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Mr. DeCONCINI. Mr. President, it is indeed a pleasure to present this conference report to the Senate. Since this will be the last official act that Senator Warner and I undertake as Chairman and vice chairman of the Select Committee on Intelligence, it is with a great deal of pride that we are able to bring back to the Senate what I believe is a significant and consequential piece of legislation.

In this regard, I want to take this opportunity to salute our colleagues on the House Permanent Select Committee on Intelligence, particularly Chairman Dan Glickman and the ranking minority member, Larry Combest, for their cooperation and willingness to work with us to produce this far-reaching bill. And I might say, since these two Congressmen also happen to be leaving their leadership positions on the House committee at the end of this Congress, how much I appreciate the fine working relationship we have had with them over the course of the 103d Congress. They have approached their duties with seriousness and enthusiasm, and as a result, have had a very productive tenure.

I also want to take this opportunity to express my appreciation to the senior Senator from Virginia, my friend and colleague, John Warner, whose good sense and steadying influence has been invaluable to me and the committee over the last 2 years. He has made an enormous and lasting contribution during his 8 years on the Intelligence Committee, and, indeed, his proposal to establish a presidential commission on intelligence, which is included as part of this bill, constitutes, I believe, a lasting legacy from his service here.

In this regard, I also want to mention the part that Senator Bob Graham made in terms of developing the commission proposal and bringing it to fruition. He has been a serious and active member of the Intelligence Committee, and believes, as many of us do, that it is time for a fundamental reassessment of the roles and capabilities of the U.S. intelligence community in the wake of the cold war.

This conference report mandates just such a review, putting everything--organizations, budgets, missions, capabilities, strategies--on the table. It calls for a 17-member commission with 9 members appointed by the President, and 8 members appointed by the congressional leadership in both Houses on both sides of the aisle. It mandates a report to the President and the Congress by March 1, 1996.

The conference report also contains far-reaching provisions to improve the coordination of counterintelligence activities and to enhance the investigative authorities of investigative agencies. My colleagues should appreciate this is in effect the committees' response to the defects we've identified in the handling of the Ames case. While no one would contend that they will put an end to spying, I do believe they will improve our chances of detecting it and prosecuting it successfully.

I also want to mention specifically the provisions of this conference report that bring physical searches done for intelligence purposes within the United States under the court order procedures of the Foreign Intelligence Surveillance Act of 1978. Until now, such searches have been carried out without a warrant pursuant to the approval of the Attorney General. Indeed, such a search was carried out in the Ames case. The committee believed that the constitutionality of these searches was subject to question, and believed from the standpoint of civil liberties that it was preferable to have a Federal judge approve such searches as opposed to the Attorney General. I am delighted to say the Clinton administration strongly supported this legislation and that the Attorney General and Deputy Attorney General played key roles in terms of ensuring its acceptance by the conference committee.

This bill, needless to say, authorizes funding for the intelligence activities of the U.S. Government. While the precise levels are classified and are incorporated in a classified annex to the conference report, suffice it to say, the conference report funds these activities somewhat below last year's levels and below the level requested by the administration. Nonetheless, we believe it will provide an intelligence capability adequate to meet the national security needs of the country.

Finally, Mr. President, I wish simply to acknowledge the work of our fine staff in putting this legislation together: Norman Bradley, staff director; Tim Carlsgaard, deputy staff director; Judy Ansley, minority staff director; Chris Mellon, deputy minority staff director; Kathleen McGee, chief clerk; Britt Snider, general counsel; Mary Sturtevant, budget director; Charlie Battaglia; Steve Cortese; Al Cumming; Pete Dorn; Melvin Dubee; Art Grant; Pat Hanback; Mike Hathaway; Judy Hodgson; Sarah Holmes; Ed Levine; Karen Lydon; Don Mitchell; Ken Myers; Joan Piermarini; Vera Redding; Gary Reese; Randy Schieber; Chris Straub; Tawanda Sullivan; Tracey Summers; Eric Thoemmes; Jim Van Cook; Chip Walgren; Fred Ward; Grayson Winterling; Jim Wolfe; and Sheryl Wood. I know of no other committee which has as talented or as dedicated a staff.

In conclusion, Mr. President, it has been a distinct privilege for me to chair the Select Committee on Intelligence for the last 2 years. I leave with the feeling that while we have accomplished a lot over the last 2 years, there is still much to be done. But I am leaving behind a very capable group of members and staff who I am confident will carry on the important work of this committee.

Mr. D'AMATO. Mr. President, I rise today in support of adoption of the report of the committee of conference on H.R. 4299, the Intelligence Authorization Act for Fiscal Year 1995. This act marks a very significant step forward for this Nation and for the intelligence community, primarily because of its provisions establishing a Commission on the Roles and Capabilities of the United States Intelligence Community and because of the improvements it makes in our counterintelligence structure and statutes.

I want to take this opportunity to speak in support of this bill, which authorizes appropriations for the intelligence community for the coming fiscal year, because I want to make clear my wholehearted support for the professionals who do the work that makes our national intelligence system the best in the world. While budgets are declining, I believe that this bill provides adequate funds to meet this Nation's intelligence needs in the coming year.

I have spoken out concerning what I believe are very important flaws in the way the community is run. I will continue my efforts to correct those flaws. However, I do not want the many thousands of people who labor in necessary anonymity and sometimes in dangerous and difficult circumstances to collect, report, analyze, and disseminate intelligence that is critical to our national security to think that their efforts are not appreciated or will not be supported.

The problems revealed by the Select Committee on Intelligence's public hearing on the National Reconnaissance Office's headquarters complex and in the continued revelations concerning the Aldrich Hazen Ames case are simply indicative of larger problems we are working to fix. While relations between the committee and the Director of Central Intelligence, Mr. R. James Woolsey, have become strained, the problems are not problems of personality conflicts nor do they originate with Director Woolsey's tenure in office.

It would be a mistake for observers to conclude that Director Woolsey is the problem. But by his actions--and inactions--he had become a part of the problem, instead of a part of the solution. I regret that this is the case.

In fact, a member of the committee has publicly called upon Director Woolsey to resign, and upon the President to call for his resignation. I have not gone that far, but I believe that the President should consult with everyone who has to work with Mr. Woolsey and make a judgment about his future, because I think that very few retain confidence in his leadership.

Mr. Woolsey has a big job to do. If he can do it, he may be able to regain enough confidence to allow him to continue in office. If not, the President should evaluate the impact of his continuation in office upon the national security, the intelligence community, and the Central Intelligence Agency, reach his own conclusions, and act accordingly.

Mr. President, one of the major elements in the present situation is the aftermath of the Ames case. The Inspector General of the Central Intelligence Agency, Mr. Frederick P. Hitz, produced a long, classified report on the case. He also made a statement describing the Ames case and his findings. This statement is unclassified. I ask unanimous consent that his statement be printed in the Congressional Record at the conclusion of my remarks, along with two articles from the Friday, September 30, 1994 edition of The New York Times. These articles, both by Tim Weiner, are respectively entitled

`C.I.A. Official Tells of Botching of Ames Case,' and `Agencies Admit Failure To Tell Senate Enough on Spy Building,' both of which were printed on page A24 of the paper.

Taken together, the Hitz statement and the articles will provide anyone reading the Congressional Record with a good summary of the public part of the situation that leads me and many of my colleagues to such dramatic conclusions regarding Mr. Woolsey.

Beyond these matters, there is the case involving Jane Doe Thompson, a female case officer who claims she was the subject of gender-based discrimination by the CIA. It is my understanding that she is far from unique among female career employees at the Agency. I look forward to working to resolve the problems of fairness and equality that her case has highlighted.

Finally, I want to praise my colleagues and especially our distinguished chairman and vice chairman for their dedication to making substantial improvements in this Nation's counterintelligence posture. Their efforts have resulted in a truly substantial improvement over the present state of affairs.

As a member of the Select Committee on Intelligence, I am proud to have been a cosponsor of S. 2056, the Counterintelligence and Security Enhancements Act of 1994. Among other things, this bill: First, required creation of a simplified and uniform system to govern access to classified information; second, placed in law the new counterintelligence structure created by Presidential Decision Directive 24, but importantly strengthened this structure by requiring that `the head of each department or agency within the executive branch of Government shall ensure that * * * the Federal Bureau of Investigation is advised immediately of any information, regardless of its source, which indicates that classified information is being, or may have been disclosed in an unauthorized manner to a foreign power of an agent of a foreign power;' third, permitted disclosure of consumer credit reports to the FBI in espionage investigations, but only where `* * * there are specific and articulable facts giving reason to believe that the consumer whose consumer report is sought * * *' is a spy; fourth, created authority for the Attorney General to pay rewards for information concerning espionage; fifth, provided for criminal forfeiture of property received for or used to commit espionage; sixth, denied annuities or retired pay to persons convicted in foreign courts of espionage involving U.S. classified information; seventh, provided for a warrant process under the Foreign Intelligence Surveillance Court to govern physical searches within the United States for the purpose of collecting foreign intelligence information; and eighth, made unauthorized removal and retention of classified material a Federal criminal offense.

These provisions were substantially included in H.R. 4299, the Intelligence Authorization Act for Fiscal 1995. I believe they will make a very positive difference in our ability to deter espionage against us and to detect persons committing espionage at the earliest possible stage so that damage to this country can be minimized.

In addition, the Violent Crime Control and Law Enforcement Act of 1994, H.R. 3355, contained a provision, section 60003(a)(2), that reinstated the death penalty for espionage provided for in 18 U.S.C. section 794(a). It amended that section, making the death penalty available in cases where a spy's actions resulted in `the identification by a foreign power * * * of an individual acting as an agent of the United States and consequently in the death of that individual, or directly concerned nuclear weaponry, military spacecraft or satellites, early warning systems, or other means of defense or retaliation against large-scale attack; war plans; communications intelligence or cryptographic information, or any other major weapons system or major element of defense strategy.' This bill became Public Law 103-322.

Mr. President, the Commission on the Roles and Capabilities of the United States Intelligence Community is also important for the future. It will hopefully produce the equivalent of the Defense Department's Bottom-Up Review for the intelligence community. It will help us make certain that the community is going in the right direction in the future--no matter who is leading it. It will also allow us to make smarter policy and budget choices as we try to shape the community to better meet this Nation's future intelligence needs.

Again, in closing, I urge my colleagues to support this bill.

There being no objection, the material was ordered to be printed in the Record, as follows:

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From the New York Times, Sept. 30, 1994


C.I.A. Official Tells of Botching of Ames Case


Washington, September 29: Adding new details to the Central Intelligence Agency's self-portrait of ineffectiveness in the case of Aldrich H. Ames, the agency's inspector general testified today that Mr. Ames's drunkenness, rule-flouting and laziness had not been `considered unusual' by his superiors.

The inspector general, Frederick P. Hitz, told a closed session of the Senate Intelligence Committee that for two years the agency all but gave up searching for the traitor it suspected was in its ranks and that it did not focus on Mr. Ames for nearly seven years after be began his betrayals on behalf of Moscow in 1985. Mr. Hitz's remarks were made public today by the C.I.A.

The agency's investigation began in 1986, when the C.I.A.'s spies inside the Soviet Union began disappearing and dying. The secrets that Mr. Ames had sold to the Soviets for more than $2 million led directly to the death of 10 secret agents.

The Federal Bureau of Investigation, whose own agents had seen Mr. Ames visiting the Soviet Embassy in Washington, asked the C.I.A. to investigate in 1986. But the intelligence agency failed to do so, the inspector general said, and the matter was soon forgotten.

`The mole hunt virtually ceased' from 1988 to 1990, and the C.I.A. did not draw up a formal list of suspects until 1991, Mr. Hitz said. `Factors that contributed to this delay,' he said, `included the agency's reluctance to believe that one of its own could betray it and a continuing general distaste for the counterespionage function of investigating agency employees.'

The C.I.A. missed many opportunities to catch Mr. Ames, Mr. Hitz testified. Those breakdowns, he said, included two botched lie-detector tests, failure for nearly four years to complete a financial inquiry into Mr. Ames's affluence, and a near-total collapse in communications among C.I.A. officers when they did begin to focus on him in 1991.

But the most profound failure was that of the C.I.A.'s top managers, the inspector general concluded.

Mr. Ames had a long history of `no enthusiasm, little regard for rules and requirements, little self-discipline, little security consciousness, little respect for management or the mission, few good work habits, few friends and a bad reputation in terms of integrity, dependability and discretion,' Mr. Hitz said. `Yet his managers were content to tolerate his low productivity, clean up after him when he failed, find well-chosen words to praise him and pass him on with accolades to the next manager.'

His laziness and frequent drunkenness `were observed by Ames's colleagues and supervisors and were tolerated by many,' Mr. Hitz said. That tolerance permitted the C.I.A. to award Mr. Ames a series of promotions to positions `where he was perfectly placed to betray almost all of C.I.A.'s most sensitive Soviet assets.' In retrospect, this managerial indifference is `difficult to justify,' the inspector general testified.

Mr. Hitz said suspicions about Mr. Ames finally crystallized at the C.I.A. in August 1992, seven years after his spying for Moscow had begun. Still, the agency did nothing to act upon those suspicions until the F.B.I.'s formal criminal investigation of the case began eight months later.

Operations against the Soviet Union were the C.I.A.'s highest priority in the 1980's, Mr. Hitz testified. The destruction of the agency's network of Soviet spies `should have had a profound effect on the thinking and actions of the leaders of the C.I.A.'

But thee was no such effect, he concluded. In his final report on the matter, issued this week, Mr. Hitz declined to say why that might have been or who might be to blame.



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Agencies Admit Failure To Tell Senate Enough on Spy Building


Washington, September 29: The National Reconnaissance Office, the secretive Government agency that builds spy satellites, did not intentionally mislead Congress about the cost of its new headquarters, but failed to provide detailed and straightforward information about the building, the Pentagon and the Central Intelligence Agency said today.

The new headquarters, a complex of four buildings outside Washington, was to have cost up to $347 million, according to figures that the Reconnaissance Office provided after protests by the Senate Intelligence Committee this summer. The committee this month ordered that no more than $310 million be spent.

In addition, the statement by the Pentagon and C.I.A. said, the headquarters has room for up to 3,900 people, 1,000 more than originally planned, and its costs could be cut to about $300 million. The statement said a final report on the project will be completed in October.

Roger Marsh, the project manager for the new headquarters, apologized to the Senate committee in August, saying the Reconnaissance Office had been `negligent, clearly negligent, for not showing the budget breakout for this project.'

The money for the building was broken up into different secret accounts in the Reconnaissance Office's operating budget, its officials said at the August hearing. Today's statement, while finding no intent to deceive Congress, said the office failed to follow guidelines for presenting secret budgets to the Congressional intelligence committees.

Almost everything about the Reconnaissance Office, whose existence was not officially acknowledged until 1992, is classified more secret than Top Secret. The agency spends, by some estimates, more than $6 billion a year building highly sophisticated spy satellites.

The chairman of the Senate Intelligence Committee, Dennis DeConcini, Democrat of Arizona, and the vice-chairman, John W. Warner, Republican of Virginia, said today that they remain convinced that they were not fully informed about the project, which Senator Warner called `a `Taj Mahal.' '

Mr. DeConcini said he attributed the Senate's lack of knowledge about the headquarters' cost to `clandestine bookkeeping' by the Reconnaissance Office. `As the smoke continues to clear, I believe the numbers will show that the N.R.O. spent an extra $100 million of taxpayer dollars to insure this complex was a Rolls-Royce and not a Chevrolet,' he said.



Statement of Frederick P. Hitz

Mr. Chairman, Mr. Vice-Chairman, Members of the Committee and Staff:

Thank you for the opportunity to discuss our investigation of issues relating to the Agency's handling of the Ames case. The investigation has been an unusual one for the CIA Office of Inspector General. First, our inquiry was requested directly by the Chairman and Vice-Chairman of this Committee in late February 1994--shortly after Aldrich H. Ames and his wife were arrested. Normally, the intelligence oversight committees of the Congress ask the Director of Central Intelligence to request an IG investigation, but on this occasion your request was directed to me. The request underscored the oversight committee's intense interest in this particular investigation.

Second, DCI Woolsey asked us not to delve fully into the Ames matter until some time had passed after Ames's arrest for fear of disrupting the Ames prosecution. Based on the DCI's concern and also that of the Department of Justice and the United States Attorney for the Eastern District of Virginia that we do nothing which would potentially complicate any trial of Ames, we confined ourselves to background file reviews and interviews of non-witnesses until the Ameses pled guilty in April 1994. The consequence was, however, that we had to cover a great deal of ground in a much shorter time in order to have our Report ready for the DCI and our Congressional oversight committees by September 1994. I am extremely proud of our 12-person investigative team. Their efforts are evident in the depth and breadth of the Report.

A third unusual feature was that in March 1994, the DCI asked us to seek to determine whether individuals in Ames's supervisory chain discharged their responsibilities in the manner expected of them. In this regard, the DCI directed the Executive Director of CIA to prepare a list of Ames's supervisors during the relevant periods. The DCI also directed that awards and promotions for the individuals on the Executive Director's list be held in escrow pending the outcome of our investigation. Neither I nor any member of the team investigating the Ames case has viewed the DCI's escrow list. We wanted to be as completely unaffected by the names on the list as we could be in order to discharge our responsibility to advise the DCI objectively of possible disciplinary recommendations. As a precautionary measure, I did ask my Deputy for Inspections, who was otherwise uninvolved in the Ames investigation, to compare our interview list and the escrow list and determine whether any individuals on the escrow list had not been afforded the opportunity to comment on their actions with respect to Ames. That has been our only involvement with the escrow list.

In addition to the unusual circumstances that attended this investigation, it was clear from the outset that the Ames case presented several major substantive issues of the most serious concern to the DCI, our oversight committees and the American people. Thus, we chose not to tell the story in the normal chronological way. Instead, we focused on themes: Ames's life, his career, his vulnerabilities, how he was handled from a management standpoint, and how the system dealt with him. We have also discussed in the context of this particular case how counterespionage investigations have been conducted in CIA since the Edward Lee Howard betrayal and the 1985 Year of the Spy.

At this point, I would like to summarize for the Committee the major findings and conclusions of our investigation. These findings and conclusions were developed after the review of almost forty-five thousand pages of documents, ten years of prior studies, thousands of hours of interviews with over 300 employees and other individuals, painstaking analysis, and countless hours of planning, deliberation and vigorous debate.

The key, inescapable conclusion of our investigation is that the effort to identify the reasons for the loss of virtually all of CIA's human sources reporting on its primary target in the 1980s, the Soviet Union, did not receive the attention that it rightfully deserved. In view of the scope and nature of the losses the Agency suffered, the Agency should have expended every effort and resource necessary to identify the cause. If it had, Ames might have been apprehended sooner and subsequent losses avoided.

Although the damage assessment is still underway, the estimate at this time of the damage attributable to Ames are truly staggering. As stated in our Report, we now know that he provided the Soviets with information on 36 cases in June 1985. Based on his debriefings, Ames now acknowledges providing the Soviets with information on a large number of additional Soviet and East European cases. In addition, Ames disclosed the identities of many Agency employees and non-official cover officers, as well as technical operations, finished intelligence, and Agency planning and policy documents.

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The effort to find the source of the losses, which we have referred to as the molehunt, began in 1986. However, that effort was plagued after 1987 by senior management inattention and failure to apply an appropriate level of resources to the effort until 1991. For an extensive period of time between 1988 and 1990, the molehunt virtually ceased despite information obtained from several Agency components in 1989 that should have focused attention directly on Ames. Factors that contributed to this delay included the Agency's reluctance to believe that one of its own could betray it and a continuing general distaste for the counterespionage function of investigating Agency employees. In 1991, the molehunt effort was rejuvenated, the FBI offered to participate, and the investigation gradually began to show results.


Ames was authorized to engage in contacts with Soviet Embassy officials in Washington in 1984, 1985 and 1986. Agency management failed to monitor his contacts with these officials more closely in 1985 and failed to pursue them adequately after they were requested by the FBI in 1986. This provided Ames with the opportunity to consummate the espionage he contemplated based upon his financial situation and the influence on his thinking that resulted from his prior contacts with Soviet officials in New York. If his failure to submit timely contact reports had been questioned vigorously at the time, Ames might have been told to break off the contacts or been caught in a lie regarding their nature and extent. Ames, albeit not the most trustworthy of witnesses, has said that he would have had a hard time explaining these contacts had questions been raised. If the contacts had been pursued as they should have, appropriate attention might have been drawn to Ames in 1985 or 1986 rather than years later. As it was, Ames ignored the request to report on the contacts and it was soon forgotten.


The inquiry into the Ameses' finances should have been completed much sooner by CIC than the more than three and one-half years that the inquiry consumed. After it was discovered in 1989 by CIC that Ames had paid for his house in cash and moved large sums of money from abroad to domestic bank accounts, a full financial inquiry should have been undertaken by CIC and the Office of Security on a priority basis. This effort languished despite a December 1990 memorandum from CIC to the Office of Security requesting a reinvestigation of Ames on the basis of his finances and noting his potential link to the 1985-86 compromises. In addition, other available information was not correlated with the financial information.


The 1986 polygraph of Ames was deficient because the examiner failed to establish the proper relationship with Ames and did not detect Ames's reactions even though Ames says he had great apprehension at the time that he would be found out. The 1991 polygraph sessions were not properly coordinated by CIC with the Office of Security after they were requested. The polygraph examiners in 1991 were not given complete access to the information that had been provided to the Office of Security by CIC in December 1990 regarding Ames's finances and they did not have the benefit of the thorough background investigation that
had been completed on Ames on the very day of the first examination session. Once they had developed suspicions about Ames, the responsible CIC officers, especially with their Office of Security backgrounds, should have participated more aggressively and directly in Ames's polygraph. Since the polygraph was handled in a routine fashion, no CI emphasis was placed on formulating the questions or selecting examiners with the appropriate levels of experience. The was no strategy for the questioning and no planning how to handle any admissions he might have made. The result of the 1991 polygraph was to divert attention from him for a time.


In view of the number of Soviet sources that were compromised, insufficient personnel resources were devoted to the molehunt effort virtually from the beginning. The failure to request additional resources has been acknowledged by several of the key officials involved. Additional resources could have been used to systematically develop and narrow a list of potential suspects based upon employee access to the compromised cases. Prior to 1991, no formal lists of suspects based on access were created or reviewed. This was partly because access or `bigot' lists for the individual cases did not exist or were inaccurate. Although the investigation clearly had to be conducted with discretion, concerns about compartmentation must be balanced at some point against the overriding need to resolve the serious problems the compromises created. There clearly were more than three trustworthy and capable officers available in the Agency with the necessary expertise to assist in the molehunt effort. With more focused involvement by senior Agency management, additional personnel could have been added to pursue the financial inquiries and create a better mix of analytical and investigative skills.


The ambiguous division of responsibility for counterintelligence between CIC and the Office of Security and excessive compartmentation contributed to a breakdown in communication between the two offices, despite the fact that CIC was created in part to overcome such coordination problems. This breakdown in communication had a highly adverse impact on the Ames counterespionage investigation. There was a general absence of collaboration and sharing of information by CIC with the Office of Security at critical points in the reinvestigation of Ames in 1991. Office of Security officers who were assigned to CIC minimized the contribution that could be expected to be received from the Office of Security and their resulting failure to collaborate in fact produced the minimal contribution they expected. These problems and others persisted despite the fact that prior Inspector General inspection reports on Counterintelligence, the Office of Security and Command and Control in the Agency pointed out the jurisdictional and communication ambiguities in counterintelligence matters.


The lack of an effective and timely reinvestigation polygraph program in 1985, when Ames began his espionage activities, enhanced the breakdown of inhibitions that Ames had experienced and led him to believe that he would not be required to undergo a reinvestigation polygraph before his contemplated retirement in 1990. By 1985 the Office of Security reinvestigation polygraph program had fallen seriously behind its targeted five-year schedule and Ames had not been polygraphed for almost ten years. Although the Agency gave the program increased attention in 1985 and made a commitment to provide the resources necessary to maintain a five-year reinvestigation schedule, the hiring of new polygraph examiners created other problems, such as the need for increased management and supervision of inexperienced examiners. These problems were compounded by an exaggerated concern about the reaction of Agency officers and managers to adverse results from polygraph examinations. Employee, management and congressional concerns regarding the intrusiveness of the polygraph led Office of Security management to soften the polygraph program and cater to `customer satisfaction,' which seems to have meant not offending employees. These developments reduced the effectiveness and reliability of the polygraph program, which must be based upon an
apprehension of the consequences of untruths, and encouraged employees and managers to resist the program.


No evidence has been found that any Agency manager or employee knowingly and willfully aided Ames in his espionage activities. Allegations in the so-called `poison fax,' sent to the SSCI earlier this year, that the Chief of CE Division from 1989 to 1992 warned Ames regarding Agency suspicions about him appear to be without foundation. Many of the other statements made in the fax also appear to have been unfounded. That said, it is clear from comparing Ames's personnel file with the knowledge about him that was shared orally by employees and managers, that Agency managers consistently failed after 1981 to come to grips with marginal performer who had substantial flaws both personally and professionally. His few contributions to the work of the Agency were exaggerated while his deficiencies and cost to the organization were minimized and not officially documented or formally addressed. He had little focus, few recruitments, no enthusiasm, little regard for rules and requirements, little self-discipline, little security consciousness, little respect for management or the mission, few good work habits, few friends, and a bad reputation in terms of integrity, dependability, and discretion. Yet his managers were content to tolerate his non-productivity, clean up after him when he failed, find well chosen words to praise him, and pass him on with accolades to the next manager.


Despite his deficiencies in performances, Ames continued to be selected for positions that gave him considerable access to highly sensitive information. In the face of the strong and persistent evidence of performance and suitability problems that was available, this access is difficult to justify. Our report reviews most of these assignments in detail. While Ames's poor performance would probably not have led to termination of his employment, it did not justify permitting him to fill positions where he was perfectly placed to betray almost all of CIA's sensitive Soviet assets. Despite doubts about his performance and suitability among officials who previously supervised him, he was placed in positions that gave him access to the most sensitive Soviet sources. After a disastrous tour in Mexico, Ames was placed in charge of a counterintelligence unit that was responsible for Soviet operations, and it was there that he acquired much of the information he turned over to the KGB in 1985.

Ames was selectied to participate in debriefings of Vitaliy Yurchenko, described by the Associate Deputy Director for Operations at the time as the most important defector in CIA's history. Little in his previous performance merited that selection and the task should have been reserved for the very best SE Division had to offer. His assignment to a sensitive position in SE Division after his return to Headquarters in the Fall of 1989 from Rome is inexplicable in light of the reservations about him that were held by the departing Chief of SE Division who had considered Amess's Rome assignment as a means of getting rid of a problem employee.

Ames's selection in October 1990 to serve in CIC is hard to explain given the knowledge that was then available to SE Division's management and CIC regarding the 1985-86 compromises, Ames's work habits, his unexplained affluence, and the nature and scope of the access to information that he would have. His CIC managers had been warned that there was reason to watch him closely and certainly could have south more specific information from their superiors in CIC. Once suspicions concerning Ames had crystallized in August 1992 when his bank deposits and contacts with the Soviets had been correlated and Agency management had been advised, he should have been place in a position where his access would have been limited and his activities closely managed. No evidence was found that senior Agency managers were fully advised or that such alternatives were ever discussed by Agency management, and neither CIC nor the Office of Security played any role in decisions regarding his assignments until after the FBI investigation began in the spring of 1993.

Necessarily, we have made analytical judgments about what we have learned--some of them quite harsh. We believe this is our job--not just to present the facts, but to tell the DCI, our oversight committees and other readers how our findings strike us. We have the confidence to do this because we have lived with the guts of Ames's betrayal for countless hours, we know the information we have developed better than anyone else at this point, and it is our responsibility to make these judgments. In this sense, our 12 investigators are like a jury--they find the facts and make recommendations to the DCI for his final determination. And the investigative team and I, like a jury, represent the peers of the intelligence professionals from whose ranks we are drawn. We have been sometimes shocked and dismayed at what we have learned, intrigued by the complexity of the Ames story and appreciative of the individual acts of competence and courage, of which there are many outlined in our Report.

In this latter regard, several individuals deserve special praise: the Deputy Chief, CIC for his persistent efforts to get to the bottom of the matter despite the passage of time; three CIC members for their work that paved the way for identifying Ames as a spy; four employees and managers who made known their concerns about aspects of Ames's wealth, suitability and performance; and finally, the officer who conducted a timely and thorough background investigation of Ames in 1991 and the Deputy Chief, Counternarcotics Center and another officer who provided substantial assistance to the FBI in the FBI phase of the investigation.

In the end, however, the Ames case is about accountability, both individual and managerial. The DCI and our oversight committees have made this the issue, but if they had not, we would have. In this regard, let me note that we had already assembled a small team to look into the Ames case on our own prior to any request from the SSCI or the DCI. We did so because we believed that the statute setting up our office required it. The issue of managerial accountability has been one of my office's principal points of focus since its inception in 1990--and we have enjoyed mixed success in our efforts to assist in bringing it about.

Fixing managerial accountability in the Ames case has not been an easy task. On the individual level, we have uncovered a vast quantity of information about Ames' professional sloppiness, his failure to file accountings, contact reports, and requests for foreign travel. Ames was oblivious to issues of personal security--he carried incriminating documents in his checked airline luggage; he left classified files on a subway train; he openly walked into a Soviet compound in Rome and the Soviet Embassy in Washington. We have noted that Ames's abuse of alcohol, while not constant throughout his career, was chronic and interfered with the performance of his duties. By and large, these deficiencies were observed by Ames's colleagues and supervisors and were tolerated by many who did not consider them highly unusual for Directorate of Operations officers on the `not going anywhere' promotion track. That an officer with these observed vulnerabilities should have been placed in positions involving counterintelligence and Soviet operations where he was in a prime position to contact Soviet officials and thus massively betray his trust is difficult to justify. The IG investigative team has found fault with management's tolerant view of Ames's professional deficiencies and the random indifference given to his assignments, and our recommendations reflect that view. We have not made these recommendations, which are primarily systemic and institutional in nature, a formal part of our Report, but have given them to the DCI in an advisory capacity.

In inclusion, on the grander scale of how the Agency's reaction to the unprecedented loss of Soviet cases in 1985-86 was managed, our team has been strict and demanding. The pivotal point of our logic is that, if Soviet operations--the effort to achieve human penetrations of the USSR for foreign intelligence and counterintelligence information--were the priority mission of the clandestine service of CIA in 1985-86, then the rapid loss of most of our assets in this crucial area should have had a profound effect on the thinking and actions of the leaders of the Directorate of Operations and CIA. The effort to probe the reasons for these losses should have been of the most vital importance to U.S. intelligence and should have been pursued with the utmost vigor and all necessary resources until an explanation--a technical or human penetration--was found. In this investigation we have concluded that the intelligence losses of 1985-86 were not pursued to the fullest extent of CIA's capabilities, and our findings, analytical judgments and recommendations reflect that conclusion.

Thank you Mr. Chairman. I will be glad to try to answer any questions you or other Members of the Committee may have.

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Mr. WARNER. Mr. President, I join the chairman of the Intelligence Committee in strongly recommending that the Senate adopt the conference report on the fiscal year 1995 Intelligence authorization bill.

While I would have preferred, and supported, a higher funding level for intelligence activities, I believe that the conference report dollar amount strikes a responsible compromise. The conference agreement contains a reduction of only $340 million from the administration's request; but it provides funding, in excess of the request, in four key areas for which I sought higher funding:

First and foremost, intelligence support to U.S. military operations;

Second, efforts to improve our counterintelligence capabilities;

Third, activities to reduce the critical problem of proliferation of weapons of mass destruction; and

Finally, advanced R&D initiatives which will help keep our intelligence capabilities on the cutting edge.

Several months ago, General Clapper appeared before the Senate Intelligence Committee and revealed that there are currently 64 hot spots in the world today--areas where there exists extensive fighting, human rights violations, and tragic death. That is double the number from just 7 years ago. We are today confronted with a world that is rife with ethnic, religious, and racial conflict--witness the problems in Haiti, Bosnia, Somalia, and Rwanda.

Such a world presents the intelligence community with new diverse, and complex challenges. Maintaining a viable intelligence capability in a rapidly changing world is not an easy--or inexpensive--task. And it is a time-honored principle that intelligence is a force multipler, especially as defense expenditures decline. Therefore, I will continue to resist further reductions in the intelligence budget until I am convinced that efficiencies can be achieved that will not harm U.S. National security.

In addition to authorizing the resources and activities of the intelligence agencies, this measure contains landmark legislation that will enhance the security of the United States for many years to come.

Every Senator, indeed all Americans, are shocked by the

tragic case of Aldrich Ames. We are shocked not only by the magnitude of Ames' treachery, which cost many lives, but also by the fact that it took so long for the CIA to catch a sloppy spy, who made little effort to conceal his ill-gotten gains. That he went undetected for 9 years, despite the fact that there were numerous warning signs pointing to Ames' betrayal, indicates that we need more than minor counterintelligence reforms at the CIA, we need new attitudes and procedures--in effect, cultural changes.

Unfortunately, many of the problems that the Ames case has uncovered do not lend themselves to legislative solutions. They require strong leadership and internal reforms at the CIA. However, a number of critical problems were revealed by the Ames case that do require legislative remedies.

Shortly after the Ames case came to light in February, I joined with Chairman DeConcini, who, to his credit, has worked relentlessly on this legislation against considerable opposition from the administration, in introducing legislation to improve the counterintelligence and security posture of the U.S. intelligence community. Our legislation--which was incorporated in the pending conference report--provides valuable tools for deterring espionage activities and detecting violations when deterrence fails.

Unlike the spies of the 1940's, 1950's, and 1960's who were primarily motivated by ideology, today's turncoats betray this great Nation for money. With this in mind, the DeConcini-Warner bill focuses on the financial activities of employees with access to classified information.

The legislation requires all employees who are granted a security clearance to consent--in writing--to Government access to their financial and travel records. In addition, those employees with access to particularly sensitive information would be required to file financial disclosure reports. We leave it to the President's discretion to determine which categories of employees would be required to file such financial disclosure forms, and how often those forms would have to be filed.

I know some have voiced concern about this legislation due to concerns about the right to privacy of the Government employees who would be affected. I believe that Government employees who are trusted with the Nation's most vital intelligence information must be willing to accept certain personal disclosures as a condition of employment. It is an issue that balances national security interests against one's rights to personal privacy.

In an area as sensitive and critical as the Nation's security, the scales must tip in favor of protecting our Nation's secrets. Our legislation achieves that goal.

Another issue we addressed in our counterintelligence

legislation was the long-standing--and clearly documented--problem of lack of cooperation, over many years, between the CIA and the FBI in espionage cases. Our solutions engendered a great deal of controversy in the Senate, and outright opposition from the administration. Understandably, the executive branch believed the general doctrine of executive prerogative should control.

The lack of effective cooperation between the CIA and FBI is not a new problem. This is an issue that has come before the Intelligence Committee in years past, and it is one that the CIA, for example, assured the committee--in 1986--had been resolved. Unfortunately, we find now that that was not the case then or now. This lack of cooperation has continued to lessen the effectiveness of espionage investigation, and contributed to delays of several years in making a legal case against Aldrich Ames.

The administration believed that they could fix this problem with a new executive order--despite the fact that there have been no less than 10 such good faith attempts since 1947 to find a solution. We believed that legislation was necessary, convinced the conference, and now this will go to the President.

Our bill establishes a mandatory requirement for all agencies and departments to immediately notify the FBI when they have reason to believe that classified information has been compromised. In turn, we place a reciprocal requirement on the FBI to consult with affected departments and agencies during the course of espionage investigations. While Director Woolsey vigorously opposed a legislative solution, he did make important suggestions, as did Senator Warner, in the final draft.

From this point forward we expect the FBI to be alerted to possible espionage cases at the very outset so that their investigative expertise can be brought to bear at the earliest opportunity.

The Ames case prompted me to pursue the need for an independent, objective, top to bottom review of the roles and capabilities of the intelligence community in the post-cold-war world.

As far back as May, I sent a letter to President Clinton proposing such a Presidential commission to examine the roles and missions of our intelligence agencies, particularly the CIA. At the time I first raised the idea of a commission, there was widespread opposition, both from the administration and my Senate colleagues.

It has been a long uphill struggle, but gradually the idea of a commission for the intelligence community gained support in the Congress. When the Intelligence authorization bill came to the Senate floor in August, my commission amendment passed 99-0. I am pleased to report that despite continuing administration

opposition, the conference report before you does indeed contain the Warner amendment on a Presidential commission. I want to acknowledge the strong support I received from Senator Graham, who made valuable additions, and to Chairman DeConcini.

The commission established by this measure will consist of 17 members--9 appointed by the President and 8 by the congressional leadership. In order to ensure objectivity, the staff of the commission will be drawn almost entirely from outside of the intelligence community.

The commission will have a broad mandate to examine the activities and capabilities of the intelligence community--the legislation lists 19 specific areas for review. The commission is to make its final report to the Congress no later than March 1, 1996. I believe that a truly independent and objective assessment by this commission will validate the need for intelligence activities to support senior policymakers and the U.S. military. At the same time, the commission may well recommend changes in priorities, organization, or the allocation of resources. It is my hope, however, that at the end of the process, the public will have renewed confidence that the activities and funding levels of the intelligence community merit this support in this ever changing world. It is not becoming a safer place.

In closing, I would like to pay tribute to my co-chairman, Senator DeConcini, who has made an important contribution to the security of this country with this legislation. He and I have worked together from the beginning, and never once did partisanship interfere. We consulted closely, as two Americans with the best interests of their country at heart, and I am very proud of the result.

I would also like to thank our excellent professional staff, Judy Ansley, Chris Mellon, Norm Bradley, Tim Carlsgaard, Britt Snider, Mary Sturtevant, Pat Hanback, and others, for their tireless work on this legislation. They made vital contributions to this process and we are fortunate to have them on the committee staff.

The conference report was agreed to.

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