106th Congress                                                   Report
                                 SENATE

 2d Session                                                     106-279
_______________________________________________________________________


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

                                _______
                                

                  May 4, 2000.--Ordered to be printed
                                                                           
                           

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

                          [To accompany S. 2507]                         


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

   This bill will:                                                         

      (1) Authorize appropriations for fiscal year 2001 for (a) U.S.       
   intelligence activities and programs; (b) the Central Intelligence      
   Agency Retirement and Disability System; and (c) the Community          
   Management Account of the Director of Central Intelligence;             
      (2) Authorize the personnel ceilings as of September 30, 2001, for   
   intelligence activities of the U.S. Government and for the Community    
   Management Account of the Director of Central Intelligence;             
      (3) Authorize the Director of Central Intelligence, with Office of   
   Management and Budget approval, to exceed the personnel ceilings by up  
   to two percent;                                                         
      (4) Prohibit the knowing and willful unauthorized disclosure of      
   classified information to a person not authorized to receive it;        
      (5) Establish a POW/MIA analytic capability within the Intelligence  
   Community;                                                              
      (6) Preclude the application of any U.S. law implementing treaties   
   and other international agreements to otherwise lawful and authorized   
   U.S. Government intelligence activities unless U.S. law expressly states
   that it will apply to such activities;                                  
      (7) Require the Director of Central Intelligence to certify to       
   Congress that each element of the Department of State that handles,     
   retains, or stores material classified at the Sensitive Compartmented   
   Information level is in full compliance with applicable Executive Orders
   and Director of Central Intelligence Directives;                        
      (8) Permit Executive branch agencies to contribute appropriated funds
   for fiscal year 2000 to support the Counterdrug Intelligence Executive  
   Secretariat;                                                            
      (9) Expand the reporting requirements of the CIA Inspector General to
   include notification concerning certain designated senior officials;    
      (10) Extend the CIA's Central Services Program and expand the        
   authorities for the Central Services Working Capital Fund;              
      (11) Permit long-term detailing of CIA employees to the National     
   Reconnaissance Office on a reimbursable basis;                          
      (12) Permit appropriated funds transferred by the CIA to other       
   government agencies for the purpose of the acquisition of land to remain
   available for a period of three years;                                  
      (13) Permit the Director of Central Intelligence to designate        
   categories of employees in addition to those designated in law that     
   would be eligible to receive partial reimbursement for the cost of      
   purchasing professional liability insurance;                            
      (14) Extend for two additional years the Secretary of Defense's      
   authority to engage in commercial activities as security for            
   intelligence collection activities;                                     
      (15) Support the Intelligence Community's effort to monitor nuclear  
   weapons tests on a worldwide basis by authorizing the Department of     
   Defense to convey nuclear test monitoring equipment to a foreign        
   government through a bilateral agreement which provides the U.S. the    
   right to install, inspect, and maintain such equipment and to have      
   continued access to data collected;                                     
      (16) Expand the hiring authority of the Director of Central          
   Intelligence to facilitate the recruitment of eminent experts in science
   and engineering for research and development projects administered by   
   the National Imagery and Mapping Agency (NIMA), National Security Agency
   (NSA), National Reconnaissance Office (NRO), and Defense Intelligence   
   Agency (DIA); and                                                       
      (17) Clarify the standing of United States citizens to challenge the 
   blocking of assets under the Foreign Narcotics Kingpin Designation Act. 

                       CLASSIFIED SUPPLEMENT TO THE COMMITTEE REPORT              

      The classified nature of United States intelligence activities       
   prevents the Committee from disclosing the details of its budgetary     
   recommendations in this Report.                                         
      The Committee has prepared a classified supplement to this Report,   
   which contains (a) the classified annex to this Report and (b) the      
   classified Schedule of Authorizations which is incorporated by reference
   in the Act and has the same legal status as public law. The classified  
   annex to this report explains the full scope and intent of the          
   Committee's action as set forth in the classified Schedule of           
   Authorizations. The classified annex has the same status as any Senate  
   Report, and the Committee fully expects the Intelligence Community to   
   comply with the limitations, guidelines, directions, and recommendations
   contained therein.                                                      
      The classified supplement to the Committee Report is available for   
   review by any Member of the Senate, subject to the provisions of Senate 
   Resolution 400 of the 94th Congress.                                    
      The classified supplement is made available to the Committees on     
   Appropriations of the Senate and the House of Representatives and to the
   President. The President shall provide for appropriate distribution     
   within the Executive branch.                      
                      
                                 SCOPE OF COMMITTEE REVIEW                        

      The Committee conducted a detailed review of the fiscal year 2001    
   budget requests for the National Foreign Intelligence Program (NFIP) of 
   the Director of Central Intelligence; the Joint Military Intelligence   
   Program (JMIP) of the Deputy Secretary of Defense; and the Tactical     
   Intelligence and Related Activities (TIARA) of the military services.   
   The Committee's review entailed a series of briefings and hearings with 
   senior intelligence officials, numerous staff briefings, review of      
   budget justification materials, and numerous written responses provided 
   by the Intelligence Community to specific questions posed by the        
   Committee. The Committee also monitored compliance with numerous        
   reporting requirements contained in statute. Each report was scrutinized
   by the Committee and appropriate action was taken when necessary.       
      In accordance with a Memorandum of Agreement with the Senate Armed   
   Services Committee (SASC), the Committee is including its               
   recommendations on both JMIP and TIARA in its public report and         
   classified annex. The Senate Select Committee on Intelligence (SSCI) has
   agreed that JMIP and TIARA issues will continue to be authorized in the 
   defense authorization bill. The SASC has also agreed to involve the SSCI
   staff in staff-level defense authorization conference meetings and to   
   provide the Chairman and Vice Chairman of the SSCI the opportunity to   
   consult with the SASC Chairman and Ranking member before a JMIP or TIARA
   issue is finally closed out in conference in a manner with which they   
   disagree. The Committee looks forward to continuing its productive      
   relationship with the SASC on all issues of mutual concern.             
      In addition to its annual review of the Administration's budget      
   request, the Committee performs continuing oversight of various         
   intelligence activities and programs. The Committee's audit staff       
   conducts in-depth audits and reviews of specific programs and activities
   identified by the Committee as needing thorough and focused scrutiny.   
   The Audit Staff also supports the Committee's continuing oversight of a 
   number of administrative and operational issues. During the last year   
   the Committee's Audit Staff reviewed the National Imagery and Mapping   
   Agency (NIMA) and a covert action program; completed portions of the    
   Committee staff's review of counterintelligence at the Department of    
   Energy's National Laboratories and the mishandling of classified        
   information by former Director of Central Intelligence John Deutch; and 
   monitored the products and activities of the Community's statutory and  
   administrative Inspectors General. These kinds of inquiries frequently  
   lead to Committee action with respect to the authorities, applicable    
   laws, and budget of the activity or program concerned.                 
 
                                 COMMITTEE RECOMMENDATIONS                        

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

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

           Signals intelligence                                                    

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

           Human intelligence                                                      

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

           MASINT and IMINT intelligence                                           

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

           Rebuilding the National Security Agency                                 

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

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

                 MISHANDLING OF CLASSIFIED INFORMATION BY FORMER DCI DEUTCH       

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

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

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

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

      In 1998, the Committee directed a State Department Office of         
   Inspector General review of the protection of classified information at 
   the Department of State, and last year the Committee directed a review  
   by the Director of Central Intelligence Department compliance with      
   directives regarding protection of classified material. Among the State 
   IG recommendations included in its review was the transfer of           
   responsibility for protection of Sensitive Compartmented Information    
   (SCI) from the Bureau of Intelligence and Research (INR) to the Bureau  
   of Diplomatic Security (DS). The DCI review did not address this        
   recommendation. The Committee believes such a transfer unnecessarily    
   complicates efforts to address this issue, and may hinder the           
   possibility for success in this vitally important task.                 
      The transfer of responsibility for protection of SCI material from   
   INR to DS improperly transfers authority from an Intelligence Community 
   element to a bureau over which the Director of Central Intelligence has 
   no oversight authority. Despite INR's record, it is a member of the     
   Intelligence Community, and the DCI has statutory authority to approve  
   its budget. This oversight and budgetary authority will be critical to  
   ensure effective implementation of measures to protect intelligence     
   information. The DCI does not approve the budget request for DS, has no 
   influence over DS personnel, and will not have the organizational       
   authority to review directly DS compliance with directives concerning   
   the handling of classified information. This will severely limit the    
   ability of the DCI to carry out his responsibility under the National   
   Security Act of 1947 to ensure the protection of intelligence sources   
   and methods.                                                            
      Further, the proposed transfer will complicate and hinder oversight  
   of protection of SCI material at the State Department by the Legislative
   branch. This Committee and the House Permanent Select Committee on      
   Intelligence (HPSCI) are the congressional bodies with the legal        
   responsibility, institutional knowledge, and expertise necessary to     
   exert legislative oversight over the protection of SCI material. The    
   SSCI and HPSCI are charged with overseeing the Intelligence Community,  
   which produces the SCI material that requires stringent controls and    
   accounting. Neither the SSCI nor the HPSCI currently have direct        
   jurisdiction or oversight over the Bureau of Diplomatic Security.       
      For the reasons stated above, the Committee believes the proposed    
   transfer of the responsibility for protection of SCI material from INR  
   to DS imprudently takes this function away from those with the authority
   to ensure successful implementation. Therefore, the Committee will      
   closely review any Department of State plan to transfer the             
   responsibility for protecting Sensitive Compartmented Information from  
   the Bureau of Intelligence and Research to the Bureau of Diplomatic Security. 
   The Committee supports the efforts by the Secretary of State to improve 
   the security procedures and practices     
   throughout the State Department. However, the Committee believes the    
   responsibility for protecting SCI material within the Intelligence      
   Community elements that use and produce such information must continue  
   to reside with those elements themselves.                               
   
                              COUNTERINTELLIGENCE--CI 21                       

      The Committee has become increasingly concerned about the ability of 
   existing U.S. counterintelligence structures, programs, and policies to 
   address both emerging threats and traditional adversaries using cutting 
   edge technologies and tradecraft in the 21st Century. The Committee has 
   made its views known to the nation's senior intelligence and            
   counterintelligence officials, and found many of them share these       
   concerns.                                                               
      On March 8, 2000, the Director of Central Intelligence, the Director 
   of the FBI, and the Deputy Secretary of Defense unveiled a proposal     
   entitled ``Counterintelligence for the 21st Century'' during a closed   
   hearing before the SSCI. The plan, generally referred to as ``CI 21,''  
   resulted from a review launched in June 1999 to assess existing         
   counterintelligence structures and capabilities to address emerging as  
   well as traditional counterintelligence threats.                        
      CI 21 restates and expands upon other recent assessments on the      
   emerging counterintelligence environment. The report notes that the     
   threat has expanded beyond the traditional paradigm of ``adversary      
   states stealing classified data''--which includes traditional espionage 
   by Russia, the PRC, North Korea, Cuba, Iran, and Iraq--to include new   
   efforts by these traditional adversaries, as well as threats from       
   certain allies and friendly states, to collect economic information and 
   critical but unclassified technologies.                                 
      Terrorist groups, organized crime, and drug cartels are additional,  
   non-state actors that pose an increasing counterintelligence threat. New
   roles and missions for U.S. military forces, such as peacekeeping and   
   new kinds of coalition operations, create new force protection and      
   counterintelligence challenges. Academic exchanges and joint ventures   
   also are venues for the loss--witting or unwitting--of sensitive or even
   classified information.                                                 
      Both traditional and non-traditional threats are exploiting modern   
   technology, particularly modern computer technology and the Internet, to
   develop information warfare (IW) and intelligence collection            
   capabilities and tradecraft that alter traditional notions of time,     
   distance and access.                                                    
      Complicating the task of U.S. counterintelligence agencies is the    
   sheer volume of classified and sensitive information that requires      
   protection, and the resulting need for top level policy guidance and    
   prioritization in determining which information and technologies must be
   protected.                                                              
      CI 21 found current U.S. counterintelligence capabilities intended to
   confront this expanding and changing threat to be ``piecemeal and       
   parochial.'' Key problems include:        
                              
       inadequate coordination between policy and counterintelligence,     
   including failure to identify ``must protect'' information;        
     
       inadequate coordination, cooperation, and information-sharing       
   between counterintelligence agencies;                      
             
     lack of strategic counterintelligence threat analysis;              
  
     lack of agility, and a focus that is reactive instead of            
   proactive--at both the national and operational levels;          
       
     failure to adequately exploit new technologies;                  
     
     lack of a national counterintelligence plan to integrate            
   information, analysis, and a new proactive focus;          
             
     an inadequately prepared workforce and insufficient, diffused,      
   resources;                                                            
  
      a lack of a national advocate for resources, policies, and proactive
   initiatives; and                                                 
       
     inadquate coordination with the private sector.                       

      To address these shortfalls, the CI 21 report recommends adoption of 
   a new counterintelligence philosophy--described as more policy-driven,  
   prioritized, and flexible, with a strategic, national-level focus--and a
   restructured national counterintelligence system. The proposed new national         
   counterintelligence system would include:      
                         
     A National Counterintelligence Executive;                             

     A National Counterintelligence Board of Directors; and                

     A National Counterintelligence Steering Committee.                    

      The Committee commends both the senior leadership and the senior     
   counterintelligence officials of the CIA, FBI, and the Defense          
   Department for their work in developing the CI 21 proposal. This        
   ambitious plan proposes significant changes in the way the United States
   Government approaches, and organizes itself to meet, the threat of      
   foreign espionage and intelligence gathering. Implementation would      
   require additional resources, as well as changes to existing            
   Presidential directives and statutory authorities. Perhaps most         
   difficult, it would challenge traditional ways of doing business.       
      The Committee notes that the CI 21 plan has not yet received final   
   interagency approval. Given the seriousness and evolving nature of the  
   threat, and the demonstrated shortcomings of current counterintelligence
   structures, the Committee strongly urges the agencies involved to reach 
   agreement on this matter.                                               

                         COUNTERINTELLIGENCE--DEPARTMENT OF ENERGY                

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

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

                                      COUNTERTERRORISM                            

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

           Proliferation of chemical, biological, radiological and nuclear weapons 

      The Committee believes that the bi-annual reports provided by the    
   Director of Central Intelligence pursuant to Section 721 of the         
   Intelligence Authorization Act for Fiscal Year 1997 are valuable to the 
   Senate and contribute to the public's knowledge of proliferation        
   activities of concern. The Committee also acknowledges the many         
   classified reports and briefings on proliferation provided to the       
   Committee and Committee Staff.                                          
      The Committee believes, however, that a number of issues warrant     
   comprehensive assessments and in some cases, publication of unclassified
   separate reports.                         
                              
            1. Russian and Chinese proliferation to Iran                            

      The Committee directs the DCI to provide the Committee with a        
   comprehensive report detailing available information concerning Russian 
   and Chinese cooperation with Iranian military programs and their        
   transfer of sensitive technologies to Iran. This report should be       
   provided no later than October 1, 2000, and if possible should be       
   provided in classified and unclassified versions. The classified report 
   should include information gained from bilateral discussions with the   
   Russians. The unclassified version should include, to the maximum extent
   possible, declassification of information provided to the government of 
   Russia under the classification ``Secret, Release Only to Russia.''     

            2. Biological weapons capabilities                                      

      The Committee commends the Intelligence Community on its publication 
   of the National Intelligence Estimate on biological weapons             
   capabilities. However, the Committee believes that the information in   
   this report should be provided in an unclassified form to the maximum   
   extent possible. The Committee therefore directs the DCI to provide the 
   Committee with an update to the NIE as well as an unclassified version  
   of the NIE no later than October 1, 2000.       
                        
            3. Possible Iraqi misuse of Oil for Food Program funds                  

      The Committee is concerned by the lack of monitoring and verification
   of Iraqi purchases under the United nations Oil For Food Program. While 
   the United States reviews contracts prior to United Nations approval, no
   monitoring and verification program exists to confirm identified end    
   uses and end users once items enter Iraq. The Committee therefore       
   directs the DCI to provide the Committee with a report on the challenge 
   posed by this lack of monitoring and verification, the number and nature
   of dual use items provided under Oil for Food contracts to date, and the
   contribution these dual use items could make to Iraq's chemical,        
   biological, radiological and nuclear weapons, and missile programs. The 
   report should be provided to the Congressional intelligence committees  
   no later than February 28, 2001.                               
         
          Foreign missile developments and the ballistic missile threat
           to the United States        
                                            
      The Senate report 105 24 accompanying the Intelligence Authorization 
   Act for Fiscal Year 1998 directed the Intelligence Community to produce 
   annual reports on the ballistic missile threat. The reports, due        
   annually in march, have been provided in March 1998 and September 1999. 
      In July 1998, the Commission to Assess the Ballistic Missile Threat  
   to the United States, also known as the Rumsfield Commission, produced  
   an independent assessment of and recommendations for improvements to    
   Intelligence Community assessments. The Intelligence Community adopted these         
   recommendations and the changes were reflected in the September 1999    
   report. The Committee applauds the more realistic approach to the       
   ballistic missile threat and the analytical rigor of the September 1999 
   report, which was prepared as a National Intelligence Estimate, and     
   which drew upon outside expertise as recommended by the Rumsfeld        
   Commission.                                                             
      The Committee is disappointed, however, that the Intelligence        
   Community has missed the deadline for submission of this year's         
   congressionally-mandated annual report. The Committee also notes that   
   the requirement for an annual estimate on the ``non-traditional''       
   weapons of mass destruction threat to the United States, as detailed in 
   the Senate report 105 24, has not been met. The Committee urges the     
   Director of Central Intelligence to ensure that these Congressional     
   requirements are satisfied. The Administration should also ensure that  
   adequate funds and other resources are made available to enable timely  
   provision of rigorous assessments to Congress and the American public.  

           Consolidation of theater and cruise missile analysis and production     

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

           North Korea                                                             

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

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

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

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

                                       EXPORT CONTROL                             

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

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

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

                             ADMINISTRATIVE INSPECTORS GENERAL                    

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

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

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

                           NATIONAL FOREIGN INTELLIGENCE PROGRAM                  

          Guidelines and limitations governing intelligence collection 
           information on U.S. persons     
                                        
      The Committee is concerned about recent media accounts alleging that 
   the National Security Agency (NSA) conducts activities that may violate 
   the constitutional rights of United States persons.                     
      The NSA's primary mission is to intercept and analyze the            
   communications of foreign adversaries, including terrorists and drug    
   traffickers. The President and other policymakers rely heavily on the   
   critical information provided by the NSA. The Committee recognizes the  
   potential intrusion into the private lives of U.S. citizens inherent in 
   this type of intelligence collection, and the need to remain vigilant to
   ensure that the laws and regulations that protect the privacy of U.S.   
   persons are strictly adhered to. This Committee was created in part in  
   response to violations of the constitutional rights of American citizens
   by intelligence agencies that at times lost sight of the critical       
   balance between defending national security and defending those values  
   upon which our security as a nation ultimately depends. The Committee   
   has no more critical responsibility than to ensure that this balance is 
   maintained.                                                             
      In the 1970's, after congressional inquiries revealed abuses by the  
   NSA, CIA and FBI, the Congress and the Executive branch created an      
   extensive structure of laws and oversight (including the creation of the
   Congressional oversight committees). These laws, executive orders and   
   regulations established stringent guidelines and limitations governing  
   the collection of information on U.S. persons. Finally, the intelligence
   agencies, including the NSA, were prohibited by presidential executive  
   order from circumventing United States legal restrictions by asking     
   foreign agents or governments to collect information on their behalf.   
      The Committee believes, based on all available information, that the 
   NSA is in compliance with applicable laws and regulations. The NSA is   
   required by law to keep the oversight committees fully and currently    
   informed of all significant intelligence activities and must report any 
   illegal intelligence activities. Moreover, the NSA, in coordination with
   the CIA and the Justice Department, was required last year by congress  
   to conduct a review of the legal standards in place to protect the      
   constitutional rights of U.S. persons from intrusive electronic         
   surveillance. The report indicates that the legal standards controlling 
   the NSA's electronic surveillance are effective in adhering to the      
   requirements of the Fourth Amendment to the United States Constitution. 
   As noted above, however, the Committee has no more critical             
   responsibility than to ensure that the balance between national security
   and rights of Americans established in law is maintained, and will      
   continue to monitor strictly the NSA's activities.              
        
           Experimental Personnel Management Program for technical      
           personnel for certain elements of the Intelligence Community            
 
     Section 503 establishes an experimental personnel program providing  
   the Director of Central Intelligence with limited authority over a      
   five-year period to recruit up to 39 science and engineering experts for
   advanced research and development projects administered by three        
   elements of the Intelligence Community. Of the 39 positions covered     
   under this personnel program, the National Imagery and Mapping Agency   
   (NIMA) will be allocated no more than fifteen positions, the national   
   Security Agency twelve positions, the National Reconnaissance office six
   positions, and the Defense Intelligence Agency six positions. Expanded  
   hiring authorities of this type were granted to the Defense Advanced    
   Research Projects Agency in fiscal year 1999. The need for such         
   authorities in the Intelligence Community has been supported by the     
   testimony of the respective program managers and was reaffirmed by the  
   Committee's May 1999 Technical Advisory Group report on the NIMA, the   
   future of imagery intelligence, and the emerging challenge of           
   modernizing the Intelligence Community's tasking, processing,           
   exploitation, and dissemination system.                                 
      Beginning in 2001, the DCI must submit, no later than October 15 of  
   each year in which employees serve under the program, an annual report  
   to the intelligence oversight committees of the Congress. The annual    
   report shall include a discussion on the DCI's exercise of the special  
   personnel management authority during the reporting period, the sources 
   from which individuals appointed were recruited, and the methodology of 
   identification and selection of recruits.                               

           Functional management of Tactical Imagery and Geospatial Programs       

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

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

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

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

           Critical Intent Model 2 (CIM2)                                          

      Given the emergence of new and ambiguous threats, it is important for
   the United States, its allies and future coalition partners to find and 
   develop additional ways to exploit new information technology to improve
   radically their crisis avoidance, situation assessment, and             
   collaboration capabilities. The explosion of information available      
   combined with reduced resources available for national security programs
   highlighted the need for a fast and efficient capability to detect and  
   manage crises. The Committee is aware of the Critical Intent Model      
   (CIM)--a structured argumentation tool--as a key enabling technology in 
   PROJECT GENOA, which provides analysts and policy makers with the       
   capability to track ongoing and evolving situations, collect analysis,  
   and enable users to discover previously unknown information and critical
   data relationships. The CIM structured argumentation tool facilitates   
   more comprehensive analysis, creates a corporate memory for use in      
   current analysis, and allows the comparison and contrasting of details  
   of a particular argument. Moreover, CIM captures logic patterns for     
   policy option analysis and serves as a foundation for scenario-based    
   crisis avoidance systems.                                               
      The Committee recommends the transition of the CIM structured        
   argument prototype software from the Defense Advanced Research Projects 
   Agency to the Intelligence Community, and strongly recommends investment
   by the Intelligence community in the CIM structured argument tool with  
   available fiscal year 2000 and 2001 funds.           
                   
           Funding of intelligence activities, section 504                         

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

           Joint Signals Intelligence (SIGINT) Avionics Family                     

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

           Geospatial production                                                   

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

           TACTICAL INTELLIGENCE AND RELATED ACTIVITIES              

           GUARDRAIL Common Sensor                                                 

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

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

                        SECTION-BY-SECTION ANALYSIS AND EXPLANATION               

                     TITLE I--INTELLIGENCE ACTIVITIES                    

           Section 101. Authorization of appropriations                            

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

           Section 102. Classified schedule of authorizations                      

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

           Section 103. Personnel ceiling adjustments                              

      Section 103 authorizes the Director of Central Intelligence, with the
   approval of the Director of the Office of Management and Budget, in     
   fiscal year 2001 to exceed the personnel ceilings applicable to the     
   components of the Intelligence Community under Section 102 by an amount 
   not to exceed two percent of the total of the ceilings applicable under 
   Section 102. The Director may exercise this authority only when         
   necessary to the performance of important intelligence functions or to  
   the maintenance of a stable personnel force, and any exercise of this   
   authority must be reported to the intelligence oversight committees of  
   the Congress.                                                           

           Section 104. Community Management Account                               

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

  TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM 

           Section 201. Authorization of appropriations                            

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

           Section 301. Increase in employee compensation and benefits  
           authorized by law   
                                                    
      Section 301 provides that appropriations authorized by the conference
   report for salary, pay, retirement, and other benefits for federal      
   employees may be increased by such additional or supplemental amounts as
   may be necessary for increases in such compensation or benefits         
   authorized by law.                                       
               
           Section 302. Restriction on conduct of intelligence activities          

      Section 302 provides that the authorization of appropriations by the 
   conference report shall not be deemed to constitute authority for the   
   conduct of any intelligence activity which is not otherwise authorized  
   by the Constitution or laws of the United States.     
                  
           Section 303. Prohibition of unauthorized disclosure of       
           classified information              
                                    
      Section 303 creates a basis in law for prosecuting the knowing and   
   willful unauthorized disclosure of classified information to a person   
   not authorized to receive that information. This section closes the gap 
   in existing law for the unauthorized disclosure of classified           
   information.                                            
                
           Section 304. POW/MIA analytic capability in the Intelligence Community  

      Section 304 requires the Director of Central Intelligence to         
   establish and maintain a POW/MIA analytic capability within Intelligence
   Community with responsibility for intelligence in support of the        
   activities of the United States relating to prisoners of war and missing
   persons.                           
                                     
           Section 305. Applicability to lawful United States           
           intelligence activities of Federal laws implementing international      
           treaties and agreements                          
                       
      Section 305 amends the National Security Act of 1947 to add a new    
   provision which articulates a rule of statutory construction applicable 
   to U.S. laws enacted to implement the provisions of treaties and other  
   international agreements. Section 305 provides that future U.S. laws    
   enacted to implement treaties shall not be construed as making unlawful 
   what are otherwise lawful and authorized intelligence activities of the 
   United States, unless Congress includes an express provision to the     
   contrary.                                                             
  
           Section 306. Limitation of handling, retention, and storage  
           of certain classified materials by the Department of State    
          
      Section 306 requires the Director of Central Intelligence to certify 
   to Congress that each element of the Department of State that handles,  
   retains or stores material classified at the Sensitive Compartmented    
   Information (SCI) level is in full compliance with all applicable       
   Director of Central Intelligence directives (DCIDs) or Executive Orders 
   regarding the handling, retention, or storage of SCI materials. As of   
   January 2001, funds authorized to be appropriated under this Act for the
   Department of State Bureau of Intelligence and Research shall be        
   prohibited from obligation or expenditure so long as any covered element
   of the Department of State has not been certified by the Director of    
   Central Intelligence (DCI) as being in full compliance. Any element of  
   the Department of State not certified will be prohibited from retaining 
   or storing material classified at the SCI level until the DCI certifies 
   its compliance, unless such elements receive a Presidential waiver.     

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

           Section 308. Availability of certain funds for administrative
           costs of Counterdrug Intelligence Executive Secretariat      
           
      Section 308 waives prohibitions that prevent Executive branch        
   agencies from contributing appropriated fiscal year 2000 funds to an    
   interagency body for the purpose of supporting the Counterdrug          
   Intelligence Executive Secretariat.                         
            
                  TITLE IV--CENTRAL INTELLIGENCE AGENCY                  

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

           Section 402. Subpoena authority of the Inspector General of  
           the Central Intelligence Agency           
                              
      Section 402 provides several technical corrections to the Central    
   Intelligence Agency Act of 1949 to address superseding legislation,     
   conform language and streamline reporting procedures.         
          
           Section 403. Improvement and extension of Central Services Program      

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

           Section 404. Details of employees to the National Reconnaissance Office 

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

           Section 405. Transfers of funds to other agencies for        
           acquisition of land             
                                        
      Section 405 extends the life of appropriated funds transferred by the
   CIA permitting them to remain available for three years to other        
   government agencies for the purpose of purchasing land. Any exercise of 
   this authority must be reported to the intelligence oversight committees
   of the Congress.   
                                                     
          Section 406. Eligibility of additional employees for         
           reimbursement for professional liability insurance              
        
      Section 406 allows the Director of Central Intelligence to designate 
   categories of employees in addition to those noted in Public Law 104    
   208, who would be eligible to receive reimbursement for up to one-half  
   of the cost of purchasing professional liability insurance. This section
   permits the expenditure of appropriated funds to reimburse employees who
   are at risk of incurring liability claims due to the nature of their    
   duties, but are not included within the existing job categories that are
   currently eligible for reimbursement. Any exercise of this authority    
   must be reported to the intelligence oversight committees of the        
   Congress.                                                               

          TITLE V--DEPARTMENT OF DEFENSE INTELLIGENCE ACTIVITIES         

           Section 501. Two-year extension of authority to engage in    
           commercial activities as security for intelligence collection activities

      Section 501 amends section 431(a) of title 10 to extend current      
   Department of Defense authority to engage in commercial activities as   
   security for intelligence collection activities until December 31, 2002.
   This authority expires on December 31, 2000.      
                      
           Section 502. Nuclear test monitoring equipment                          

      Section 502 authorizes the Secretary of Defense, who may delegate the
   authority to the Secretary of the Air Force, to convey to a foreign     
   government nuclear test explosion monitoring equipment that is installed
   within the territory of that government. This equipment would be        
   conveyed with a bilateral agreement in which the recipient nation agrees
   to provide the United States with timely access to the data produced,   
   collected, or generated and to provide the U.S. access to the equipment 
   for purposes of inspecting, testing, maintaining, repairing, or         
   replacing the equipment.               
                                 
           Section 503. Experimental personnel management program for   
           technical personnel for certain elements of the Intelligence Community  

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

      On April 27, 2000, the Select Committee on Intelligence approved the 
   Bill and ordered that it be favorably reported. The Committee approved  
   by a vote of 11 0 an amendment by Senator Levin to add Section 307, a   
   clarification of the standing of United States citizens to challenge    
   certain blocking of assets by the United States.                     
   
                                     ESTIMATE OF COSTS                            

      Pursuant to paragraph 11(a) of rule XXVI of the Standing Rules of the
   Senate, the estimated costs incurred in carrying out the provisions of  
   this Bill, for fiscal year 2001, are set forth in the classified annex  
   to this Bill. Estimates of the costs incurred in carrying out this Bill 
   in the five fiscal years thereafter are not available from the Executive
   branch, and therefore the Committee deems it impractical, pursuant to   
   paragraph 11(a)(3) of rule XXVI of the Standing Rules of the Senate, to 
   include such estimates in this report. On May 4, 2000, the Committee    
   transmitted this Bill to the Congressional Budget Office (CBO) and      
   requested that it conduct an estimate of the costs incurred in carrying 
   out the provisions of this Bill.                  
                      
                              EVALUATION OF REGULATORY IMPACT                     

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

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