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49-006

109TH CONGRESS

REPORT

HOUSE OF REPRESENTATIVES

2d Session

109-411

--INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2007

APRIL 6, 2006- Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. HOEKSTRA, from the Permanent Select Committee on Intelligence, submitted the following

R E P O R T

together with

MINORITY VIEWS

[To accompany H.R. 5020]

[Including cost estimate of the Congressional Budget Office]

SEC. 1. SHORT TITLE; TABLE OF CONTENTS.

Sec. 1. Short title; table of contents.
TITLE I--INTELLIGENCE ACTIVITIES
Sec. 101. Authorization of appropriations.
Sec. 102. Classified Schedule of Authorizations.
Sec. 103. Personnel ceiling adjustments.
Sec. 104. Intelligence Community Management Account.
Sec. 105. Incorporation of reporting requirements.
TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM
Sec. 201. Authorization of appropriations.
TITLE III--INTELLIGENCE AND GENERAL INTELLIGENCE COMMUNITY MATTERS
Sec. 301. Increase in employee compensation and benefits authorized by law.
Sec. 302. Restriction on conduct of intelligence Activities.
Sec. 303. Clarification of definition of Intelligence Community under the National Security Act of 1947.
Sec. 304. Delegation of authority for travel on common carriers for intelligence collection personnel.
Sec. 305. Retention and use of amounts paid as debts to Elements of the Intelligence Community.
Sec. 306. Availability of funds for travel and transportation of personal effects, household goods, and automobiles.
Sec. 307. Purchases by elements of the intelligence community of products of federal prison industries.
TITLE IV--MATTERS RELATING TO ELEMENTS OF THE INTELLIGENCE COMMUNITY
Subtitle A--Office of the Director of National Intelligence
Sec. 401. Clarification of delegation of transfer or reprogramming authority.
Sec. 402. Clarification of limitation on co-location of the Office of the Director of National Intelligence.
Sec. 403. Additional duties of the Director of Science and Technology of the Office of the Director of National Intelligence.
Sec. 404. Appointment and title of Chief Information Officer of the Intelligence Community.
Sec. 405. Leadership and location of certain offices and officials.
Sec. 406. Eligibility for incentive awards of personnel assigned to the Office of the Director of National Intelligence.
Sec. 407. Repeal of certain authorities relating to the Office of the national counterintelligence Executive.
Sec. 408. Membership of the Director of National Intelligence on the transportation security oversight Board.
Sec. 409. Temporary inapplicability to the Office of the Director of National Intelligence of certain financial reporting requirements.
Sec. 410. Comprehensive inventory of special access programs.
Sec. 411. Sense of Congress on multi-level security clearances.
Sec. 412. Access to information by staff and members of the congressional intelligence committees.
Sec. 413. Study on revoking pensions of persons who commit unauthorized disclosures of classified information.
Subtitle B--Central Intelligence Agency
Sec. 421. Enhanced protection of Central Intelligence Agency intelligence sources and methods from unauthorized disclosure.
Sec. 422. Additional exception to foreign language proficiency requirement for certain senior level positions in the Central Intelligence Agency.
Sec. 423. Additional functions and authorities for protective personnel of the central intelligence agency.
Sec. 424. Protective services for former officials of the intelligence community.
Sec. 425. Strategic review process.
Subtitle C--Defense Intelligence Components
Sec. 431. Enhancements of National Security Agency training Program.
Sec. 432. Codification of authorities of national security agency protective personnel.
Subtitle D--Other Elements
Sec. 441. Clarification of inclusion of Coast Guard and Drug Enforcement Administration elements in the Intelligence Community.
Sec. 442. Clarifying amendments relating to Section 105 of the Intelligence Authorization Act for Fiscal Year 2004.
TITLE V--OTHER MATTERS
Sec. 501. Aerial reconnaissance platforms.
Sec. 502. Elimination of certain reporting requirements.
Sec. 503. Technical amendments to the National Security Act of 1947.
Sec. 504. Technical clarification of certain references to joint military intelligence Program and tactical intelligence and related Activities.
Sec. 505. Technical amendments to the Intelligence Reform and Terrorism Prevention Act of 2004.
Sec. 506. Technical amendment to the Central Intelligence Agency Act of 1949.
Sec. 507. Technical amendments relating to the multiyear National Intelligence Program.
Sec. 508. Technical amendments to the Executive Schedule.
Sec. 509. Technical amendments relating to redesignation of the National Imagery and Mapping Agency as the national Geospatial-Intelligence Agency.

TITLE I--INTELLIGENCE ACTIVITIES

SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

SEC. 102. CLASSIFIED SCHEDULE OF AUTHORIZATIONS.

SEC. 103. PERSONNEL CEILING ADJUSTMENTS.

SEC. 104. INTELLIGENCE COMMUNITY MANAGEMENT ACCOUNT.

SEC. 105. INCORPORATION OF REPORTING REQUIREMENTS.

TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM

SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

TITLE III--INTELLIGENCE AND GENERAL INTELLIGENCE COMMUNITY MATTERS

SEC. 301. INCREASE IN EMPLOYEE COMPENSATION AND BENEFITS AUTHORIZED BY LAW.

SEC. 302. RESTRICTION ON CONDUCT OF INTELLIGENCE ACTIVITIES.

SEC. 303. CLARIFICATION OF DEFINITION OF INTELLIGENCE COMMUNITY UNDER THE NATIONAL SECURITY ACT OF 1947.

SEC. 304. DELEGATION OF AUTHORITY FOR TRAVEL ON COMMON CARRIERS FOR INTELLIGENCE COLLECTION PERSONNEL.

SEC. 305. RETENTION AND USE OF AMOUNTS PAID AS DEBTS TO ELEMENTS OF THE INTELLIGENCE COMMUNITY.

`RETENTION AND USE OF AMOUNTS PAID AS DEBTS TO ELEMENTS OF THE INTELLIGENCE COMMUNITY

`Sec. 1103. Retention and use of amounts paid as debts to elements of the intelligence community.'.

SEC. 306. AVAILABILITY OF FUNDS FOR TRAVEL AND TRANSPORTATION OF PERSONAL EFFECTS, HOUSEHOLD GOODS, AND AUTOMOBILES.

SEC. 307. PURCHASES BY ELEMENTS OF THE INTELLIGENCE COMMUNITY OF PRODUCTS OF FEDERAL PRISON INDUSTRIES.

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

Subtitle A--Office of the Director of National Intelligence

SEC. 401. CLARIFICATION OF DELEGATION OF TRANSFER OR REPROGRAMMING AUTHORITY.

SEC. 402. CLARIFICATION OF LIMITATION ON CO-LOCATION OF THE OFFICE OF THE DIRECTOR OF NATIONAL INTELLIGENCE.

SEC. 403. ADDITIONAL DUTIES OF THE DIRECTOR OF SCIENCE AND TECHNOLOGY OF THE OFFICE OF THE DIRECTOR OF NATIONAL INTELLIGENCE.

SEC. 404. APPOINTMENT AND TITLE OF CHIEF INFORMATION OFFICER OF THE INTELLIGENCE COMMUNITY.

SEC. 405. LEADERSHIP AND LOCATION OF CERTAIN OFFICES AND OFFICIALS.

SEC. 406. ELIGIBILITY FOR INCENTIVE AWARDS OF PERSONNEL ASSIGNED TO THE OFFICE OF THE DIRECTOR OF NATIONAL INTELLIGENCE.

SEC. 407. REPEAL OF CERTAIN AUTHORITIES RELATING TO THE OFFICE OF THE NATIONAL COUNTERINTELLIGENCE EXECUTIVE.

SEC. 408. MEMBERSHIP OF THE DIRECTOR OF NATIONAL INTELLIGENCE ON THE TRANSPORTATION SECURITY OVERSIGHT BOARD.

SEC. 409. TEMPORARY INAPPLICABILITY TO THE OFFICE OF THE DIRECTOR OF NATIONAL INTELLIGENCE OF CERTAIN FINANCIAL REPORTING REQUIREMENTS.

SEC. 410. COMPREHENSIVE INVENTORY OF SPECIAL ACCESS PROGRAMS.

SEC. 411. SENSE OF CONGRESS ON MULTI-LEVEL SECURITY CLEARANCES.

SEC. 412. ACCESS TO INFORMATION BY STAFF AND MEMBERS OF THE CONGRESSIONAL INTELLIGENCE COMMITTEES.

SEC. 413. STUDY ON REVOKING PENSIONS OF PERSONS WHO COMMIT UNAUTHORIZED DISCLOSURES OF CLASSIFIED INFORMATION.

Subtitle B--Central Intelligence Agency

SEC. 421. ENHANCED PROTECTION OF CENTRAL INTELLIGENCE AGENCY INTELLIGENCE SOURCES AND METHODS FROM UNAUTHORIZED DISCLOSURE.

SEC. 422. ADDITIONAL EXCEPTION TO FOREIGN LANGUAGE PROFICIENCY REQUIREMENT FOR CERTAIN SENIOR LEVEL POSITIONS IN THE CENTRAL INTELLIGENCE AGENCY.

SEC. 423. ADDITIONAL FUNCTIONS AND AUTHORITIES FOR PROTECTIVE PERSONNEL OF THE CENTRAL INTELLIGENCE AGENCY.

`Sec. 3065. Powers of authorized personnel in the Central Intelligence Agency

`3065. Powers of authorized personnel in the Central Intelligence Agency.'.

SEC. 424. PROTECTIVE SERVICES FOR FORMER OFFICIALS OF THE INTELLIGENCE COMMUNITY.

`PROTECTIVE SERVICES FOR FORMER OFFICIALS OF THE INTELLIGENCE COMMUNITY

`Sec. 304. Protective services for former officials of the intelligence community.'.

SEC. 425. STRATEGIC REVIEW PROCESS.

Subtitle C--Defense Intelligence Components

SEC. 431. ENHANCEMENTS OF NATIONAL SECURITY AGENCY TRAINING PROGRAM.

SEC. 432. CODIFICATION OF AUTHORITIES OF NATIONAL SECURITY AGENCY PROTECTIVE PERSONNEL.

`Sec. 3066. Powers of authorized personnel in the National Security Agency

`3066. Powers of authorized personnel in the National Security Agency.'.

Subtitle D--Other Elements

SEC. 441. CLARIFICATION OF INCLUSION OF COAST GUARD AND DRUG ENFORCEMENT ADMINISTRATION ELEMENTS IN THE INTELLIGENCE COMMUNITY.

SEC. 442. CLARIFYING AMENDMENTS RELATING TO SECTION 105 OF THE INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2004.

TITLE V--OTHER MATTERS

SEC. 501. AERIAL RECONNAISSANCE PLATFORMS.

SEC. 502. ELIMINATION OF CERTAIN REPORTING REQUIREMENTS.

SEC. 503. TECHNICAL AMENDMENTS TO THE NATIONAL SECURITY ACT OF 1947.

SEC. 504. TECHNICAL CLARIFICATION OF CERTAIN REFERENCES TO JOINT MILITARY INTELLIGENCE PROGRAM AND TACTICAL INTELLIGENCE AND RELATED ACTIVITIES.

SEC. 505. TECHNICAL AMENDMENTS TO THE INTELLIGENCE REFORM AND TERRORISM PREVENTION ACT OF 2004.

SEC. 506. TECHNICAL AMENDMENT TO THE CENTRAL INTELLIGENCE AGENCY ACT OF 1949.

SEC. 507. TECHNICAL AMENDMENTS RELATING TO THE MULTIYEAR NATIONAL INTELLIGENCE PROGRAM.

`SEC. 1403. MULTIYEAR NATIONAL INTELLIGENCE PROGRAM.'.

SEC. 508. TECHNICAL AMENDMENTS TO THE EXECUTIVE SCHEDULE.

Sec. 509. Technical amendments relating to redesignation of the National Imagery and Mapping Agency as the national Geospatial-Intelligence Agency

`Sec. 1336. National Geospatial-Intelligence Agency: special publications'.

`1336. National Geospatial-Intelligence Agency: special publications.'.

PURPOSE

The purpose of H.R. 5020 is to authorize the intelligence and intelligence-related activities of the United States Government for Fiscal Year 2007 in order to enhance the national security of the United States, to support and assist the armed forces of the United States, and to support the President in the execution of the foreign policy of the United States. The bill also clarifies certain Intelligence Community authorities and makes technical corrections flowing from the Intelligence Reform and Terrorism Protection Act.

CLASSIFIED ANNEX AND COMMITTEE INTENT

The classified annex to this report includes the classified Schedule of Authorizations and its associated explanatory language. The Committee views the classified annex as an integral part of this legislation. The classified annex contains a thorough discussion of the issues considered by the Committee underlying the funding authorizations found in the classified Schedule of Authorizations. The Committee intends that all intelligence programs discussed in the classified annex to this report be conducted in accordance with the guidance and limitations set forth as associated language therein. The classified Schedule of Authorizations is incorporated directly into this legislation by virtue of section 102 of the bill. The classified annex is available for review by all Members of the House of Representatives, subject to the requirements of clause 13 of rule XXIII of the Rules of the House of Representatives, and rule 14 of the Rules of Procedure for the House Permanent Select Committee on Intelligence. In addition, Section 105 of the bill incorporates reporting requirements of the Classified Annex and any Joint Explanatory Statement into the Act.

SCOPE OF COMMITTEE REVIEW

The bill authorizes U.S. intelligence and intelligence-related activities under the jurisdiction of the Committee, including the National Intelligence Program (NIP), and the Military Intelligence Program (MIP), formerly the Joint Military Intelligence Program and the Tactical Intelligence and Related Activities. The NIP consists of all activities of the Office of the Director of National Intelligence, as well as those national foreign intelligence, intelligence-related, and/or counterintelligence activities conducted by: (1) the Central Intelligence Agency; (2) the Department of Defense; (3) the Defense Intelligence Agency; (4) the National Security Agency; (5) the National Reconnaissance Office; (6) the National Geospatial-Intelligence Agency; (7) the Departments of the Army, Navy, and Air Force; (8) the Department of State; (9) the Department of the Treasury; (10) the Department of Energy; (11) the Department of Justice; (12) the Federal Bureau of Investigation; (13) the U.S. Coast Guard; (14) the Department of Homeland Security; and (15) the Drug Enforcement Administration. The Committee has exclusive legislative, authorizing and oversight jurisdiction of these programs.

COMMITTEE STATEMENT AND VIEWS

A. THE COMMITTEE REVIEW

The Committee completed its review of the President's fiscal year 2007 budget request, carrying out its annual responsibility to prepare an authorization based on close examination of the U.S. government's intelligence programs and proposed expenditures. In a deliberate departure from past practice, the Committee decided to mark up the budget request much earlier in the calendar year than normal. This required that the Committee's focus be more strategic in nature. Instead of many budget-related hearings with witnesses from each intelligence program, the Committee held only three, two of which had the new Director of National Intelligence (DNI) as the primary witness, and one with the Under Secretary of Defense for Intelligence. Despite the limited number of formal hearings, Members and Staff took dozens of briefings covering all major intelligence programs within the National Intelligence Program (NIP) and the Military Intelligence Program (MIP). This review covered all functional capabilities, such as human intelligence, signals intelligence, imagery intelligence, open source intelligence, analysis, counterintelligence, counternarcotics, and counterterrorism.

As always, the Committee's legislative and budgetary actions are based on more than these budget-specific hearings and briefings. The actions taken in this bill are the result of the Committee's ongoing, rigorous oversight of the U.S. Intelligence Community. This oversight activity includes the scores of Committee and subcommittee hearings and briefings, site visits, and fact-finding trips, and studies of intelligence capabilities, strategies, plans, and challenges throughout the year.

Director of National Intelligence

As was the case for its fiscal year 2006 review, the Committee notes the time and attention it has devoted to the creation of an empowered, capable and agile U.S. Intelligence Community for the 21st Century. Since the end of calendar year 2004 when it passed sweeping legislation reforming the U.S. Intelligence Community, the Congress, and particularly this committee, has continued to oversee, assist in, comment on, and as necessary, criticize the Administration's effort to realize the goals and vision of that legislation. This oversight has focused on, but not been limited to, the standup of the Office of the Director of National Intelligence (ODNI). With the Intelligence Reform and Terrorism Prevention Act, the Congress intended to create a responsible authority that would oversee and orchestrate a coordinated effort by the entire Community. The Committee has concern that the DNI is pursuing a path that will make the ODNI less an intended `orchestration mechanism,' and more another layer of large, unintended and unnecessary bureaucracy. Despite this concern, the Committee is committed to supporting all efforts that will make the DNI successful in better integrating the disparate members of the Intelligence Community and creating the best possible intelligence capabilities for America. In that respect, the Committee notes, with pleasure, that this year's budget request was the first that was fully determined by the DNI, and that effort by the DNI to create an Intelligence Community that is greater than the sum of its parts is beginning to bear fruit.

The war on terrorism and the Terrorist Surveillance Program

There is no question about the respect and admiration that this Committee has for the intelligence professionals that serve all of us in quiet, unheralded service, often in dangerous places and situations around the world. In the conduct of its oversight responsibilities, the Committee has had the opportunity to meet and work with intelligence professionals throughout the Community. The work that our intelligence personnel do is truly the first line of defense for all Americans. We owe them a great deal of gratitude, and we owe them every effort to give them the tools, resources, and authorities necessary to protect our nation.

Unfortunately, these honorable men and women have been poorly served by a small few who have taken it upon themselves to, for political or other motives, recklessly and illegally disclose America's necessary secrets and national security information. The issue of unauthorized disclosures of classified information has been extremely troubling and a focus of a major work effort for the Committee. The Committee has written to the President expressing its concern that there appears to be no reasonable expectation of consequences for those who harm America's national security by leaking classified information. Each of these perpetrators, whether they provide information to the media or to sworn enemies, is committing a crime and violating an oath to which they have sworn. Further, the Committee finds reprehensible the irresponsible reporting of extremely sensitive national security information. Such reporting does not serve well the national interests, costs untold millions of dollars in lost intelligence collection capabilities funded by U.S. taxpayers, literally puts lives in jeopardy, and makes the work by the honorable people of our Intelligence Community far more difficult. Instead of chastising this Community for its lawful and protective efforts, we should be fully supporting them with all remedies possible to stop these unauthorized disclosures. The Committee's work plan for this fiscal year includes reviewing all legal avenues to bring to justice those who violate the law, including those who knowingly receive, what is essentially, stolen classified information.

One of the most damaging leaks of national security information was the revelation of the National Security Agency's Terrorist Surveillance Program. As a direct result of this illegal compromise of classified information, the ability of the United States to protect itself from terrorists has been compromised. It can be argued that what factually correct information was disclosed in the press was done so for profit and to inflict political harm. However, beyond disclosure of the classified facts, false and reprehensible claims of improper or illegal activities are even more troubling. For example, the Minority, in its views accompanying this report, state that the President has violated the law by failing to `keep the Committee `fully and currently' informed of all intelligence activities of the United States.' In point of fact, leaders in Congress had been briefed more than a dozen times on the authorization and related activities. Further, the Attorney General and the Principal Deputy Director of National Intelligence briefed the full Committee at length on the legal issues and certain operational details. What the Minority further continues to omit in the public version of its position is that the National Security Act of 1947 clearly provides that `the President and the congressional intelligence committees shall each establish such procedures as may be necessary to carry out the provisions of this title' and that the requirement to keep the committees `fully and currently' informed is to be done `to the extent consistent with due regard for the protection from unauthorized disclosure of classified information relating to sensitive intelligence sources and methods or other exceptionally sensitive matters.' In full accordance with those two provisions of the law, the Committee has determined that the extraordinary sensitivities of the operational aspects of this program would be limited to select Members and Staff of the Committee. That procedure has allowed the Committee to get full and current briefings on this program to monitor the communications of known terrorists. Therefore, it is the Committee position that the President of the United States has in no way violated the law with respect to notifying the Congress on these activities.

With respect to the Terrorist Surveillance Program, the Committee is fully supportive of this defensive measure to understand efforts by known Al Qaeda or its affiliates to attack America or its allies. The Committee's position is taken with the full understanding that we are a nation at war. This is a global war on terrorism: a war that is not being fought primarily by conventional military forces on the traditional field of battle and governed by time-tested rules of land warfare. This is a war of asymmetry: a war to attack the hearts and minds of civilized nations; and a war, the battlefield of which, includes the homeland, something not seen in more than 100 years. To combat the elusive, smart, and agile enemy, America must think differently, act differently, and be more flexible. America's major weapon in this war is the ability to create knowledge about the enemy. The primary responsibility to `man this weapon' rests on the Intelligence Community. We, as a nation, must not tie the hands of those who are charged with defending us, and we must at the same time, and as a culture, protect the civil liberties we hold dear. The Terrorist Surveillance Program is critical to our national security, and the Committee believes firmly that the National Security Agency program provides the proper balance between the two. Accordingly, the Committee's Republican Majority rejected an effort by the Democratic Minority to withhold twenty percent of the funding for the overall operation of the National Security Agency until the Executive Branch provided cost data on this single, extremely small, program. The Majority found that it would be completely irresponsible in a time of war to withhold funding from an Intelligence Community agency that is providing real-time information on terrorists and other foreign intelligence targets in a time of war.

Continuing Intelligence Community reform

In the unclassified report accompanying the fiscal year 2006 legislation, the Committee commented extensively on the need for change within the Intelligence Community. Those comments focused on the need to respond positively to the criticisms and `failures' of intelligence that prompted reviews by the National Commission on Terrorist Attacks Upon the United States (9/11 Commission) and the Commission on the Intelligence Capabilities of the United States Regarding Weapons of Mass Destruction (WMD Commission). The Committee agreed with many of the recommendations of those commissions, stating that some of the needed changes will require cultural change and, moreover, a real need for the Intelligence Community to adopt a more receptive attitude to change. Ultimately, such will be necessary to improve the Community's overall product--knowledge. The Committee continues to believe that a number of systemic and focus area changes need to occur, and has, once again, in this legislation attempted to put emphasis on those areas of most concern: human intelligence, intelligence analysis, community infrastructure, and counter-intelligence.

The Committee notes that the President's budget makes good progress in improving human intelligence capabilities--delivering a plan to increase the number of core collectors and analysts by fifty percent. The Committee further notes that the DNI has had some good success in improving long-standing analytic process and tradecraft problems. The Committee's funding recommendations further enhances both the human intelligence and analytic areas by attempting to drive improved changes. With respect to infrastructure issues, the Committee is very concerned about the state of basic facilities and, in some cases, services throughout the Community. These include the relatively mundane, but extraordinarily important, things such as power and water utilities, the capacity of training facilities and instructors, and support to field operations. All of these supporting infrastructure functions are critical to collection, analysis and information dissemination, and have captured the long-term interest of the Committee. Finally, the Committee has focused attention on the issue of counterintelligence. There appears to be an alarming increase by nation-state and non-nation-state actors to conduct intelligence operations against the United States. The Committee notes that certain nations are conducting espionage efforts against this country at a level not seen since before the end of the Cold War. It is nearly inherent that when a country is, as we are, at war and focused on that war, its enemies will increase their intelligence efforts against it. We should expect this to continue as we pursue the Global War on Terrorism. This is an alarming situation, and the Committee believes that the Intelligence Community must refocus, and moreover, reemphasize its counter-intelligence capabilities and methodologies.

Lastly, the Committee finds that the Intelligence Community must embrace more fully unconventional and open sources of information. Many estimate that large percentages of information needs can be satisfied by open source materials, and the Committee believes that the growth of the internet and mass media has dramatically altered the amount of information available through open and unconventional sources. To ignore the value of such information is dangerous. The Committee is, therefore, pleased that the DNI has moved quickly to make the use of open source (unclassified) materials an institutional imperative throughout the analytic community. However, it will take a dramatic change in cultural philosophy to trust and use open source materials that weren't collected or discovered by `secret means.' Conversely, the

Committee is not pleased by the reticence of the Community, including the DNI, to more fully embrace the notion of unconventional sources of information. For example, and to its credit, the ODNI recently began releasing to the general public unclassified documents captured during Operation Iraqi Freedom. This project will allow the world community to help understand the Iraqi positions prior to the start of the war. Already this project has brought to light many of the intentions and efforts by the Saddam regime to hide materials from the United Nations inspectors and its ties with terrorists. However, the Committee's effort to get these unconventionally collected materials released was not supported by the DNI until forced to do so. Additionally, the Community all too often appears to be less-than-enthusiastic in following up on information brought to it by people outside the Community, including former government officials, experts in particular fields, or even authors who have more expertise on specific issues than anyone within the Intelligence Community. The Committee finds that opportunities are lost and information leads on things such as possible weapons of mass destruction locations are not properly followed. This is not the hallmark of a flexible and agile-thinking intelligence function that was envisioned in the intelligence reform legislation. The Committee intends to monitor closely the efforts to improve the use of these open source and unconventional sources of information.

The Intelligence Community today is one of transition. There is a continuing mission transition from old mindsets of a bipolar world to one of a network-based world. There is a philosophical transition from a DCI-centric community of disparate agencies to a more corporate-centric community orchestrated by the DNI. And, there is a need to recognize that transition `back to the basics' of good human intelligence to act as a basis for our unparalleled technical intelligence capabilities is critical. As we continue these transitions, we must recognize that there are gaps in capabilities, particularly in our ability to persistently stare at targets, which must be corrected. And, we must fully recognize that the need to focus on the issue of terrorism cannot be an excuse for not producing intelligence on the `traditional' foreign intelligence targets like Iran and North Korea, as well as the transnational problem sets, such as illegal narcotics and human smuggling. Some of these issues are specifically addressed in the `Areas of Special Interest/General Provisions' section immediately following. A complete discussion of the Committee's oversight findings and recommendations is contained in the classified annex to this report.

B. LEGISLATION

The bill and accompanying classified Schedule of Authorizations includes the Committee's recommended authorizations for the President's Fiscal Year 2007 budget request. This includes an authorization for the intelligence portion of the funding for the Global War on Terrorism (GWOT) and operations in Iraq and Afghanistan. The Committee views these funds as an integral part of the Fiscal Year 2007 budget and has decided to specifically authorize these activities for the full year in this legislation at this time.

H.R. 5020 provides strategic and substantial enhancements in funding for critical world-wide intelligence capabilities. The Committee believes there is a need to improve certain intelligence capabilities, including human intelligence, counterintelligence, analysis, and infrastructure. For a number of reasons fully explained in the classified annex, the Committee has made some specific and major recommendations to realign funding. These changes include:

In addition to authorization for intelligence and intelligence-related activities, the bill includes provisions intended to clarify certain authorities of the DNI. These provisions are intended to further refine and strengthen the authorities provided to the DNI to oversee, coordinate, and manage Intelligence Community activities.

Finally, just as in last year's bill, the Committee has focused on the Nation's overhead imagery architecture. Last year, a decision was made to terminate a part of the Future Imagery Architecture program. Although this tough decision had certain positive aspects, one disadvantage is that it is essential to ensure that there are no future gaps in capability. In this bill, the Committee vigorously urge the Intelligence Community toward one of a very limited number of options, so that the Nation will have the imagery capability it needs in the future. The Committee's action in this area will begin a process of fundamental change for the Future Imagery Architecture program. Although the Committee expects some discomfort within the Intelligence Community with this and other provisions, it continues to agree with outside observers that the Intelligence Community appears incapable of meaningful change without significant outside assistance. The Intelligence Authorization Act for Fiscal Year 2007 is intended to provide such assistance.

C. AREAS OF SPECIAL INTEREST

In this section, the Committee highlights areas of concern that it believes must be addressed as a high priority by the Director of National Intelligence in leading the Intelligence Community into the future.

Strategic review process

The Committee believes that achieving the necessary reforms of the Intelligence Community will only occur through a strategic planning process. Accordingly, Section 425 of the bill requires the Director of National Intelligence to, in consultation with the heads of the Intelligence Community elements, manage and oversee the conduct of a strategic review to develop intelligence capabilities required to address threats to national security.

A formalized, periodic, and structured review, much like the Quadrennial Defense Review process used by the Department of Defense, is intended to identify the breadth and depth of national security threats, the capabilities existing and needed to combat those threats, and better identify the alignment of resources, authorities, and personnel needed to support those required capabilities. Such a review will enable the Intelligence Community to more readily make and accept change, infuse flexibility into its management and operational structures, and enable the DNI to gain better insight on intelligence and intelligence-related activities throughout the U.S. Government. The review also is expected to influence the National Intelligence

Strategy by examining requirements necessary to address national priorities and objectives, determine which intelligence disciplines can provide the best support, and properly identify budget resources should be allocated to those priorities and objectives.

The Committee requests that the DNI provide the Committee with his plan for initiating and conducting this review.

Reporting regarding Iran and North Korea

The development by Iran and North Korea of nuclear, chemical, biological or radiological weapons and the missiles capable of delivering them are among the most significant potential threats to the United States. The Committee believes that it is imperative that the Intelligence Community continue to improve its collection and analysis of intelligence information on Iran and North Korea.

This point was highlighted by the bipartisan WMD Commission. The Commission's 2005 report stated: `Across the board, the Intelligence Community knows disturbingly little about the nuclear programs of the world's most dangerous actors. In some cases, it knows less now than it did five or ten years ago.' This statement aptly describes the challenge faced by U.S. policymakers with regard to Iran and North Korea's nuclear, chemical, and biological weapons programs.

If the President and Congress are to develop effective policies to counter Iran's and North Korea's weapons programs, such policies must be based on accurate and timely intelligence. The Committee has conducted regular and ongoing oversight of these efforts, and expects the DNI to ensure that the Intelligence Community continues to provide timely, detailed, and frequent reporting on the current intentions and capabilities on Iran and North Korea's nuclear, chemical, biological, radiological, and missile programs, as well as the Intelligence Community's capabilities to understand and evaluate these programs.

In particular, the Committee is interested in receiving on an ongoing basis: (1) current assessments of Iran's and North Korea's nuclear, chemical, biological weapons, and missile programs; (2) information on new intelligence developed, including intelligence collected from both open and clandestine sources; and (3) full discussion of any gaps in knowledge, dissents, caveats, or other information that would tend to reduce confidence in the overall assessment.

The Committee believes that these reports will provide timely information to help better inform Congress as it is asked to make decisions regarding U.S. policy towards Iran and North Korea.

Risk-taking and discouragement of risk averse culture

Intelligence is an art, not a science, and therefore imperfect, and it takes significant time to hone the operational skills necessary to conduct effective intelligence operations. The Committee recognizes that setbacks and shortcomings are inevitable while developing and conducting operations, especially against extremely difficult targets. However, fear of setbacks or `failures' should never be a deterrent to conducting high risk, essential intelligence operations.

As the Intelligence Community increases operations in exceptionally dangerous circumstances and against unpredictable targets, mistakes may occur. However, the Committee believes it is more realistic to measure success in the effort and initiative exhibited and not necessarily in the interim result. Lessons learned from failed operations should highlight shortcomings, and changes should be made. Only in this way can mission success be achieved. Although the Committee supports the notion `failure is not an option,' strict adherence to such a view may contribute to the development of a risk adverse culture in which certain operations are not conducted because of a fear of answering for failure. Although the Committee is responsible for investigating intelligence failures, it understands that honest mistakes will be made in highly fluid and complex operational environments. Our Intelligence Community must constantly strive for the `perfect,' but be willing to accept and take responsibility for failure; we must not foster a risk averse society.

The men and women of the Intelligence Community are among the bravest in the country, readily accepting the extreme personal risks inherent in their chosen profession. The Committee honors the sacrifices they make daily in their professional and personal lives and commits to the notion that honest failure is a price we must pay for being bold and proactive.

Unauthorized disclosures of classified information

As previously stated, the Committee remains gravely concerned with the problem of unauthorized disclosures of classified information, which harms national security, places American citizens and intelligence community personnel at increased risk, and inevitably results in substantial consequences to the United States--both tangible and intangible.

The Committee continues to address this important issue through two separate endeavors. It is continuing a legislative review, including hearings, to examine relevant issues and what changes to the law may be desirable. Those efforts have clearly established that prosecution under current laws relating to unauthorized disclosure has not been an effective deterrent tool, although it remains unclear whether this lack of effectiveness requires changes in the law or is due to other factors. In either event, the Committee believes that additional and more creative steps to deter unauthorized disclosures are warranted. Section 413 of the bill is a first step, requiring the DNI to review whether current law or administrative authorities enable the revocation of pensions of intelligence community personnel who commit unauthorized disclosures of classified information.

In addition, the Committee has initiated a review of certain specific potential unauthorized disclosures of classified information at the request of the Speaker of the House. That review primarily is concentrating on an investigation of four cases to develop a better understanding of the related facts and circumstances. The investigation is in turn expected to better enable the Committee to understand how and why unauthorized disclosures occur, and how the protection of classified information is perceived in practice.

It is important to emphasize that the Committee's concern is in no way intended to limit or reduce proper oversight of intelligence community activities or of activities with heightened potential to affect civil liberties. As one of the primary bodies intended to conduct oversight of intelligence activities on behalf of the American people, we are mindful of the need for ongoing and thorough review of such activities. However, the delicate balance between protecting national security and safeguarding civil liberties must be carried out in a manner that fully protects both interests, through mechanisms such as regular reporting to the congressional intelligence committees and the use of the Intelligence Community Whistleblower Protection Act. By definition, no individual--whether a journalist, government official, or intelligence community employee--can or should singlehandedly presume to determine what information `deserves' to be withheld from disclosure in order to protect national security, especially without full knowledge of the surrounding context.

Prosecution of espionage

Investigators, analysts, inspectors, and prosecutors from the Departments of Justice, Defense, and Homeland Security are working together in an effort to combat espionage. The Committee is pleased to note that since 2005, their combined efforts have resulted in the arrest of at least ten individuals in the United States accused of spying on behalf of a number of foreign countries.

The Committee is concerned, however, that these individuals will face relatively light sentences if found guilty. All of them are charged under 18 U.S.C. Sec. 793 (gathering, transferring, or losing defense information) or 18 U.S.C. 951 (agents of foreign governments), which carry penalties of no more than ten years imprisonment. The Committee notes that most, if not all, were not charged under 18 U.S.C. 794 (gathering or delivering defense information to aid foreign governments), which carries penalties ranging from life imprisonment to death. The Committee also notes that some of these individuals stand accused of stealing defense-related trade secrets from U.S. companies. However, none of these suspects were charged with violating 18 U.S.C. 1831 (economic espionage), which carries a maximum penalty of 15 years imprisonment for stealing trade secrets to benefit a foreign government.

The Committee believes that the penalties facing these accused spies are not an effective deterrent to espionage. Americans tempted to spy on behalf of a foreign power should understand clearly that doing so will have extremely negative consequences, resulting in their arrest, conviction, and long-term imprisonment.

The Committee notes the effective work of Justice Department prosecutors, but encourages the Attorney General to review the Department's counterespionage strategies. The review should address the following questions: Is the current strategy an effective deterrent to espionage? Are those convicted of espionage and related charges receiving the punishment they deserve? Why are more spies not charged under 18 U.S.C. Sec. 794 and 1831? Would stricter penalties for violating 18 U.S.C. 793 act as a better deterrent to espionage? The Committee expects the Attorney General to update it periodically on the status of such a review.

Counterintelligence field activity

The Committee remains concerned about improper instances of maintaining information regarding U.S. persons at the Counterintelligence Field Activity (CIFA) within the Department of Defense, and believes it is important to highlight the incident as well as the corrective actions promptly taken by the Department to address those practices.

CIFA was established to bring leadership to counterintelligence efforts within the Department. The counterintelligence mission involves the identification and neutralization of the pervasive foreign intelligence and terrorism threat directed globally against the Department of Defense and the U.S. Government. CIFA is responsible for overseeing counterintelligence investigations, operations, and services within the Department; overseeing and conducting joint CI advanced training and analyzing counterintelligence information to identify and target the threat in our increasingly complex and asymmetrical world.

In the course of gathering information believed to relate to force protection, CIFA improperly collected and retained information on U.S. persons engaged in constitutionally-protected protests at the University of California. In response to a congressional inquiry, the Department of Defense acknowledged that CIFA failed to follow policies regarding the collection and retention of information about U.S. persons. These failures were especially troubling in light of CIFA's important mission to set the standards while protecting the Constitutional rights of American citizens.

The Department of Defense subsequently has assessed that approximately 260 records out of 13,000 records in a classified CIFA database, or two percent of the total, improperly contained information relating to U.S. persons. Department leadership has responded to this assessment and directed that the database should be used only to report information regarding possible international terrorist activity, required supervisors to review all reports before inclusion in the database, and provided for refresher training for Department personnel on what information properly may be included in the database.

The Committee understands that the Department of Defense Inspector General is in the process of preparing a report addressing at least some of these issues. The Committee requests that the Inspector General submit no later than February 1, 2007 a report which includes the results of any audits relating to CIFA including but not limited to the collection, retention, and dissemination of information relating to U.S. persons. In addition, the Department of Defense shall submit no later than February 1, 2007, a report containing the results of any internal department review or investigation of policies, guidelines, and practices of CIFA related to the collection, retention, and dissemination of information relating to U.S. persons, as well as a description of remedial actions taken to address the findings and recommendations of the Inspector General and any other internal review.

Intelligence support for transformational diplomacy strategy

The Secretary of State has launched a major initiative to reposition U.S. diplomatic personnel across the world. This includes moving hundreds of positions to critical emerging areas in Africa, South Asia, East Asia, and the Middle East over the next several years. This

year alone, the Department will move approximately 100 positions out of Washington and European capitals. Enhancements to the Department's ability to monitor Iran--through the establishment of a new Office of Iranian Affairs and the creation of Iran `watcher' positions in Dubai, London, Frankfurt, and other capitals--represent perhaps the most dramatic, and most critical, elements of this transformation.

Such a major realignment of strategic priorities and of diplomats working on the `front lines' may require a significant shift in intelligence support provided to Department policymakers by the Bureau of Intelligence and Research (INR). To its credit, INR analysts have worked on their areas of expertise longer, on average, than many of their colleagues in other agencies, and INR has one of the lowest personnel turnover rates in the Intelligence Community. However, the long tenure and low turnover of INR analysts may make it difficult for the Bureau to adjust to changing priorities.

This Committee has previously urged the Department to increase the resources provided to INR, which has remained relatively constant in recent years. Given the proposed transformations to the Department's overall strategy, the Committee strongly encourages the Secretary of State to examine INR's current allocation of human and financial resources to ensure that INR will be able to adequately support the Department's new strategic priorities.

Director of National Intelligence Office of the Inspector General

Section 1078 of the Intelligence Reform and Terrorism Prevention Act of 2004 provided the Director of National Intelligence with the authority to establish an Office of the Inspector General. On September 7, 2005, the DNI established such an office, `charged with detecting fraud, waste, and abuse; evaluating performance; and making recommendations to promote economy, efficiency, and effectiveness in the ODNI and the Intelligence Community.' Although the Committee supports the DNI's desire to have an Office of the Inspector General, it is concerned that it 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, specifically with regard to keeping the Committee informed of its activities and findings.

As an example, the Intelligence Reform and Terrorism Prevention Act provided that any Office of the Inspector General created by the DNI would have the duties, responsibilities, and authorities contained in the Inspector General Act of 1978. That law requires each Inspector General to prepare semi-annual reports summarizing the activities of the office during the preceding six month period, which are to be forwarded to the agency head and transmitted to the appropriate committees of Congress. The DNI instruction calls for only an annual report, and makes no reference to a copy being provided to Congress.

The Inspector General Act also requires those offices to keep Congress and the appropriate Committees fully and currently informed about problems and deficiencies it discovers as well as the necessity for and progress of corrective action. The Committee is concerned that the structure for congressional interaction with the DNI Inspector General outlined in the September 2005 Instruction is overly restrictive of the flow of information to the Committee. The Instruction states:

The Inspector General shall notify the DNI and the Director, Office of Legislative Affairs, of any request from the intelligence committees or any other committee or subcommittee of the Congress for any report or findings and recommendations of any inspection, investigation, audit, or other inquiry conducted by the Inspector General, and after consultation with the DNI, prepare an appropriate response to any such request.

Another area of Committee concern deals with the DNI's authority to direct the Inspector General not to initiate, carry out, or complete any review without notification to Congress. While other Inspectors General within the Intelligence Community operate subject to similar authority, there is also the requirement for a notification to Congress on the use of such authority. That requirement calls for statements to be submitted by both the affected Inspector General and the official who exercised the authority. The DNI's September 2005 Instruction has no such provision for Congressional notification.

One final area of concern relates to the reporting of `urgent concerns' from whistleblowers, and `particularly serious or flagrant' issues. In 1998, Congress created special whistleblower protections and procedures applicable within the Intelligence Community. The September 2005 Instruction makes reference to the DNI's Inspector General conducting reviews based on information from employees or contractors of the ODNI or any element of the intelligence community and states that they should `be subject to, and in accordance with, DNI policy and regulations concerning whistleblower protection.' However, it is unclear that these policies and regulations conform to existing law governing whistleblower protection and notification to Congress.

The Committee notes also that the CIA's Inspector General is required to report immediately to the Director of that agency `whenever he becomes aware of particularly serious or flagrant problems, abuses, or deficiencies relating to the administration of programs and operations.' The Director is to transfer such reports to the Committee within seven calendar days. The Committee believes that similarly prompt reporting of issues identified by the DNI Inspector General is necessary.

In order to strengthen the foundation on which the DNI Office of Inspector General was created and to ensure that the appropriate oversight committees receive the maximum utility from its efforts, the Committee requests that within 180 days of enactment of this legislation the DNI issue an updated notification that incorporates elements of the Inspector General Act and the Central Intelligence Agency Act of 1949 that relate to Congressional notification and whistleblower protections.

Enterprise architecture

The Committee continues to believe that well-formed and successfully executed Enterprise Architecture (EA) frameworks in individual intelligence agencies and across the Intelligence Community will ensure more reliable Information Technology (IT) financial management and planning. These EA structures guide the IT budget and decisionmaking processes, which in turn should facilitate informed strategic investments and unified controls. This belief led in large part to the inclusion of responsibilities relating to EA for the Intelligence Community Chief Information Officer (CIO) and other responsible officials in the Intelligence and Terrorism Prevention Act of 2004.

In 2005, the Committee noted its view that `the IC would benefit greatly by undertaking a formal IC-wide EA effort, as this process would take these `linkages' and fuse them together across the community in the form of standard business, performance, data and information, service component, and technical models.' H. Rept. 108-558, at 35. The Committee also directed that the Intelligence Community CIO in conjunction with the agency level CIOs to `draft the implementation plan for an IC-wide EA, which will conform the agencies' EAs to the broader IC strategy. * * *' The Committee understands that the creation and implementation of these EA frameworks is ongoing and urges the DNI to continue to work collaboratively with the Intelligence Community agencies to ensure that these are completed within the timeframe prescribed. The Committee directs that the fiscal year 2008 National Intelligence Program and Military Intelligence Program budgets tie all IT spending to their respective EA frameworks at both the agency-level and Intelligence Community-wide.

Space acquisition programs--personnel

There is a general acknowledgement that the U.S. space acquisition programs at the National Reconnaissance Office and the Space and Missile Systems Center are in trouble. Simply put, expensive and complex acquisition endeavors always take longer, and therefore end up costing more than the initial estimates. Unanticipated delays can cause budgetary problems for other Intelligence Community programs, particularly when competition for resources leaves very little reserve to absorb unplanned cost overruns.

The Committee is interested in promoting greater continuity of personnel assigned to intelligence-related acquisition programs. It is not uncommon for space acquisition programs to take ten years, beginning with concept exploration, then developing an acquisition strategy, performing the source selection, and ultimately developing, launching, initializing, and operating the system (which can last decades). A seasoned acquisition professional will experience the interdependencies of all of these phases, and more importantly, gains an understanding of how the consequences of decisions made in any one phase ultimately affect the following phases. The Committee notes that previous personnel policies allowed uniformed military officers to remain assigned to NRO programs for the entire duration of an acquisition--in fact many Air Force officers made an entire career in the NRO. These extended assignments contributed to a sense of ownership, dedication, and commitment that is immeasurable and invaluable.

As anecdotally suggested, today's two-year rotational assignments do not provide an effective environment for successful space acquisitions. The Committee understands the military's desire to develop future leaders that have a breadth of experience, including experience focused in space related assignments. However, the Committee believes the mission to provide effective space acquisition professionals and to deliver these critical systems to the country far outweigh the need to develop well-rounded senior officers who are generalists.

Simply put, complex space systems acquisition requires extraordinarily specialized knowledge, skills, and dedicated effort overtime. This specialty deserves a focused, protected, long-term career status. The Committee believes that recreating a protected career field that focuses on acquisition of space systems is a key to fixing the underlying problems with our space developments.

Further, the Committee believes that current personnel assignment policies should be improved to allow space acquisition professionals to obtain greater experience and technical depth. Today's policies place a high degree of importance on rotational assignments to obtain broad experience. This model leads to high turnover rate in personnel and impedes military officers from developing the technical expertise required to manage complex space programs. In contrast, civilian acquisition personnel career progression is rooted in specific program management experience and a high degree of relevant continuing education. The Committee believes that such longer-term assignments for military officers would provide the acquisition professionals with more experience, with better judgment, and result in more personal commitment to success, than the current short rotational assignments.

Therefore, the Committee directs the Secretary of Defense, in cooperation with the Director of National Reconnaissance Office and the Secretary of the Air Force, to commission a study to determine the value and feasibility of establishing a protected career service for space acquisition professionals (similar to the JAG or Medical Corps) and how such a policy can be implemented. The Committee directs that the report be delivered to the congressional intelligence committees no later than 120 days after enactment of this legislation.

D. CONGRESSIONAL OVERSIGHT REFORM

Many of the studies and reports that have emphasized the need for reform within various federal departments and agencies have also highlighted the need to modernize congressional oversight. The Final Report of the National Commission on Terrorist Attacks Upon the United States (`9/11 Commission') labeled congressional oversight of intelligence `dysfunctional' (p. 420). Many of the criticisms can be summarized by stating that `Congress is engaged in too much of the wrong kind of oversight--too few national debates on major issues and far too much time and energy being spent on relatively minor and parochial issues.' (Center for Strategic and International Studies, Beyond Goldwater-Nichols: Defense Reform for a New Strategic Era, March 2004.)

Specific recommendations of the Commission on the Intelligence Capabilities of the United States Regarding Weapons of Mass Destruction (WMD Commission) to improve congressional oversight include:

Both the House and the Senate intelligence committees have indicated their intention to establish oversight subcommittees. But these subcommittees will not improve intelligence if they simply demand additional testimony from top intelligence officials on the crisis or scandal of the day. We suggest that, if created, the oversight subcommittees limit their activities to `strategic oversight,' meaning they would set an agenda at the start of the year or session of Congress, based on top priorities such as information sharing, and stick to that agenda. (p. 338).

Encourage more informal discussions and collaboration between the Intelligence Community and its congressional overseers. (p. 340).

The Committee takes such recommendations seriously and is determined to improve congressional oversight for the benefit of our national goals. At the beginning of the 109th Congress, the Committee created the Subcommittee on Oversight, which is specifically charged with conducting strategic oversight. Among the subject areas assigned to the Subcommittee are the responsibility for overseeing implementation of the Intelligence Reform and Terrorism Prevention Act, including the creation of the office of DNI, and specific oversight emphasis items, such as information sharing, unauthorized disclosures of classified information, intelligence analysis, and information assurance. This subcommittee has taken a number of steps to improve congressional oversight, including developing performance criteria to measure Intelligence Community progress and studying the practice of Congressionally Directed Actions.

Metrics within the intelligence community

To facilitate increased oversight, the Committee has placed special attention on the development of objective oversight metrics. Few organizations outside of government do not use objective measurements as a tool to gauge success and to track progress. Many government organizations, even without the profit motive, have found effective ways to measure progress and improvement through objective measurements. For example, some agencies have developed measurements to track use of their products and modify them when customers aren't using them.

Logically, every intelligence agency should use some set of metrics as a management tool. Correspondingly, the Committee in its oversight role needs to have a useful set of metrics, likely somewhat different than those used by program managers, to evaluate the productivity of the Community. The standards should not be too different, however, because all branches of the U.S. Government should be working toward the same goal.

The Director of the National Quality Program at the National Institute of Standards and Technology observed that `We generally measure the easy, rather than the important. The challenge is to define the important.' The Committee seeks to work in partnership with the Intelligence Community to jointly identify and understand what is important--or at least that which points to the important. A former Speaker of the House has noted that `It's what you inspect, not what you expect' that drives what agencies do in response to oversight. The Committee is not interested in receiving reporting merely for the sake of reporting or in creating data for its own end.

Any effective measurements should be tied to clear goals and objectives. As illustrated by the observation `if you don't know where you're going, any road will get you there,' it will be hard to measure progress without understanding what the Intelligence Community needs to achieve and where it needs to go. Once the Community and Congress clearly understand those objectives they can determine how to measure and understand what is aiding or hindering progress on important issues. The Committee seeks to work closely with leaders of the Intelligence Community and develop meaningful metrics to measure the progress in reforming intelligence and improving important processes within the Intelligence Community.

The Subcommittee on Oversight has conducted an intensive review with outside experts. In particular, the Committee has reviewed the Baldridge review process and notes that significant improvements have taken place in companies and government agencies that have participated in the process. The Committee encourages the DNI to review this process and determine how it could be adapted and implemented within the Intelligence Community.

Congressionally directed actions

Historically, the Committee has included congressionally directed actions (CDAs) as part of the report language of yearly Intelligence Authorization Acts as a way to direct specific actions or to formally obtain information that could not be obtained through other means. CDAs also spark debate on key issues or gaps that, in the Committee's opinion, are not receiving the required attention of Intelligence Community agencies, leadership, and management. However, the Committee believes that responses to CDAs often do not satisfy the intent of the request, do not include a sufficient level of detail, and may not be properly used when received.

In the recent past, neither the Intelligence Community nor the Committee have had consistent processes in place to track, review or provide feedback on congressionally directed actions. Now is the time to improve the quality of both CDA tasking and their responses. It is the Committee's intent to move CDA reporting from the insufficient, resource draining exercise it has often been to the worthwhile information exchange it was intended to be. The Committee hopes to increase the quality of CDA responses from the Intelligence Community and decrease duplication or unnecessary reporting requirements tasked to the Intelligence Community.

The Committee notes that some CDAs are the result of internal congressional compromises or carry annual reporting requirements without sunset provisions, resulting in a growing list of required reports that may have lost relevance. For instance, in the Intelligence Authorization Act for Fiscal Year 2000, the President is required to submit annual reports on the Public Identification of Significant Foreign Narcotics Traffickers. The Committee is at a loss as to why it currently needs specific reporting of the names of convicted narcotics traffickers, especially when other processes are in place to ensure proper efforts are undertaken against such traffickers. More broadly, the Intelligence Community currently must answer 72 annual CDAs, in addition to those newly assigned each year. Many contain useful information needed to perform the Committee's oversight responsibilities. Fiscal Year 2005 marked a high point for CDA tasking in the past ten years, with the Intelligence Community answering 248, while in Fiscal Year 2006 the Intelligence Community was tasked with 197 CDAs.

In the spirit of congressional oversight reform, the Committee would like to establish uniform procedures with respect to CDAs. For example, the Committee may agree that a briefing would satisfy certain CDA requests where that format is most conductive to the exchange of information. In addition, the Subcommittee on Oversight is conducting a thorough review of all annual reporting requirements to assess the usefulness and the cost to prepare the other reports now required. As a result of an initial review, the Committee-reported bill repeals provisions of law requiring several of these annual reports. It is a good beginning.

The Committee would like to acknowledge the work put into CDA responses by the Intelligence Community workforce, and by the ODNI to ensure that all CDAs are answered in a timely, worthwhile manner. Going forward, it is in the best interest of our national security to minimize duplication and waste in all areas, and the Committee sees the clarification and restructuring of CDAs as a perfect opportunity.

COMMITTEE CONSIDERATION AND ROLLCALL VOTES

On March 30, 2006, the Committee met in open and closed session and ordered the bill H.R. 5020 favorably reported, as amended.

OPEN SESSION

In open session, the Committee considered the text of the bill H.R. 5020.

Chairman Hoekstra offered an amendment in the nature of a substitute to H.R. 5020. The contents of the amendment in the nature of a substitute are described in the Section-by-Section analysis and the Explanation of Amendment. The Committee considered the following amendments to the amendment in the nature of a substitute:

Mr. Hastings offered an amendment to require the President to submit a separate statement of the proposed budget for the Privacy and Civil Liberties Oversight Board and to authorize appropriations. It was not agreed to by a record vote of 8 ayes to 10 noes:

Mr. Everett offered an amendment to limit termination of the U-2 aircraft program. It was agreed to by voice vote.

CLOSED SESSION

Ms. Harman then moved to close the meeting because national security would be endangered if the matters to be considered were disclosed. The motion was agreed to by a record vote of 15 ayes to 0 noes:

Ms. Eshoo offered an amendment to provide that not more than 80 percent of the funds specified for a program in the classified Schedule of Authorizations shall be authorized until the President submits a report on the cost of the program described in the weekly radio address of the President on December 17, 2005.

OPEN SESSION

After debate, the Committee returned to open session by unanimous consent. The amendment was not agreed to by a record vote of 8 ayes to 10 noes:

The Committee then adopted the amendment in the nature of a substitute by voice vote.

CLOSED SESSION

Ms. Harman then moved to close the meeting because national security would be endangered if the matters to be considered were disclosed. The motion was agreed to by a record vote of 15 ayes to 0 noes:

Ms. Eshoo offered an amendment to modify the funding level for a program contained in the classified Schedule of Authorizations. In lieu of the amendment, the Schedule of Authorizations was modified by unanimous consent.

Mr. Boswell offered an amendment to modify the funding levels for programs contained in the classified Schedule of Authorizations. It was not agreed to by a record vote of 7 ayes to 10 noes:

The Committee then adopted the classified Schedule of Authorizations by voice vote.

OPEN SESSION

By unanimous consent, the Committee returned to open session.

By voice vote, the Committee adopted a motion by the Chairman to favorably report the bill H.R. 5020 to the House, as amended.

SECTION-BY-SECTION ANALYSIS AND EXPLANATION OF THE AMENDMENT

Section 1--Short title and table of contents

Section 1 contains the short title for the bill and the Table of Contents.

TITLE I--INTELLIGENCE ACTIVITIES

Section 101--Authorization of appropriations

Section 101 of the bill authorizes appropriations for the intelligence and intelligence-related activities of these elements of the United States Government: The Office of the Director of National Intelligence, the Central Intelligence Agency, the Department of Defense, the Defense Intelligence Agency, the National Security Agency, the Departments of the Army, Navy and Air Force, the Department of State, the Department of the Treasury, the Department of Justice, the Federal Bureau of Investigation, the National Reconnaissance Office, the National Geospatial-Intelligence Agency, the Coast Guard, the Department of Homeland Security, and the Drug Enforcement Administration.

Section 102--Classified schedule of authorizations

Section 102 provides that the amounts and personnel ceilings authorized under Section 101 shall be specified in the accompanying classified Schedule of Authorizations, which shall be made available to the Committee on Appropriations and to the President.

Section 103--Personnel ceiling adjustments

Section 103 permits the Director of National Intelligence (DNI) to authorize employment of civilian personnel in excess of the authorized number when the DNI determines that it is necessary to the performance of important intelligence functions and promptly notifies the congressional intelligence committees.

Section 104--Intelligence community management account

Section 104 authorizes specified funds, as well as classified amounts, for the Intelligence Community Management Account and provides that personnel detailed to that staff from other agencies are detailed on a reimbursable basis.

Section 105--Incorporation of reporting requirements

Section 105 provides that each requirement to submit a report to the congressional intelligence committees included in the joint explanatory statement to accompany the conference report on the bill is incorporated into the Act and made a requirement in law.

TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM

Section 201--Authorization of appropriations

Section 201 authorizes funds for the CIA Retirement and Disability System.

TITLE III--GENERAL PROVISIONS

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

Section 301 permits the authorized amounts to be increased to provide increases in compensation and benefits authorized by law.

Section 302--Restriction on conduct of intelligence activities

Section 302 provides that the authorization of funds in this act does not constitute authority for the conduct of any intelligence activity 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 provides a technical clarification with respect to designation of members of the Intelligence Community.

Section 304--Delegation of authority for travel on common carriers for intelligence collection personnel

Section 304 permits the DNI to delegate authority to approve certain travel on common carriers to the heads of individual Intelligence Community elements.

Section 305--Retention and use of amounts paid as debts to elements of the intelligence community

Section 305 authorizes intelligence community elements to accept, retain, and use certain amounts received fro