106th Congress                                                   Report
                                 SENATE

 2d Session                                                     106-325
_______________________________________________________________________


 
                      INTELLIGENCE AUTHORIZATION ACT FOR FY 2001         

                                _______
                                

                  June 29, 2000.--Ordered to be printed
                                                                           
                           

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

                          [To accompany S. 2507]                         

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

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

                        SCOPE OF COMMITTEE REVIEW                        

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

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

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

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

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

      The SSCI report would direct the transfer of imagery analysts and    
   systems support personnel from the General Defense Intelligence Program 
   ( GDIP) to the National Imagery and Mapping Agency Program ( NIMAP).    
   According to the Secretary of Defense: "The Combatant Commanders are   
   unanimous in their opposition to this proposal, citing it as unnecessary
   and detrimental to the accomplishment of their missions.'' The SASC     
   agrees that the Combatant Commanders need to retain control of these    
   imagery analysts and support personnel. The overall allocation of       
   imagery analysts was evaluated in 1996 when NIMA was established. There 
   were good and sufficient reasons for those original decisions made in   
   consolidating imagery professionals. Therefore, the SASC recommends an  
   amendment that would prohibit the proposed transfer. However, the SASC  
   does agree that it would be appropriate for the Secretary of Defense to 
   assess options for strengthening the role of the NIMA Director as       
   functional manager for imagery and geospacial programs. Therefore, the  
   amendment proposed by the SASC would require the Secretary of Defense,  
   in consultation with the DCI, to conduct such an assessment. The SASC   
   believes that it may be possible for NIMA to assume overall control of  
   those imagery analysts currently funded in the GDIP, while allowing the 
   Combatant Commanders to retain day-to-day operational control over such 
   personnel, similar to the current arrangement for signals intelligence  
   personnel. The SASC directs the Secretary of Defense to evaluate such an
   option and include an evaluation of this option in his report on        
   strengthening NIMA's authority.                 
                        
           Prohibition on transfer of collection management personnel   
           from General Defense Intelligence Program to Community Management       
           Account     
                                                            
      The SSCI report would direct a transfer of resources and personnel   
   who are performing multidiscipline requirements management and tasking  
   from the GDIP to the Community Management Account. According to the     
   Secretary of Defense: "The assets affected by this proposed move are   
   the assets that function as my Intelligence Collection Manager, serving 
   as the focal point for all DOD requirements. This move will restrict our
   intelligence efforts.'' The DCI has also registered objection to this   
   transfer. The SASC agrees with these assessments and recommends an      
   amendment that would prohibit the transfer of collection management     
   personnel from the GDIP to the Community Management Account.          
  
           Authorized personnel ceiling for General Defense Intelligence Program   

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

           Measurement and Signature Intelligence                                  

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

           Defense Attache System                                                  

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

           National Reconnaissance Office operational support                      

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

                             COMMITTEE ACTION                            

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

                               FISCAL DATA                               

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

                            REGULATORY IMPACT                            

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

                    COMMENTS FROM THE EXECUTIVE BRANCH                   

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


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

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

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

                         CHANGES IN EXISTING LAW                         

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