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104th Congress                                                   Report
                                 SENATE

 2d Session                                                     104-277
_______________________________________________________________________


 
 TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 1997 FOR INTELLIGENCE AND 
    INTELLIGENCE-RELATED ACTIVITIES OF THE UNITED STATES GOVERNMENT

                                _______


                  June 6, 1996.--Ordered to be printed

_______________________________________________________________________


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

                              R E P O R T

                         [To accompany S. 1718]

    The Committee on Armed Services, to which was referred the 
bill (S. 1718) having considered the same, reports favorably 
thereon with amendments and recommends that the bill as amended 
do pass.

                          purpose of the bill

    S. 1718 would authorize appropriations for fiscal year 1997 
for intelligence and intelligence-related activities of the 
United States Government, 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 April 30, 1996 and it was referred to the Committee 
on Armed Services on May 2, 1996 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 
1997. The committee conducted hearings and met with the 
Chairman and Vice Chairman of the SSCI to discuss budget 
matters and legislative provisions of concern to both 
committees. The committee also engaged in lengthy and detailed 
negotiations in an attempt to resolve issues of disagreement 
between the SASC and the SSCI.
    The committee has carefully reviewed the report of the SSCI 
(Sen. Rep. 104-258) and has incorporated the relevant budget 
decisions of the SSCI into S. 1745, the National Defense 
Authorization Act for Fiscal Year 1997, which was reported to 
the Senate on May 13, 1996.
    The following explains the committee's proposed amendment 
to the bill as reported by the SSCI, as well as the committee's 
clarification to the report issued by the SSCI.

Overview

    S. 1718, as reported by the SSCI, contains a number of 
controversial provisions, which the SASC opposes and the 
Executive Branch does not support. On April 15, 1996, the 
Chairman and Ranking Minority Member of the SASC wrote to the 
Chairman and Vice Chairman of the SSCI to express concern 
regarding these issues and to urge the SSCI not to include such 
provisions in the Intelligence Authorization Bill for Fiscal 
Year 1997. In general, these provisions seek to shift a 
significant degree of authority from the Secretary of Defense 
to the Director of Central Intelligence (DCI), especially in 
the area of budget formulation and execution. The bill also 
contains a number of provisions that, taken together, lay the 
foundation for the creation of what amounts to a ``Department 
of Intelligence.'' The SASC supports a strong DCI yet maintains 
that the DCI's function is not to act as a quasi-departmental 
head, but to coordinate the intelligence activities of various 
departments and to act as the principal intelligence advisor to 
the President and the National Security Council. Providing the 
DCI the type of authority recommended by the SSCI would 
seriously undermine the Secretary of Defense's ability to 
manage the Department of Defense. The committee notes that the 
Secretary of Defense strongly opposes such a shift of power and 
the DCI has not sought such authorities. If S. 1718 were passed 
in its current form, it would almost certainly be vetoed.
    The SSCI nonetheless included many of the controversial 
provisions in S. 1718, thereby creating a significant 
disagreement between the SASC and the SSCI. Once S. 1718 had 
been referred to the SASC on sequential referral (as the 
Intelligence Authorization Bill is every year), the SASC 
Chairman and Ranking Minority Member agreed to enter into 
negotiations with the SSCI to attempt to resolve these 
differences. Notwithstanding this effort to work out a 
consensus in good faith, the Chairman and Vice Chairman of the 
SSCI took the unprecedented step of requesting sequential 
referral of the Defense Authorization Bill.
    After three weeks of negotiations and four proposals and 
counter-proposals between the committees, the SASC concluded 
that, given the SSCI's insistence on retaining many of the 
controversial elements of S. 1718, the differences between the 
committees were unresolvable through negotiation. Therefore, 
the SASC has decided to report S. 1718 to the Senate, with a 
proposed amendment addressing the bill's major deficiencies. 
The SSCI retains the right to follow a similar procedure with 
regard to S. 1745. This approach would leave it to the Senate 
to resolve issues of disagreement between the committees on 
both S. 1718 and S. 1745.
    The committee notes that its proposed amendment only deals 
with issues within the jurisdiction of the SASC, and that S. 
1718 contains a number of other controversial provisions that 
fall within the jurisdiction of other committees. The committee 
has not taken a position on these matters, per se, but 
individual members of the committee, or other members of the 
Senate, may offer amendments to S. 1718 to address these 
issues.
    The committee recommends the following specific amendments 
to S. 1718.

Section 707--Enhancement of authority of Director of Central 
        Intelligence to manage budget, personnel, and activities of 
        intelligence community

    Section 707, as reported by the SSCI, would significantly 
expand the DCI's authority over the DOD elements of the 
intelligence community. It would: (1) require the Secretary of 
Defense to get DCI concurrence on the Joint Military 
Intelligence Program (JMIP) budget, and consult with the DCI on 
the Tactical Intelligence and Related Activities (TIARA) 
budget; (2) give the DCI authority to manage all the national 
collection activities of the intelligence community (including 
Defense human intelligence); (3) require that any reprogramming 
within the JMIP receive DCI approval; (4) give the DCI 
authority to reprogram funds and transfer personnel among 
National Foreign Intelligence Program (NFIP) elements after 
consultation with (in lieu of concurrence by) agency heads; (5) 
give the DCI authority to allocate and expend all NFIP funds 
for the National Reconnaissance Office (NRO), the National 
Security Agency (NSA), and the National Imagery and Mapping 
Agency (NIMA) (giving the DCI authority he now only has for the 
Central Intelligence Agency (CIA)).
    The proposed SASC amendment would enhance the DCI's 
participation in the management of Defense intelligence 
activities, but would not alter the authority of the Secretary 
of Defense over such activities. Specifically, the amendment 
would: (1) provide for the participation of the DCI in the 
development of budgets for JMIP and TIARA, while leaving the 
final authority on these matters with the Secretary; (2) give 
the DCI the peacetime authority to approve national collection 
requirements, determine national collection priorities, and 
resolve conflicts in collection priorities levied on national 
collection assets; (3) require the Secretary of Defense to 
consult with the DCI on JMIP reprogramming actions; (4) strike 
SSCI language allowing the DCI to transfer NFIP funds over the 
objection of the affected Defense Agency head; (5) strike the 
SSCI language giving the DCI authority to manage and expend 
funds for Defense Department elements of the NFIP, and 
substitute language establishing a database on intelligence 
funding to give the DCI greater insight into the overall 
intelligence budget; (6) strike SSCI language giving the DCI 
authority to rotate personnel in the absence of coordination 
with agency heads.

Section 708--Reallocation of responsibilities of Director of Central 
        Intelligence and Secretary of Defense for intelligence 
        activities under National Foreign Intelligence Program

    Section 708, as reported by the SSCI, would give the DCI 
joint management authority with the Secretary of Defense over 
the NFIP elements in the Department of Defense, including NRO, 
NSA, and NIMA.
    The proposed SASC amendment would strike the SSCI's 
language and substitute a provision that would require the 
Secretary of Defense to consult with the DCI in fulfilling his 
responsibilities pertaining to the NFIP (as provided in Section 
105 of Title 50, U.S.C.). The SASC amendment would also require 
the DCI to submit an annual evaluation to Congress and the 
National Security Council on the performance of the NRO, NSA, 
and NIMA in meeting their national missions.

Section 709--Improvement of intelligence collection

    Section 709, as reported by the SSCI, would establish the 
position of Assistant DCI for Collection, to be appointed by 
the President and confirmed by the Senate. Section 709 would 
also transfer the responsibilities and authorities of the 
Secretary of Defense for the clandestine elements of the 
Defense Human Intelligence Service to the DCI.
    The proposed SASC amendment would modify the authorities of 
the Assistant DCI for Collection, limiting them to general 
responsibilities in assisting the DCI in carrying out existing 
collection authorities. The proposed SASC amendment would also 
strike the SSCI language regarding the transfer of authorities 
over the Defense Human Intelligence Services, and substitute 
language requiring a report by the DCI and the Deputy Secretary 
of Defense regarding on-going activities of those officials to 
achieve commonality, interoperability, and, where practicable, 
consolidation between the clandestine human intelligence 
activities of the Defense Human Intelligence Service and the 
CIA.

Section 711--Improvement of administration of intelligence activities

    Section 711, as reported by the SSCI, would establish the 
position of Assistant DCI for Administration to be appointed by 
the President and confirmed by the Senate.
    The proposed SASC amendment would modify the SSCI language 
specifying the duties of the Assistant DCI for Administration 
by dropping a detailed listing of areas for administration.

Section 714--Office of Congressional Affairs

    Section 714, as reported by the SSCI, would establish an 
office of congressional affairs for the intelligence community.
    The proposed SASC amendment would change the designation of 
this new office to ``Office of Congressional Affairs for the 
Director of Central Intelligence'' to reflect that this new 
office would not manage the activities of the various 
congressional affairs offices in the Department of Defense.

Section 715--Assistance for law enforcement agencies by intelligence 
        community

    Section 715, as reported by the SSCI, would authorize U.S. 
intelligence agencies, on the request of a U.S. law enforcement 
agency, to collect information on non-U.S. citizens outside the 
U.S. for law enforcement or counter-intelligence purposes.
    The proposed SASC amendment would (1) limit this authority 
to NRO, NSA, and NIMA; (2) preclude direct participation of 
military personnel in arrests; (3) prohibit assistance if it 
would adversely affect military preparedness; and (4) require 
the Secretary of Defense to prescribe such regulations as 
necessary to implement this authority and to protect sources 
and methods.

Section 716--Appointment and evaluation of officials responsible for 
        intelligence-related activities

    Section 716, as reported by the SSCI, would require the 
Secretary of Defense to seek the concurrence of the DCI before 
making a recommendation to the President on heads of NRO and 
NSA. The SSCI provision would also require the DCI to provide 
annual performance evaluations for the heads of NRO and NSA to 
the Secretary of Defense.
    The proposed SASC amendment would modify the SSCI language 
requiring DCI concurrence on appointments to provide that the 
Secretary, after seeking concurrence, may make the 
recommendation to the President without the DCI's concurrence 
if the Secretary notes that the DCI does not concur. This 
modification is consistent with the SASC's intention to extend 
this recommendation process to the director of NIMA (a matter 
to be taken up on the Defense Authorization bill). The 
amendment would also strike the SSCI language requiring the DCI 
to provide annual performance evaluation. But the committee 
intends to include language in the Defense Authorization bill 
that would allow for DCI input on performance evaluations for 
the directors of NSA, NRO, and NIMA for consideration by the 
Secretary of Defense in the preparation of the Secretary's own 
performances evaluations of these directors.

Section 717--Intelligence community senior executive service

    Section 717, as reported by the SSCI, would establish an 
intelligence community Senior Executive Service.
    The proposed SASC amendment would strike this provision. 
The committee notes that the Department of Defense strongly 
opposes the establishment of a DCI-managed Senior Executive 
Service that would include a large number of Department of 
Defense personnel. The SSCI provision contradicts a proposal 
made by the Executive Branch to improve DOD intelligence 
civilian personnel management, which the DCI has characterized 
as one of his top priorities, and which the Secretary of 
Defense strongly supports. The committee is considering options 
for including a version of the Executive Branch DOD 
intelligence personnel proposal in the Defense Authorization 
bill.

Title VIII--National Imagery and Mapping Agency

    Title VIII of S. 1718, as reported by the SSCI, establishes 
the National Imagery and Mapping Agency (NIMA) in Title 50, 
U.S.C., not as a Combat Support Agency. The Executive Branch 
had requested that NIMA be established in Title 10, U.S.C., and 
be designated in law as a Combat Support Agency. The SASC-
reported Defense Authorization Bill contains a comprehensive 
legislative charter for NIMA, which, with a few minor 
exceptions, is consistent with the Executive Branch proposal.
    The proposed SASC amendment would strike the SSCI language 
regarding NIMA and would substitute language regarding NIMA's 
national mission and clarifying the peacetime status of the 
DCI's national imagery collection tasking authority. The 
proposed SASC amendment would also provide that the Secretary 
of Defense and the DCI, in consultation with the Chairman of 
the Joint Chiefs of Staff, would jointly identify deficiencies 
in the capabilities of NIMA to accomplish assigned national 
missions and develop policies and programs to review and 
correct such deficiencies. The committee expects that 
disagreements between the DCI and the Secretary of Defense 
relating to the identification of NIMA's deficiencies in 
performing its national mission would be settled according to 
normal inter-agency procedures, with the President having the 
ultimate authority to resolve differences. These provisions 
would be included in title 50, U.S.C. The SASC intends to 
include identical language in the Defense Authorization bill in 
addition to language specifying that the Secretary of Defense 
shall implement actions to correct deficiencies jointly 
identified by the Secretary and the DCI.

                            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 S. 1718 
with an amendment.

                              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. 1718.

                        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 not necessary to dispense with showing such 
changes in order to expedite the business of the Senate and 
reduce the expenditure of funds.