106th Congress                                                   Report
                                 SENATE

 2d Session                                                     106-325
_______________________________________________________________________



                      INTELLIGENCE AUTHORIZATION ACT FOR FY 2001

                                _______


                  June 29, 2000.--Ordered to be printed



  Mr. Warner , from the Committee on Armed Services, submitted the
 following

                                  REPORT

                          [To accompany S. 2507]

      The Committee on Armed Services, to which was referred the 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, having
   considered the same, reports favorably thereon with amendments and
   recommends that the bill as amended do pass.

                           PURPOSE OF THE BILL

      S. 2507 would authorize appropriations and other matters for Fiscal
   Year 2001 for intelligence activities of the United States, including
   certain Department of Defense intelligence related activities within the
   jurisdiction of the Senate Armed Services Committee ( SASC).
      The Senate Select Committee on Intelligence (SSCI) reported the bill
   on May 4, 2000, and it was referred to the Committee on Armed Services
   in accordance with section 3(b) of Senate Resolution 400, 94th Congress.

                        SCOPE OF COMMITTEE REVIEW

      The committee conducted a detailed review of the intelligence
   community authorization request for Fiscal Year 2001. The committee
   conducted hearings and met with the Chairman and Vice Chairman of the
   Senate Select Committee on Intelligence.
      The committee has carefully reviewed the report of the Select
   Committee on Intelligence (S. Rept. 106-279) and has incorporated the
   relevant budget decisions of the SSCI into S. 2549, the National Defense
   Authorization Act for Fiscal Year 2001, which the SASC reported to the
   Senate on May 12, 2000.
      The following explains the committee's proposed amendments to the
   bill as reported by the SSCI, as well as the committee's clarification
   to the report issued by the SSCI.

           Two year extension of authority to engage in commercial
           activities as security for intelligence collection activities

      Section 431(a) of Title 10, United States Code (USC), authorizes the
   Secretary of Defense to authorize the conduct of those commercial
   activities necessary to provide security for authorized intelligence
   collection activities abroad undertaken by the Department of Defense.
   Section 501 of S. 2507, as reported by the SSCI, would extend this
   authority by two years. The SASC has no objection to such an extension
   of authority. As a matter of committee jurisdiction, however, the SASC
   insists that amendments to Title 10, USC, be included in the Defense
   Authorization Act, not in the Intelligence Authorization Act. Therefore,
   the SASC proposes an amendment to S. 2507 as reported by the SSCI to
   strike section 501. The SASC intends, with the approval of the Senate,
   to include an identical provision in S. 2549.

           Nuclear test monitoring equipment

      Section 502 of S. 2507, as reported by the SSCI, would amend
   subchapter II of chapter 138 of Title 10, USC, by providing the
   Secretary of Defense with authority to convey or otherwise provide to a
   foreign government equipment for monitoring nuclear test explosions and
   to install such equipment on foreign territory. Section 1206 of S. 2549
   would provide similar authority, as well as other authorities, for DOD
   to manage this effort. Therefore, the SASC recommends an amendment to
   strike section 502 of S. 2507, as reported by the SSCI. The SASC intends
   to work with the SSCI to reconcile any differences in policy between the
   two committees on this matter prior to completion of the conference
   report on the National Defense Authorization Act for Fiscal Year 2001.

           Experimental personnel management program for technical
           personnel for certain elements of the intelligence community

      Section 503 of S. 2507, as reported by the SSCI, would authorize the
   Director of Central Intelligence ( DCI) to carry out a program of
   experimental use of special personnel management authority in order to
   facilitate recruitment of eminent experts in science and engineering for
   research and development projects administered by the National Security
   Agency ( NSA), the National Reconnaissance Office ( NRO), the National
   Imagery and Mapping Agency ( NIMA), and the Defense Intelligence Agency
   ( DIA). Since these are all defense agencies under the personnel
   management system of the Department of Defense, the SASC objects to
   granting such authority to the DCI. The Secretary of Defense has also
   stated that such an approach "would take the unprecedented
   step of authorizing the DCI to appoint personnel across Executive
   Department lines to positions in DOD, without the Secretary of Defense's
   approval or involvement. This is inconsistent with the Secretary's
   responsibilities to manage the Department pursuant to 10 USC, section
   113.'' The SASC recognizes the need for several of the intelligence
   agencies to have special hiring authority for select cases involving
   science and engineering specialties. Section 1113 of S. 2549 would
   extend such authority to the Secretary of Defense for filling positions,
   on a limited basis, in NSA and NIMA. For the reasons specified above,
   the SASC recommends an amendment to strike section 503 of S. 2507, as
   reported by the SSCI.

           Prohibition on transfer of imagery analysts from General
           Defense Intelligence Program to National Imagery and Mapping Agency
           Program

      The SSCI report would direct the transfer of imagery analysts and
   systems support personnel from the General Defense Intelligence Program
   ( GDIP) to the National Imagery and Mapping Agency Program ( NIMAP).
   According to the Secretary of Defense: "The Combatant Commanders are
   unanimous in their opposition to this proposal, citing it as unnecessary
   and detrimental to the accomplishment of their missions.'' The SASC
   agrees that the Combatant Commanders need to retain control of these
   imagery analysts and support personnel. The overall allocation of
   imagery analysts was evaluated in 1996 when NIMA was established. There
   were good and sufficient reasons for those original decisions made in
   consolidating imagery professionals. Therefore, the SASC recommends an
   amendment that would prohibit the proposed transfer. However, the SASC
   does agree that it would be appropriate for the Secretary of Defense to
   assess options for strengthening the role of the NIMA Director as
   functional manager for imagery and geospacial programs. Therefore, the
   amendment proposed by the SASC would require the Secretary of Defense,
   in consultation with the DCI, to conduct such an assessment. The SASC
   believes that it may be possible for NIMA to assume overall control of
   those imagery analysts currently funded in the GDIP, while allowing the
   Combatant Commanders to retain day-to-day operational control over such
   personnel, similar to the current arrangement for signals intelligence
   personnel. The SASC directs the Secretary of Defense to evaluate such an
   option and include an evaluation of this option in his report on
   strengthening NIMA's authority.

           Prohibition on transfer of collection management personnel
           from General Defense Intelligence Program to Community Management
           Account

      The SSCI report would direct a transfer of resources and personnel
   who are performing multidiscipline requirements management and tasking
   from the GDIP to the Community Management Account. According to the
   Secretary of Defense: "The assets affected by this proposed move are
   the assets that function as my Intelligence Collection Manager, serving
   as the focal point for all DOD requirements. This move will restrict our
   intelligence efforts.'' The DCI has also registered objection to this
   transfer. The SASC agrees with these assessments and recommends an
   amendment that would prohibit the transfer of collection management
   personnel from the GDIP to the Community Management Account.

           Authorized personnel ceiling for General Defense Intelligence Program

      The SSCI report would reduce funds available for GDIP military pay
   and would mandate a significant overall endstrength reduction of billets
   credited against the GDIP. The SASC understands the SSCI's concern
   regarding the fill rate for personnel funded in the GDIP. The SASC
   notes, however, that fill rates below fully authorized levels is common
   throughout the Department of Defense. The GDIP does not appear to be
   suffering personnel fill levels significantly below other comparable
   agencies. Nonetheless, the SASC agrees that the issue of fill rates at
   intelligence agencies in the Department of Defense should be assessed to
   determine whether these agencies can achieve higher personnel levels.
   Therefore, the committee directs the Secretary of Defense to conduct an
   assessment of all intelligence agencies within the Department of Defense
   to determine whether their personnel fill rates can be improved. A
   report on this assessment shall be submitted to the congressional
   defense and intelligence committees not later than April 1, 2001. The
   SASC, however, opposes the SSCI recommendation to cut GDIP billets.
   According to the Secretary of Defense: "The loss of the billets and pay
   would materially reduce DIA's military intelligence collection,
   processing, and reporting capabilities, and a realignment of billets and
   pay would undermine severely the Department's accounting procedures.''
   The SASC is concerned that reducing the personnel ceiling will not fix
   the fill rate problem, but would more likely just establish a lower
   ceiling against which unchanged fill rates would be applied. This
   outcome would certainly result in a severe reduction in personnel
   available to satisfy important DIA requirements. Therefore, the SASC
   recommends an amendment that would restore the billets proposed to be
   cut and transferred by the SSCI.

           Measurement and Signature Intelligence

      The SSCI report would require that the DCI conduct a study of the
   utility and feasibility of various options for improving the management
   and organization of measurement and signature intelligence ( MASINT).
   The SASC agrees that such a review is necessary, but is concerned that
   the SSCI language excludes the Secretary of Defense, who has a
   significant role in the area of MASINT. Therefore, the SASC recommends
   an amendment that would require that the DCI conduct such a review, in
   coordination with the Secretary of Defense.

           Defense Attache System

      The SSCI report would require a significant cut in the budget request
   for Defense Attache System funding intended to be used for expansion
   into regional hot spots. The SASC is concerned that reducing the planned
   increase in defense HUMINT capabilities would be unwise, particularly at
   a time of increasing tension around the globe. The SASC urges the SSCI
   to reconsider its proposal and to support full funding for the Defense
   Attache System in conference.

           National Reconnaissance Office operational support

      The SSCI would reduce funds for the NRO's operational support
   program. Such funds are used to provide training for the warfighter on
   NRO systems. As the Secretary of Defense has stated: "The
   Commanders-in-Chief and other Defense activities that receive support
   through this program consider NRO personnel an invaluable, integrated
   component of their multidiscipline intelligence terms.'' The SASC
   strongly supports the NRO's efforts to provide space support to the
   warfighter, and urges the SSCI to support full funding of the NRO's
   budget request for operational support in conference.

                             COMMITTEE ACTION

      In accordance with the Legislative Reorganization Act of 1946, as
   amended by the Legislative Reorganization Act of 1970, the committee
   approved a motion to report favorably to the Senate S. 2507 with
   amendments.

                               FISCAL DATA

      The Committee will publish in the Congressional Record information on
   five-year cost projections when such information is received from the
   Congressional Budget Office.

                            REGULATORY IMPACT

      Paragraph 11(b) of rule XXVI of the Standing Rules of the Senate
   requires that a report on the regulatory impact of a bill be included in
   the report on the bill. The Committee finds that there is no regulatory
   impact in the cost of S. 2507.

                    COMMENTS FROM THE EXECUTIVE BRANCH

      On June 28, 2000, the committee received a letter from the Secretary
   of Defense and the Chairman of the Joint Chiefs of Staff regarding S.
   2507, among other things. A copy of this letter appears below.


       Hon.  John W. Warner,
       Chairman, Committee on Armed Services,
       U.S. Senate, Washington, DC.

       Dear Mr. Chairman: As the Congress considers the FY 2001
   Intelligence Authorization legislation, we want to highlight for you
   several issues within the House and Senate bills to which we must
   object. We are very concerned about the potential negative impact of
   several fiscal marks and language on defense intelligence, and we are
   deeply troubled by language that would limit our abilities to execute
   responsibilities in support of military operations.
       Transfer Authority of the Director of Central Intelligence ( DCI):
   The House Permanent Select Committee on Intelligence ( HPSCI) recommends
   an amendment to section 104(d)(1) of the National Security Act of 1947
   that both interferes with the Secretary's ability to object to the
   movement of DoD NFIP funds and personnel and restricts the Secretary's
   authority to delegate. The proposed language would allow the DCI or his
   delegated representative to effect changes to DoD NFIP programs unless
   the Secretary of Defense objects in writing. Further, it would limit the
   Secretary's authority to delegate such objections only to the Deputy
   Secretary. The requirement that such an objection be in writing is
   unnecessarily onerous and the delegation restriction infringes upon the
   Secretary's authority and responsibility to manage the Department, and
   is inconsistent with the intent of 10 USC 113(d). We strongly urge that
   Section 105 be deleted in its entirety and that we work together to
   address any concerns of the Congress that produced this language.
       Intelligence Community Communications Architect/Architecture: The
   HPSCI mark directs the DCI to establish the position of Intelligence
   Community Communications Architect, with a 30-person professional staff
   with broad responsibilities for the development of a worldwide
   intelligence community telecommunications architecture and network. The
   HPSCI further recommends that $80M be transferred from NRO, NSA and DIA
   to the Community Management Account to fund architectural efforts. This
   unilateral and independent architectural office would seriously damage,
   if not totally destroy, the efforts of the DoD Chief Information Officer
   ( CIO), who has ongoing activities with the IC and Defense Intelligence
   Component CIO's to advance interoperability between and among
   intelligence producers and consumers, and who has statutory
   responsibilities under the Clinger-Cohen Act. The IC is an integral
   mission partner in the DoD's Global Information Grid ( GIG) that is
   being designed and implemented to address many of the concerns raised by
   the committee. The HPSCI's marks will perturbate existing relationships
   and potentially prevent pursuit of an efficient GIG strategy. We
   strongly urge the conference committee to delete these marks in their
   entirety and to reemphasize support for a DoD and DCI technological and
   managerial partnership to address these issues.
       Experimental Personnel Management Program: The Senate Select
   Committee on Intelligence ( SSCI) proposes language that would take the
   unprecedented step of authorizing the DCI to appoint personnel across
   Executive Department lines to positions in the DoD, without the
   Secretary of Defense's approval or involvement. This is inconsistent
   with the Secretary's responsibilities to manage the Department pursuant
   to 10 USC 113. We would welcome, however, legislation to increase the
   statutory cap on Defense Intelligence Senior Executive Service
   positions, contained in 10 U.S.C. 1606(a), from 493 to 517.
       Collaboration: We very much appreciate the HPSCI's positive
   assessment of the Department's Joint Intelligence Virtual Architecture (
   JIVA) tool but we must oppose direction to transfer program oversight to
   the DCI's ADCI/A&P and further believe it is premature to declare JIVA
   the community standard for collaboration. we feel strongly that it would
   be counter-productive both to prohibit further non-JIVA technology
   pursuits and to remove the program from the DoD oversight that has made
   it the success that the committee commends.
       General Defense Intelligence Program (GDIP): The SSCI proposed
   several reductions and realignments that would diminish Defense
   Intelligence capabilities.
      The SSCI recommends a reduction to GDIP military pay and further
   recommends that over 1,000 billets not be credited against the GDIP. The
   DIA accounts for military billets and pay in accordance with DoD policy.
   The loss of billets and pay would materially reduce DIA's military
   intelligence collection, processing, and reporting capabilities, and a
   realignment of billets and pay would undermine severely the Department's
   accounting procedures. We urge deletion of this language in its
   entirety.
      The SSCI recommends a transfer of resources and personnel who are
   performing Multidiscipline Requirements Management and Tasking from the
   GDIP to the Community Management Account. This is one of several
   provisions that we find personally disturbing. It would appear the
   committee is attempting to systematically dismantle organizations and
   functions that are historically and inherently Defense Intelligence
   activities and realign them to the DCI's Community Management Staff. The
   assets affected by this proposed move are the assets that function as
   Intelligence Collection Manager, serving as the focal point for all DoD
   requirements. This move will restrict our intelligence efforts.
      The SSCI recommends the transfer of imagery analysts and systems
   support personnel and resources from the GDIP to the NIMA. These
   resources provide direct support to the Service intelligence chiefs and
   the Commanders of the Combatant Commands. At the formation of NIMA, the
   Department made a conscious choice to exclude these resources from the
   consolidation. The Combatant Commanders are unanimous in their
   opposition to this proposal, citing it as unnecessary and detrimental to
   the accomplishment of their missions. They are adamant that such a
   transfer will deprive them of flexibility and undermine the unity of
   control within the Combatant Commands. We oppose this provision.
      The SSCI, in a mark entitled "Balancing DAO Collection
   Capabilities,'' recommends a drastic cut to Defense Attache System
   funding that reverses the planned expansion into regional hot spots. The
   Committee is committed to sustaining and enhancing our ever increasingly
   important global HUMINT capabilities. We have made great progress since
   the consolidation of all Defense HUMINT activities in 1995 and
   with continued congressional support we will continue to fine-tune our
   capabilities. Contrary to the assertions in the committee report, we are
   increasing our efforts against hard targets while at the same time
   expanding our attache system in response to requirements identified by
   the military theater Commanders-in-Chief. We urge restoration of these
   funds and seek your continued support of this most critical discipline.
      The SSCI eliminated all funds requested to design an addition to the
   Defense Intelligence Analysis Center at Bolling Air Force Base. Our
   desire and intent are to consolidate DIA Washington area personnel into
   a single, secure facility on a military installation. Collocation
   benefits from a business perspective are rather intuitive, but we must
   also face the reality of the potential terrorism threat that our
   intelligence personnel face every single day that they remain, in large
   numbers, in unsecure leased commercial facilities. The committee notes
   that the consolidation will not take place for several more years. We
   sincerely wish that we could make it happen today, but we cannot. With
   congressional support we can make it happen with all due haste. This cut
   only serves to prolong the time required to adequately protect our
   military and civilian personnel. We strongly urge restoration of the
   requested funds.
       National Imagery and Mapping Agency: The SSCI recommends a
   redirection of funds within the National Imagery and Mapping Program to
   boost funding for modernizing TPED functions within the U.S. Imagery and
   Geospatial System. NIMA's FY 2001 budget request already includes
   additional resources over last year's request, reflective of a community
   commitment to modernizing USIGS. NIMA made the difficult internal
   realignment decisions necessary to provide these additional funds. Any
   further perturbation will degrade NIMA's ability to support both
   national and tactical customers beyond already reduced levels. We
   strongly urge that this provision be deleted and that the Director of
   NIMA, in consultation with appropriate congressional committees, our
   offices, and that of the DCI, be afforded an opportunity to implement
   the difficult decisions that have already been reached.
       National Reconnaissance Office: We urge the conference committee to
   support the President's Budget request for the National Reconnaissance
   Program and we specifically request your support on the following items
   that impact Defense.
      Both the SSCI and HPSCI directed cuts against the NRO's Operational
   Support line. Operational Support funds provide training for the
   warfighter on NRO systems and ensures rapid, two-way communication
   between the warfighter and NRO management and ensure a high level of
   fidelity in support to the operational commander. The NRO is to be
   commended for deploying a first rate cadre of professionals who fully
   interact and coordinate their activities with other intelligence agency
   officers around the world. The Commanders-in-Chief and other Defense
   activities that receive support through this program consider NRO
   personnel an invaluable, integrated component of their multidiscipline
   intelligence teams. We urge full restoration of the funds requested for
   this activity.
      The HPSCI zeroed the request for the Discoverer II program. This is a
   critical demonstration program for the potential future of space-based
   radar collection. It meets all technical objectives and provides a
   necessary and timely step toward exploring new space sensing
   capabilities that could be incorporated into any future space-based
   radar system. An excellent partnership has been forged between the NRO,
   Air Force, Army and DARPA that ensures this demonstration effort
   addresses both military and national needs. We strongly urge full
   funding of this program.
      The HPSCI proposes language that prohibits the NRO from using Space
   and Missile Systems Center contracts to acquire launch vehicles and
   directs the NRO to assume direct responsibility and authority for their
   procurement needs by contracting directly with industry. Certainly there
   has been legitimate reason for concern in this arena, but we would urge
   a new review that we are confident will reveal a much improved
   management structure and contracting process that does not merit this
   language. Both the mandates and proscriptions of the HPSCI language
   could ultimately create inefficiencies of the very nature that the
   committee seeks to prevent. We encourage the Congress to work with the
   NRO to seek a satisfactory solution to its concerns and urge the
   conference committee to remove this well-intentioned but
   counterproductive provision.
       National Security Agency: While we understand the HPSCI's concerns
   about funding levels necessary to achieve successful NSA Transformation,
   we are disturbed that the House has recommended significant changes to
   NSA's Consolidated Cryptologic Program budget. We are convinced that the
   budget presented, as modified by the NSA Business Plan, provides the
   best plan for transformation given the 1-5 year change cycle required
   for transformation, and provides the most flexibility for implementation
   until early stage results are available. As such we object vigorously to
   large-scale funding shifts that will damage the Department's and NSA's
   ability to achieve their strategic goals. The House also included a
   provision regarding NSA acquisition, which directs the DCI's Senior
   Acquisition Executive to prepare a plan for review, approval, and
   monitoring of NSA's modernization effort. The Department, specifically
   the Office of Assistant Secretary of Defense for Command, Control,
   Communications, and Intelligence, must be involved in this effort.
      We appreciate your support and thank you for the opportunity to
   convey our concerns to the House and Senate on the FY 2001 Intelligence
   Authorization bills. We are sending identical letters to the Chairman
   and Ranking Minority Members of the House Armed Services Committee, the
   House and Senate Committees on Appropriations Subcommittees on Defense,
   and House Permanent and Senate Select Committees on Intelligence.
   Sincerely,

    Henry H. Shelton,
      Chairman of the Joint Chiefs of Staff.
    William S. Cohen,
      Secretary of Defense.

                         CHANGES IN EXISTING LAW

      Pursuant to the provisions of paragraph 12 of rule XXVI of the
   Standing Rules of the Senate, the changes in existing law made by
   certain portions of the bill have not been shown in this section of the
   report because, in the opinion of the Committee, it is necessary to
   dispense with showing such changes in order to expedite the business of
   the Senate and reduce the expenditure of funds.