49-010

109TH CONGRESS

Report

SENATE

2d Session

109-259

--INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2007

May 25, 2006- Ordered to be printed

Mr. ROBERTS, from the Select Committee on Intelligence, submitted the following

R E P O R T

together with

ADDITIONAL VIEWS

[To accompany S. 3237]

The Select Committee on Intelligence (SSCI or Committee), having considered the original bill (S. 3237), to authorize appropriations for fiscal year 2007 for intelligence and intelligence-related activities of the United States Government, the Intelligence Community Management Account, and the Central Intelligence Agency Retirement and Disability System, and for other purposes, reports an original bill without amendment favorably thereon and recommends that the bill do pass.

CLASSIFIED SUPPLEMENT TO THE COMMITTEE REPORT

The classified nature of United States intelligence activities precludes disclosure by the Committee of details of its budgetary recommendations in this Report. The Committee has prepared a classified supplement to this Report that contains (a) the Classified Annex to this Report and (b) the classified Schedule of Authorizations. The Schedule of Authorizations is incorporated by reference in the Act and has the same legal status as public law. The Classified Annex to this Report explains the full scope and intent of the Committee's actions in the classified Schedule of Authorizations. The Classified Annex has also been incorporated by reference in Section 103. As such, the Intelligence Community is required to comply with any directions or requirements contained therein as it would any other statutory requirement.

The classified supplement to the Report is available for review by any Member of the Senate, subject to the provisions of Senate Resolution 400 of the 94th Congress, as amended by Senate Resolution 445 of the 108th Congress.

The classified supplement is made available to the Committees on Appropriations of the Senate and the House of Representatives, to the Permanent Select Committee on Intelligence of the House of Representatives, and to the President. The President shall provide for appropriate distribution within the Executive Branch.

SECTION-BY-SECTION ANALYSIS AND EXPLANATION

The following is a section-by-section analysis and explanation of the Intelligence Authorization Act for Fiscal Year 2007, as reported herein. Following the section-by-section analysis and explanation there are Committee comments on other matters. The report also includes additional views offered by Committee Members regarding this legislation and other matters.

TITLE I--INTELLIGENCE ACTIVITIES

Section 101. Authorization of appropriations

Section 101 lists the United States government departments, agencies, and other elements for which the Act authorizes appropriations for intelligence and intelligence-related activities for fiscal year 2007.

Section 102. Classified schedule of authorizations

Section 102 makes clear that the details of the amounts authorized to be appropriated for intelligence and intelligence-related activities and the applicable personnel ceilings covered under this title for fiscal year 2007 are contained in a classified Schedule of Authorizations. The Schedule of Authorizations shall be made available to the Committees on Appropriations of the Senate and House of Representatives and to the President.

Section 103. Incorporation of classified annex

Section 103 incorporates into law the Classified Annex to this Report. Unless otherwise specifically stated, the amounts authorized in the Classified Annex are not in addition to amounts authorized to be appropriated by other provisions of the Act or by the classified Schedule of Authorizations.

The Committee has taken the step of incorporating the Classified Annex because the Executive Branch, in the past, has refused to treat with equal weight the language in the classified annexes and the text of recent authorization acts and their accompanying classified schedules of authorizations. This Committee, and Congress, will not permit the Executive Branch to ignore the clear instructions of Congress merely because the directives are contained, by necessity of classification, in an annex accompanying the report associated with intelligence authorizing legislation. The Committee directs the Executive Branch to comply fully with any directed transfers, temporary limitations on use (fences), or other limitations or instructions contained in the Classified Annex to this Report.

Section 104. Personnel ceiling adjustments

Section 104 authorizes the Director of National Intelligence (DNI), with the approval of the Director of the Office of Management and Budget (OMB), in fiscal year 2007 to authorize employment of civilian personnel in excess of the personnel ceilings applicable to the elements of the Intelligence Community under Section 102 by an amount not to exceed 2 percent of the total of the ceilings applicable under Section 102. The DNI may exercise this authority only if necessary to the performance of important intelligence functions. Any exercise of this authority must be reported to the intelligence committees of the Congress.

Section 105. Intelligence Community Management Account

Section 105 authorizes appropriations for the Intelligence Community Management Account (CMA) of the DNI and sets the personnel end-strength for the elements within the CMA for fiscal year 2007.

Subsection (a) authorizes appropriations of $648,952,000 for fiscal year 2007 for the activities of the CMA of the DNI. Subsection (a) also authorizes funds identified for advanced research and development to remain available for two years.

Subsection (b) authorizes 1,575 full-time personnel for elements within the CMA for fiscal year 2007 and provides that such personnel may be permanent employees of a CMA element or detailed from other elements of the United States government.

Subsection (c) authorizes additional appropriations and personnel for the CMA as specified in the classified Schedule of Authorizations and permits the additional funding for research and development to remain available through September 30, 2008.

Subsection (d) requires that, except as provided in Section 113 of the National Security Act of 1947, personnel from another element of the United States government shall be detailed to an element of the CMA on a reimbursable basis, except that for temporary functions such personnel may be detailed on a non-reimbursable basis for periods of less than one year.

Section 106. Incorporation of reporting requirements

Section 106 incorporates into the Act by reference each requirement to submit a report contained in the Joint Explanatory Statement to accompany the Conference Report or in the Classified Annex accompanying the Conference Report.

Section 107. Availability to public of certain intelligence funding information

Section 107 would require the President to disclose the aggregate amount of funds requested for the National Intelligence Program in the annual budget submission for the program. The section would also require Congress to disclose the aggregate amount of funds authorized to be appropriated, and the aggregate amount appropriated, for the National Intelligence Program. It also directs the DNI to conduct a study to assess the advisability of publicly disclosing the aggregate amount of funding requested, authorized, and appropriated for each of the 16 elements of the Intelligence Community. The report must be submitted to Congress within 180 days of enactment of this Act.

Section 108. Response of Intelligence Community to requests from Congress for intelligence documents and information

Section 108 provides for certain procedural requirements related to the ability of Congress to gain access, through the intelligence committees and other committees of jurisdiction, to intelligence reports, assessments, estimates, legal opinions, and other intelligence information. The provision states that elements of the Intelligence Community must provide to the intelligence committees any intelligence documents or information requested by the Chairman or Vice Chairman (or Ranking Minority Member) of such committees. The statutory requirement applies only to existing intelligence documents and information and would not apply to requests to generate new intelligence assessments, reports, estimates, legal opinions, or other information.

TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM

Section 201. Authorization of appropriations

Section 201 authorizes appropriations in the amount of $256,400,000 for fiscal year 2007 for the Central Intelligence Agency Retirement and Disability Fund.

TITLE III--INTELLIGENCE AND GENERAL INTELLIGENCE COMMUNITY MATTERS

Section 301. Increase in employee compensation and benefits authorized by law

Section 301 provides that funds authorized to be appropriated by this Act for salary, pay, retirement, and other benefits for Federal employees may be increased by such additional or supplemental amounts as may be necessary for increases in such compensation or benefits authorized by law.

Section 302. Restriction on conduct of intelligence activities

Section 302 provides that the authorization of appropriations by the Act shall not be deemed to constitute authority for the conduct of any intelligence activity that is not otherwise authorized by the Constitution or laws of the United States.

Section 303. Clarification of definition of Intelligence Community under the National Security Act of 1947

Section 303 amends Section 3(4)(L) of the National Security Act of 1947 (50 U.S.C. 401a(4)(L)) to permit the designation as `elements of the intelligence community' of other elements of departments and agencies of the United States government not listed in Section 3(4).

Section 304. Improvement of notification of Congress regarding intelligence activities of the United States Government

Section 304 amends the requirements for notifications to Congress under Sections 502 and 503 of the National Security Act of 1947 (50 U.S.C. 413a & 413b). First, Section 304 amends the definition of `congressional intelligence committees' in Section 3(7) of the National Security Act of 1947 (50 U.S.C. 401a(7)), specifically including `each member' of the Select Committee on Intelligence of the Senate and the Permanent Select Committee on Intelligence of the House of Representatives within such definition. Second, Section 304 requires that, in the event that the DNI or the head of an Intelligence Community element does not provide to all Members of the `congressional intelligence committees' the notification required by Section 502 (relating to intelligence activities other than covert actions) or Section 503 (relating to covert actions) of the National Security Act of 1947, that all Members will be provided with a notification of this fact and will be provided with a summary of the intelligence activity or covert action in a manner sufficient to permit such Members to assess the legality, benefits, costs, and advisability of the intelligence activity or covert action. Third, Section 304 extends requirements in Section 502 of the National Security Act of 1947 on the form and contents of reports to the `congressional intelligence committees' on intelligence activities other than covert actions to the requirements for notifications to Congress under Section 503 of that Act (relating to covert actions). Fourth, the section requires that any change to a covert action finding under Section 503 of that Act must be reported to the committees, rather than the existing requirement to report any `significant' change.

Section 305. Delegation of authority for travel on common carriers for intelligence collection personnel

Section 116 of the National Security Act of 1947 (50 U.S.C. 404k) allows the DNI to authorize travel on any common carrier when it is consistent with Intelligence Community mission requirements or, more specifically, is required for cover purposes, operational needs, or other exceptional circumstances. As presently written, the DNI may only delegate this authority to the Principal Deputy DNI (PDDNI) or, with respect to Central Intelligence Agency (CIA) employees, to the Director of the CIA.

Section 305 of this bill provides that the DNI may delegate the authority in Section 116 of the National Security Act of 1947 to the head of any element of the Intelligence Community. This expansion is consistent with the view of the Committee that the DNI should be able to delegate authority throughout the Intelligence Community when such delegation serves the overall interests of the Community.

Section 305 also provides that the head of an Intelligence Community element to whom travel authority has been delegated is also empowered to delegate the authority to senior officials of the element as specified in guidelines issued by the DNI. This allows for administrative flexibility, consistent with the guidance of the DNI, for the entire Community. To facilitate Congressional oversight, the DNI shall submit the guidelines to the intelligence committees of the Congress.

Section 306. Modification of availability of funds for different intelligence activities

Section 306 conforms the text of Section 504(a)(3)(B) of the National Security Act of 1947 (50 U.S.C. 414(a)(3)(B) (governing the funding of intelligence activities)) with the text of Section 102A(d)(5)(A)(ii) of that Act (50 U.S.C. 403-1(d)(5)(A)(ii)), as amended by Section 1011(a) of the Intelligence Reform and Terrorism Prevention Act of 2004 (Pub. L. No. 108-458 (Dec. 17, 2004)) (governing the transfer and reprogramming by the DNI of certain intelligence funding). In particular, this conforming amendment replaces the `unforeseen requirements' standard in Section 504(a)(3)(B) with a clearer standard to govern reprogrammings and transfers of funds authorized for a different intelligence or intelligence-related activity. Under the new standard, a reprogramming or transfer would be authorized if, in addition to the other requirements of Section 504(a)(3), the new use of funds would `support an emergent need, improve program effectiveness, or increase efficiency.' This modification brings the standard for reprogrammings or transfers of intelligence funding into conformity with the standards applicable to reprogrammings and transfers under Section 102A of the National Security Act of 1947. The modification preserves Congressional oversight of proposed reprogrammings and transfers while enhancing the Intelligence Community's ability to carry out missions and functions vital to national security.

Section 307. Additional limitation on availability of funds for intelligence and intelligence-related activities

Section 307 specifies that appropriated funds may be obligated or expended for an intelligence or intelligence-related activity only if the `congressional intelligence committees' have been `fully and currently informed' of that activity, or if all Members have been provided a summary of the activity, consistent with the requirements of Sections 502(b) and 503(c)(5) of the National Security Act of 1947 (50 U.S.C. 413a(b) & 413b(c)(5)), as amended by Section 304 of this Act.

Section 308. Increase in penalties for disclosure of undercover intelligence officers and agents

Section 308 amends Section 601 of the National Security Act (50 U.S.C. 421) to increase the criminal penalties for individuals with authorized access to classified information who

intentionally disclose any information identifying a covert agent, if those individuals know that the United States is taking affirmative measures to conceal such covert agent's intelligence relationship to the United States. Currently, the maximum sentence for disclosure by someone who has had `authorized access to classified information that identifies a covert agent' is 10 years. Subsection (a) increases that maximum sentence to 15 years. Currently, the maximum sentence for disclosure by someone who `as a result of having authorized access to classified information, learns of the identity of a covert agent' is 5 years. Subsection (b) increases that maximum sentence to 10 years.

Section 309. Retention and use of amounts paid as debts to elements of the Intelligence Community

Section 309 adds a new Section 1103 to the National Security Act of 1947, authorizing Intelligence Community elements to accept, retain, and--for certain purposes--use amounts received from private parties as repayment of debts owed to such element.

Each year some property purchased with appropriated funds is damaged beyond use or is lost through the negligence of a private party or an employee of the Intelligence Community. The damaged or lost property may have been used to support wartime activities or other national intelligence missions and, thus, waiting for additional funds to be provided through the next annual appropriation cycle inhibits the Intelligence Community's ability to quickly and efficiently support the war fighter and other national intelligence missions.

Section 309 addresses this shortcoming by authorizing elements of the Intelligence Community to accept and retain reimbursement, outside of the annual appropriations cycle, from a private party, including a Federal employee, who has been found to have negligently lost or damaged property. As a result, elements of the Intelligence Community will be able to expeditiously repair or replace lost or damaged property without waiting for the next appropriation cycle. Similarly, this new section also authorizes elements of the Intelligence Community to retain funds paid by Intelligence Community employees or former employees as repayment of a default on the terms and conditions of scholarship, fellowship, or other educational assistance provided by the Community to the employee. The section authorizes crediting payments only to the current appropriation account related to the debt and limits the subsequent use of the funds.

Section 310. Pilot program on disclosure of records under the Privacy Act relating to certain intelligence activities

As a result of reporting requirements in the Intelligence Authorization Act for Fiscal Year 2004 (Pub. L. No. 108-177 (Dec. 13, 2003)) intended to improve information access, the Intelligence Community, Department of Defense (DoD), Department of Homeland Security, and Federal law enforcement agencies formed the Information Sharing Working Group (ISWG) to, inter alia, identify impediments to information access in existing laws and in Intelligence Community and DoD policies. The ISWG issued its report in December 2004.

In the report, the ISWG noted that certain provisions of the Privacy Act could prevent the sharing of intelligence information within the Executive Branch. Generally, the Privacy Act (5 U.S.C. 552a) precludes the dissemination of information regarding U.S. persons stored within a system of records maintained by the United States government without the consent of that individual. There are, however, twelve exceptions to this general rule. For example, one exception permits the sharing of information to support a civil or criminal law enforcement activity under certain prescribed circumstances. There is no exception permitting Intelligence Community elements and other United States government agencies to share foreign intelligence or counterintelligence information (including information concerning international terrorism or proliferation of weapons of mass destruction) between or with elements of the Intelligence Community.

To address this shortcoming, Section 310 creates a pilot program to study a narrow intelligence exception to the Privacy Act. Specifically, the provision allows transfers under three circumstances. First, the provision permits elements of the Intelligence Community to share with other elements of the Intelligence Community information covered by the Privacy Act pertaining to an identifiable individual when that information is relevant to a lawful and authorized foreign intelligence or counterintelligence activity. To share such foreign intelligence or counterintelligence information under this provision pertaining to other than an identifiable individual would require the authorization of the DNI or his designee. Second, the provision permits the head of an element of the Intelligence Community to request in writing from another United States government agency Privacy Act records relevant to a lawful and authorized activity of that element to protect against international terrorism or the proliferation of weapons of mass destruction. Third, the provision authorizes heads of non-Intelligence Community agencies to share Privacy Act records with an element of the Intelligence Community if the record constitutes `terrorism information' (as defined in Section 1016(a)(4) of the Intelligence Reform and Terrorism Prevention Act of 2004 (Pub. L. No. 108-458 (Dec. 17, 2004)) or information concerning the proliferation of weapons of mass destruction, if the receiving element of the Intelligence Community is lawfully authorized to collect or analyze the information to protect against international terrorism or proliferation. When necessary to determine whether a record held by a non-Intelligence Community agency constitutes terrorism information or information concerning the proliferation of weapons of mass destruction, the head of such agency may consult the DNI or the Attorney General. Section 310 also extends to the pilot program an exemption from certain records access and disclosure accounting requirements. In order to protect intelligence sources and methods from unauthorized disclosure, this exemption is similar to the exemption extended to the DNI under Section 416 of this Act.

Section 310 will not be effective until the DNI and the Attorney General issue guidelines governing the implementation and exercise of the authorities granted by the section. The guidelines will ensure that Section 310 is implemented in a manner designed to protect the

constitutional rights of U.S. persons and consistent with existing law, regulations, and Executive orders governing the conduct of intelligence activities.

It is important to note that Section 310 facilitates the sharing only of intelligence information already lawfully collected and maintained within United States government record systems and relevant to a lawful and authorized foreign intelligence or counterintelligence activity (with a particular focus on sharing by non-Intelligence Community elements of information concerning international terrorism and the proliferation of weapons of mass destruction). The provision expressly states that the new authority to share already collected information does not permit the collection or retention of foreign intelligence or counterintelligence information not otherwise authorized by law.

To ensure that the exception to the Privacy Act permits necessary sharing of critical foreign intelligence and counterintelligence information while providing appropriate protections for the privacy and civil liberties of U.S. persons, Section 310 establishes a three-year pilot program. The exception to the Privacy Act will expire three years after the DNI and the Attorney General issue the guidelines discussed above, unless renewed. During the course of the program, the DNI and the Attorney General, in consultation with the Privacy and Civil Liberties Oversight Board, are required to submit to the intelligence committees annual reports on the status and implementation of the pilot program. Additionally, six months prior to the expiration of the program, the DNI and the Attorney General, in coordination with the Privacy and Civil Liberties Oversight Board, will submit a final report to the intelligence committees, including any recommendations regarding continued authorization of the exception. Similarly, the Privacy and Civil Liberties Oversight Board will submit to the intelligence committees a separate report providing the Board's advice and counsel on the development and implementation of the authorities provided under this Section.

Section 310 includes modifications proposed by the Armed Services Committee, the Homeland Security and Governmental Affairs Committee, and individual Members of the Senate. Both the Office of the DNI and the Department of Justice (DoJ) have expressed their support for this provision. Specifically, in a letter to the Committee dated December 1, 2005, referring to a provision similar to Section 310 in the Committee-passed Intelligence Authorization Act for Fiscal Year 2006, the DNI wrote, the `Administration strongly supports this provision because it would facilitate the type of information sharing mandated by the [Intelligence Reform and Terrorism Prevention Act of 2004], consistent with the need to protect privacy and civil liberties.' Similarly, in a separate letter to the Committee dated November 28, 2005, the Assistant Attorney General for Legislative Affairs wrote, `We support section 307 [of the Committee-passed Intelligence Authorization Act for Fiscal Year 2006]. * * * We believe that this provision would help in resolving some of the concerns that some agencies have expressed about sharing information with the FBI for counterterrorism purposes.' In fact, the DNI included a Privacy Act exception similar to Section 310 in this year's annual request for legislative authorities.

Section 311. Extension to Intelligence Community of authority to delete information about receipt and disposition of foreign gifts and decorations

Current law requires that certain Federal `employees'--a term that generally applies to all officials and personnel of the Intelligence Community and certain contractors, spouses, dependents, and others--file reports with their `employing' agency regarding the receipt of gifts or `decorations' from foreign governments. See 5 U.S.C. 7342. Following compilation of these reports, the `employing' agency is required to annually file with the Secretary of State detailed information about the receipt of foreign gifts and decorations reported by its employees, including the source of the gift. See 5 U.S.C. 7342(f). The Secretary of State is then required to publish a comprehensive list of the agency reports in the Federal Register. See id. With respect to the activities of the Intelligence Community, the public disclosure of such gifts or decorations in the Federal Register has the potential to compromise intelligence sources (e.g., the confirmation of an intelligence relationship with a foreign government) and could undermine national security. Recognizing this potential concern, the Director of Central Intelligence (DCI) was granted a limited exemption from reporting certain specified information about such foreign gifts or decorations where the publication of the information could adversely affect United States intelligence sources. See Pub. L. No. 95-105, Sec. 515(a) (Aug. 17, 1977). Section 1079 of the Intelligence Reform and Terrorism Prevention Act of 2004, Pub. L. No. 108-458 (Dec. 17, 2004) (`Intelligence Reform Act'), extended a similar exemption to the DNI (in addition to amending the existing exemption to apply to the Director of the CIA).

Section 311 amends existing law to provide to the heads of each Intelligence Community element the same limited exemption from specified public reporting requirements that is currently authorized for the DNI and the Director of the CIA. The national security concerns that prompted the initial DCI exemption, and the subsequent exemptions for the DNI and Director of the CIA, apply with equal weight to other Intelligence Community elements--the publication of certain information relating to foreign gifts or decorations provided to employees of all Intelligence Community agencies could adversely affect United States intelligence sources. Section 311 provides the exemption necessary to protect national security, but mandates that the information not provided to the Secretary of State be provided to the DNI to ensure continued independent oversight of the receipt by Intelligence Community `employees' of foreign gifts or decorations.

Section 312. Availability of funds for travel and transportation of personal effects, household goods, and automobiles

Section 312 provides the CIA and the Office of the DNI the same authority that is granted to the Department of State by Section 2677 of Title 22, United States Code, when travel and transportation authorized by valid travel orders begins in one fiscal year, but may not be completed during that same fiscal year. The Committee believes this authority will relieve the administrative burden of charging the eligible costs to two fiscal years' appropriations and adjusting associated accounts.

Section 313. Director of National Intelligence report on compliance with the Detainee Treatment Act of 2005

Section 313 requires the DNI to submit a classified report to the intelligence committees on all measures taken by the Office of the DNI, and by any element of the Intelligence Community with relevant responsibilities, on compliance with two provisions of the Detainee Treatment Act of 2005. The report is to be submitted no later than September 1, 2006.

The Detainee Treatment Act of 2005 provides, in part, that no individual in the custody or under the physical control of the United States, regardless of nationality or physical location, shall be subject to cruel, inhuman, or degrading treatment or punishment. The report required by Section 313 shall include a description of any detention or interrogation methods that have been determined to comply with this prohibition or have been discontinued pursuant to it.

The Detainee Treatment of Act of 2005 also provides, in part, for the protection, against civil or criminal liability, for United States Government personnel who had engaged in officially authorized interrogations that were determined to be lawful at the time. Section 313 requires the DNI to report on actions taken to implement that provision.

The report required by Section 313 shall also include an appendix containing all guidelines on the application of the Detainee Treatment Act of 2005 to the detention or interrogation activities, if any, of any element of the Intelligence Community. The appendix shall also include all legal opinions of the DoJ about the meaning of the Detainee Treatment Act of 2005 or its application to detention or interrogation activities, if any, of any element of the Intelligence Community.

Section 314. Report on alleged clandestine detention facilities for individuals captured in the global war on terrorism

Section 314 requires the DNI to submit a classified, detailed report to the Members of the intelligence committees that provides a full accounting on each clandestine prison or detention facility, if any, currently or formerly operated by the United States Government, regardless of location, at which detainees in the global war on terrorism are or have been held. Section 314 sets forth required elements of this report: the location and size of each such prison or facility, its disposition if no longer operated by the United States Government, plans for the ultimate disposition of detainees currently held, a description of interrogation procedures used or formerly used, and whether those procedures are or were in compliance with United States obligations under the Geneva Conventions and the Convention Against Torture. The classified report is to be submitted no later than 60 days after enactment of this Act.

TITLE IV--MATTERS RELATING TO ELEMENTS OF THE INTELLIGENCE COMMUNITY

SUBTITLE A--OFFICE OF THE DIRECTOR OF NATIONAL INTELLIGENCE

Section 401. Additional authorities of the Director of National Intelligence on intelligence information sharing

Section 401 amends the National Security Act of 1947 to provide the DNI statutory authority to use National Intelligence Program funds to quickly address deficiencies or needs that arise in intelligence information access or sharing capabilities. The new Section 102A(g)(1)(G) of the National Security Act of 1947 authorizes the DNI to provide to a receiving agency or component--for that agency or component to accept and use--funds that have been authorized and appropriated to address intelligence information access or sharing needs. In the alternative, the DNI may provide to a receiving agency necessary or associated services and equipment procured with funds from the National Intelligence Program. The new Section 102A(g)(1)(H) of the National Security Act of 1947 also grants the DNI the authority to provide funds to non-National Intelligence Program activities for the purpose of addressing critical gaps in intelligence information access or sharing capabilities. Without the authority, the development and implementation of necessary capabilities could be delayed by an agency's lack of authority to accept or utilize systems funded from the National Intelligence Program, inability to use or identify current-year funding, or concerns regarding the augmentation of appropriations. These new DNI authorities are similar to authority granted to the National Geospatial-Intelligence Agency (NGA) with respect to imagery and imagery-related systems. See Section 105(b)(2)(D)(ii) of the National Security Act of 1947 (50 U.S.C. 403-5).

Section 402. Modification of limitation on delegation by the Director of National Intelligence of the protection of intelligence sources and methods

Section 402 amends the National Security Act of 1947 to modify the limitation on delegation by the DNI of the authority to protect intelligence sources and methods from unauthorized disclosure. The provision permits the DNI to delegate the authority to the Deputy Directors of National Intelligence or the Chief Information Officer of the Intelligence Community. A previous provision in the National Security Act of 1947 had vested the power to protect sources and methods in the DCI, but did not constrain further delegation of the authority.

Section 403. Authority of the Director of National Intelligence to manage access to human intelligence information

Section 403 provides the DNI with the authority to ensure the dissemination of intelligence information collected through human sources, including the underlying operational data necessary to understand that reporting, to appropriately cleared analysts or other intelligence officers throughout the Intelligence Community. Recent intelligence failures--particularly related to pre-war intelligence assessments on Iraq--have demonstrated the importance of rebuilding and

improving the nation's human intelligence capabilities. While the Intelligence Community is making some progress in this regard, a great deal remains to be done, particularly in the area of access to intelligence gathered through human intelligence operations.

The Committee's review of the Intelligence Community's pre-war assessments on Iraq highlighted the impact of unnecessary restrictions on access by intelligence analysts to human intelligence information. In its Report of the Select Committee on Intelligence on the U.S. Intelligence Community's Pre-War Intelligence Assessments on Iraq, the Committee concluded that the Intelligence Community's failure to provide cleared analysts with a legitimate `need-to-know' broader access to human intelligence reporting, including the operational data underlying that reporting, contributed to the flawed intelligence assessments on Iraq's weapons of mass destruction programs. Access to this data--controlled by the agencies that collected the information--would have provided analysts with a better understanding of the reliability of the sources of the reporting, as well as other significant intelligence information required for their work.

The Intelligence Reform Act provides the DNI with a number of tools to foster greater information access within the Community. Section 403 builds on these tools by providing the DNI with the specific authority to ensure analysts and other Intelligence Community officers are provided with improved access to human intelligence reporting, consistent with the DNI's determinations regarding the protection of intelligence sources and methods. Although the Committee expects that individual elements will continue to retain human intelligence operational data, access decisions will be made by the DNI as a neutral arbiter of need-to-know. No longer will these access decisions be left to individual agencies with a parochial--and understandable--desire to protect sources at all costs. Access to human intelligence reporting, and underlying operational reporting, must be balanced against real threats to sources and methods. Under Section 403, the Committee expects the DNI to perform the necessary balancing. Section 403 also provides the DNI with full and regular access to the information necessary to `manage and direct * * * the tasking of, collection, analysis, production, and dissemination of national intelligence by elements of the intelligence community.' See Section 102A(f)(1)(A)(ii) of the National Security Act of 1947 (50 U.S.C. 403-1(f)(1)(A)(ii)).

To effectively implement Section 403, the DNI should standardize security clearance processes across Intelligence Community elements to resolve issues that have hampered information access in the past. The Committee does not believe that working in a particular agency makes one Intelligence Community officer inherently more trustworthy than a counterpart with the same security clearance and a legitimate `need-to-know' at another element. Resolution of disparate clearance standards and processes, however, should provide Intelligence Community elements with an additional degree of comfort that, while information from sources for which those agencies are responsible has received greater distribution, the recipients of that information are appropriately cleared consistent with DNI standards. Based on the authorities provided to the DNI in the Intelligence Reform Act and this section, the Committee is confident that the DNI can implement the protections necessary for intelligence sources and methods, while making human intelligence information more readily available to appropriately cleared intelligence officers who need the information for the conduct of their duties.

Section 404. Additional administrative authority of the Director of National Intelligence

From an organizational standpoint, the DNI should be able to rapidly focus the Intelligence Community on a particular intelligence issue through a coordinated effort that uses all available resources. The ability of the DNI to respond with flexibility and to coordinate the Intelligence Community response to an emerging threat should not depend on the time-sensitive vagaries of the budget cycle and should not be constrained by general limitations found in appropriations law (e.g., 31 U.S.C. 1532) or the annual limitation set forth in the `General Provisions' of the Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act. See, e.g., Consolidated Appropriations Act, 2005, Division H--Transportation, Treasury, Independent Agencies, and General Government Appropriations Act, 2005, Section 610, Pub. L. No. 108-447 (Dec. 8, 2004); see also, e.g., In re: Veterans Administration Funding of Federal Executive Boards, 65 Comp. Gen. 689 (July 1, 1986) (discussing history of prohibition on interagency financing of boards, commissions, councils, committees, or similar groups).

To provide this needed operational and organizational flexibility, Section 404 grants the DNI the authority--notwithstanding certain specified provisions of general appropriations law--to approve interagency financing of national intelligence centers (authorized under Section 119B of the National Security Act of 1947 (50 U.S.C. 404o-2)) and of other boards, commissions, councils, committees, or similar groups established by the DNI (e.g., `mission managers,' as recommended by the Commission on the Intelligence Capabilities of the United States regarding Weapons of Mass Destruction (WMD Commission)). Under Section 404, the DNI could authorize the pooling of resources from various Intelligence Community and non-Intelligence Community agencies to finance national intelligence centers or other organizational groupings designed to address identified intelligence matters. Once approved by the DNI, the provision also expressly permits other United States government departments and agencies, including Intelligence Community elements, to fund, or participate in the funding of, the authorized activities.

The Committee recognizes the need for coordinated responses to national security threats and intelligence problems. To better understand how the DNI intends to utilize the authority provided under Section 404, the Committee directs the DNI to provide an annual report--through the end of fiscal year 2010--providing details on how this authority has been exercised, what amount of appropriated funds attributable to each interagency contributor has been accessed to finance each national intelligence center or other organizational grouping under this section, and whether the National Intelligence Program or other budget account has been modified to provide specific funding for such national intelligence centers or other organizational groupings or whether funding will continue to be provided under the authority of Section 404.

Section 405. Clarification of limitation on co-location of the Office of the Director of National Intelligence

Section 405 clarifies that the ban on co-location of the Office of the DNI with any other Intelligence Community element, which is slated to take effect as of October 1, 2008, applies to the co-location of the headquarters of the Office of the DNI with the headquarters of any other Intelligence Community agency or element. This provision provides flexibility to ensure that components of the Office of the DNI may be located in the most appropriate facility or facilities, including co-location with components of Intelligence Community agencies or elements. The Committee is aware that the DNI intends to find a headquarters that is separate and apart from the headquarters of the various Intelligence Community elements, consistent with the expressed intent of Congress.

Section 406. Additional duties of the Director of Science and Technology of the Office of the Director of National Intelligence

As part of the restructuring of the nation's intelligence infrastructure in the Intelligence Reform Act, Congress created a Director of Science and Technology within the Office of the DNI. Under the Act, the Director of Science and Technology serves as the DNI's chief representative for science and technology, assisting the DNI in formulating a long-term strategy for scientific advances in the field of intelligence and on the science and technology elements of the intelligence budget. Additionally, the Director of Science and Technology chairs the DNI's Science and Technology Committee--responsible for coordinating advances in intelligence-related research and development.

The House-passed version of the Intelligence Authorization Act for Fiscal Year 2007, H.R. 5020 (109th Cong., 2d Sess.), contains a provision (Section 403) that further expounds on the role of the Director of Science and Technology. Section 403 in H.R. 5020 would require the Director of Science and Technology to systematically identify the Intelligence Community's most significant challenges requiring technical solutions and to develop options to enhance research and development efforts to meet requirements in a timely manner. Section 403 would also require the DNI to submit to Congress a report detailing the strategy for development and use of technology throughout the Intelligence Community through 2021. The report is to identify the Community's highest priority intelligence gaps that may be resolved by the use of technology; identify goals for advanced research and development; explain how advanced research and development projects funded under the National Intelligence Program address the identified gaps; specify current and projected research and development projects; and provide a plan for incorporating technology from research and development projects into National Intelligence Program acquisition programs.

Section 406 incorporates additional requirements into a provision otherwise similar to Section 403 of H.R. 5020.

The Committee supports the House provision, but also believes that such a provision should make clear that it is the responsibility of the Director of Science and Technology to assist the DNI in ensuring that the Intelligence Community's research and development priorities and projects are consistent with national intelligence requirements; that a priority be placed on addressing identified deficiencies in the collection, processing, analysis, or dissemination of national intelligence; that the research and development priorities and projects account for program development and acquisition funding constraints; and that such priorities and projects address system requirements from collection to final dissemination.

The Committee further requires the Director of Science and Technology, at the direction of the DNI, to develop and maintain an integrated Technical Standards System for major acquisitions. The Technical Standards System should improve the availability of technical standards for the design, development, and operation of Intelligence Community programs and projects; reduce duplication of effort and improve interoperability within the Intelligence Community, with the private sector, and with international partners; and enhance awareness of standardization in the Intelligence Community. Under this provision, the Director of Science and Technology will develop standards that document uniform engineering and technical requirements for processes, procedures, practices, and methods, including requirements for selection, application, and design criteria of particular items. The Committee encourages the DNI to consult, as appropriate, with the heads of other United States government departments and agencies (e.g., the Secretary of Defense, the Administrator of the National Aeronautics and Space Administration, Secretary of Homeland Security) when developing standards and specifications under this provision.

Section 407. Appointment and title of Chief Information Officer of the Intelligence Community

Section 407 converts the position of Chief Information Officer (CIO) of the Intelligence Community from an appointment by the President, by and with the advice and consent of the Senate, to an appointment by the DNI. The provision also expressly designates the position as CIO of the Intelligence Community. The modification to the title of the position of CIO is consistent with the position's overall responsibilities as outlined in Section 103G(b) of the National Security Act of 1947 (50 U.S.C. 403-3g(b)). Section 407 shall apply with respect to any appointment of an individual to serve as CIO of the Intelligence Community that is made on or after the date of enactment of this Act.

The CIO of the Intelligence Community has reorganized his office to reflect his legislative responsibilities. The reorganized office consists of the following units: (1) Intelligence Community Governance; (2) Intelligence Community Enterprise Architecture; (3) Information Sharing and Customer Outreach; (4) Intelligence Community Information Technology Management; and (4) Enterprise Services. The CIO of the Intelligence Community has also established a CIO Council that is composed of program managers from several key Intelligence Community elements. The CIO of the Intelligence Community also plans on

establishing a `board of governors' consisting of officials from the various agencies who will work together to resolve issues.

The creation of a CIO of the Intelligence Community (Section 303 of the Intelligence Authorization Act for Fiscal Year 2005 (Pub. L. No. 108-487 (Dec. 23, 2004))), combined with the budgetary authorities and information technology responsibilities of the DNI (see, e.g., Section 1011 of the Intelligence Reform Act), laid an important foundation for improvements in the information technology infrastructure of the Intelligence Community. The Committee believes that the CIO of the Intelligence Community must provide direction and guidance to all elements of the Intelligence Community to ensure that information technology research and development, security, and acquisition programs support information access throughout the Intelligence Community. The modification to the manner in which the CIO of the Intelligence Community is appointed should not be construed to diminish the authorities or responsibilities of the position.

Section 408. Inspector General of the Intelligence Community

Section 1078 of the Intelligence Reform Act authorizes the DNI to establish an Office of Inspector General if the DNI determines that an Inspector General `would be beneficial to improving the operations and effectiveness of the Office of the DNI.' It further provides that the DNI may grant to the Inspector General `any of the duties, responsibilities, and authorities' set forth in the Inspector General Act of 1978. The DNI has now appointed an Inspector General and has granted the Inspector General certain authorities pursuant to Director of National Intelligence Instruction No. 2005-10 (Sept. 7, 2005). The duties, responsibilities, and authorities of the Inspector General, and his ability to exercise his authorities across all elements of the Community, remain ambiguous, however. In H.R. Rep. 109-411 (April 6, 2006) (report of the Permanent Select Committee on Intelligence of the House of Representatives (HPSCI) to accompany H.R. 5020, the Intelligence Authorization Act for Fiscal Year 2007), the HPSCI has also expressed concerns that `[the Office of the Inspector General] is currently chartered in a way that does not ensure the maximum utility of that office to act as a coordinating organization for all Intelligence Community Inspector Generals [sic], specifically with regard to keeping the Committee informed of its activities and findings.'

The problems expressed by the HPSCI report and the concerns identified in the Committee's oversight must be addressed by an empowered and effective Inspector General to serve the DNI and the Intelligence Community. A strong Inspector General is vital to achieving the goal, set forth in the Intelligence Reform Act, of improving the operations and effectiveness of the Intelligence Community. It is also vital to achieving the broader goal of identifying problems and deficiencies wherever they may be found in the Intelligence Community, including the manner in which elements of the Community interact with each other in such matters as providing access to information and undertaking joint or cooperative activities. To that end, by way of a proposed new Section 103H of the National Security Act of 1947, Section 408 of this Act establishes an Inspector General of the Intelligence Community.

The office will be established within the Office of the DNI. The Inspector General will keep both the DNI and the intelligence committees fully and currently informed about problems and deficiencies in Intelligence Community programs and operations and the need for corrective actions. The Inspector General will be appointed by the President, with the advice and consent of the Senate, and will report directly to the DNI. To bolster the Inspector General's independence within the Intelligence Community, the Inspector General may be removed only by the President, who must then communicate the reasons for the Inspector General's removal to the intelligence committees.

The DNI may prohibit the Inspector General from conducting an investigation, inspection, or audit if the DNI determines that such action is necessary to protect vital national security interests. If the DNI exercises the authority to prohibit an investigation, the DNI must provide the reasons for taking such action to the intelligence committees within seven days. The Inspector General may, as necessary, provide a response to the intelligence committees regarding the actions of the DNI.

The Inspector General will have direct and prompt access to the DNI and any Intelligence Community employee, or employee of a contractor, whose testimony is needed. The Inspector General will also have direct access to all records that relate to programs and activities for which the Inspector General has responsibility. Failure to cooperate will be grounds for appropriate administrative action.

The Inspector General will have subpoena authority; however, information within the possession of the United States government must be obtained through other procedures. Subject to the DNI's concurrence, the Inspector General may request information from any United States government department, agency, or element. Upon receiving such a request from the Inspector General, heads of United States government departments, agencies, and elements, insofar as practicable and not in violation of law or regulation, must provide the requested information to the Inspector General.

The Inspector General must submit semiannual reports to the DNI that include a description of significant problems relating to Intelligence Community programs and operations and to the relationships between Intelligence Community elements. The reports must include a description of Inspector General recommendations and a statement whether corrective action has been completed. Within 30 days of receiving the report from the Inspector General, the DNI must submit each semiannual report to Congress.

The Inspector General must immediately report to the DNI particularly serious or flagrant violations. Within seven days, the DNI must transmit those reports to the intelligence committees, together with any comments. In the event the Inspector General is unable to resolve differences with the DNI, the Inspector General is authorized to report the serious or flagrant violation directly to the intelligence committees. Reports to the intelligence committees are also required with respect to investigations concerning high-ranking Intelligence Community officials.

Intelligence Community employees, or employees of contractors, who intend to report to Congress an `urgent concern'--such as a violation of law or Executive order, a false statement to Congress, or a willful withholding from Congress--may report such complaints and supporting information to the Inspector General. Following a review by the Inspector General to determine the credibility of the complaint or information, the Inspector General must transmit such complaint and information to the DNI. On receiving the complaints or information from the Inspector General (together with the Inspector General's credibility determination), the DNI must transmit such complaint or information to the intelligence committees. If the Inspector General does not find a complaint or information to be credible, the reporting individual may submit the matter directly to the intelligence committees by following appropriate security practices outlined by the DNI. Reprisals or threats of reprisal against reporting individuals constitute reportable `urgent concerns.' The Committee will not tolerate actions by the DNI, or by any Intelligence Community element, constituting a reprisal for reporting an `urgent concern' or any other matter to Congress. Nonetheless, reporting individuals should ensure that the complaint and supporting information are provided to Congress consistent with appropriate procedures designed to protect intelligence sources and methods and other sensitive matters.

For matters within the jurisdiction of both the Inspector General of the Intelligence Community and an Inspector General for another Intelligence Community element (or a parent department or agency), the Inspectors General must expeditiously resolve who will undertake the investigation, inspection, or audit. For investigations, inspections, or audits commenced by an Inspector General of an Intelligence Community element prior to the enactment of this Act, the Inspector General of the Intelligence Community should exercise his authority in a manner that does not disrupt the timely completion of such investigations, inspections, or audits or result in unnecessary duplication of effort. An Inspector General for an Intelligence Community element must share the results of any inspection, investigation, or audit with any other Inspector General, including the Inspector General of the Intelligence Community, who otherwise would have had jurisdiction over the investigation.

Consistent with existing law, the Inspector General must report to the Attorney General any information, allegation, or complaint received by the Inspector General relating to violations of Federal criminal law.

Section 408 includes modifications proposed by the Armed Services Committee of the Senate during its sequential consideration of S. 1803, the Intelligence Authorization Act for Fiscal Year 2006. In addition to technical modifications, these proposed modifications: (1) removed the authority of the Inspector General of the Intelligence Community to serve as the final arbiter of jurisdictional disputes among Intelligence Community Inspectors General; (2) exempted initial investigations, inspections, or audits of the DoD Inspector General, or any other Inspectors General within the DoD, from the authority of the Inspector General of the Intelligence Community to conduct a subsequent investigation, inspection, or audit of the same matter if the initial investigation, inspection, or audit was deemed deficient; and (3) deleted a requirement that Intelligence Community Inspectors General must comply fully with requests for information or assistance from the Inspector General of the Intelligence Community. Compare S. 1803, Section 408, as reported by the Committee (S. Rep. 109-142 (Sept. 29, 2005) (adding proposed subsection (g)(1), (g)(3), and (h)(3)(C) of new Section 103H of the National Security Act of 1947)) with S. 1803, Section 408, as reported by the Armed Services Committee (S. Rep. 109-173 (Oct. 27, 2005) (modifying proposed subsection (g)(1), (g)(3), and (h)(3)(C))).

Section 409. Leadership and location of certain offices and officials

Section 409 expressly establishes four new officers within the Office of the DNI: (1) the CIO of the Intelligence Community; (2) the Inspector General of the Intelligence Community; (3) the Director of the National Counterterrorism Center; and (4) the Director of the National Counter Proliferation Center (NCPC). It also provides that the DNI shall appoint the Director of the NCPC.

The establishment of a Director of the NCPC is consistent with Section 1022 of the Intelligence Reform Act. Section 1022 added a new Section 119A of the National Security Act of 1947, which provides that the President shall establish an NCPC. Under the Act, the NCPC has seven missions and objectives and should serve as the primary organization within the United States government for analyzing and integrating all intelligence pertaining to proliferation. Among its other powers, the NCPC is authorized to coordinate the counter proliferation plans and activities of all United States government departments and agencies. Section 119A also provided that the NCPC should conduct `strategic operational planning' for the United States government to prevent the spread of weapons of mass destruction, delivery systems, and materials and technologies.

Congress provided the President with the authority to waive any, or all, of the requirements of Section 119A if it was determined that they did not materially improve the nonproliferation ability of the United States. At the time Congress enacted the Intelligence Reform Act, the WMD Commission had not completed its work. Congress provided that the President, after receiving the WMD Commission report, should submit to Congress his views on the establishment of the NCPC.

In its March 31, 2005, report, the WMD Commission recommended that the President establish a relatively small NCPC that manages and coordinates analysis and collection across the Intelligence Community on nuclear, biological, and chemical weapons. The WMD Commission supported the concept of `strategic operational planning,' but recommended that it not be performed by the NCPC.

On June 29, 2005, the White House announced that