
        place names developed by the Board on Geographic Names, 
        and a standard set of geographic coordinates.
          ``(3) Submittal to congress.--The Director shall 
        submit a copy of the guidelines to the congressional 
        intelligence committees.
    ``(c) Congressional Intelligence Committees Defined.--In 
this section, the term `congressional intelligence committees' 
means the following:
          ``(1) The Select Committee on Intelligence of the 
        Senate.
          ``(2) The Permanent Select Committee on Intelligence 
        of the House of Representatives.''.
    Standardized transliteration of names into the Roman 
alphabet. Act Nov. 27, 2002, P.L. 107-306, Title III, Subtitle 
F, Sec. 352, 116 Stat. 2401, provides:
    ``(a) Method of Transliteration Required.--Not later than 
180 days after the date of the enactment of this Act, the 
Director of Central Intelligence shall provide for a 
standardized method for transliterating into the Roman alphabet 
personal and place names originally rendered in any language 
that uses an alphabet other than the Roman alphabet.
    ``(b) Use by Intelligence Community.--The [Director] 
National Intelligence Director shall ensure the use of the 
method established under subsection (a) in--
          ``(1) all communications among the elements of the 
        intelligence community; and
          ``(2) all intelligence products of the intelligence 
        community.''.
    Pilot program on analysis of signals and other intelligence 
by intelligence analysts of various elements of intelligence 
community. Act Dec. 13, 2003, P.L. 108-177, Title III, Subtitle 
B, Sec. 317, 117 Stat. 2611, provides:
    ``(a) In General.--The [Director of Central Intelligence] 
National Intelligence Director shall, in coordination with the 
Secretary of Defense, carry out a pilot program to assess the 
feasibility and advisability of permitting intelligence 
analysts of various elements of the intelligence community to 
access and analyze intelligence from the databases of other 
elements of the intelligence community in order to achieve the 
objectives set forth in subsection (c).

           *       *       *       *       *       *       *

    ``(g) Assessment.--Not later than February 1, 2004, after 
the commencement under subsection (d) of the pilot program 
under subsection (a), the Under Secretary of Defense for 
Intelligence and the [Assistant Director of Central 
Intelligence for Analysis and Production] Principal Deputy 
National Intelligence Director shall jointly carry out an 
assessment of the progress of the pilot program in meeting the 
objectives set forth in subsection (c).
    ``(h) Report.--
          ``(1) The [Director of Central Intelligence] National 
        Intelligence Director shall, in coordination with the 
        Secretary of Defense, submit to the appropriate 
        committees of Congress a report on the assessment 
        carried out under subsection (g).
          ``(2) The report shall include--
                  ``(A) a description of the pilot program 
                under subsection (a);
                  ``(B) the findings of the Under Secretary and 
                Assistant Director as a result of the 
                assessment;
                  ``(C) any recommendations regarding the pilot 
                program that the Under Secretary and the 
                Assistant Director jointly consider appropriate 
                in light of the assessment; and
                  ``(D) any recommendations that the Director 
                and Secretary consider appropriate for purposes 
                of the report.
    ``(i) Appropriate Committees of Congress Defined.--In this 
section, the term `appropriate committees of Congress' means--
          ``(1) the Select Committee on Intelligence, the 
        Committee on Armed Services, and the Committee on 
        Appropriations of the Senate; and
          ``(2) the Permanent Select Committee on Intelligence, 
        the Committee on Armed Services, and the Committee on 
        Appropriations of the House of Representatives.''.

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Sec. 403-5. Responsibilities of the Secretary of Defense pertaining to 
                    the [National Foreign Intelligence Program] 
                    National Intelligence Program

    (a) In General.--The Secretary of Defense, in consultation 
with the [Director of Central Intelligence] National 
Intelligence Director, shall--
          (1) [ensure] assist the Director in ensuring that the 
        budgets of the elements of the intelligence community 
        within the Department of Defense are adequate to 
        satisfy the overall intelligence needs of the 
        Department of Defense, including the needs of the 
        chairman of the Joint Chiefs of Staff and the 
        commanders of the unified and specified commands and, 
        wherever such elements are performing governmentwide 
        functions, the needs of other departments and agencies;
          (2) ensure appropriate implementation of the policies 
        and resource decisions of the Director [of Central 
        Intelligence] by elements of the Department of Defense 
        within the [National Foreign Intelligence Program] 
        National Intelligence Program;
          (3) ensure that the tactical intelligence activities 
        of the Department of Defense complement and are 
        compatible with intelligence activities under the 
        [National Foreign Intelligence Program] National 
        Intelligence Program;

           *       *       *       *       *       *       *

    (b) Responsibility for the Performance of Specific 
Functions.--Consistent with sections 103 and 104 of this Act 
[50 USCS Sec. Sec. 403-3 and 403-4], the Secretary of Defense 
shall ensure--
          (1) through the National Security Agency (except as 
        otherwise directed by the President or the National 
        Security Council), the continued operation of an 
        effective unified organization for the conduct of 
        signals intelligence activities and shall ensure that 
        the product is disseminated in a timely manner to 
        authorized recipients;
          (2) through the National Geospatial-Intelligence 
        Agency (except as otherwise directed by the President 
        or the National Security Council), with appropriate 
        representation from the intelligence community, the 
        continued operation of an effective unified 
        organization within the Department of Defense--
                  (A) for carrying out tasking of imagery 
                collection;
                  (B) for the coordination of imagery 
                processing and exploitation activities;
                  (C) for ensuring the dissemination of imagery 
                in a timely manner to authorized recipients; 
                and
                  (D) notwithstanding any other provision of 
                law, for--
                          (i) prescribing technical 
                        architecture and standards related to 
                        imagery intelligence and geospatial 
                        information and ensuring compliance 
                        with such architecture and standards; 
                        and
                          (ii) developing and fielding systems 
                        of common concern related to imagery 
                        intelligence and geospatial 
                        information;
          (3) through the National Reconnaissance Office 
        (except as otherwise directed by the President or the 
        National Security Council), the continued operation of 
        an effective unified organization for the research and 
        development, acquisition, and operation of overhead 
        reconnaissance systems necessary to satisfy the 
        requirements of all elements of the intelligence 
        community;
          (4) through the Defense Intelligence Agency (except 
        as otherwise directed by the President or the National 
        Security Council), the continued operation of an 
        effective unified system within the Department of 
        Defense for the production of timely, objective 
        military and military-related intelligence, based upon 
        all sources available to the intelligence community, 
        and shall ensure the appropriate dissemination of such 
        intelligence to authorized recipients;
          (5) through the Defense Intelligence Agency (except 
        as otherwise directed by the President or the National 
        Security Council), effective management of Department 
        of Defense human intelligence activities, including 
        defense attaches; and
          (6) that the military departments maintain sufficient 
        capabilities to collect and produce intelligence to 
        meet--
                  (A) the requirements of the [Director of 
                Central Intelligence] National Intelligence 
                Director;

           *       *       *       *       *       *       *


Sec. 403-4 note. Separation Pay

    (a) Definitions.--For purposes of this section--
          [(1) the term ``Director'' means the Director of 
        Central Intelligence; and]
          (1) the term ``Director'' means the Director of the 
        Central Intelligence Agency; and

           *       *       *       *       *       *       *


Sec. 403-5b. Disclosure of foreign intelligence acquired in criminal 
                    investigations; notice of criminal investigations 
                    of foreign intelligence sources

    (a) Disclosure of Foreign Intelligence.--
          (1) Except as otherwise provided by law and subject 
        to paragraph (2), the Attorney General, or the head of 
        any other department or agency of the Federal 
        Government with law enforcement responsibilities, shall 
        expeditiously disclose to the [Director of Central 
        Intelligence] National Intelligence Director, pursuant 
        to guidelines developed by the Attorney General in 
        consultation with the Director, foreign intelligence 
        acquired by an element of the Department of Justice or 
        an element of such department or agency, as the case 
        may be, in the course of a criminal investigation.
          (2) The Attorney General by regulation and in 
        consultation with the Director [of Central 
        Intelligence] may provide for exceptions to the 
        applicability of paragraph (1) for one or more classes 
        of foreign intelligence, or foreign intelligence with 
        respect to one or more targets or matters, if the 
        Attorney General determines that disclosure of such 
        foreign intelligence under that paragraph would 
        jeopardize an ongoing law enforcement investigation or 
        impair other significant law enforcement interests.
    (b) Procedures for Notice of Criminal Investigations.--Not 
later than 180 days after the date of enactment of this section 
[enacted Oct. 26, 2001], the Attorney General, in consultation 
with the [Director of Central Intelligence] National 
Intelligence Director,shall develop guidelines to ensure that 
after receipt of a report from an element of the intelligence community 
of activity of a foreign intelligence source or potential foreign 
intelligence source that may warrant investigation as criminal 
activity, the Attorney General provides notice to the Director [of 
Central Intelligence], within a reasonable period of time, of his 
intention to commence, or decline to commence, a criminal investigation 
of such activity.

           *       *       *       *       *       *       *


[Sec. 403-6. Appointment of officials responsible for intelligence-
                    related activities

    [(a) Concurrence of DCI in Certain Appointments.--
          [(1) In the event of a vacancy in a position referred 
        to in paragraph (2), the Secretary of Defense shall 
        obtain the concurrence of the Director of Central 
        Intelligence before recommending to the President an 
        individual for appointment to the position. If the 
        Director does not concur in the recommendation, the 
        Secretary may make the recommendation to the President 
        without the Director's concurrence, but shall include 
        in the recommendation a statement that the Director 
        does not concur in the recommendation.
          [(2) Paragraph (1) applies to the following 
        positions:
                  [(A) The Director of the National Security 
                Agency.
                  [(B) The Director of the National 
                Reconnaissance Office.
                  [(C) The Director of the National Geospatial-
                Intelligence Agency.
    [(b) Consultation With DCI in Certain Appointments.--
          [(1) In the event of a vacancy in a position referred 
        to in paragraph (2), the head of the department or 
        agency having jurisdiction over the position shall 
        consult with the Director of Central Intelligence 
        before appointing an individual to fill the vacancy or 
        recommending to the President an individual to be 
        nominated to fill the vacancy.
          [(2) Paragraph (1) applies to the following 
        positions:
                  [(A) The Director of the Defense Intelligence 
                Agency.
                  [(B) The Assistant Secretary of State for 
                Intelligence and Research.
                  [(C) The Director of the Office of 
                Intelligence of the Department of Energy.
                  [(D) The Director of the Office of 
                Counterintelligence of the Department of 
                Energy.
                  [(E) The Assistant Secretary for Intelligence 
                and Analysis of the Department of the Treasury.
          [(3) In the event of a vacancy in the position of the 
        Assistant Director, National Security Division of the 
        Federal Bureau of Investigation, the Director of the 
        Federal Bureau of Investigation shall provide timely 
        notice to the Director of Central Intelligence of the 
        recommendation of the Director of the Federal Bureau of 
        Investigation of an individual to fill the position in 
        order that the Director of Central Intelligence may 
        consult with the Director of the Federal Bureau of 
        Investigation before the Attorney General appoints an 
        individual to fill the vacancy.]

           *       *       *       *       *       *       *


Sec. 403a. Definitions relating to Central Intelligence Agency

    When used in this Act, the term--
    [(a)] (1) ``Agency'' means the Central Intelligence Agency;
    [(b)] (2) [``Director'' means the Director of Central 
Intelligence;] ``Director'' means the Director of the Central 
Intelligence Agency; and
    [(c)] (3) ``Government agency'' means any executive 
department, commission, council, independent establishment, 
corporation wholly or partly owned by the United States which 
is an instrumentality of the United States, board, bureau, 
division, service, office, officer, authority, administration, 
or other establishment, in the executive branch of the 
Government.

           *       *       *       *       *       *       *


Sec. 403b. Seal of office of Central Intelligence Agency

    The Director [of Central Intelligence] shall cause a seal 
of office to be made for the Central Intelligence Agency, of 
such design as the President shall approve, and judicial notice 
shall be taken thereof.

           *       *       *       *       *       *       *


Sec. 403p. Health benefits for certain former spouses of Central 
                    Intelligence Agency employees

           *       *       *       *       *       *       *


    (c) Eligibility of Former Wives or Husbands.--
          (1) Notwithstanding subsections (a) and (b) and 
        except as provided in subsections (d), (e), and (f), an 
        individual--
                  (A) who was divorced on or before December 4, 
                1991, from a participant or retired participant 
                in the Central Intelligence Agency Retirement 
                and Disability System or the Federal Employees 
                Retirement System Special Category;
                  (B) who was married to such participant for 
                not less than ten years during the 
                participant's creditable service, at least five 
                years of which were spent by the participant 
                during the participant's service as an employee 
                of the Agency outside the United States, or 
                otherwise in a position the duties of which 
                qualified the participant for designation by 
                the Director [of Central Intelligence] as a 
                participant under section 203 of the Central 
                Intelligence Agency Retirement Act (50 U.S.C. 
                2013); and

           *       *       *       *       *       *       *


Sec. 403g. Protection of nature of Agency's functions

    In the interests of the security of the foreign 
intelligence activities of the United States and in order 
further to implement [section 103(c)(7) of the National 
Security Act of 1947 (50 U.S.C. 403-3(c)(7))] section 
112(a)(11) of the National Intelligence Reform Act of 2004 that 
the [Director of Central Intelligence] National Intelligence 
Director shall be responsible for protecting intelligence 
sources and methods from unauthorized disclosure, the Agency 
shall be exempted from the provisions ofsections 1 and 2, 
chapter 795 of the Act of August 28, 1935 (49 Stat. 956, 957; 5 U.S.C. 
654), and the provisions of any other law which require the publication 
or disclosure of the organization, functions, names, official titles, 
salaries, or numbers of personnel employed by the Agency: Provided, 
That in furtherance of this section the Director of the Office of 
Management and Budget shall make no reports to the Congress in 
connection with the Agency under section 607, title VI, chapter 212 of 
the Act of June 30, 1945, as amended (5 U.S.C. 947(b)).

           *       *       *       *       *       *       *


Sec. 403n. Retirement equity for spouses of certain employees

    (a) Manner and Extent of Applicability.--The provisions of 
sections 102, 221(b)(1)-(3), 221(f), 221(g), 221(h)(2), 221(i), 
221(l), 222, 223, 224, 225, 232(b), 241(b), 241(d), and 264(b) 
of the Central Intelligence Agency Retirement Act [50 USCS 
Sec. Sec. 2002, 2031(b)(1)-(3), (f), (g), (h)(2), (i), (l), 
2032-2035, 2052(b), 2071(b), (d), 2094(b)] ([former] 50 U.S.C. 
403 note) establishing certain requirements, limitations, 
rights, entitlements, and benefits relating to retirement 
annuities, survivor benefits, and lump-sum payments for a 
spouse or former spouse of an Agency employee who is a 
participant in the Central Intelligence Agency Retirement and 
Disability System shall apply in the same manner and to the 
same extent in the case of an Agency employee who is a 
participant in the Civil Service Retirement and Disability 
System.
    (b) Regulations.--The Director of the Office of Personnel 
Management, in consultation with the [Director of Central 
Intelligence] Director of the Central Intelligence Agency, 
shall prescribe such regulations as may be necessary to 
implement the provisions of this section.

           *       *       *       *       *       *       *


Sec. 403p. Health benefits for certain former spouses of Central 
                    Intelligence Agency employees

    (a) Persons Eligible.--Except as provided in subsection 
(e), any individual--
          (1) formerly married to an employee or former 
        employee of the Agency, whose marriage was dissolved by 
        divorce or annulment before May 7, 1985;
          (2) who, at any time during the eighteen-month period 
        before the divorce or annulment became final, was 
        covered under a health benefits plan as a member of the 
        family of such employee or former employee; and
          (3) who was married to such employee for not less 
        than ten years during periods of service by such 
        employee with the Agency, at least five years of which 
        were spent outside the United States by both the 
        employee and the former spouse, is eligible for 
        coverage under a health benefits plan in accordance 
        with the provisions of this section.
    (b) Enrollment for Health Benefits.--
          (1) Any individual eligible for coverage under 
        subsection (a) may enroll in a health benefits plan for 
        self alone or for self and family if, before the 
        expiration of the six-month period beginning on the 
        effective date of this section, and in accordance with 
        such procedures as the Director of the Office of 
        Personnel Management shall by regulation prescribe, 
        such individual--
                  (A) files an election for such enrollment; 
                and
                  (B) arranges to pay currently into the 
                Employees Health Benefits Fund under section 
                8909 of title 5, United States Code, an amount 
                equal to the sum of the employee and agency 
                contributions payable in the case of an 
                employee enrolled under chapter 89 of such 
                title in the same health benefits plan and with 
                the same level of benefits.
          (2) The [Director of Central Intelligence] Director 
        of the Central Intelligence Agency shall, as soon as 
        possible, take all steps practicable--
                  (A) to determine the identity and current 
                address of each former spouse eligible for 
                coverage under subsection (a); and
                  (B) to notify each such former spouse of that 
                individual's rights under this section.
          (3) The Director of the Office of Personnel 
        Management, upon notification by the [Director of 
        Central Intelligence] Director of the Central 
        Intelligence Agency, shall waive the six-month 
        limitation set forth in paragraph (1) in any case in 
        which the [Director of Central Intelligence] Director 
        of the Central Intelligence Agency determines that the 
        circumstances so warrant.

           *       *       *       *       *       *       *


Sec. 403q. Inspector General for the Agency

           *       *       *       *       *       *       *


    (d) Semiannual Reports; Immediate Reports of Serious or 
Flagrant Problems; Reports of Functional Problems; Reports to 
Congress on Urgent Concerns.--
          (1) The Inspector General shall, not later than 
        January 31 and July 31 of each year, prepare and submit 
        to the Director [of Central Intelligence] a classified 
        semiannual report summarizing the activities of the 
        Office during the immediately preceding six-month 
        periods ending December 31 (of the preceding year) and 
        June 30, respectively. Not later than the dates each 
        year provided for the transmittal of such reports in 
        section 507 of the National Security Act of 1947 [50 
        USCS Sec. 415b], the Director shall transmit such 
        reports to the intelligence committees with any 
        comments he may deem appropriate. Such reports shall, 
        at a minimum, include a list of the title or subject of 
        each inspection, investigation, or audit conducted 
        during the reporting period and--

           *       *       *       *       *       *       *

    (f) Separate Budget Account.--Beginning with fiscal year 
1991, and in accordance with procedures to be issued by the 
[Director of Central Intelligence] National Intelligence 
Director in consultation with the intelligence committees, the 
[Director of Central Intelligence] National Intelligence 
Director shall include in the [National Foreign Intelligence 
Program] National Intelligence Program budget a separate 
account for the Office of Inspector General established 
pursuant to this section.

           *       *       *       *       *       *       *


Sec. 403t. General Counsel of the Central Intelligence Agency

    (a) Appointment.--There is a General Counsel of the Central 
Intelligence Agency, appointed from civilian life by the 
President, by and with the advice and consent of the Senate.
    (b) Chief Legal Officer.--The General Counsel is the chief 
legal officer of the Central Intelligence Agency.
    (c) Functions.--The General Counsel of the Central 
Intelligence Agency shall perform such functions as the 
Director [of Central Intelligence] may prescribe.

           *       *       *       *       *       *       *


Sec. 403u. Central services program

           *       *       *       *       *       *       *


    (g) Termination.--
          (1) Subject to paragraph (2), the [Director of 
        Central Intelligence] Director of the Central 
        Intelligence Agency and the Director of the Office of 
        Management and Budget, acting jointly--
                  (A) may terminate the program under this 
                section and the Fund at any time; and
                  (B) upon such termination, shall provide for 
                the disposition of the personnel, assets, 
                liabilities, grants, contracts, property, 
                records, and unexpended balances of 
                appropriations, authorizations, allocations, 
                and other funds held, used, arising from, 
                available to, or to be made available in 
                connection with the program or the Fund.
          (2) The [Director of Central Intelligence] Director 
        of the Central Intelligence Agency and the Director of 
        the Office of Management and Budget may not undertake 
        any action under paragraph (1) until 60 days after the 
        date on which the Directors jointly submit notice of 
        such action to the Permanent Select Committee on 
        Intelligence of the House of Representatives and the 
        Select Committee on Intelligence of the Senate.

           *       *       *       *       *       *       *


Sec. 404e. National Mission of National Geospatial-Intelligence Agency

    (a) In General.--In addition to the Department of Defense 
missions set forth in section 442 of title 10, United States 
Code, the National Geospatial-Intelligence Agency shall support 
the geospatial intelligence requirements of the Department of 
State and other departments and agencies of the United States 
outside the Department of Defense.
    (b) Requirements and Priorities.--The [Director of Central 
Intelligence] National Intelligence Director shall establish 
requirements and priorities governing the collection of 
national intelligence by the National Geospatial-Intelligence 
Agency under subsection (a).
    (c) Correction of Deficiencies.--The [Director of Central 
Intelligence] National Intelligence Director shall develop and 
implement such programs and policies as the Director and the 
Secretary of Defense jointly determine necessary to review and 
correct deficiencies identified in the capabilities of the 
National Geospatial-Intelligence Agency to accomplish assigned 
national missions, including support to the all-source analysis 
and production process. The Director shall consult with the 
Secretary of Defense on the development and implementation of 
such programs and policies. The Secretary shall obtain the 
advice of the Chairman of the Joint Chiefs of Staff regarding 
the matters on which the Director and the Secretary are to 
consult under the preceding sentence.

           *       *       *       *       *       *       *


[Sec. 404f. Collection tasking authority

    [Unless otherwise directed by the President, the Director 
of Central Intelligence shall have authority (except as 
otherwise agreed by the Director and the Secretary of Defense) 
to--
          [(1) approve collection requirements levied on 
        national imagery collection assets;
          [(2) determine priorities for such requirements; and
          [(3) resolve conflicts in such priorities.]

           *       *       *       *       *       *       *


Sec. 404g. Restrictions on intelligence sharing with the United Nations

    (a) Provision of Intelligence Information to the United 
Nations.--
          (1) No United States intelligence information may be 
        provided to the United Nations or any organization 
        affiliated with the United Nations, or to any officials 
        or employees thereof, unless the President certifies to 
        the appropriate committees of Congress that the 
        [Director of Central Intelligence] National 
        Intelligence Director, in consultation with the 
        Secretary of State and the Secretary of Defense, has 
        established and implemented procedures, and has worked 
        with the United Nations to ensure implementation of 
        procedures, for protecting from unauthorized disclosure 
        United States intelligence sources and methods 
        connected to such information.

           *       *       *       *       *       *       *

    (d) Relationship to Existing Law.--Nothing in this section 
shall be construed to--
          (1) impair or otherwise affect the authority of the 
        [Director of Central Intelligence] National 
        Intelligence Director to protect intelligence sources 
        and methods from unauthorized disclosure pursuant to 
        section 103(c)(7) of this Act [50 USCS Sec. 403-
        3(c)(7)]; or
          (2) supersede or otherwise affect the provisions of 
        title V of this Act [50 USCS Sec. Sec. 413 et seq.].

           *       *       *       *       *       *       *


Sec. 404g. Restrictions on intelligence sharing with the United Nations

           *       *       *       *       *       *       *


    (d) Relationship to Existing Law.--Nothing in this section 
shall be construed to--
          (1) impair or otherwise affect the authority of the 
        Director of Central Intelligence to protect 
        intelligence sources and methods from unauthorized 
        disclosure pursuant to [section 103(c)(7) of this Act] 
        section 112(a)(11) of the National Intelligence Reform 
        Act of 2004; or

           *       *       *       *       *       *       *


Sec. 404h. Detail of intelligence community personnel; intelligence 
                    community assignment program

           *       *       *       *       *       *       *


    (b) Benefits, Allowances, Travel, Incentives.--
          (1) An employee detailed under subsection (a) may be 
        authorized any benefit, allowance, travel, or incentive 
        otherwise provided to enhance staffing by the 
        organization from which the employee is detailed.
          (2) The head of an agency of an employee detailed 
        under subsection (a) may pay a lodging allowance for 
        the employee subject to the following conditions:
                  (A) The allowance shall be the lesser of the 
                cost of the lodging or a maximum amount payable 
                for the lodging as established jointly by the 
                [Director of Central Intelligence] National 
                Intelligence Director and--

           *       *       *       *       *       *       *


Sec. 404i. [Additional annual reports from the Director of Central 
                    Intelligence] Additional Annual Reports from the 
                    National Intelligence Director

    (a) Annual Report on the Safety and Security of Russian 
Nuclear Facilities and Nuclear Military Forces.--
          (1) The [Director of Central Intelligence] National 
        Intelligence Director shall submit to the congressional 
        leadership on an annual basis, and to the congressional 
        intelligence committees on the date each year provided 
        in section 507 [50 USCS Sec. 415b], an intelligence 
        report assessing the safety and security of the nuclear 
        facilities and nuclear military forces in Russia.
          (2) Each such report shall include a discussion of 
        the following:
                  (A) The ability of the Government of Russia 
                to maintain its nuclear military forces.
                  (B) The security arrangements at civilian and 
                military nuclear facilities in Russia.
                  (C) The reliability of controls and safety 
                systems at civilian nuclear facilities in 
                Russia.
                  (D) The reliability of command and control 
                systems and procedures of the nuclear military 
                forces in Russia.
          (3) Each such report shall be submitted in 
        unclassified form, but may contain a classified annex.
    (b) Annual Report on Hiring and Retention of Minority 
Employees.--
          (1) The [Director of Central Intelligence] National 
        Intelligence Director shall, on an annual basis, submit 
        to Congress a report on the employment of covered 
        persons within each element of the intelligence 
        community for the preceding fiscal year.
          (2) Each such report shall include disaggregated data 
        by category of covered person from each element of the 
        intelligence community on the following:
                  (A) Of all individuals employed in the 
                element during the fiscal year involved, the 
                aggregate percentage of such individuals who 
                are covered persons.
                  (B) Of all individuals employed in the 
                element during the fiscal year involved at the 
                levels referred to in clauses (i) and (ii), the 
                percentage of covered persons employed at such 
                levels:
                          (i) Positions at levels 1 through 15 
                        of the General Schedule.
                          (ii) Positions at levels above GS-15.
                  (C) Of all individuals hired by the element 
                involved during the fiscal year involved, the 
                percentage of such individuals who are covered 
                persons.
          (3) Each such report shall be submitted in 
        unclassified form, but may contain a classified annex.
          (4) Nothing in this subsection shall be construed as 
        providing for the substitution of any similar report 
        required under another provision of law.
          (5) In this subsection, the term ``covered persons'' 
        means--
                  (A) racial and ethnic minorities;
                  (B) women; and
                  (C) individuals with disabilities.
    (c) Annual Report on Threat of Attack on the United States 
Using Weapons of Mass Destruction.--
          (1) Not later each year than the date provided in 
        section 507 [50 USCS Sec. 415b], the [Director] 
        National Intelligence Director shall submit to the 
        congressional committees specified in paragraph (3) a 
        report assessing the following:

           *       *       *       *       *       *       *


Sec. 404i-1. Annual report on improvement of financial statements for 
                    auditing purposes

    Not later each year than the date provided in section 507 
[50 USCS Sec. 415b], the [Director of Central Intelligence] 
National Intelligence Director, the Director of the Central 
Intelligence Agency, the Director of the [National Security 
Agency,] the Director of the Defense Intelligence Agency, and 
the Director of the National Imagery and Mapping Agency 
[National Geospatial-Intelligence Agency] shall each submit to 
the congressional intelligence committees a report describing 
the activities being undertaken by such official to ensure that 
the financial statements of such agency can be audited in 
accordance with applicable law and requirements of the Office 
of Management and Budget.

           *       *       *       *       *       *       *


Sec. 404j. Limitation on establishment or operation of diplomatic 
                    intelligence support centers

    (a) In General.--
          (1) A diplomatic intelligence support center may not 
        be established, operated, or maintained without the 
        prior approval of the [Director of Central 
        Intelligence] National Intelligence Director.
          (2) The Director may only approve the establishment, 
        operation, or maintenance of a diplomatic intelligence 
        support center if the Director determines that the 
        establishment, operation, or maintenance of such center 
        is required to provide necessary intelligence support 
        in furtherance of the national security interests of 
        the United States.
    (b) Prohibition of Use of Appropriations.--Amounts 
appropriated pursuant to authorizationsby law for intelligence 
and intelligence-related activities may not be obligated or expended 
for the establishment, operation, or maintenance of a diplomatic 
intelligence support center that is not approved by the [Director of 
Central Intelligence] National Intelligence Director.
    (c) Definitions.--In this section:
          (1) The term ``diplomatic intelligence support 
        center'' means an entity to which employees of the 
        various elements of the intelligence community (as 
        defined in section 3(4) [50 USCS Sec. 401a(4)]) are 
        detailed for the purpose of providing analytical 
        intelligence support that--
                  (A) consists of intelligence analyses on 
                military or political matters and expertise to 
                conduct limited assessments and dynamic 
                taskings for a chief of mission; and
                  (B) is not intelligence support traditionally 
                provided to a chief of mission by the [Director 
                of Central Intelligence] National Intelligence 
                Director.
          (2) The term ``chief of mission'' has the meaning 
        given that term by section 102(3) of the Foreign 
        Service Act of 1980 (22 U.S.C. 3902(3)), and includes 
        ambassadors at large and ministers of diplomatic 
        missions of the United States, or persons appointed to 
        lead United States offices abroad designated by the 
        Secretary of State as diplomatic in nature.

           *       *       *       *       *       *       *


Sec. 404k. Travel on any common carrier for certain intelligence 
                    collection personnel

    (a) In General.--Notwithstanding any other provision of 
law, the [Director of Central Intelligence] National 
Intelligence Director may authorize travel on any common 
carrier when such travel, in the discretion of the Director--
          (1) is consistent with intelligence community mission 
        requirements, or
          (2) is required for cover purposes, operational 
        needs, or other exceptional circumstances necessary for 
        the successful performance of an intelligence community 
        mission.
    (b) Authorized Delegation of Duty.--The [Director] National 
Intelligence Director may only delegate the authority granted 
by this section [to the Deputy Director of Central 
Intelligence, or with respect to employees of the Central 
Intelligence Agency the Director may delegate such authority to 
the Deputy Director for Operations] to the Principal Deputy 
National Intelligence Director, or, with respect to the 
employees of the Central Intelligence Agency, to the Director 
of the Central Intelligence Agency.

           *       *       *       *       *       *       *


Sec. 404l. POW/MIA analytic capability

    (a) Requirement.--
          (1) The [Director of Central Intelligence] National 
        Intelligence Director shall, in consultation with the 
        Secretary of Defense, establish and maintain in the 
        intelligence community an analytic capability with 
        responsibility for intelligence in support of the 
        activities of the United States relating to individuals 
        who, after December 31, 1990, are unaccounted for 
        United States personnel.

           *       *       *       *       *       *       *


Sec. 404n. National Virtual Translation Center

    (a) Establishment.--[The Director of Central Intelligence, 
acting as the head of the intelligence community] National 
Intelligence Director, shall establish in the intelligence 
community an element with the function of connecting the 
elements of the intelligence community engaged in the 
acquisition, storage, translation, or analysis of voice or data 
in digital form.

           *       *       *       *       *       *       *


Sec. 404n-1. Foreign Terrorist Asset Tracking Center

    (a) Establishment.--The [Director of Central Intelligence, 
acting as the head of the intelligence community, shall 
establish in the Central Intelligence Agency] National 
Intelligence Director shall establish within the Central 
Intelligence Agency an element responsible for conducting all-
source intelligence analysis of information relating to the 
financial capabilities, practices, and activities of 
individuals, groups, and nations associated with international 
terrorism in their activities relating to international 
terrorism.

           *       *       *       *       *       *       *


Sec. 404n-2. Terrorist identification classification system

    (a) Requirement.--
          (1) The [Director of Central Intelligence, acting as 
        head of the Intelligence Community] National 
        Intelligence Director, shall--

           *       *       *       *       *       *       *

    (c) Information Sharing.--Subject to [section 103(c)(7) of 
the National Security Act of 1947 (50 U.S.C. 403-3(c)(7))] 
section 112(a)(11) of the National Intelligence Reform Act of 
2004, relating to the protection of intelligence sources and 
methods, the Director shall provide for the sharing of the 
list, and information on the list, with such departments and 
agencies of the Federal Government, State and local government 
agencies, and entities of foreign governments and international 
organizations as the Director considers appropriate.

           *       *       *       *       *       *       *


                MISCELLANEOUS AND CONFORMING PROVISIONS

Sec. 405. Advisory Committees; appointment; compensation of part-time 
                    personnel; applicability of other laws

    (a) The Secretary of Defense, the Director of the Office of 
Defense Mobilization [Director of the Federal Emergency 
Management Agency], the [Director of Central Intelligence] 
National Intelligence Director, and the National Security 
Council, acting through its Executive Secretary, are authorized 
to appoint such advisory committees and to employ, consistent 
with other provisions of this Act, such part-time advisory 
personnel as they may deem necessary in carrying out their 
respective functions and the functions of agencies under their 
control. Persons holding other offices or positions under the 
United States for which they receive compensation, while 
serving as members of such committees, shall receive no 
additional compensation for such service. Retired members of 
the uniformed services employed by the [Director of Central 
Intelligence] National Intelligence Director who hold no other 
office or position under the United States for which they 
receive compensation, other members of such committees and 
other part-time advisory personnel so employed may serve 
without compensation or may receive compensation at a daily 
rate not to exceed the daily equivalent of the rate of pay in 
effect for grade GS-18 of the General Schedule established by 
section 5332 of title 5, United States Code, as determined by 
the appointing authority.

           *       *       *       *       *       *       *


               ACCOUNTABILITY FOR INTELLIGENCE ACTIVITIES

Sec. 413. General congressional oversight provisions

           *       *       *       *       *       *       *


    (d) Procedures To Protect From Unauthorized Disclosure.--
The House of Representatives and the Senate shall each 
establish, by rule or resolution of such House, procedures to 
protect from unauthorized disclosure all classified 
information, and all information relating to intelligence 
sources and methods, that is furnished to the congressional 
intelligence committees or to Members of Congress under this 
title [50 USCS Sec. Sec. 413 et seq.]. Such procedures shall be 
established in consultation with the [Director of Central 
Intelligence] National Intelligence Director. In accordance 
with such procedures, each of the congressional intelligence 
committees shall promptly call to the attention of its 
respective House, or to any appropriate committee or committees 
of its respective House, any matter relating to intelligence 
activities requiring the attention of such House or such 
committee or committees.

           *       *       *       *       *       *       *


Sec. 413a. Reporting of intelligence activities other than covert 
                    actions

    (a) In General.--To the extent consistent with due regard 
for the protection from unauthorized disclosure of classified 
information relating to sensitive intelligence sources and 
methods or other exceptionally sensitive matters, the [Director 
of Central Intelligence] National Intelligence Director and the 
heads of all departments, agencies, and other entities of the 
United States Government involved in intelligence activities 
shall--
          (1) keep the congressional intelligence committees 
        fully and currently informed of all intelligence 
        activities, other than a covert action (as defined in 
        section 503(e) [50 USCS Sec. 413b(e)]), which are the 
        responsibility of, are engaged in by, or are carried 
        out for or on behalf of, any department, agency, or 
        entity of the United States Government, includingany 
significant anticipated intelligence activity and any significant 
intelligence failure; and
          (2) furnish the congressional intelligence committees 
        any information or material concerning intelligence 
        activities, other than covert actions, which is within 
        their custody or control, and which is requested by 
        either of the congressional intelligence committees in 
        order to carry out its authorized responsibilities.
    (b) Form and Contents of Certain Reports.--Any report 
relating to a significant anticipated intelligence activity or 
a significant intelligence failure that is submitted to the 
congressional intelligence committees for purposes of 
subsection (a)(1) shall be in writing, and shall contain the 
following:
          (1) A concise statement of any facts pertinent to 
        such report.
          (2) An explanation of the significance of the 
        intelligence activity or intelligence failure covered 
        by such report.
    (c) Standards and Procedures for Certain Reports.--The 
[Director of Central Intelligence] National Intelligence 
Director, in consultation with the heads of the departments, 
agencies, and entities referred to in subsection (a), shall 
establish standards and procedures applicable to reports 
covered by subsection (b).

Sec. 413b. Presidential approval and reporting of covert actions

           *       *       *       *       *       *       *


    (b) Reports to Intelligence Committees; Production of 
Information.--To the extent consistent with due regard for the 
protection from unauthorized disclosure of classified 
information relating to sensitive intelligence sources and 
methods or other exceptionally sensitive matters, the [Director 
of Central Intelligence] National Intelligence Director and the 
heads of all departments, agencies, and entities of the United 
States Government involved in a covert action--

           *       *       *       *       *       *       *


Sec. 414. Funding of intelligence activities

    (a) Obligations and Expenditures for Intelligence or 
Intelligence-Related Activity; Prerequisites.--Appropriated 
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 of the Central Intelligence Agency] 
        Reserve for Contingencies of the National Intelligence 
        Director and consistent with the provision of section 
        503 of this Act [50 USCS Sec. 413b] concerning any 
        significant anticipated intelligence activity, the 
        [Director of Central Intelligence] National 
        Intelligence Director has notified the appropriate 
        congressional committees of the intent to make such 
        funds available for such activity; or
          (3) in the case of funds specifically authorized by 
        the 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 [unforeseen] requirements; 
                and
                  (C) the [Director of Central Intelligence] 
                National Intelligence Director, the Secretary 
                of Defense, or the Attorney General, as 
                appropriate, has notified the appropriate 
                congressional committees of the intent to make 
                such funds available for such activity;
          (4) nothing in this subsection prohibits obligation 
        or expenditure of funds available to an intelligence 
        agency in accordance with sections 1535 and 1536 of 
        title 31, United States Code.
    (b) Activities Denied Funding by Congress.--Funds available 
to an intelligence agency may not be made available for any 
intelligence or intelligence-related activity for which funds 
were denied by the Congress.
    (c) Presidential Finding Required for Expenditure of Funds 
on Covert Action.--No funds appropriated for, or otherwise 
available to, any department, agency, or entity of the United 
States Government may be expended, or may be directed to be 
expended, for any covert action, as defined in section 503(e) 
[50 USCS Sec. 413b(e)], unless and until a Presidential finding 
required by subsection (a) of section 503 [50 USCS 
Sec. 413b(a)] has been signed or otherwise issued in accordance 
with that subsection.
    (d) Report to Congressional Committees Required for 
Expenditure of Non-Appropriated Funds for Intelligence 
Activity.--
          (1) Except as otherwise specifically provided by law, 
        funds available to an intelligence agency that are not 
        appropriated funds may be obligated or expended for an 
        intelligence or intelligence-related activity only if 
        those funds are used for activities reported to the 
        appropriate congressional committees pursuant to 
        procedures which identify--
                  (A) the types of activities for which 
                nonappropriated funds may be expended; and
                  (B) the circumstances under which an activity 
                must be reported as a significant anticipated 
                intelligence activity before such funds can be 
                expended.
          (2) Procedures for purposes of paragraph (1) shall be 
        jointly agreed upon by the congressional intelligence 
        committees and, as appropriate, the [Director of 
        Central Intelligence] National Intelligence Director or 
        the Secretary of Defense.

           *       *       *       *       *       *       *


Sec. 415a. [Specificity of National Foreign Intelligence Program budget 
                    amounts for counterterrorism, counterproliferation, 
                    counternarcotics, and counterintelligence] 
                    Specificity of National Intelligence Program Budget 
                    Amounts for Counterterrorism, Counterproliferation, 
                    Counternarcotics, and Counterintelligence

    (a) In General.--The budget justification materials 
submitted to Congress in support of the budget of the President 
for a fiscal year that is submitted to Congress under section 
1105(a) of title 31, United States Code, shall set forth 
separately the aggregate amount requested for that fiscal year 
for the [National Foreign Intelligence Program] National 
Intelligence Program for each of the following:
          (1) Counterterrorism.
          (2) Counterproliferation.
          (3) Counternarcotics.
          (4) Counterintelligence.

           *       *       *       *       *       *       *


Sec. 415a-1. Budget treatment of costs of acquisition of major systems 
                    by the intelligence community

    (a) Independent Cost Estimates.--
          (1) The [Director of Central Intelligence] National 
        Intelligence Director shall, in consultation with the 
        head of each element of the intelligence community 
        concerned, prepare an independent cost estimate of the 
        full life-cycle cost of development, procurement, and 
        operation of each major system to be acquired by the 
        intelligence community.

           *       *       *       *       *       *       *

    (b) Preparation of Independent Cost Estimates.--
          (1) The Director shall establish within the [Office 
        of the Deputy Director of Central Intelligence] Office 
        of the National Intelligence Director for Community 
        Management an office which shall be responsible for 
        preparing independent cost estimates, and any updates 
        thereof, under subsection (a), unless a designation is 
        made under paragraph (2).

           *       *       *       *       *       *       *


          PROTECTION OF CERTAIN NATIONAL SECURITY INFORMATION

Sec. 423. Report

    (a) Annual Report by President to Congress on Measures to 
Protect Identities of Covert Agents.--The President, after 
receiving information from the [Director of Central 
Intelligence] National Intelligence Director, shall submit to 
the congressional intelligence committees an annual report on 
measures to protect the identities of covert agents, and on any 
other matter relevant to the protection of the identities of 
covert agents. The date for the submittal of the report shall 
be the date provided in section 507 [50 USCS Sec. 415b].

           *       *       *       *       *       *       *


                    PROTECTION OF OPERATIONAL FILES

Sec. 431. Operational files of the Central Intelligence Agency

    (a) Exemption by Director of Central Intelligence.--
[Operational files of the Central Intelligence Agency may be 
exempted by the Director of Central Intelligence] The Director 
of the Central Intelligence Agency, with the coordination of 
the National Intelligence Director, may exempt operational 
files of the Central Intelligence Agency from the provisions of 
section 552 of title 5, United States Code (Freedom of 
Information Act), which require publication or disclosure, or 
search or review in connection therewith.

           *       *       *       *       *       *       *

    (c) Search and Review for Information.--Notwithstanding 
subsection (a) of this section, exempted operational files 
shall continue to be subject to search and review for 
information concerning--
          (1) United States citizens or aliens lawfully 
        admitted for permanent residence who have requested 
        information on themselves pursuant to the provisions of 
        section 552 of title 5, United States Code (Freedom of 
        Information Act), or section 552a of title 5, United 
        States Code (Privacy Act of 1974);
          (2) any special activity the existence of which is 
        not exempt from disclosure under the provisions of 
        section 552 of title 5, United States Code (Freedom of 
        Information Act); or
          (3) the specific subject matter of an investigation 
        by the congressional intelligence committees, the 
        Intelligence Oversight Board, the Department of 
        Justice, the Office of General Counsel of the Central 
        Intelligence Agency, the Office of Inspector General of 
        the Central Intelligence Agency, [or the Office of the 
        Director of Central Intelligence] the Office of the 
        Director of the Central Intelligence Agency, or the 
        Office of the National Intelligence Director for any 
        impropriety, or violation of law, Executive order, or 
        Presidential directive, in the conduct of an 
        intelligence activity.

           *       *       *       *       *       *       *

    (g) Decennial Review of Exempted Operational Files.--
          (1) Review by [Director of Central Intelligence] 
        Director of Central Intelligence Agency and the 
        National Intelligence Director. Not less than once 
        every ten years, the Director of Central Intelligence 
        shall review the exemptions in force under subsection 
        (a) to determine whether such exemptions may be removed 
        from any category of exempted files or any portion 
        thereof.

           *       *       *       *       *       *       *


Sec. 432. Operational files of the National Geospatial-Intelligence 
                    Agency

    (a) Exemption of Certain Operational Files From Search, 
Review, Publication, or Disclosure.--
          (1) The Director of the National Geospatial-
        Intelligence Agency, with the coordination of the 
        [Director of Central Intelligence] National 
        Intelligence Director, may exempt operational files of 
        the National Geospatial-Intelligence Agency from the 
        provisions of section 552 of title 5, United States 
        Code, which require publication, disclosure, search, or 
        review in connection therewith.

           *       *       *       *       *       *       *

    (b) Decennial Review of Exempted Operational Files.--
          (1) Not less than once every 10 years, the Director 
        of the National Geospatial-Intelligence Agency and the 
        [Director of Central Intelligence] National 
        Intelligence Director shall review the exemptions in 
        force under subsection (a)(1) to determine whether such 
        exemptions may be removed from the category of exempted 
        files or any portion thereof. The [Director of Central 
        Intelligence] National Intelligence Director must 
        approve any determination to remove such exemptions.

           *       *       *       *       *       *       *


Sec. 432a. Operational files of the National Reconnaissance Office

    (a) Exemption of Certain Operational Files From Search, 
Review, Publication, or Disclosure.--
          (1) The Director of the National Reconnaissance 
        Office, with the coordination of the [Director of 
        Central Intelligence] National Intelligence Director, 
        may exempt operational files of the National 
        Reconnaissance Office from the provisions of section 
        552 of title 5,United States Code, which require 
publication, disclosure, search, or review in connection therewith.

           *       *       *       *       *       *       *

          (6)(A) Except as provided in subparagraph (B), 
        whenever any person who has requested agency records 
        under section 552 of title 5, United States Code, 
        alleges that NRO has withheld records improperly 
        because of failure to comply with any provision of this 
        section, judicial review shall be available under the 
        terms set forth in section 552(a)(4)(B) of title 5, 
        United States Code.
          (B) Judicial review shall not be available in the 
        manner provided for under subparagraph (A) as follows:

           *       *       *       *       *       *       *

                  (viii) Any information filed with, or 
                produced for the court pursuant to clauses (i) 
                and (iv) shall be coordinated with the 
                [Director of Central Intelligence] National 
                Intelligence Director prior to submission to 
                the court.

           *       *       *       *       *       *       *

    (b) Decennial Review of Exempted Operational Files.--
          (1) Not less than once every 10 years, the Director 
        of the National Reconnaissance Office and the [Director 
        of Central Intelligence] National Intelligence Director 
        shall review the exemptions in force under subsection 
        (a)(1) to determine whether such exemptions may be 
        removed from the category of exempted files or any 
        portion thereof. The [Director of Central Intelligence] 
        National Intelligence Director must approve any 
        determination to remove such exemptions.

           *       *       *       *       *       *       *


Sec. 432b. Operational files of the National Security Agency

    (a) Exemption of Certain Operational Files From Search, 
Review, Publication, or Disclosure.--The Director of the 
National Security Agency, in coordination with the [Director of 
Central Intelligence] National Intelligence Director, may 
exempt operational files of the National Security Agency from 
the provisions of section 552 of title 5, United States Code, 
which require publication, disclosure, search, or review in 
connection therewith.

           *       *       *       *       *       *       *

    (f) Allegation; Improper Withholding of Records; Judicial 
Review.--
          (1) Except as provided in paragraph (2), whenever any 
        person who has requested agency records under section 
        552 of title 5, United States Code, alleges that the 
        National Security Agency has withheld records 
        improperly because of failure to comply with any 
        provision of this section, judicial review shall be 
        available under the terms set forth in section 
        552(a)(4)(B) of title 5, United States Code.
          (2) Judicial review shall not be available in the 
        manner provided for under paragraph (1) as follows:

           *       *       *       *       *       *       *

                  (H) Any information filed with, or produced 
                for the court pursuant to subparagraphs (A) and 
                (D) shall be coordinated with the [Director of 
                Central Intelligence] National Intelligence 
                Director before submission to the court.
    (g) Decennial Review of Exempted Operational Files.--
          (1) Not less than once every 10 years, the Director 
        of the National Security Agency and the [Director of 
        Central Intelligence] National Intelligence Director 
        shall review the exemptions in force under subsection 
        (a) to determine whether such exemptions may be removed 
        from a category of exempted files or any portion 
        thereof. The [Director of Central Intelligence] 
        National Intelligence Director must approve any 
        determination to remove such exemptions.

           *       *       *       *       *       *       *


             EDUCATION IN SUPPORT OF NATIONAL INTELLIGENCE

Sec. 441g. Scholarships and work-study for pursuit of graduate degrees 
                    in science and technology

    (a) Program Authorized.--The [Director of Central 
Intelligence] National Intelligence Director may carry out a 
program to provide scholarships and work-study for individuals 
who are pursuing graduate degrees in fields of study in science 
and technology that are identified by the Director as 
appropriate to meet the future needs of the intelligence 
community for qualified scientists and engineers.
    (b) Administration.--If the [Director] National 
Intelligence Director carries out the program under subsection 
(a), the Director shall administer the program through the 
[Assistant Director of Central Intelligence for Administration] 
Office of the National Intelligence Director.
    (c) Identification of Fields of Study.--If the [Director] 
National Intelligence Director carries out the program under 
subsection (a), the Director shall identify fields of study 
under subsection (a) in consultation with the other heads of 
the elements of the intelligence community.
    (d) Eligibility for Participation.--An individual eligible 
to participate in the program is any individual who--
          (1) either--
                  (A) is an employee of the intelligence 
                community; or
                  (B) meets criteria for eligibility for 
                employment in the intelligence community that 
                are established by the [Director] National 
                Intelligence Director;
          (2) is accepted in a graduate degree program in a 
        field of study in science or technology identified 
        under subsection (a); and
          (3) is eligible for a security clearance at the level 
        of Secret or above.
    (e) Regulations.--If the [Director] National Intelligence 
Director carries out the program under subsection (a), the 
Director shall prescribe regulations for purposes of 
theadministration of this section.

           *       *       *       *       *       *       *

    Other provisions: Pilot program on recruitment and training 
of intelligence analysts. Act Dec. 13, 2003, P.L. 108-177, 
Title III, Subtitle B, Sec. 318, 117 Stat. 2613, provides:
    ``(a) Pilot Program.--
          (1) The [Director of Central Intelligence] National 
        Intelligence Director shall carry out a pilot program 
        to ensure that selected students or former students are 
        provided funds to continue academic training, or are 
        reimbursed for academic training previously obtained, 
        in areas of specialization that the Director, in 
        consultation with the other heads of the elements of 
        the intelligence community, identifies as areas in 
        which the current analytic capabilities of the 
        intelligence community are deficient or in which future 
        analytic capabilities of the intelligence community are 
        likely to be deficient.

           *       *       *       *       *       *       *


                  ADDITIONAL MISCELLANEOUS PROVISIONS

Sec. 442a. Counterintelligence initiatives

    (a) Inspection Process.--
          (1) In order to protect intelligence sources and 
        methods from unauthorized disclosure, the [Director of 
        Central Intelligence] National Intelligence Director 
        shall establish and implement an inspection process for 
        all agencies and departments of the United States that 
        handle classified information relating to the national 
        security of the United States intended to assure that 
        those agencies and departments maintain effective 
        operational security practices and programs directed 
        against counterintelligence activities.
          (2) The Director shall carry out the process through 
        the Office of the National Counterintelligence 
        Executive.
    (b) Annual Review of Dissemination Lists.--
          (1) The [Director of Central Intelligence] National 
        Intelligence Director shall establish and implement a 
        process for all elements of the intelligence community 
        to review, on an annual basis, individuals included on 
        distribution lists for access to classified 
        information. Such process shall ensure that only 
        individuals who have a particularized ``need to know'' 
        (as determined by the Director) are continued on such 
        distribution lists.
          (2) Not later than October 15 of each year, the 
        Director shall certify to the congressional 
        intelligence committees that the review required under 
        paragraph (1) has been conducted in all elements of the 
        intelligence community during the preceding fiscal 
        year.
    (c) Completion of Financial Disclosure Statements Required 
for Access to Certain Classified Information.--
          (1) The [Director of Central Intelligence] National 
        Intelligence Director shall establish and implement a 
        process by which each head of an element of the 
        intelligence community directs that all employees of 
        that element, in order to be granted access to 
        classified information referred to in subsection (a) of 
        section 1.3 of Executive Order No. 12968 (August 2, 
        1995; 60 Fed. Reg. 40245; 50 U.S.C. 435 note), submit 
        financial disclosure forms as required under subsection 
        (b) of such section.
          (2) The Director shall carry out paragraph (1) 
        through the Office of the National Counterintelligence 
        Executive.
    (d) Arrangements To Handle Sensitive Information.--The 
[Director of Central Intelligence] National Intelligence 
Director shall establish, for all elements of the intelligence 
community, programs and procedures by which sensitive 
classified information relating to human intelligence is 
safeguarded against unauthorized disclosure by employees of 
those elements.

           *       *       *       *       *       *       *


             CHAPTER 36--FOREIGN INTELLIGENCE SURVEILLANCE


                        ELECTRONIC SURVEILLANCE

    Review expert commentary from The National Institute for 
Trial Advocacy preceding 50 USCS Sec. 1801

Sec. 1802. Electronic surveillance authorization without court order; 
                    certification by Attorney General; reports to 
                    congressional committees; transmittal under seal; 
                    duties and compensation of communication common 
                    carrier; applications; jurisdiction of court

           *       *       *       *       *       *       *


          (4) With respect to electronic surveillance 
        authorized by this subsection, the Attorney General may 
        direct a specified communication common carrier to--
                  (A) furnish all information, facilities, or 
                technical assistance necessary to accomplish 
                the electronic surveillance in such a manner as 
                will protect its secrecy and produce a minimum 
                of interference with the services that such 
                carrier is providing its customers; and
                  (B) maintain under security procedures 
                approved by the Attorney General and the 
                [Director of Central Intelligence] National 
                Intelligence Director any records concerning 
                the surveillance or the aid furnished which 
                such carrier wishes to retain. The Government 
                shall compensate, at the prevailing rate, such 
                carrier for furnishing such aid.

           *       *       *       *       *       *       *


Sec. 1803. Designation of judges

           *       *       *       *       *       *       *


    (c) Expeditious Conduct of Proceedings; Security Measures 
for Maintenance of Records.--Proceedings under this Act shall 
be conducted as expeditiously as possible. The record of 
proceedings under this Act, including applications made and 
orders granted, shall be maintained under security measures 
established by the Chief Justice in consultation with the 
Attorney General and the [Director of Central Intelligence] 
National Intelligence Director.

           *       *       *       *       *       *       *


Sec. 1804. Applications for court orders

           *       *       *       *       *       *       *


    (e) Personal Review by Attorney General.--
          (1)(A) Upon written request of the Director of the 
        Federal Bureau of Investigation, the Secretary of 
        Defense, the Secretary of State, or the [Director of 
        Central Intelligence] National Intelligence Director, 
        the Attorney General shall personally review under 
        subsection (a) an application under that subsection for 
        a target described in section 101(b)(2) [50 USCS 
        Sec. 1801(b)(2)].

           *       *       *       *       *       *       *


Sec. 1805. Issuance of order

           *       *       *       *       *       *       *


    (c) Specifications and Directions of Orders.--An order 
approving an electronic surveillance under this section shall--
          (1) specify--
                  (A) the identity, if known, or a description 
                of the target of the electronic surveillance;
                  (B) the nature and location of each of the 
                facilities or places at which the electronic 
                surveillance will be directed, if known;
                  (C) the type of information sought to be 
                acquired and the type of communications or 
                activities to be subjected to the surveillance;
                  (D) the means by which the electronic 
                surveillance will be effected and whether 
                physical entry will be used to effect the 
                surveillance;
                  (E) the period of time during which the 
                electronic surveillance is approved; and
                  (F) whenever more than one electronic, 
                mechanical, or other surveillance device is to 
                be used under the order, the authorized 
                coverage of the devices involved and what 
                minimization procedures shall apply to 
                information subject to acquisition by each 
                device; and
          (2) direct--
                  (A) that the minimization procedures be 
                followed;
                  (B) that, upon the request of the applicant, 
                a specified communication or other common 
                carrier, landlord, custodian, or other 
                specified person, or in circumstances where the 
                Court finds that the actions of the target of 
                the application may have the effect of 
                thwarting the identification of a specified 
                person, such other persons, furnish the 
                applicant forthwith all information, 
                facilities, or technical assistance necessary 
                to accomplish the electronic surveillance in 
                such a manner as will protect its secrecy and 
                produce a minimum of interference with the 
                services that such carrier, landlord, 
                custodian, or other person is providing that 
                target of electronic surveillance;
                  (C) that such carrier, landlord, custodian, 
                or other person maintain under security 
                procedures approved by the Attorney General and 
                the [Director of Central Intelligence] National 
                Intelligence Director any records concerning 
                the surveillance or the aid furnished that such 
                person wishes to retain; and

           *       *       *       *       *       *       *


   CHAPTER 38--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY


                              DEFINITIONS

             Sec. 2001. Definitions relating to the system

    When used in this Act [50 USCS Sec. Sec. 2001 et seq.]:
          (1) Agency.--The term ``Agency'' means the Central 
        Intelligence Agency.
          [(2) Director.--The term ``Director'' means the 
        Director of Central Intelligence.]
          (2) Director.--The term ``Director'' means the 
        Director of the Central Intelligence Agency.

           *       *       *       *       *       *       *


    THE CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM


                        ESTABLISHMENT OF SYSTEM

                      Sec. 2011. The CIARDS system

    (a) In General.--
          (1) Establishment of system.--There is a retirement 
        and disability system for certain employees of the 
        Central Intelligence Agency known as the Central 
        Intelligence Agency Retirement and Disability System 
        (hereinafter in this Act [50 USCS Sec. Sec. 2001 et 
        seq.] referred to as the ``system''), originally 
        established pursuant to title II of the Central 
        Intelligence Agency Retirement Act of 1964 for Certain 
        Employees [former 50 USCS Sec. 403 note].
          (2) DCI regulations.--The Director shall prescribe 
        regulations for the system. The Director shall submit 
        any proposed regulations for the system to the 
        congressional intelligence committees not less than 14 
        days before they take effect.
    (b) Administration of System.--The Director shall 
administer the system in accordance with regulations prescribed 
under this title [50 USCS Sec. Sec. 2011 et seq.] and with the 
principles established by this title [50 USCS Sec. Sec. 2011 et 
seq.].
    (c) Finality of Decisions of DCI.--In the interests of the 
security of the foreign intelligence activities of the United 
States and in order further to implement [paragraph (6) of 
section 103(c) of the National Security Act of 1947 (50 U.S.C. 
403-3(c)) that the Director of Central Intelligence] section 
112(a)(11) of the National Intelligence Reform Act of 2004 that 
the National Intelligence Director shall be responsible for 
protecting intelligence sources and methods from unauthorized 
disclosure, and notwithstanding the provisions of chapter 7 of 
title 5, United States Code [5 USCS Sec. Sec. 701 et seq.], or 
any other provision of law (except section 305(b) of this Act 
[50 USCS Sec. 2155(b)]), any determination by the Director 
authorized by this Act [50 USCS Sec. Sec. 2001 et seq.] shall 
be final and conclusive and shall not be subject to review by 
any court.

           *       *       *       *       *       *       *


                             117 STAT. 2634


SEC. 504. MEASUREMENT AND SIGNATURES INTELLIGENCE RESEARCH PROGRAM.

    (a) Research Program.--(1) The Secretary of Defense and the 
[Director of Central Intelligence] National Intelligence 
Director shall jointly carry out a program to incorporate the 
results of basic research on sensors into the measurement and 
signatures intelligence systems of the United States, to the 
extent the results of such research are applicable to such 
systems.
    (2) In carrying out paragraph (1), the Secretary of Defense 
and the [Director of Central Intelligence] National 
Intelligence Director shall act through the Director of the 
Defense Intelligence Agency's Directorate for MASINT and 
Technical Collection (hereinafter in this section referred to 
as the ``Director''.)

                                  
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