Congressional Record: November 21, 2003 (Senate)
Page S15335-S15358
INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2004--CONFERENCE REPORT
Mr. FRIST. Mr. President, I now move to proceed to the consideration
of H.R. 2417, the Intelligence authorization conference report. Before
the Chair puts the question, this conference report has been cleared on
both sides, and I hope that we can finish action on it very quickly.
The PRESIDING OFFICER. The question is on agreeing to the motion to
proceed.
The Senator from Nevada.
Mr. REID. Mr. President, in response to the leader's statement, we
also believe in energy independence and the security of the Nation.
The PRESIDING OFFICER. It is not a debatable motion.
Mr. REID. Fine. I will withhold.
The PRESIDING OFFICER. The question is on agreeing to the motion to
proceed.
The motion was agreed to.
The PRESIDING OFFICER. The report will be stated.
The legislative clerk read as follows:
The Committee of Conference on the disagreeing votes of the
two Houses on the amendment of the Senate to the bill (H.R.
2417) to authorize appropriations for fiscal year 2004 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 met, have agreed that
the House recede from its disagreement to the amendment of
the Senate, and agree to the same with an amendment and the
Senate agree to the same, signed by a majority of the
conferees on the part of both Houses.
The Senate proceeded to consider the conference report.
(The conference report is printed in the House proceedings of the
Record of November 19, 2003.)
Mr. FRIST. Mr. President, I am happy to yield to the distinguished
assistant Democratic leader for a question.
[...]
The PRESIDING OFFICER. The Senator from Kansas is recognized.
Mr. ROBERTS. Mr. President, it is my understanding that the pending
business before the Senate is the Intelligence conference report; is
that correct?
The PRESIDING OFFICER. The Senator is correct.
Mr. ROBERTS. Mr. President, I rise today to urge Senate passage of
the conference report for the Fiscal Year 2004 Intelligence
Authorization Act.
On November 20 the conference report was approved by the House of
Representatives. In order to quickly provide the Intelligence Community
the authorities it requires in order to pay, house, and equip its
personnel for our most sensitive and critical national security work,
this legislation should be sent to the President without delay. The
horrible terrorist attacks in Turkey underscore the urgency of our
task.
This conference report is good legislation with important management
and budget authorities. I will review just a few of them for you.
In the conference report, the Senate receded to a number of
significant House provisions of interest. The most significant of these
is a provision that will consolidate and organize existing
intelligence-related functions in the Department of the Treasury by
creating a new Office of Intelligence and Analysis. This
administration-supported provision also creates a new Assistant
Secretary position.
Senate managers also accepted a House provision intended to foster
better information-sharing among Federal, State and local government
officials. The bombings in Turkey illustrate that terrorists remain
capable of striking at the heart of peaceful societies. We must be
prepared to meet this continuing threat.
The conference report retains a Senate provision on Central
Intelligence Agency Compensation Reform, with a House amendment to
ensure that Congress will have an opportunity to assess the impact of
such reform before it becomes permanent.
The conference report provides important new personal services
contracting authority to the Director of the Federal Bureau of
Investigations. This authority is intended to permit the Director to
exercise greater hiring flexibility as was recommended post-9/11 in
order to bring aboard certain categories of critically-needed skills
more quickly.
Turning to the budget, when we began to review the President's fiscal
year 2004 request I became very concerned at the recent growth in
intelligence funding. I am still concerned.
There is clearly not enough money in future years to fully fund the
intelligence programs in this year's budget request. That is the sad
reality of this budget. The intelligence community is stretched thin,
with far more requirements than available funds. Too many projects and
activities have been started that cannot be accommodated in the top
line. It does not matter what caused this problem. The problem exists.
Unless the President directs a dramatic and sustained increase to the
intelligence budget next year, we will have to make the hard choices
ourselves.
A significant issue that must be addressed by the executive branch is
the manner in which cost estimates for the procurement of major
intelligence community systems are conducted. The magnitude and
consistency in the cost growth on recent acquisitions indicates a
systemic intelligence community bias to underestimate the cost of major
systems.
This ``perceived affordability'' creates difficulties in the out
years as the National Foreign Intelligence Program becomes burdened
with content that is
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more costly than the budgeted funding. This underestimation of future
costs has resulted in significant re-shuffling of NFIP funds to meet
emerging shortfalls.
In an attempt to correct this problem, the conference report contains
a provision which would mandate a fundamentally more sound approach to
cost estimates for major systems. The business-as-usual approach must
end.
There is another area I wish to mention in general terms concerning
the analytical capabilities of the intelligence community. All recent
after-action reports or studies of intelligence failures point to the
inability of analysts to process ever-growing quantities of
information. In an effort to correct this problem, the conferees agreed
to move funds to programs at the Defense Intelligence Agency, the
National Security Agency, and the CIA to improve the community's
analytic capabilities.
My key objectives in formulating the conference report were to ensure
our Nation's continuing effort to prosecute the war on terrorism and to
ensure that the ``longer view'' about intelligence community
requirements is taken into account. I believe that this conference
report meets both objectives.
We met those objectives because we had bipartisan cooperation when
and where it counted. I wish to thank the distinguished vice chairman,
Senator Rockefeller, as well as the distinguished House chairman,
Representative Goss, and his ranking member, Representative Harman, for
their assistance in making the conference report possible. The staff of
both intelligence Committees must also be commended for their diligent
work on this important legislation.
There is no opposition on our side of the aisle. We have worked very
hard with the House to come up with a good compromise. This bill is
vitally needed on behalf of national security. A similar bill passed
the Senate several weeks ago by unanimous consent.
I yield to my distinguished colleague, the vice chairman, Senator
Rockefeller.
The PRESIDING OFFICER. The Senator from West Virginia is recognized.
Mr. ROCKEFELLER. Mr. President, I agree with the chairman of the
committee, the Senator from Kansas. There is no objection on this side.
It has been cleared. There is no objection on our side. I presume the
bill will be voted through.
Mr. President, I am pleased to join the distinguished chairman of the
Select Committee on Intelligence in recommending passage of the
conference report on H.R. 2417, the Intelligence Authorization Act for
Fiscal Year 2004.
The bill authorizes appropriations for the Central Intelligence
Agency, the Defense Intelligence Agency, the National Security Agency,
and the intelligence components of the F.B.I. and other U.S. government
agencies. It also contains a number of important provisions intended to
lay the foundation for process and organizational changes in the
intelligence community.
The classified nature of U.S. intelligence activities prevents us
from disclosing publicly the details of our budgetary recommendations.
As I described to the Senate when our bill was considered in July, 10
years ago I joined a majority of Senate colleagues in voting to express
the sense of Congress that the aggregate amount requested, authorized,
and spent for intelligence should be disclosed to the public in an
appropriate manner. The House opposed the provision. I continue to
believe that we should find a means, consistent with national security,
of sharing with the American taxpayer information about the total
amount, although not the details, of our intelligence spending. In
holding the intelligence community accountable for performance, and the
Congress and the President accountable for the resources they provide
to the Intelligence Community, citizens should know the Nation's
overall investment in intelligence.
The bill includes a number of provisions intended to promote
innovations in information sharing, human intelligence, and
counterintelligence, among other things. Many of these initiatives
represent initial steps rather than solutions, but they are necessary
to raise the level of awareness in Congress and the executive branch
regarding a variety of urgent and complex challenges and to lay the
foundation for reforms the committee will be considering next year.
Section 351 of the bill requires a report on the threat posed by
espionage in an era when secrets are stored on powerful, classified
U.S. computer networks rather than on paper. A single spy today can
remove more information on a disk than spies of yesteryear could remove
with a truck. We have already suffered losses, for example, in the
Ames, Regan, and Hanssen cases, where sloppy computer security
permitted traitors to exploit large quantities of highly classified
information. Unfortunately, these cases provide a warning that appears
to have gone largely unheeded. We still do not have a cohesive set of
policies and procedures to protect our classified networks from cleared
insiders who seek to betray their country, Our reliance on classified
information systems for warfighting and intelligence is growing daily,
yet hundreds of thousands of individuals have virtually unrestricted
access to these critical networks.
All but a few Government personnel are honest and patriotic
Americans, but the sad fact is that there has not been a day since WWII
when we have not had spies within our Government. There have been over
80 espionage convictions in the last 25 years. They include personnel
from the Army, Navy, Air Force, Marine Corps, NSA, CIA, FBI, State
Department, the National Reconnaissance Office and the Office of the
Secretary of Defense. It is a very real and continuing problem and
there will undoubtedly be more espionage arrests in the months and
years ahead. Espionage is an unfortunate fact of life, and we simply
cannot afford to operate classified systems in which thousands of
individuals enjoy the ability to download or upload classified
information at will.
Other countries are seeking to exploit this situation to collect
defense secrets, and no doubt contemplate blinding our Government and
troops in time of war. We would never permit such broad access to
weapons in an armory, yet these classified systems are of much greater
strategic significance than M-16 rifles, tanks, or 500 pound gravity
bombs. We simply must develop the policies and capabilities necessary
to control input and output devices on these systems and monitor their
use.
Section 352 of the bill calls for a review of our cumbersome,
outmoded, and many would say ineffective personnel security system. It
is a fact that almost every spy has held high-level security
clearances. It is also a fact that few, if any of these individuals
were identified through routine security clearance updates.
Most people who become spies join the government with no intention of
betraying their country. Research by the Defense Department shows that
most spies are people who develop grievances as their careers progress,
at times having developed money and alcohol problems as well, and then
turn to espionage as a way of feeding their egos and their bank
accounts.
Yet, we give a young, single Navy recruit seeking an intelligence
assignment the same scrutiny as a 30-year intelligence operative with
financial troubles who routinely travels to countries of concern.
Further, even when derogatory information surfaces, sometimes even very
disturbing information which raises serious espionage issues, the
government rarely revokes the clearances we rely on so heavily and
which cost so much.
In the information age, we cannot wait 5 to10 years to identify
employee problems that may be related to espionage. Too much damage can
be done too quickly. We need fresh thinking and recommendations that
will provide more effective security for the large sums of money the
taxpayer is investing.
Section 354 of our bill calls for a review of classified information
sharing policies within the Federal Government. This is an issue
closely related to the foregoing provisions regarding inadequate
security policies. ATM machines, for example, are a wonderfully
convenient and effective means of providing access to banking
resources--but they could not exist without magnetic cards, personal
identification
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numbers, cameras and locks. Similarly, improved security is not a
barrier to more flexible information sharing, it is a fundamental
ingredient. The Joint Inquiry report on the 9/11 attacks highlighted
information sharing as a critical shortcoming that prevented the
interception of several hijackers. To help accelerate reform, the Joint
Inquiry requested an administration report by this past June 30 on
progress to reduce barriers among intelligence and law enforcement
agencies engaged in counterterrorism. Unfortunately, no report has been
submitted.
We have the technology for improved information sharing, and
significant progress is being made. A Terrorist Threat Integration
Center has been established, and new guidelines regarding sharing of
grand jury information have been promulgated. These are very important
steps forward. But to truly break down the barriers to information
sharing, rather than relying on work-arounds, we need revised policies
on sharing classified information which recognize and exploit the
opportunities provided by modern information technology. This is
especially important as we look to bridging the gap between the
Intelligence Community and organizations charged with Homeland
Security.
Section 355 of the bill identifies a problem that would probably stun
most taxpayers. Simply stated, notwithstanding the many billions of
dollars invested in complex intelligence systems, ranging from
satellites, to aircraft, to ships, and land-based collection platforms,
there is no capability in the executive branch to independently and
comprehensively model the performance of these systems. Consequently,
new multi-billion-dollar systems are procured without the ability to
rigorously evaluate potential trade-offs with other systems.
Questions such as these should be asked: Given projected satellite,
aircraft and UAV constellations, what is the marginal value of adding
space-based radar satellites? Are there alternative investments that
can better satisfy intelligence requirements? Don't senior policymakers
need the ability to systematically examine the interactions of these
many systems to identify trade-offs that can be achieved?
Currently, most of the analysis of proposed collection systems is
performed by the agencies seeking to justify their programs, or by
senior policy officials who struggle to apply common sense and spread-
sheet level analysis to systems that often have overlapping
capabilities. There is no reason that a rigorous, independent and
comprehensive capability cannot be developed to support the
programmatic reviews of the DCI and the Defense Department. This is but
one example, though an important one, of the ways in which we believe
the intelligence community can improve its strategic planning and
decisionmaking processes.
Section 356 of the bill raises an issue of profound strategic
significance for the United States, namely the growing reliance of our
country on hardware and software produced overseas. Although specific
cases are classified, this is clearly a growing problem.
After 1973, when the risks inherent in America's reliance on foreign
oil became clear, many positive steps were taken to ameliorate our
national vulnerabilities. Those steps included establishment of a
strategic petroleum reserve, establishment of the Central Command, and
research into alternative fuels. Unlike our dependence on foreign oil,
however, our rapidly growing dependence on foreign hardware and
software creates numerous opportunities for espionage and information
operations that are extremely difficult to detect. Ironically, the
countries identified by the FBI as most actively engaged in economic
espionage against the United States are leading producers of the
hardware and software we all use on a daily basis.
The plain truth is that even the Defense Department does not know
where most of the hardware and software it uses originates. Moreover,
the Government does not have the right to examine source code unless
voluntarily supplied. Further, at the present time, there are limited
capabilities for analyzing source code that is made available. This
situation requires serious attention by senior policymakers, including
Congress, and the report required by section 356 should help to prompt
a long overdue discussion of these issues.
In concluding my remarks, I would like to look beyond our current
bill to the issues the Intelligence Committee must contend with next
year. Other committees share responsibility for reviewing the funding
and systems needed by the intelligence community, but our committee is
uniquely positioned to evaluate the intelligence community's
performance--both its successes and failures--and to identify the
changes required to meet the challenges of the future.
In my view, money alone is not sufficient to enable the intelligence
community to reach its full potential. The current structure of the
intelligence community is fundamentally unchanged from its
establishment in 1947. Serious change is long overdue. I strongly
believe that new structures and authorities, coupled with able and
aggressive leadership, are required to dramatically improve our
intelligence community's efficiency and effectiveness.
In many respects, the organizational issues confronting the
intelligence community are analogous to those confronting the Defense
Department prior to the Goldwater-Nichols Act. The fundamental problem
confronting the Department of Defense prior to Goldwater-Nichols was
excessive military service control over military operations, policies
and budgets. In response, Congress strengthened the weak integrating
mechanisms in DoD, specifically the Chairman of the Joint Chiefs and
the Commanders of the Combatant Commands. The difference in military
performance before Goldwater-Nichols--e.g., Desert 1, Lebanon, and
Grenada--and after--Panama, Haiti, and Iraq--is stark and clear. In
fact, I am convinced that the Goldwater-Nichols Act did more to enhance
U.S. national security than any weapons system ever procured by the
Department of Defense.
Although the Goldwater-Nichols reorganization is not a precise
template for restructuring the intelligence community, the problems are
fundamentally similar: towering vertical structures--NSA, CIA, DIA,
NRO, NIMA, the service intelligence components--and relatively weak
integrating mechanisms--the DCI and his Community Management Staff. Any
reorganization proposal needs to address this fundamental problem of
inadequate integration and coordination. In that regard, I would
suggest that the intelligence community's lack of responsiveness to the
DCI's declaration of war on al- Qaida prior to 9/11 was in part a
result of the DCI's weak community management authorities and inability
to move the system. I am convinced that a strengthened DCI could more
effectively manage the intelligence community, leading to performance
improvements comparable to those achieved by the military in the wake
of the Goldwater-Nichols Act.
A conservative, incremental approach would involve the creation of a
permanent cadre to staff the DCI much as the Secretary of Defense has
an OSD staff. This simple change, coupled with aggressive business
process reengineering and ``year of execution budget authority'' for
the DCI over NFIP programs, would significantly strengthen the DCI's
ability to manage the intelligence community and respond to new threats
and opportunities.
A more aggressive and far-reaching plan would have to address the
fundamental changes that have occurred since the current structure was
established by the National Security Act of 1947. Specifically, it
would recognize that the once useful distinction between home and
abroad has become not only irrelevant, but dysfunctional. This is not
to suggest any need to reduce the protections afforded U.S. persons
under the Constitution, merely that globalization and the development
of cyberspace, combined with the rise of apocalyptic terrorists groups
empowered by lethal new technologies, require a different, more agile
structure that is not impeded by outmoded geographic distinctions. In
that regard, we should find ways to more effectively coordinate foreign
and domestic intelligence.
Achievement of any substantial reorganization will require meticulous
research by the congressional oversight committees, a substantial
hearing record, and sustained interest by the administration. At the
end of the day,
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incremental steps will be better than none, and a more aggressive
reorganization require a consensus not only on the Intelligence
Authorization Committees, but with the Armed Services Committees as
well. As challenging as these issues are, we simply cannot fulfill our
duty to the American people unless we confront these crucial issues
when Congress returns next year.
In conclusion, the important steps we have taken with this measure,
to include full funding of the administration's requests for
intelligence activities, are the result of lengthy deliberations on
matters as complex as they are vital. It is gratifying to see the work
that has been done in both Chambers come together today in a bill we
can send to the President. It is a useful first step, but only a first
step, towards the development of an intelligence community better able
to adapt to the rapidly evolving threats confronting our great nation.
Finally, I would like to thank the chairman and the Committee staff
for their arduous work on this bill. I look forward to making great
strides together next year.
I urge support for this measure.
OFFICE OF INTELLIGENCE AND ANALYSIS
Mr. SHELBY. Mr. President, I rise in my capacity as the chairman of
the Committee on Banking, Housing and Urban Affairs regarding the
Conference Report to accompany H.R. 2417, the Intelligence
Authorization Act of 2004. Section 105 of the act will create a new
Office of Intelligence and Analysis within the Department of the
Treasury. The Office is to be headed by a newly authorized Assistant
Secretary for Intelligence and Analysis appointed by the President and
confirmed by the Senate. It will enhance the Department's access to
intelligence community information and permit a reorganization and
upgrading of the scope and capacities of Treasury's intelligence
functions in light of the Nation's counterterrorist and economic
sanctions programs. This section was drafted with bipartisan
participation and close coordination with the Department of the
Treasury.
The particular terms governing the new office are important to me as
chairman of the Committee on Banking, Housing, and Urban Affairs over
legislative and oversight matters relating, inter alia, to the Nation's
economic sanctions laws and the Bank Secrecy Act, and, more generally,
because of the importance of carefully delineating the limitations on
any part of the U.S. intelligence community that lie within the
structure of an executive department of the Government. I have a letter
signed by the ranking member of the Banking Committee, Senator Paul S.
Sarbanes, and myself addressed to Secretary of the Treasury John W.
Snow, as well as Secretary Snow's response. This letter reflects the
agreement of Treasury about the organization, structure and role of the
new Office and Assistant Secretary position created and important
related organizational matters concerning the Financial Crimes
Enforcement Network and the Office of Foreign Assets Control.
I request unanimous consent that the two letters be included in the
Record. They provide, I believe, a good statement of congressional
intent with regard to the establishment of the new Office and the new
Assistant Secretary position. At this time I would yield the floor to
the ranking member of the committee on Banking, Housing and Urban
Affairs, Senator Sarbanes.
Mr. SARBANES. I thank the Senator. I simply want to note my agreement
with the chairman and with his request to include the two letters in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Senate, Committee on Banking, Housing, and Urban
Affairs,
Washington, DC, November 20, 2003.
Hon. John W. Snowe,
Secretary of the Treasury, Department of the Treasury,
Washington, DC.
Dear Secretary Snowe: A proposed amendment to section 105
of the Intelligence Authorization Act of 2004, H.R. 2417,
would create a new Office of Intelligence and Analysis within
the Department of the Treasury, The Office would be headed by
a newly-authorized Assistant Secretary for Intelligence and
Analysis appointed by the President and confirmed by the
Senate. The Office would enhance the Department's access to
Intelligence Community information and permit a
reorganization and upgrading of the scope and capacities of
Treasury's intelligence functions in light of the nation's
counter-terrorist and economic sanctions programs.
We are writing to you to confirm formally, before
consideration of the amendment proceeds, your and our mutual
understanding of the role of the proposed new Office and
Assistant Secretary within the Department of the Treasury.
Such confirmation is necessary because of the authority of
the Senate Committee on Banking, Housing, and Urban Affairs
over legislative and oversight matters relating, inter alia,
to the Nation's economic sanctions laws and the Bank Secrecy
Act, and, more generally, to the Nation's financial system.
In that context, the Committee is necessarily concerned with
the careful delineation of the functions, and limitations, of
any part of the U.S. Intelligence Community that lies within
the structure of the Department of the Treasury.
Based on discussions between members of our staffs and the
Assistant Secretary of the Treasury (Legislative Affairs), we
understand that:
1. The new Office is to be responsible for the receipt,
collation, analysis, and dissemination of all foreign
intelligence and foreign counterintelligence information
relevant to the operations and responsibilities of the
Treasury Department, and to have such other directly related
duties and authorities as the Secretary of the Treasury may
assign to it. The new Office will replace and absorb the
duties and personnel of Treasury's present Office of
Intelligence Support (``OIS'') and will carry on OIS' work in
the provision of information for use of the Department's
senior policy makers.
2. The Assistant Secretary for Intelligence and Analysis
will report to an Under Secretary of the Treasury
(Enforcement) as required by the statute. The Assistant
Secretary for Intelligence and Analysis will at no time
supervise any organization other than the new Office or
assume any other policy or supervisory duties not directly
related to that Office.
3. The Secretary will seek prompt designation of a new
appointee for the vacant position of Under Secretary, and
ensure the chain of command will be organized and implemented
as outlined above.
4. Our mutual understanding is that Treasury plans to have
an official appointed to a vacant Assistant Secretary
position. The official appointed to that position will
supervise the Office of Foreign Assets Control (``OFAC'') and
the Financial Crimes Enforcement Network (``FinCEN'') as well
as other functions, but he or she will at no time supervise
the Office of Intelligence and Analysis. This Assistant
Secretary also will report to the Under Secretary referred to
in paragraphs 2. and 3., above.
5. The general responsibilities of OFAC and FinCEN will not
be changed in the course of creating the new Office and these
new positions. However, it is anticipated that the new Office
will coordinate and oversee all work involving intelligence
analysts who work in OFAC and FinCEN (or in other parts of
the Treasury) primarily with classified information, in the
interest of creating the more robust analytic capability at
Treasury that was the articulated reason for the
authorization of this new Office. One of the primary tasks of
the new Office will be to examine and analyze classified
information, in conjunction with the relevant unclassified
information already available to OFAC and FinCEN, so that the
resultant product can be of use to OFAC and FinCEN as well as
to other agencies, under applicable legal rules. Thus, the
new Office will have access to all relevant information held
by FinCEN and OFAC for national security and anti-terrorism
purposes.
The expertise of the Department of the Treasury is
necessary and integral to our Nation's security and to
success in the war on terrorism. We expect within the next
year to highlight your efforts in this area in one of the
series of Terror Finance hearings to be held by the
Committee, and we look forward to hearing at that time about
the innovative approaches to counter-terrorism efforts that
the proposed revitalization of Treasury's capacity for
financial intelligence analysis can produce.
Sincerely,
Richard C. Shelby,
Chairman, Committee on Banking, Housing and Urban Affairs.
Paul S. Sarbanes,
Ranking Member, Committee on Banking, Housing and Urban
Affairs.
____
Department of the Treasury,
Washington, DC, November 21, 2003.
Hon. Richard Shelby,
Chairman, Committee on Banking, Housing and Urban
Development, U.S. Senate, Washington, DC.
Dear Chairman Shelby: Thank you for your letter concerning
creation, in section 105 of the Intelligence Authorization
Act of 2004, of the proposed Office of Intelligence and
Analysis, to be headed by a new Assistant Secretary for
Intelligence and Analysis, within the Department of the
Treasury. I have reviewed your letter and it correctly states
the commitments made to you on behalf about the role of the
proposed new Office and new Assistant Secretary within the
Department of the Treasury.
I appreciate your input and look forward to working with
you, Senator Sarbanes, and
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your House colleagues to make sure the Treasury Department
meets the Congress' expectations. An identical letter has
also been sent to Senator Sarbanes.
If there is anything that I can do to be of assistance to
you, please do not hesitate to contact me.
Sincerely,
John W. Snow.
Mr. ROBERTS. Mr. President, I ask that the Chair put the question to
the body.
The PRESIDING OFFICER. Is there further debate?
If not, the question is on agreeing to the conference report.
The conference report was agreed to.
____________________