[Pages H15224-H15235]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

CONFERENCE REPORT ON H.R. 1655, INTELLIGENCE AUTHORIZATION ACT FOR
FISCAL YEAR 1996

Mr. COMBEST submitted the following conference report and statement
on the bill (H.R. 1655) to authorize appropriations for fiscal year
1996 for intelligence and intelligence-related activities of the United
States Government, the Community Management Account, and the Central
Intelligence Agency Retirement and Disability System, and for other
purposes:

Conference Report (H. Rept. 104-427)

The committee of conference on the disagreeing votes of the
two Houses on the amendment of the Senate to the bill (H.R.
1655), to authorize appropriations for fiscal year 1996 for
intelligence and intelligence-related activities of the
United States Government, the Community Management Account,
and the Central Intelligence Agency Retirement and Disability
System, and for other purposes, having met, after full and
free conference, have agreed to recommend and do recommend to
their respective Houses as follows:
That the House recede from its disagreement to the
amendment of the Senate and agree to the same with an
amendment as follows:
In lieu of the matter proposed to be inserted by the Senate
amendment, insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the
``Intelligence Authorization Act for Fiscal Year 1996''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

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. Community Management Account.

TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM

Sec. 201. Authorization of appropriations.

TITLE III--GENERAL PROVISIONS

Sec. 301. Increase in employee compensation and benefits authorized by
law.
Sec. 302. Restriction on conduct of intelligence activities.
Sec. 303. Application of sanctions laws to intelligence activities.
Sec. 304. Thrift savings plan forfeiture.
Sec. 305. Authority to restore spousal pension benefits to spouses who
cooperate in criminal investigations and prosecutions for
national security offenses.
Sec. 306. Secrecy agreements used in intelligence activities.
Sec. 307. Limitation on availability of funds for automatic
declassification of records over 25 years old.
Sec. 308. Amendment to the Hatch Act Reform Amendments of 1993.
Sec. 309. Report on personnel policies.
Sec. 310. Assistance to foreign countries.
Sec. 311. Financial management of the National Reconnaissance Office.

TITLE IV--CENTRAL INTELLIGENCE AGENCY

Sec. 401. Extension of the CIA Voluntary Separation Pay Act.
Sec. 402. Volunteer service program.
Sec. 403. Authorities of the Inspector General of the Central
Intelligence Agency.

TITLE V--DEPARTMENT OF DEFENSE INTELLIGENCE ACTIVITIES

Sec. 501. Defense intelligence senior level positions.
Sec. 502. Comparable benefits and allowances for civilian and military
personnel assigned to defense intelligence functions
overseas.
Sec. 503. Extension of authority to conduct intelligence commercial
activities.
Sec. 504. Availability of funds for Tier II UAV.
Sec. 505. Military Department Civilian Intelligence Personnel
Management System.
Sec. 506. Enhancement of capabilities of certain army facilities.

TITLE VI--FEDERAL BUREAU OF INVESTIGATION

Sec. 601. Disclosure of information and consumer reports to FBI for
counterintelligence purposes.

TITLE VII--TECHNICAL AMENDMENTS

Sec. 701. Clarification with respect to pay for Director or Deputy
Director of Central Intelligence appointed from
commissioned officers of the Armed Forces.
Sec. 702. Change of designation of CIA Office of Security.
TITLE I--INTELLIGENCE ACTIVITIES

SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

Funds are hereby authorized to be appropriated for fiscal
year 1996 for the conduct of the intelligence and
intelligence-related activities of the following elements of
the United States Government:
(1) The Central Intelligence Agency.
(2) The Department of Defense.
(3) The Defense Intelligence Agency.
(4) The National Security Agency.
(5) The Department of the Army, the Department of the Navy,
and the Department of the Air Force.
(6) The Department of State.
(7) The Department of Treasury.
(8) The Department of Energy.

[[Page H15225]]

(9) The Federal Bureau of Investigation.
(10) The Drug Enforcement Administration.
(11) The National Reconnaissance Office.
(12) The Central Imagery Office.

SEC. 102. CLASSIFIED SCHEDULE OF AUTHORIZATIONS.

(a) Specifications of Amounts and Personnel Ceilings.--The
amounts authorized to be appropriated under section 101, and
the authorized personnel ceilings as of September 30, 1996,
for the conduct of the intelligence and intelligence-related
activities of the elements listed in such section, are those
specified in the classified Schedule of Authorizations
prepared to accompany the conference report on the bill H.R.
1655 of the One Hundred Fourth Congress.
(b) Availability of 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. The
President shall provide for suitable distribution of the
Schedule, or of appropriate portions of the Schedule, within
the executive branch.

SEC. 103. PERSONNEL CEILING ADJUSTMENTS.

(a) Authority for Adjustments.--With the approval of the
Director of the Office of Management and Budget, the Director
of Central Intelligence may authorize employment of civilian
personnel in excess of the number authorized for fiscal year
1996 under section 102 when the Director of Central
Intelligence determines that such action is necessary to the
performance of important intelligence functions, except that
the number of personnel employed in excess of the number
authorized under such section may not, for any element of the
intelligence community, exceed two percent of the number of
civilian personnel authorized under such section for such
element.
(b) Notice to Intelligence Committees.--The Director of
Central Intelligence shall promptly notify the Permanent
Select Committee on Intelligence of the House of
Representatives and the Select Committee on Intelligence of
the Senate whenever he exercises the authority granted by
this section.

SEC. 104. COMMUNITY MANAGEMENT ACCOUNT.

(a) Authorization of Appropriations.--There is authorized
to be appropriated for the Community Management Account of
the Director of Central Intelligence for fiscal year 1996 the
sum of $90,713,000. Within such amounts authorized, funds
identified in the classified Schedule of Authorizations
referred to in section 102(a) for the Advanced Research and
Development Committee and the Environmental Task Force shall
remain available until September 30, 1997.
(b) Authorized Personnel Levels.--The Community Management
Staff of the Director of Central Intelligence is authorized
247 full-time personnel as of September 30, 1996. Such
personnel of the Community Management Staff may be permanent
employees of the Community Management Staff or personnel
detailed from other elements of the United States Government.
(c) Reimbursement.--During fiscal year 1996, any officer or
employee of the United States or a member of the Armed Forces
who is detailed to the Community Management Staff from
another element of the United States Government shall be
detailed on a reimbursable basis, except that any such
officer, employee or member may be detailed on a
nonreimbursable basis for a period of less than one year for
the performance of temporary functions as required by the
Director of Central Intelligence.
TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM

SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

There is authorized to be appropriated for the Central
Intelligence Agency Retirement and Disability Fund for fiscal
year 1996 the sum of $213,900,000.
TITLE III--GENERAL PROVISIONS

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

Appropriations authorized 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.

SEC. 302. RESTRICTION ON CONDUCT OF INTELLIGENCE ACTIVITIES.

The authorization of appropriations by this Act shall not
be deemed to constitute authority for the conduct of any
intelligence activity which is not otherwise authorized by
the Constitution or the laws of the United States.

SEC. 303. APPLICATION OF SANCTIONS LAWS TO INTELLIGENCE
ACTIVITIES.

(a) General Provisions.--The National Security Act of 1947
(50 U.S.C. 401 et seq.), is amended by adding at the end
thereof the following new title:

``TITLE IX--APPLICATION OF SANCTIONS LAWS TO INTELLIGENCE ACTIVITIES

``stay of sanctions

``Sec. 901. Notwithstanding any provision of law identified
in section 904, the President may stay the imposition of an
economic, cultural, diplomatic, or other sanction or related
action by the United States Government concerning a foreign
country, organization, or person when the President
determines and reports to Congress in accordance with section
903 that to proceed without delay would seriously risk the
compromise of an ongoing criminal investigation directly
related to the activities giving rise to the sanction or an
intelligence source or method directly related to the
activities giving rise to the sanction. Any such stay shall
be effective for a period of time specified by the President,
which period may not exceed 120 days, unless such period is
extended in accordance with section 902.

``extension of stay

``Sec. 902. Whenever the President determines and reports
to Congress in accordance with section 903 that a stay of
sanctions or related actions pursuant to section 901 has not
afforded sufficient time to obviate the risk to an ongoing
criminal investigation or to an intelligence source or method
that gave rise to the stay, he may extend such stay for a
period of time specified by the President, which period may
not exceed 120 days. The authority of this section may be
used to extend the period of a stay pursuant to section 901
for successive periods of not more than 120 days each.

``reports

``Sec. 903. Reports to Congress pursuant to sections 901
and 902 shall be submitted promptly upon determinations under
this title. Such reports shall be submitted to the Committee
on International Relations of the House of Representatives
and the Committee on Foreign Relations of the Senate. With
respect to determinations relating to intelligence sources
and methods, reports shall also be submitted to the Permanent
Select Committee on Intelligence of the House of
Representatives and the Select Committee on Intelligence of
the Senate. With respect to determinations relating to
ongoing criminal investigations, reports shall also be
submitted to the Committees on the Judiciary of the House of
Representatives and the Senate.

``laws subject to stay

``Sec. 904. The President may use the authority of sections
901 and 902 to stay the imposition of an economic, cultural,
diplomatic, or other sanction or related action by the United
States Government related to the proliferation of weapons of
mass destruction, their delivery systems, or advanced
conventional weapons otherwise required to be imposed by the
Chemical and Biological Weapons Control and Warfare
Elimination Act of 1991 (title III of Public Law 102-182);
the Nuclear Proliferation Prevention Act of 1994 (title VIII
of Public Law 103-236); title XVII of the National Defense
Authorization Act for Fiscal Year 1991 (Public Law 101-510)
(relating to the nonproliferation of missile technology); the
Iran-Iraq Arms Nonproliferation Act of 1992 (title XVI of
Public Law 102-484); section 573 of the Foreign Operations,
Export Financing Related Programs Appropriations Act, 1994
(Public Law 103-87); section 563 of the Foreign Operations,
Export Financing Related Programs Appropriations Act, 1995
(Public Law 103-306); and comparable provisions.

``application

``Sec. 905. This title shall cease to be effective on the
date which is one year after the date of the enactment of
this title.''.
(b) Clerical Amendment.--The table of contents in the first
section of such Act is amended by adding at the end thereof
the following:

``TITLE IX--APPLICATION OF SANCTIONS LAWS TO INTELLIGENCE ACTIVITIES

``Sec. 901. Stay of sanctions.
``Sec. 902. Extension of stay.
``Sec. 903. Reports.
``Sec. 904. Laws subject to stay.
``Sec. 905. Application.''.

SEC. 304. THRIFT SAVINGS PLAN FORFEITURE.

(a) In General.--Section 8432(g) of title 5, United States
Code, is amended by adding at the end the following new
paragraph:
``(5) Notwithstanding any other provision of law,
contributions made by the Government for the benefit of an
employee or Member under subsection (c), and all earnings
attributable to such contributions, shall be forfeited if the
annuity of the employee or Member, or that of a survivor or
beneficiary, is forfeited under subchapter II of chapter
83.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to offenses upon which the requisite annuity
forfeitures are based occurring on or after the date of the
enactment of this Act.

SEC. 305. AUTHORITY TO RESTORE SPOUSAL PENSION BENEFITS TO
SPOUSES WHO COOPERATE IN CRIMINAL
INVESTIGATIONS AND PROSECUTIONS FOR NATIONAL
SECURITY OFFENSES.

Section 8318 of title 5, United States Code, is amended by
adding at the end the following:
``(e) The spouse of an individual whose annuity or retired
pay is forfeited under section 8312 or 8313 after the date of
enactment of this subsection shall be eligible for spousal
pension benefits if the Attorney General of the United States
determines that the spouse fully cooperated with Federal
authorities in the conduct of a criminal investigation and
subsequent prosecution of the individual which resulted in
such forfeiture.''.

SEC. 306. SECRECY AGREEMENTS USED IN INTELLIGENCE ACTIVITIES.

Notwithstanding any other provision of law not specifically
referencing this section, a nondisclosure policy form or
agreement that is to be executed by a person connected with
the conduct of an intelligence or intelligence-related
activity, other than an employee or officer of the United
States Government, may contain provisions appropriate to the
particular activity for which such document is to be used.
Such form or agreement shall, at a minimum--
(1) require that the person will not disclose any
classified information received in the course of such
activity unless specifically authorized to do so by the
United States Government; and
(2) provide that the form or agreement does not bar--
(A) disclosures to Congress; or
(B) disclosures to an authorized official of an executive
agency that are deemed essential to reporting a violation of
United States law.

SEC. 307. LIMITATION ON AVAILABILITY OF FUNDS FOR AUTOMATIC
DECLASSIFICATION OF RECORDS OVER 25 YEARS OLD.

(a) In General.--The Director of Central Intelligence shall
use no more than $25,000,000 of

[[Page H15226]]
the amounts authorized to be appropriated for fiscal year 1996 by this
Act for the National Foreign Intelligence Program to carry
out the provisions of section 3.4 of Executive Order 12958.
The Director may, in the Director's discretion, draw on this
amount for allocation to the agencies within the National
Foreign Intelligence Program for the purpose of automatic
declassification of records over 25 years old.
(b) Required Budget Submission.--The President shall submit
for fiscal year 1997 and each of the following fiscal years
through fiscal year 2000 a budget request which specifically
sets forth the funds requested for implementation of section
3.4 of Executive Order 12958.

SEC. 308. AMENDMENT TO THE HATCH ACT REFORM AMENDMENTS OF
1993.

Section 7325 of title 5, United States Code, is amended by
adding after ``section 7323(a)'' the following: ``and
paragraph (2) of section 7323(b)''.

SEC. 309. REPORT ON PERSONNEL POLICIES.

(a) Report Required.--Not later than three months after the
date of enactment of this Act, the Director of Central
Intelligence shall submit to the intelligence committees of
Congress a report describing personnel procedures, and
recommending necessary legislation, to provide for mandatory
retirement for expiration of time in class, comparable to the
applicable provisions of section 607 of the Foreign Service
Act of 1980 (22 U.S.C. 4007), and termination based on
relative performance, comparable to section 608 of the
Foreign Service Act of 1980 (22 U.S.C. 4008), and to provide
for other personnel review systems for all civilian employees
of the Central Intelligence Agency, the National Security
Agency, the Defense Intelligence Agency, and the intelligence
elements of the Army, Navy, Air Force, and Marine Corps. Such
report shall contain a description and analysis of voluntary
separation incentive options, including a waiver of the 2
percent penalty reduction for early retirement under certain
Federal retirement systems.
(b) Coordination.--The preparation of the report required
by subsection (a) shall be coordinated as appropriate with
elements of the intelligence community (as defined in section
3(4) of the National Security Act of 1947 (50 U.S.C. 401(4)).
(c) Definition.--As used in this section, the term
``intelligence committees of Congress'' means the Select
Committee on Intelligence of the Senate and the Permanent
Select Committee on Intelligence of the House of
Representatives.

SEC. 310. ASSISTANCE TO FOREIGN COUNTRIES.

Notwithstanding any other provision of law, funds
authorized to be appropriated by this Act may be used to
provide assistance to a foreign country for counterterrorism
efforts if--
(1) such assistance is provided for the purpose of
protecting the property of the United States Government or
the life and property of any United States citizen, or
furthering the apprehension of any individual involved in any
act of terrorism against such property or persons; and
(2) the Committee on Intelligence of the Senate and the
Permanent Select Committee on Intelligence of the House of
Representatives are notified not later than 15 days prior to
the provision of such assistance.

SEC. 311. FINANCIAL MANAGEMENT OF THE NATIONAL RECONNAISSANCE
OFFICE.

(a) Management Review.--(1) The Inspector General for the
Central Intelligence Agency, assisted by the Inspector
General of the Department of Defense, shall undertake a
comprehensive review of the financial management of the
National Reconnaissance Office to evaluate the effectiveness
of policies and internal controls over the budget of the
National Reconnaissance Office, including the use of carry-
forward funding, to ensure that National Reconnaissance
Office funds are used in accordance with applicable Federal
acquisition regulations and the policies of the Director of
Central Intelligence and consistent with those of the
Department of Defense, the guidelines of the National
Reconnaissance Office, and congressional direction.
(2) The review required by paragraph (1) shall--
(A) determine the quality of the development and
implementation of the budget process within the National
Reconnaissance Office at both the comptroller and directorate
level;
(B) assess the advantages and disadvantages of the use of
incremental versus full funding for contracts entered into by
the National Reconnaissance Office;
(C) assess the advantages and disadvantages of the National
Reconnaissance Office's use of carry-forward funding;
(D) determine how the National Reconnaissance Office
defines, identifies, and justifies carry-forward funding
requirements;
(E) determine how the National Reconnaissance Office tracks
and manages carry-forward funding;
(F) determine how the National Reconnaissance Office plans
to comply with congressional direction regarding carry-
forward funding;
(G) determine whether or not a contract entered into by the
National Reconnaissance Office has ever encountered a
contingency which required the utilization of more than 30
days of carry-forward funding;
(H) consider the proposal by the Director of Central
Intelligence for the establishment of a position of a Chief
Financial Officer, and assess how the functions to be
performed by that officer would enhance the financial
management of the National Reconnaissance Office; and
(I) make recommendations, as appropriate, to improve
control and management of the budget process of the National
Reconnaissance Office.
(3) The Director of Central Intelligence shall submit a
report to the Congress setting forth the findings of the
review required by paragraph (1) not later than March 1,
1996, with an interim report provided to the Congress not
later than 2 weeks after the enactment of this Act.
(b) Report.--(1) Not later than January 30, 1996, the
President shall submit a report to the appropriate committees
of the Congress on a proposal to subject the budget of the
intelligence community to greater oversight by the executive
branch of Government.
(2) Such report shall include (among other things)--
(A) consideration of establishing by statute a financial
control officer for the National Reconnaissance Office, other
elements of the intelligence community, and for the
intelligence community as a whole;
(B) recommendations for procedures to be used by the Office
of Management and Budget for review of the budget of the
National Reconnaissance Office;
(C) a proposed statutory provision that would require the
Director of Central Intelligence to establish a policy to
restrict the National Reconnaissance Office authority on
carry-forward funding in a manner consistent with the
restriction on such authority within the Department of
Defense; and
(D) an evaluation of how changes proposed as a result of
the review required by subsection (a) will affect, directly
or indirectly, the National Reconnaissance Office's
streamlined acquisition process and, ultimately, program
costs.
(c) Definition.--As used in this section, the term
``intelligence community'' has the meaning given to the term
in section 3(4) of the National Security Act of 1947 (50
U.S.C. 401a(4)).
TITLE IV--CENTRAL INTELLIGENCE AGENCY

SEC. 401. EXTENSION OF THE CIA VOLUNTARY SEPARATION PAY ACT.

(a) Extension of Authority.--Section 2(f) of the Central
Intelligence Agency Voluntary Separation Pay Act (50 U.S.C.
403-4(f)) is amended by striking ``September 30, 1997'' and
inserting ``September 30, 1999''.
(b) Remittance of Funds.--Section 2 of the Central
Intelligence Agency Voluntary Separation Pay Act (50 U.S.C.
403-4) is amended by inserting at the end the following new
subsection:
``(i) Remittance of Funds.--The Director shall remit to the
Office of Personnel Management for deposit in the Treasury of
the United States to the credit of the Civil Service
Retirement and Disability Fund (in addition to any other
payments which the Director is required to make under
subchapter III of chapter 83 and subchapter II of chapter 84
of title 5, United States Code), an amount equal to 15
percent of the final basic pay of each employee who, in
fiscal year 1998 or fiscal year 1999, retires voluntarily
under section 8336, 8412, or 8414 of such title or resigns
and to whom a voluntary separation incentive payment has been
or is to be paid under this section.''.

SEC. 402. VOLUNTEER SERVICE PROGRAM.

(a) General Authority.--The Director of Central
Intelligence is authorized to establish and maintain a
program from fiscal years 1996 through 2001 to utilize the
services contributed by not more than 50 annuitants who serve
without compensation as volunteers in aid of the review for
declassification or downgrading of classified information by
the Central Intelligence Agency under applicable Executive
orders governing the classification and declassification of
national security information and Public Law 102-526.
(b) Costs Incidental to Services.--The Director is
authorized to use sums made available to the Central
Intelligence Agency by appropriations or otherwise for paying
the costs incidental to the utilization of services
contributed by individuals under subsection (a). Such costs
may include (but need not be limited to) training,
transportation, lodging, subsistence, equipment, and
supplies. The Director may authorize either direct
procurement of equipment, supplies, and services, or
reimbursement for expenses, incidental to the effective use
of volunteers. Such expenses or services shall be in
accordance with volunteer agreements made with such
individuals. Sums made available for such costs may not
exceed $100,000.
(c) Application of Certain Provisions of Law.--A volunteer
under this section shall be considered to be a Federal
employee for the purposes of subchapter I of title 81
(relating to compensation of Federal employees for work
injuries) and section 1346(b) and chapter 171 of title 28
(relating to tort claims). A volunteer under this section
shall be covered by and subject to the provisions of chapter
11 of title 18 of the United States Code as if they were
employees or special Government employees depending upon the
days of expected service at the time they begin volunteering.

SEC. 403. AUTHORITIES OF THE INSPECTOR GENERAL OF THE CENTRAL
INTELLIGENCE AGENCY.

(a) Reports by the Inspector General.--Section 17(b)(5) of
the Central Intelligence Act of 1949 (50 U.S.C. 403q(b)(5))
is amended to read as follows:
``(5) In accordance with section 535 of title 28, United
States Code, the Inspector General shall report to the
Attorney General any information, allegation, or complaint
received by the Inspector General relating to violations of
Federal criminal law that involve a program or operation of
the Agency, consistent with such guidelines as may be issued
by the Attorney General pursuant to subsection (b)(2) of such
section. A copy of all such reports shall be furnished to the
Director.''.
(b) Exception to Nondisclosure Requirement.--Section
17(e)(3)(A) of such Act is amended by inserting after
``investigation'' the following: ``or the disclosure is made
to an official of the Department of Justice responsible for
determining whether a prosecution should be undertaken''.

[[Page H15227]]

TITLE V--DEPARTMENT OF DEFENSE INTELLIGENCE ACTIVITIES

SEC. 501. DEFENSE INTELLIGENCE SENIOR LEVEL POSITIONS.

Section 1604 of title 10, United States Code, is amended to
read as follows:

``Sec. 1604. Civilian personnel management

``(a) General Personnel Authority.--The Secretary of
Defense may, without regard to the provisions of any other
law relating to the number, classification, or compensation
of Federal employees--
``(1) establish such positions for employees in the Defense
Intelligence Agency and the Central Imagery Office as the
Secretary considers necessary to carry out the functions of
that Agency and Office, including positions designated under
subsection (f) as Defense Intelligence Senior Level
positions;
``(2) appoint individuals to those positions; and
``(3) fix the compensation for service in those positions.
``(b) Authority To Fix Rates of Basic Pay; Other Allowances
and Benefits.--(1) The Secretary of Defense shall, subject to
subsection (c), fix the rates of basic pay for positions
established under subsection (a) in relation to the rates of
basic pay provided in subpart D of part III of title 5 for
positions subject to that title which have corresponding
levels of duties and responsibilities. Except as otherwise
provided by law, an employee of the Defense Intelligence
Agency or the Central Imagery Office may not be paid basic
pay at a rate in excess of the maximum rate payable under
section 5376 of title 5.
``(2) The Secretary of Defense may provide employees of the
Defense Intelligence Agency and the Central Imagery Office
compensation (in addition to basic pay under paragraph (1))
and benefits, incentives, and allowances consistent with, and
not in excess of the levels authorized for, comparable
positions authorized by title 5.
``(c) Prevailing Rates Systems.--The Secretary of Defense
may, consistent with section 5341 of title 5, adopt such
provisions of that title as provide for prevailing rate
systems of basic pay and may apply those provisions to
positions in or under which the Defense Intelligence Agency
or the Central Imagery Office may employ individuals
described by section 5342(a)(2)(A) of such title.
``(d) Allowances Based on Living Costs and Environment for
Employees Stationed Outside Continental United States or in
Alaska.--(1) In addition to the basic compensation payable
under subsection (b), employees of the Defense Intelligence
Agency and the Central Imagery Office described in paragraph
(3) may be paid an allowance, in accordance with regulations
prescribed by the Secretary of Defense, at a rate not in
excess of the allowance authorized to be paid under section
5941(a) of title 5 for employees whose rates of basic pay are
fixed by statute.
``(2) Such allowance shall be based on--
``(A) living costs substantially higher than in the
District of Columbia;
``(B) conditions of environment which--
``(i) differ substantially from conditions of environment
in the continental United States; and
``(ii) warrant an allowance as a recruitment incentive; or
``(C) both of those factors.
``(3) This subsection applies to employees who--
``(A) are citizens or nationals of the United States; and
``(B) are stationed outside the continental United States
or in Alaska.
``(e) Termination of Employees.--(1) Notwithstanding any
other provision of law, the Secretary of Defense may
terminate the employment of any employee of the Defense
Intelligence Agency or the Central Imagery Office if the
Secretary--
``(A) considers such action to be in the interests of the
United States; and
``(B) determines that the procedures prescribed in other
provisions of law that authorize the termination of the
employment of such employee cannot be invoked in a manner
consistent with the national security.
``(2) A decision by the Secretary of Defense to terminate
the employment of an employee under this subsection is final
and may not be appealed or reviewed outside the Department of
Defense.
``(3) The Secretary of Defense shall promptly notify the
Permanent Select Committee on Intelligence of the House of
Representatives and the Select Committee on Intelligence of
the Senate whenever the Secretary terminates the employment
of any employee under the authority of this subsection.
``(4) Any termination of employment under this subsection
shall not affect the right of the employee involved to seek
or accept employment with any other department or agency of
the United States if that employee is declared eligible for
such employment by the Director of the Office of Personnel
Management.
``(5) The authority of the Secretary of Defense under this
subsection may be delegated only to the Deputy Secretary of
Defense, the Director of the Defense Intelligence Agency
(with respect to employees of the Defense Intelligence
Agency), and the Director of the Central Imagery Office (with
respect to employees of the Central Imagery Office). An
action to terminate employment of an employee by any such
officer may be appealed to the Secretary of Defense.
``(f) Defense Intelligence Senior Level Positions.--(1) In
carrying out subsection (a)(1), the Secretary may designate
positions described in paragraph (3) as Defense Intelligence
Senior Level positions. The total number of positions
designated under this subsection, when combined with the
total number of positions in the Defense Intelligence Senior
Executive Service under section 1601 of this title, may not
exceed the total number of positions in the Defense
Intelligence Senior Executive Service as of June 1, 1995.
``(2) Positions designated under this subsection shall be
treated as equivalent for purposes of compensation to the
senior level positions to which section 5376 of title 5 is
applicable.
``(3) Positions that may be designated as Defense
Intelligence Senior Level positions are positions in the
Defense Intelligence Agency and Central Imagery Office that
(A) are classified above the GS-15 level, (B) emphasize
functional expertise and advisory activity, but (C) do not
have the organizational or program management functions
necessary for inclusion in the Defense Intelligence Senior
Executive Service.
``(4) Positions referred to in paragraph (3) include
Defense Intelligence Senior Technical positions and Defense
Intelligence Senior Professional positions. For purposes of
this subsection--
``(A) Defense Intelligence Senior Technical positions are
positions covered by paragraph (3) that involve any of the
following:
``(i) Research and development.
``(ii) Test and evaluation.
``(iii) Substantive analysis, liaison, or advisory activity
focusing on engineering, physical sciences, computer science,
mathematics, biology, chemistry, medicine, or other closely
related scientific and technical fields.
``(iv) Intelligence disciplines including production,
collection, and operations in close association with any of
the activities described in clauses (i), (ii), and (iii) or
related activities; and
``(B) Defense Intelligence Senior Professional positions
are positions covered by paragraph (3) that emphasize staff,
liaison, analytical, advisory, or other activity focusing on
intelligence, law, finance and accounting, program and
budget, human resources management, training, information
services, logistics, security, and other appropriate fields.
``(g) `Employee' Defined as Including Officers.--In this
section, the term `employee', with respect to the Defense
Intelligence Agency or the Central Imagery Office, includes
any civilian officer of that Agency or Office.''.

SEC. 502. COMPARABLE BENEFITS AND ALLOWANCES FOR CIVILIAN AND
MILITARY PERSONNEL ASSIGNED TO DEFENSE
INTELLIGENCE FUNCTIONS OVERSEAS.

(a) Civilian Personnel.--Section 1605 of title 10, United
States Code, is amended--
(1) in subsection (a)--
(A) by inserting ``(1)'' after ``(a)'';
(B) by striking ``of the Department of Defense'' and all
that follows through ``this subsection,'' and inserting
``described in subsection (d)''; and
(C) by designating the second sentence as paragraph (2);
(2) by striking subsection (c) and inserting the following:
``(c) Regulations prescribed under subsection (a) may not
take effect until the Secretary of Defense has submitted such
regulations to--
``(1) the Committee on Armed Services and the Select
Committee on Intelligence of the Senate; and
``(2) the Committee on National Security and the Permanent
Select Committee on Intelligence of the House of
Representatives.''; and
(3) by adding at the end the following new subsection:
``(d) Subsection (a) applies to civilian personnel of the
Department of Defense who--
``(1) are United States nationals;
``(2) in the case of employees of the Defense Intelligence
Agency, are assigned to duty outside the United States and,
in the case of other employees, are assigned to Defense
Attache Offices or Defense Intelligence Agency Liaison
Offices outside the United States; and
``(3) are designated by the Secretary of Defense for the
purposes of subsection (a).''.
(b) Military Personnel.--Section 431 of title 37, United
States Code, is amended--
(1) in subsection (a), by striking ``who are assigned to''
and all that follows through ``of this subsection'' and
inserting ``described in subsection (e)'';
(2) by striking subsection (d) and inserting the following:
``(d) Regulations prescribed under subsection (a) may not
take effect until the Secretary of Defense has submitted such
regulations to--
``(1) the Committee on Armed Services and the Select
Committee on Intelligence of the Senate; and
``(2) the Committee on National Security and the Permanent
Select Committee on Intelligence of the House of
Representatives.''; and
(3) by adding at the end the following new subsection:
``(e) Subsection (a) applies to members of the armed forces
who--
``(1) are assigned--
``(A) to Defense Attache Offices or Defense Intelligence
Agency Liaison Offices outside the United States; or
``(B) to the Defense Intelligence Agency and engaged in
intelligence-related duties outside the United States; and
``(2) are designated by the Secretary of Defense for the
purposes of subsection (a).''.

SEC. 503. EXTENSION OF AUTHORITY TO CONDUCT INTELLIGENCE
COMMERCIAL ACTIVITIES.

Section 431(a) of title 10, United States Code, is amended
by striking ``1995'' and inserting ``1998''.

SEC. 504. AVAILABILITY OF FUNDS FOR TIER II UAV.

All funds appropriated for fiscal year 1995 for the Medium
Altitude Endurance Unmanned Aerial Vehicle (Tier II) are
specifically authorized, within the meaning of section 504 of
the National Security Act of 1947 (50 U.S.C. 414), for such
purpose.

[[Page H15228]]

SEC. 505. MILITARY DEPARTMENT CIVILIAN INTELLIGENCE PERSONNEL
MANAGEMENT SYSTEM.

(a) Establishment of Training Program.--Chapter 81 of title
10, United States Code, is amended by adding at the end
thereof the following new section:

``Sec. 1599a. Financial assistance to certain employees in
acquisition of critical skills

``(a) Training Program.--The Secretary of Defense shall
establish an undergraduate training program with respect to
civilian employees in the Military Department Civilian
Intelligence Personnel Management System that is similar in
purpose, conditions, content, and administration to the
program established by the Secretary of Defense under section
16 of the National Security Act of 1959 (50 U.S.C. 402 note)
for civilian employees of the National Security Agency.
``(b) Use of Funds for Training Program.--Any payment made
by the Secretary to carry out the program required to be
established by subsection (a) may be made in any fiscal year
only to the extent that appropriated funds are available for
that purpose.''.
(b) Clerical Amendment.--The table of sections at the
beginning of that chapter is amended by adding at the end
thereof the following new item:

``Sec. 1599a. Financial assistance to certain employees in acquisition
of critical skills.''.

SEC. 506. ENHANCEMENT OF CAPABILITIES OF CERTAIN ARMY
FACILITIES.

(a) Authority.--(1) In addition to funds otherwise
available for such purpose, the Secretary of the Army may
transfer or reprogram funds for the enhancement of the
capabilities of the Bad Aibling Station and the Menwith Hill
Station, including improvements of facility infrastructure
and quality of life programs at those installations.
(2) The authority of paragraph (1) may be exercised
notwithstanding any other provision of law.
(b) Source of Funds.--Funds available for the Army for
operations and maintenance for fiscal years 1996 and 1997
shall be available to carry out subsection (a).
(c) Congressional Notification.--Whenever the Secretary of
the Army determines that an amount to be transferred or
reprogrammed under this section would cause the total amount
transferred or reprogrammed in that fiscal year under this
section to exceed $1,000,000, the Secretary shall notify in
advance the Select Committee on Intelligence, the Committee
on Armed Services, and the Committee on Appropriations of the
Senate and the Permanent Select Committee on Intelligence,
the Committee on National Security, and the Committee on
Appropriations of the House of Representatives and provide a
justification for the increased expenditure.
(d) Statutory Construction.--Nothing in this section may be
construed to modify or obviate existing law or practice with
regard to the transfer or reprogramming of funds in excess of
$2,000,000 from the Department of the Army to the Bad Aibling
Station and the Menwith Hill Station.
TITLE VI--FEDERAL BUREAU OF INVESTIGATION

SEC. 601. DISCLOSURE OF INFORMATION AND CONSUMER REPORTS TO
FBI FOR COUNTERINTELLIGENCE PURPOSES.

(a) In General.--The Fair Credit Reporting Act (15 U.S.C.
1681 et seq.) is amended by adding after section 623 the
following new section:

``Sec. 624. Disclosures to FBI for counterintelligence
purposes

``(a) Identity of Financial Institutions.--Notwithstanding
section 604 or any other provision of this title, a consumer
reporting agency shall furnish to the Federal Bureau of
Investigation the names and addresses of all financial
institutions (as that term is defined in section 1101 of the
Right to Financial Privacy Act of 1978) at which a consumer
maintains or has maintained an account, to the extent that
information is in the files of the agency, when presented
with a written request for that information, signed by the
Director of the Federal Bureau of Investigation, or the
Director's designee, which certifies compliance with this
section. The Director or the Director's designee may make
such a certification only if the Director or the Director's
designee has determined in writing that--
``(1) such information is necessary for the conduct of an
authorized foreign counterintelligence investigation; and
``(2) there are specific and articulable facts giving
reason to believe that the consumer--
``(A) is a foreign power (as defined in section 101 of the
Foreign Intelligence Surveillance Act of 1978) or a person
who is not a United States person (as defined in such section
101) and is an official of a foreign power; or
``(B) is an agent of a foreign power and is engaging or has
engaged in an act of international terrorism (as that term is
defined in section 101(c) of the Foreign Intelligence
Surveillance Act of 1978) or clandestine intelligence
activities that involve or may involve a violation of
criminal statutes of the United States.
``(b) Identifying Information.--Notwithstanding the
provisions of section 604 or any other provision of this
title, a consumer reporting agency shall furnish identifying
information respecting a consumer, limited to name, address,
former addresses, places of employment, or former places of
employment, to the Federal Bureau of Investigation when
presented with a written request, signed by the Director or
the Director's designee, which certifies compliance with this
subsection. The Director or the Director's designee may make
such a certification only if the Director or the Director's
designee has determined in writing that--
``(1) such information is necessary to the conduct of an
authorized counterintelligence investigation; and
``(2) there is information giving reason to believe that
the consumer has been, or is about to be, in contact with a
foreign power or an agent of a foreign power (as defined in
section 101 of the Foreign Intelligence Surveillance Act of
1978).
``(c) Court Order for Disclosure of Consumer Reports.--
Notwithstanding section 604 or any other provision of this
title, if requested in writing by the Director of the Federal
Bureau of Investigation, or a designee of the Director, a
court may issue an order ex parte directing a consumer
reporting agency to furnish a consumer report to the Federal
Bureau of Investigation, upon a showing in camera that--
``(1) the consumer report is necessary for the conduct of
an authorized foreign counterintelligence investigation; and
``(2) there are specific and articulable facts giving
reason to believe that the consumer whose consumer report is
sought--
``(A) is an agent of a foreign power, and
``(B) is engaging or has engaged in an act of international
terrorism (as that term is defined in section 101(c) of the
Foreign Intelligence Surveillance Act of 1978) or clandestine
intelligence activities that involve or may involve a
violation of criminal statutes of the United States.
The terms of an order issued under this subsection shall not
disclose that the order is issued for purposes of a
counterintelligence investigation.
``(d) Confidentiality.--No consumer reporting agency or
officer, employee, or agent of a consumer reporting agency
shall disclose to any person, other than those officers,
employees, or agents of a consumer reporting agency necessary
to fulfill the requirement to disclose information to the
Federal Bureau of Investigation under this section, that the
Federal Bureau of Investigation has sought or obtained the
identity of financial institutions or a consumer report
respecting any consumer under subsection (a), (b), or (c),
and no consumer reporting agency or officer, employee, or
agent of a consumer reporting agency shall include in any
consumer report any information that would indicate that the
Federal Bureau of Investigation has sought or obtained such
information or a consumer report.
``(e) Payment of Fees.--The Federal Bureau of Investigation
shall, subject to the availability of appropriations, pay to
the consumer reporting agency assembling or providing report
or information in accordance with procedures established
under this section a fee for reimbursement for such costs as
are reasonably necessary and which have been directly
incurred in searching, reproducing, or transporting books,
papers, records, or other data required or requested to be
produced under this section.
``(f) Limit on Dissemination.--The Federal Bureau of
Investigation may not disseminate information obtained
pursuant to this section outside of the Federal Bureau of
Investigation, except to other Federal agencies as may be
necessary for the approval or conduct of a foreign
counterintelligence investigation, or, where the information
concerns a person subject to the Uniform Code of Military
Justice, to appropriate investigative authorities within the
military department concerned as may be necessary for the
conduct of a joint foreign counterintelligence investigation.
``(g) Rules of Construction.--Nothing in this section shall
be construed to prohibit information from being furnished by
the Federal Bureau of Investigation pursuant to a subpoena or
court order, in connection with a judicial or administrative
proceeding to enforce the provisions of this Act. Nothing in
this section shall be construed to authorize or permit the
withholding of information from the Congress.
``(h) Reports to Congress.--On a semiannual basis, the
Attorney General shall fully inform the Permanent Select
Committee on Intelligence and the Committee on Banking,
Finance and Urban Affairs of the House of Representatives,
and the Select Committee on Intelligence and the Committee on
Banking, Housing, and Urban Affairs of the Senate concerning
all requests made pursuant to subsections (a), (b), and (c).
``(i) Damages.--Any agency or department of the United
States obtaining or disclosing any consumer reports, records,
or information contained therein in violation of this section
is liable to the consumer to whom such consumer reports,
records, or information relate in an amount equal to the sum
of--
``(1) $100, without regard to the volume of consumer
reports, records, or information involved;
``(2) any actual damages sustained by the consumer as a
result of the disclosure;
``(3) if the violation is found to have been willful or
intentional, such punitive damages as a court may allow; and
``(4) in the case of any successful action to enforce
liability under this subsection, the costs of the action,
together with reasonable attorney fees, as determined by the
court.
``(j) Disciplinary Actions for Violations.--If a court
determines that any agency or department of the United States
has violated any provision of this section and the court
finds that the circumstances surrounding the violation raise
questions of whether or not an officer or employee of the
agency or department acted willfully or intentionally with
respect to the violation, the agency or department shall
promptly initiate a proceeding to determine whether or not
disciplinary action is warranted against the officer or
employee who was responsible for the violation.
``(k) Good-Faith Exception.--Notwithstanding any other
provision of this title, any consumer reporting agency or
agent or employee thereof making disclosure of consumer
reports or

[[Page H15229]]
identifying information pursuant to this subsection in good-faith
reliance upon a certification of the Federal Bureau of
Investigation pursuant to provisions of this section shall
not be liable to any person for such disclosure under this
title, the constitution of any State, or any law or
regulation of any State or any political subdivision of any
State.
``(l) Limitation of Remedies.--Notwithstanding any other
provision of this title, the remedies and sanctions set forth
in this section shall be the only judicial remedies and
sanctions for violation of this section.
``(m) Injunctive Relief.--In addition to any other remedy
contained in this section, injunctive relief shall be
available to require compliance with the procedures of this
section. In the event of any successful action under this
subsection, costs together with reasonable attorney fees, as
determined by the court, may be recovered.''.
(b) Clerical Amendment.--The table of sections at the
beginning of the Fair Credit Reporting Act (15 U.S.C. 1681 et
seq.) is amended by adding after the item relating to section
623 the following new item:

``624. Disclosures to FBI for counterintelligence purposes.''.
TITLE VII--TECHNICAL AMENDMENTS

SEC. 701. CLARIFICATION WITH RESPECT TO PAY FOR DIRECTOR OR
DEPUTY DIRECTOR OF CENTRAL INTELLIGENCE
APPOINTED FROM COMMISSIONED OFFICERS OF THE
ARMED FORCES.

(a) Clarification.--Subparagraph (C) of section 102(c)(3)
of the National Security Act of 1947 (50 U.S.C. 403(c)(3)) is
amended to read as follows:
``(C) A commissioned officer of the Armed Forces on active
duty who is appointed to the position of Director or Deputy
Director, while serving in such position and while remaining
on active duty, shall continue to receive military pay and
allowances and shall not receive the pay prescribed for the
Director or Deputy Director. Funds from which such pay and
allowances are paid shall be reimbursed from funds available
to the Director.''.
(b) Technical Corrections.--(1) Subparagraphs (A) and (B)
of such section are amended by striking ``pursuant to
paragraph (2) or (3)'' and inserting ``to the position of
Director or Deputy Director''.
(2) Subparagraph (B) of such section is amended by striking
``paragraph (A)'' and inserting ``subparagraph (A)''.

SEC. 702. CHANGE OF DESIGNATION OF CIA OFFICE OF SECURITY.

Section 701(b)(3) of the National Security Act of 1947 (50
U.S.C. 431(b)(3)), is amended by striking ``Office of
Security'' and inserting ``Office of Personnel Security''.
And the Senate agree to the same.

From the Permanent Select Committee on Intelligence, for
consideration of the House bill, and the Senate amendment,
and modifications committed to conference:
Larry Combest,
R.K. Dornan,
Bill Young,
James V. Hansen,
Jerry Lewis,
Proter J. Goss,
Bud Shuster,
Bill McCollum,
Michael N. Castle,
Norman Dicks,
Bill Richardson,
Julian C. Dixon,
Robert G. Torricelli,
Ron Coleman,
David E. Skaggs,
Nancy Pelosi,
As additional conferees from the Committee on National
Security, for consideration of defense tactical intelligence
and related activities:
Floyd Spence,
Bob Stump,
As additional conferees from the Committee on International
Relations, for consideration of section 303 of the House
bill, and section 303 of the Senate amendment, and
modifications committed to conference:
Benjamin A. Gilman,
Christopher Smith,
Howard L. Berman,
Managers on the Part of the House.

Arlen Specter,
Richard G. Lugar,
Richard Shelby,
Mike DeWine,
Jon Kyl,
Jim Inhofe,
Kay Bailey Hutchison,
Connie Mack,
Bill Cohen,
Strom Thurmond,
Robert Kerrey,
John Glenn,
Richard H. Bryan,
Bob Graham,
John F. Kerry,
Max Baucus,
J. Bennett Johnston,
Charles Robb,
Sam Nunn,
Managers on the Part of the Senate.

JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

The managers on the part of the House and the Senate at the
conference on the disagreeing votes of the two Houses on the
amendment of the Senate to the bill (H.R. 1655) to authorize
appropriations for fiscal year 1996 for intelligence and the
intelligence-related activities of the United States
Government, the Community Management Account, and the Central
Intelligence Agency Retirement and Disability System, and for
other purposes, submit the following joint statement to the
House and the Senate in explanation of the effect of the
action agreed upon by the managers and recommended in the
accompanying conference report:
The Senate amendment struck all of the House bill after the
enacting clause and inserted a substitute text.
The House recedes from its disagreement to the amendment of
the Senate with an amendment that is a substitute for the
House bill and the Senate amendment. The differences between
the House bill the Senate amendment, and the substitute
agreed to in conference are noted below, except for clerical
corrections, conforming changes made necessary by agreements
reached by the conferees, and minor drafting and clerical
changes.

Title I--Intelligence Activities

SEC. 101. AUTHORIZATION FOR APPROPRIATIONS.

Section 101 of the conference report lists the departments,
agencies and other elements of the United States Government
for whose intelligence and intelligence-related activities
the Act authorizes appropriations for fiscal year 1996.

SEC. 102--CLASSIFIED SCHEDULE OF AUTHORIZATIONS.

Section 102 of the conference report makes clear that the
details of the amounts authorized to be appropriated for
intelligence and intelligence-related activities and
applicable personnel ceilings covered under this title for
fiscal year 1996 are contained in a classified Schedule of
Authorizations. The Schedule of Authorizations is
incorporated into the Act by this section. The details of the
Schedule are explained in the classified annex to this
report.

SEC. 103. PERSONNEL CEILING ADJUSTMENTS.

Section 103 of the conference report authorizes the
Director of Central Intelligence, with the approval of the
Director of the Office of Management and Budget, in fiscal
year 1996 to exceed the personnel ceilings applicable to the
components of the Intelligence Community under section 102 by
an amount not to exceed two percent of the total of the
ceilings applicable under section 102. The Director may
exercise this authority only when doing so is necessary to
the performance of important intelligence functions. Any
exercise of this authority must be reported to the two
intelligence committees of the Congress.
The conferees emphasize that the authority conferred by
Section 103 is not intended to permit the whosesale raising
of personnel strength in any intelligence component. Rather,
the section provides the Director of Central Intelligence
with flexibility to adjust personnel levels temporarily for
contingencies and for overages caused by an imbalance between
hiring of new employees and attrition of current employees.
The conferees do not expect the Director of Central
Intelligence to allow heads of intelligence components to
plan to exceed levels set in the Schedule of Authorizations
except for the satisfaction of clearly identified hiring
needs which are consistent with the authorization of
personnel strengths in this bill. In no case is this
authority to be used to provide for positions denied by this
bill.

SEC. 104. COMMUNITY MANAGEMENT ACCOUNT.

Section 104 of the conference report authorizes
appropriations for the Community Management Account of the
Director of Central Intelligence and sets the personnel end-
strength for the Intelligence Community Management Staff for
fiscal year 1996.
Subsection (a) authorizes appropriations of $90,713,000 for
fiscal year 1996 for the activities of the Community
Management Account of the Director of Central Intelligence.
It also authorizes funds identified for the Advanced Research
and Development Committee and the Environmental Task Force to
remain available for two years.
Subsection (b) authorizes 247 full-time personnel for the
Community Management Staff for fiscal year 1996 and provides
that such personnel may be permanent employees of the Staff
or detailed from various elements of the United States
Government.
Subsection (c) requires that personnel be detailed on a
reimbursable basis except for temporary situations of less
than one year.

Title II--Central Intelligence Agency Retirement and Disability System

SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

Section 201 authorizes appropriations in the amount of
$213,900,000 for fiscal year 1996 for the Central
Intelligence Agency Retirement and Disability Fund.

Title III--General Provisions

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

Section 301 of the conference report provides that
appropriations authorized by the conference report 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 301 is
identical to section 301 of the House bill and section 301 of
the Senate amendment.

SEC. 302. RESTRICTION ON CONDUCT OF INTELLIGENCE ACTIVITIES.

Section 302 provides that the authorization of
appropriations by the conference report 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 302 is identical to
section 302 of the

[[Page H15230]]
House bill and section 302 of the Senate amendment.

SEC. 303. APPLICATION OF SANCTIONS LAWS TO INTELLIGENCE
ACTIVITIES.

Section 303 of the conference report amends the National
Security Act of 1947 with a new Title IX to permit the
President to stay the imposition of an economic, cultural,
diplomatic, or other sanction or related action when the
President determines and reports to Congress that to proceed
without delay would seriously risk the compromise of an
intelligence source or method or an ongoing criminal
investigation. Both the House bill and the Senate amendment
contained provisions pertaining to deferrals of sanctions.
Section 901 of the new Title IX of the National Security
Act of 1947 grants the President the authority to stay the
imposition of a sanction or related action. Section 901
requires that when a sanction or related action is to be
deferred due to the risk of compromise of a source or method
or an ongoing criminal investigation, the source or method or
the law enforcement matter in question must be related to the
activities giving rise to the sanction. The section allows
the President to stay the imposition of a sanction or related
action for a specified period not to exceed 120 days.
Section 902 of the new Title IX provides that when the
President determines and reports to Congress that a stay of
an imposition of a sanction or related action has not
afforded sufficient time to obviate the risk to an ongoing
criminal investigation or to an intelligence source or method
that gave rise to the stay, the President may extend the stay
for successive periods of not more than 120 days.
Section 903 of the new Title IX requires that reports to
Congress pursuant to section 901 and 902 be submitted
promptly upon the President's determination to stay the
imposition of a sanction or related action. Reports required
under the new title are to be submitted to the Committee on
International Relations of the House and the Committee on
Foreign Relations of the Senate. Those reports pertaining to
determinations related to intelligence sources and methods
are also to be submitted to the Permanent Select Committee on
Intelligence of the House and the Select Committee on
Intelligence of the Senate. Those reports pertaining to
determinations related to ongoing criminal investigations are
also to be submitted to the Judiciary Committees of the House
and Senate. The conferees further recognize that the actual
structure and content of the reports to the Senate and House
committees of jurisdiction will be achieved as a result of
ongoing dialogue between the Congress and the Executive
Branch. The conferees expect that the reports submitted
pursuant to the new title will indicate the nature of the
activities giving rise to the sanction or related action, the
applicable law concerned, the country or countries in which
the activity took place, and other pertinent details, to the
maximum extent practicable consistent with the protection of
intelligence sources and methods. The reports should also
include a determination that the delay in the imposition of a
sanction or related action will not be seriously prejudicial
to the achievement of the United States' nonproliferation
objectives or significantly increase the threat or risk to
United States' military forces.
Section 904 of the new Title IX enumerates specific
nonproliferation laws requiring a sanction or related action,
the imposition of which the President may stay pursuant to
sections 901 and 902. The section also grants the President
the authority to stay the imposition of a sanction or related
action contained in laws comparable to the enumerated acts.
Section 905 of the new Title IX states that the title
ceases to be effective one year from the date of its
enactment. The conferees believe this will afford Congress an
opportunity to evaluate the use and effect of this provision
in relation to sanctions laws. The Senate bill did not
contain a similar provision.
The conferees expect that when the President chooses to
exercise the deferral authority, the utmost will be done to
resolve sources or methods or law enforcement problems as
soon as possible so as to permit sanctions to be imposed as
required by law. The intelligence and judiciary committees,
as appropriate, should be informed fully of the efforts being
made to address the circumstances that led to the delay. The
conferees understand that instances where sanctions would be
deferred would be rare, and that the deferral authority will
be exercised only when an intelligence source or method or a
criminal investigation is seriously at risk, and not to
protect generic or speculative intelligence or law
enforcement interests. Moreover, the presidential
determination should not be used as a pretext for some other
reason not to impose sanctions such as economic or foreign
policy reasons. The President should lift the stay when the
President determines that it is no longer necessary to
protect against compromise.
The President must have sufficient information to determine
whether the risk to intelligence sources and methods or an
ongoing criminal investigation is significant and outweighs
any potential harm to U.S. nonproliferation objectives. The
conferees expect that determinations to invoke a stay
authorized under this new title will be preceded by a
rigorous interagency review process in which the
recommendations of all relevant agencies, together with
supporting facts, are made available to the President. The
conferees intend to closely monitor the use of the authority
provided under this title.

SEC. 304. THRIFT SAVINGS PLAN FORFEITURE.

Section 304 of the conference report adds a new subsection
to section 8432(g) of title 5, United States Code, to provide
that the Government's contribution to the Thrift Savings Plan
under the Federal Employees Retirement System (FERS) and
interest earned on that contribution shall be forfeited if
the employee's annuity has been forfeited under subchapter II
of Chapter 83, title 5, United States Code. This provision
closes a loophole that was created when the FERS was
established.
Prior to the enactment of the FERS, an employee's
retirement annuity was based entirely on contributions made
by the employee and by the Government to the applicable
retirement fund. Under subchapter II of Chapter 83, any
employee convicted of various national security offenses,
including espionage, would forfeit his annuity and be
entitled to receive only his monetary contributions to the
annuity. A new retirement benefit, however, was created with
the establishment of FERS, payable under the Thrift Savings
Plan.
The Thrift Savings Plan now permits the employee to
contribute into the Government-managed fund and requires that
the Government also contribute to the fund on the employee's
behalf. When FERS was enacted, the forfeiture provisions of
subchapter II were not amended to cover the Government's
contributions to the Plan. This situation clearly undermines
the intent of subchapter II by permitting an employee
convicted of espionage to retain the Government's
contributions to the Plan. Section 304 corrects this anomaly
by requiring the forfeiture of the Government's contribution
to the Plan and attributable earnings on that contribution in
situations where an individual's annuity is forfeited under
subchapter II. Section 304 is identical to section 304 of the
House bill and section 304 of the Senate amendment.

SEC. 305. AUTHORITY TO RESTORE SPOUSAL PENSION BENEFITS TO
SPOUSES WHO COOPERATE IN CRIMINAL
INVESTIGATIONS AND PROSECUTIONS FOR NATIONAL
SECURITY OFFENSES.

Section 304 of the conference report amends section 8318 of
title 5, United States Code, to make the spouse of an
individual whose annuity or retired pay has been forfeited
under section 8312 or 8313 of title 5 eligible for spousal
pension benefits if the Attorney General determines that the
spouse fully cooperated in the criminal investigation and
prosecution of the individual. Enactment of this legislation
will help to protect the national security interests of the
United States by encouraging the spouses of federal employees
who know or suspect that their husband or wife is engaged in
espionage activities to inform the Government and to
cooperate in a subsequent criminal investigation and
prosecution. Current law actually discourages cooperation
with the Government, since under current law pension benefits
are lost upon conviction and forfeiture of the husband's or
wife's annuity, even if the spouse has cooperated with the
Government. Section 305 is identical to section 305 of the
House bill and section 305 of the Senate amendment.

SEC. 306. SECRECY AGREEMENTS USED IN INTELLIGENCE ACTIVITIES.

Section 306 addresses a problem that CIA has experienced
with secrecy agreements in the conduct of authorized
intelligence activities. Beginning with the Treasury, Postal
Service, and General Government Appropriations Act for fiscal
year 1991 and in each year thereafter, Congress has required
that agreements to protect classified information must
contain certain prescribed language to put the executor on
notice that the agreement does not supersede specified laws
and Executive Order 12356. The language is as follows:

These restrictions are consistent with and do not
supersede, conflict with or otherwise alter the employee
obligations, rights or liabilities created by Executive Order
12356; section 7211 of title 5, United States Code (governing
disclosures to Congress); section 1034 of title 10, United
States Code, as amended by the Military Whistleblower
Protection Act (governing disclosure to Congress by members
of the military); section 2302(b)(8) of title 5, United
States Code, as amended by the Whistleblower Protection Act
(governing disclosures of illegality, waste, fraud, abuse of
public health or safety threats); the Intelligence Identities
Protection Act of 1982 (50 U.S.C. 421 et seq.) (governing
disclosures that could expose confidential Government
agents), and the statutes which protect against disclosure
that may compromise the national security, including sections
641, 793, 794, 798, and 952 of title 18, United States Code,
and section 4(b) of the Subversive Activities Act of 1950 (50
U.S.C. section 783(b)). The definitions, requirements,
obligations, rights, sanctions and liabilities created by
said Executive Order and listed statutes are incorporated
into the Agreement and are controlling.

Notwithstanding that several of the laws cited apply only
to federal employees, the Treasury appropriations acts have
required CIA to include the specified language in
nondisclosure agreements intended to be executed by private
parties. The prescribed

[[Page H15231]]
language is required in every secrecy agreement entered into, so
federal employees and private entities alike must have such
language included in the agreement that they sign. The
recitation of numerous statutes in the overbearing but
required ``legalese'' has caused confusion, complicated
authorized intelligence activities, and even disrupted them
when parties refuse to sign agreements containing provisions
that do not apply to them. The required language is
intimidating and has chilled otherwise promising intelligence
relationships with private entities.
Consequently, section 306 clarifies that CIA and other
intelligence agencies have the flexibility to tailor
nondisclosure agreements according to the needs of the
intelligence activity at hand, as long as the agreement at a
minimum requires nondisclosure without specific authorization
by the United States Government. The form or agreement must
also make clear that the form or agreement does not bar
disclosures to Congress or disclosures to an authorized
official of an executive agency that are deemed essential to
reporting a violation of United States laws. This section,
when enacted, will permit the use of secrecy agreements
stated in plain and understandable English and that will not
intimidate the layman. The provision will make it easier for
people to understand their rights and obligations when
signing a secrecy agreement, which will ultimately enhance
the protection of national security information.

SEC. 307. LIMITATION ON AVAILABILITY OF FUNDS FOR AUTOMATIC
DECLASSIFICATION OF RECORDS OVER 25 YEARS OLD.

Section 307 limits the availability of funds authorized to
be appropriated by this Act to implement section 3.4 of
Executive Order 12958 to $25 million in fiscal year 1996. The
Director of Central Intelligence, at the Director's
discretion, may allocate this amount among the agencies of
the National Foreign Intelligence Program for this purpose.
Section 307 requires the President to submit budget requests
that specifically identify the funds necessary to implement
section 3.4 for fiscal years 1997 through 2000.
Given that the conferees have received four different
estimates of the cost of implementing section 3.4 since the
beginning of the year, the conferees believe there needs to
be a continuing effort to fully evaluate the potential costs
associated with the declassification review programs. The
conferees further urge that this declassification effort be
coordinated closely with CIA's Historical Review Program
Office so as to enhance the intellectual coherence of the
declassification process. In the budget submission for
FY1997, the President is to provide a detailed request
supported by firm estimates of declassification costs.
Section 307 of the House bill limited each agency of the
National Foreign Intelligence Program to $2.5 million to
carry out the provisions of section 3.4. The Senate amendment
had no similar provision.

SEC. 308. AMENDMENT TO THE HATCH ACT REFORM AMENDMENTS OF
1993.

Section 308 restores the authority of the Office of
Personnel Management (OPM) to extend ``de-Hatching'' to
employees of the agencies listed in 5 U.S.C.
Sec. 7323(b)(2)(B)(i).
Previously, under 5 U.S.C. Sec. 7323, OPM had the authority
to designate certain municipalities and other political
subdivisions in which federal employees in both competitive
and excepted services could actively participate in local
partisan elections. (Such designation of municipalities and
political subdivisions by OPM is commonly referred to as
``de-Hatching''.) However, when this authority was amended by
Public Law 103-94 and recodified in 5 U.S.C. Sec. 7325, the
authority was granted only ``without regard to the
prohibitions in paragraphs (2) and (3) of section 7323(a)''.
The prohibitions in section 7323(a) apply to the federal
employees, both competitive and excepted service. However,
employees of NSA, CIA, DIA and the other agencies listed in 5
U.S.C. Sec. 7323(b)(2)(B)(i) are subject to additional
prohibitions under section 7323(b)(2)(A) which section 7325
does not permit OPM to disregard. Thus, OPM cannot extend de-
Hatching to employees of the listed agencies and the
implementing interim regulations issued by OPM (59 Fed. Reg.
5313 (1994) to be codified at 5 C.F.R. Part 733) reflect this
restriction.
This provision would amend the ``de-Hatching'' provision (5
U.S.C. Sec. 7325) to include the excepted services in the
category of federal employees that OPM may permit to take an
active part in local (not Federal) political campaigns.
Section 308 is identical to section 306 of the Senate
amendment. The House bill did not contain a similar
provision.

SEC. 309.--REPORT ON PERSONNEL POLICIES.

Section 309 of the conference report requires the DCI to
report to the intelligence oversight committees within three
months detailed personnel procedures that could be
implemented across the intelligence community to provide for
mandatory retirement at expiration of time in class and
termination based on relative performance similar to
comparable provisions in sections 607 and 608 of the Foreign
Service Act of 1980 (Title 22 U.S.C. 4007 and 4008) for
civilian employees.
The Director of Central Intelligence and Secretary of
Defense were directed in the FY 1995 Intelligence
Authorization Act to provide a report by December 1, 1994 on
the advisability of providing for mandatory retirement at
expiration of time in class. The oversight committees have
reviewed the issue and determined that a performance-based
policy is advisable and are now directing the DCI to develop
and report on procedures that could be implemented.
Senate floor action added a provision requiring that the
DCI's report include a description and analysis of voluntary
separation incentives, including a waiver of the ``two
percent penalty'' reduction for early retirement under
certain federal retirement systems. Section 309 is
substantially similar to section 307 of the Senate amendment.
The House bill did not contain a similar provision.

SEC. 310.--ASSISTANCE TO FOREIGN COUNTRIES.

Section 310 of the conference report authorizes assistance
to a foreign country for counterterrorism efforts,
notwithstanding any other provision of law, for the purpose
of protecting the property of the United States Government or
the life and property of any United States citizen or
furthering the apprehension of any individual involved in any
act of terrorism against such property or persons. The
appropriate committees of Congress are to be notified not
later than 15 days prior to the provision of such assistance.
This authority is needed for the purpose of furthering United
States interests. By providing this authority, there will be
no doubt that the United States will be able to provide
assistance to foreign countries that are willing to help
identify, track and apprehend persons who have destroyed
American property or harmed American citizens. Section 310 is
identical to section 308 of the Senate amendment. There was
no comparable language in the House bill.

SEC. 311.--FINANCIAL MANAGEMENT OF THE NATIONAL
RECONNAISSANCE OFFICE.

Section 311 of the conference report seeks to improve
accountability and financial management control over the
National Reconnaissance Office. The section further requires
a review of NRO's financial management by the Inspector
General of CIA, assisted by the Inspector General of DOD, to
evaluate the effectiveness of policies and internal controls
over the NRO budget, particularly wit regard to carry-forward
funding. It is the intention of the conferees that the
Director of Central Intelligence notify the intelligence
oversight committees prior to reprogramming, reallocating,
and/or rescinding funds previously authorized and
appropriated for NRO programs, projects, and activities. The
section also requires the President to report no later than
January 30, 1996 on a proposal to subject the budget of the
Intelligence Community to greater Executive Branch oversight,
including the possibility of a statutory financial control
officer for the NRO and greater Office of Management and
Budget review of the NRO's budget. The report must include an
analysis of the option for a statutory provision requiring
the DCI to establish a policy to restrict the NRO's authority
on carry-forward funding consistent with the restriction on
such authority within the Department of Defense. The
President shall also report on how changes proposed as a
result of this review will affect, directly or indirectly,
the NRO's streamlined acquisition process and ultimately,
program costs.
Elements of section 311 were added to the Senate amendment
in floor action, but the provision has been substantially
changed in subsequent discussions among conferees. There was
no comparable provision in the House bill.

Title IV--Central Intelligence Agency

SEC. 401. EXTENSION OF THE CIA VOLUNTARY SEPARATION PAY ACT.

Section 401 amends section 2(f) of the CIA Voluntary
Separation Pay Act, 50 U.S.C. Sec. 403-4(f), to extend the
Agency's authority to offer separation incentives until
September 30, 1999. Without this amendment, the Agency's
authority to offer such incentives will expire on September
30, 1997.
CIA's separation incentive program has been an effective
force reduction tool. It is necessary to extend this
authority until September 30, 1999, because CIA, Like DoD,
will continue to downsize through that year. Enactment of
this provision will ensure that CIA can minimize the need to
separate employees involuntarily. In light of the conferees'
concern that this authority may have been used in the past in
lieu of more rigorous personnel policies, this authority is
extended with the understanding that the Intelligence
Community will be pursuing such policies, and that this
authority can be used to ease the transition to the more
rigorous, performance-based criteria and policy.
Section 401(b) is designed to offset the direct spending
cost of the extension of the authority provided for in the
CIA Voluntary Separation Pay Act. Specifically, it
establishes procedures to conform with the pay-as-you-go
provision, section 252, of the Balanced Budget and Emergency
Deficit Control Act, by requiring the Director of Central
Intelligence to remit to the Treasury an amount equal to 15
percent of the final basic pay of each employee who, in
fiscal year 1998 or fiscal year 1999, retires voluntarily or
who resigns and to whom a voluntary separation incentive has
been or is to be paid.
Section 401(a) is identical to section 401 of the House
bill. Section 401(b) is identical to section 401(b) of the
Senate amendment. The House bill did not contain a similar
offset provision.

SEC. 402. VOLUNTEER SERVICE PROGRAM.

Section 402 authorizes the Director to establish, as a
demonstration project, a limited volunteer service program
for fiscal years 1996 through 2001, whereby no more

[[Page H15232]]
than 50 retirees can volunteer their services to the CIA to assist the
Agency in its systematic or mandatory review for
declassification or downgrading of classified information
under certain Executive Orders and Public Law 102-526. The
provision limits expenditures to no more than $100,000.
This section authorizes the Agency to pay costs incidental
to the use of the services of volunteers, such as training,
equipment, lodging, subsistence, equipment and supplies. It
also ensures that volunteers are covered by workers
compensation and the Federal Torts Claim Act. Without this
legislation, the CIA would be unable to pay costs incident to
the use of gratuitous services provided by volunteers, such
as training and equipment. The program established under this
section will be temporary and limited. Section 402 is
identical to section 402 of the House bill and section 402 of
the Senate amendment.

SEC. 403. AUTHORITIES OF THE INSPECTOR GENERAL OF THE CENTRAL
INTELLIGENCE AGENCY.

Section 403(a) of the conference report modifies the CIA
Inspector General statute to require the IG to report
violations of Federal law by any person, as opposed to
violations by officers or employees of the CIA. It also
allows the reports to go directly from OIG to the Department
of Justice, rather than through the DCI, although the DCI
must receive a copy of the report. This is consistent with
the Inspector General Statute of 1978 and enhances the
independence of the IG. The conferees understand that the
Inspector General has agreed to give advanced notice to the
DCI and the conferees strongly support this agreement. The
conferees further understand that this advance notice will
not be used to prevent reports from going to the Department
of Justice. Section 403(a) is identical to section 403(a) of
the Senate amendment. The House bill did not contain a
similar provision.
Section 403(b) of the conference report clarifies the CIA
Inspector General statute to ensure that the identity of an
employee who has been granted confidentiality can be
disclosed to the Department of Justice official responsible
for determining whether a prosecution should be undertaken.
Current law already provides for this but this provision
would clarify and simplify the process. Section 403(b) is
identical to section 403(b) of the Senate amendment. The
House bill did not contain a similar provision.

Title V--Department of Defense

intelligence activities

SEC. 501. DEFENSE INTELLIGENCE SENIOR LEVEL POSITIONS.

Section 501 of the conference report amends section 1604 of
title 10, United States Code, by authorizing the Secretary of
Defense to establish the Defense Intelligence Senior Level
(DISL) personnel system for the Defense Intelligence Agency
(DIA) and the Central Imagery Office (CIO). Section 1604
currently authorizes the Secretary of Defense to establish
positions for civilian officers and employees in DIA and CIO.
The rates of basic pay for these positions are fixed in
relation to the rates of basic pay provided in the General
Schedule under section 5332 of title 5. Section 5332,
however, which limits the grades of employees to GS-15, is
insufficient for the needs of DIA and CIO.
In 1991, two Army field activities were transferred to DIA.
The employees at the Missile and Space Intelligence Center
and the Armed Forces Medical Intelligence Center are high-
level technical employees. Their positions do not meet the
management and program criteria for Senior Executive Service
(SES) inclusion, but they do exceed the GS-15 criteria. DIA
is also acquiring the Human Intelligence (HUMINT) resources
of the Military Services. This functional transfer will add
over 1,000 civilian and military personnel to DIA's rolls,
and there may be a need to structure at least one senior
advisory assignment as part of the Defense HUMINT Service
(DHS) architecture. Additionally, the increased Defense
intelligence leadership roles of DIA and CIO require
increased high level activity in technical analysis, liaison
and advisory services.
The primary purpose of DISL positions will be to provide
technical expertise and advisory services beyond the GS-15
level established by DIA and CIO. Employees in DISL positions
will not be responsible for managerial and program oversight,
which are functions of the SES. DISL positions will include
Defense Intelligence Senior Technical (DIST) and Defense
Intelligence Senior Professional (DISP) assignments. These
positions are classifiable above the DIA and CIO GS-15 level
but do not involve the organizational or program management
functions necessary for the Defense Intelligence Senior
Executive Service.
DIST positions are those that involve research and
development; test and evaluation; or substantive analysis,
liaison, and/or advisory activity focusing on engineering,
physical sciences, computer science, mathematics, medicine,
biology, chemistry, or other closely related scientific and
technical fields; and intelligence disciplines including
production, collection, and operations in close association
with the preceding or related activities.
DISP positions are those that emphasize staff, liaison,
analytical, advisory, or other activity focusing on
intelligence, law, finance and accounting, program and
budget, human resources management, training, information
services, logistics, and other appropriate support fields.
DISL positions will provide DIA and CIO with the
flexibility that is essential to recruit effectively and to
retain highly competent employees with scientific, technical,
or other complex skills. This provision allows the Secretary
of Defense to establish a basic rate of pay that does not
exceed the rate paid to Executive Level IV. It also
authorizes the Secretary of Defense to provide to DIA and CIO
employees other benefits, allowances, incentives, or
compensation that similarly situated federal employees are
eligible to receive under title 5, United States Code.
Section 501 is identical to section 501 of the House bill.
The Senate amendment did not contain a similar provision.

SEC. 502. COMPARABLE BENEFITS AND ALLOWANCES FOR CIVILIAN AND
MILITARY PERSONNEL ASSIGNED TO DEFENSE
INTELLIGENCE FUNCTIONS OVERSEAS.

Section 502 of the conference report amends section 1605 of
title 10, United States Code, and section 431 of title 37,
United States Code, to provide to civilian personnel and
members of the armed forces serving with the Defense HUMINT
Service outside the United States benefits and allowances
comparable to those provided by the Secretary of State to
officers and employees of the Foreign Service.
The Secretary of Defense has the authority to provide to
civilian personnel and members of the armed forces assigned
to the Defense Attache Offices and the Defense Intelligence
Agency Liaison Offices outside the United States benefits and
allowances comparable to those provided by the Secretary of
State to officers and employees of the Foreign Service. This
authority was attained in 1983 (Public Law 98-215) because
travel allowances and related benefits for overseas personnel
at the Defense Attache Offices and the Defense Intelligence
Agency Liaison Offices were different from Foreign Service
personnel assigned overseas.
With the consolidation of Department of Defense human
intelligence into the Defense HUMINT Service, the Defense
Intelligence Agency will be responsible for a significant
number of employees overseas. Although a number of these
employees may be assigned to Defense Attache Offices or
Defense Intelligence Agency Liaison Offices outside the
United States, there will be some assigned to other overseas
locations. Since the Agency's authority to provide benefits
and allowances to overseas employees is limited to the
Defense Attache Office and the Defense Intelligence Agency
Liaison Offices, inequities will once again occur. Section
502 ensures comparable benefits for civilian and military
personnel assigned to the Defense HUMINT Service overseas.
Section 502 is virtually identical to Section 501 of the
Senate amendment and section 502 of the House bill.

SEC. 503. EXTENSION OF AUTHORITY TO CONDUCT INTELLIGENCE
COMMERCIAL ACTIVITIES.

Section 503 of the conference report would extend for three
years, until December 31, 1998, the authority of the
Secretary of Defense to initiate intelligence commercial
activities to provide cover security to intelligence
collection activities undertaken abroad by the Defense
Department. This authority permits the Secretary to waive
compliance with certain types of federal laws and regulations
pertaining to the management and administration of federal
entities when he determines that compliance by the commercial
cover activity would create an unacceptable risk of
compromise of an authorized intelligence collection activity.
This authority is similar to the authority granted to the
Central Intelligence Agency and the Federal Bureau of
Investigation.
The Secretary's intelligence commercial cover authority was
originally enacted as part of the FY 1991 Intelligence
Authorization Act (Public Law 102-88) August 14, 1991.
However, the intelligence commercial cover authority did not
become effective until December 2, 1992, after the
statutorily required promulgation and submission to Congress
of a directive from the Secretary governing the
implementation of the statute. Due to a variety of reasons,
including the launching of a plan in 1993 to create a new
Defense Humint Service under which all Defense Department
human intelligence activities are being consolidated, this
intelligence commercial activities authority has not yet been
used, due largely to significant budget cuts effected in
December 1992. Recently, however, DoD has enhanced its HUMINT
efforts and is working closely with CIA to develop the
skills, plans, and infrastructure necessary to effectively
utilize this authority. Thus, the conference report extends
the sunset provision to December 31, 1998.
The Administration's intelligence authorization legislative
proposal sought repeal of the existing ``sunset'' clause,
thus making the Secretary's intelligence commercial
activities authority permanent. Senior officials from both
the Defense Department and the Central Intelligence Agency
testified to the continuing and growing need for the
Secretary to have this authority under certain circumstances
to provide bona fide commercial cover that can withstand
detailed investigation by hostile foreign intelligence
services as well as domestic scrutiny. The conferees agreed
to the extension of the authority. However, in view of the
lack of a record of use thus far, Section 503 extends the
authority for three years, instead of the permanent extension
originally sought by the Administration. Three years should
provide time for the development and oversight of a

[[Page H15233]]
track record on the use of this authority without encouraging overuse
of it, and particularly its more elaborate and sophisticated
applications. At the end of that time, and based on its
oversight of the record, the Intelligence Committees can
address whether to make this authority permanent, extend it
for a specific period or allow it to lapse. Section 503 is
the same as section 503 of the House bill. Section 502 of the
Senate amendment had extended the authority for five years.

SEC. 504. AVAILABILITY OF FUNDS FOR TIER II UAV.

The Fiscal Year 1995 authorization bill authorized full
funding of the Defense Department's request for the Tier-2
Medium Altitude Endurance Unmanned Aerial Vehicle (UAV)
Advanced Concept Technology Demonstration. The Fiscal Year
1995 defense appropriations bill included appropriations $20
million above the amount authorized for the program. As these
additional funds were not specifically authorized, as
required by Section 504 of the National Security Act of 1947,
the Department of Defense could not spend them. To remedy
this problem, Section 504 of the conference report
specifically authorizes an additional $20 million for this
program. Section 504 is identical to section 504 of the House
bill. The Senate bill did not contain a similar provision.

SEC. 505. MILITARY DEPARTMENT CIVILIAN INTELLIGENCE PERSONNEL
MANAGEMENT SYSTEM.

Section 505 of the conference report authorizes the
Secretary of Defense to send civilian employees in the
Military Departments' Civilian Intelligence Personnel
Management System (CIPMS) to be students at accredited
professional, technical, and other institutions of higher
learning for training at the undergraduate level. This
authority would be similar to that already granted to the
Defense Intelligence Agency (DIA) in 10 U.S.C. section 1608
(Public Law 101-93, title V, section 507(a)(1), Nov 30, 1989,
103 Stat. 1710) and the National Security Agency (NSA) in 50
U.S.C. 402 note. The purpose of the new section is to
establish an undergraduate training program, including
training which may lead to the baccalaureate degree, to
facilitate the recruitment of individuals, particularly
minority, women, and handicapped high school students with a
demonstrated capability to develop skills critical to the
intelligence missions of the Military Departments in areas
such as computer science, engineering, foreign language, and
area studies. In exchange for this financial assistance from
the respective CIPMS organization, the student participant
would undertake an obligation to work for a period of one-
and-one half year for each year or partial yea of schooling.
The missions of the intelligence entities of the United
States Government demand employees of extraordinary aptitude
and strong undergraduate training. These same entities must
compete with a private sector--capable of offering more
favorable compensation arrangements--that in most instances
has been able to outbid the USG in terms of attracting
qualified minority candidates. Statistics in recent years
indicate that the success of the Military Departments' CIPMS
to attract minority group candidates has been marginal.
This proposal is designed to enhance the capabilities of
the intelligence elements of the Military Departments to: (i)
ensure equal employment opportunity with their civilian ranks
through affirmative action; (ii) develop and retain personnel
trained in the skills essential to the effective performance
of their intelligence mission; and, (iii) compete on equal
footing with other intelligence Community entities for
personnel with critical skills. Section 505 is identical to
section 503 of the Senate amendment. The House bill did not
contain a similar provision.

SEC. 506. ENHANCEMENT OF CAPABILITIES OF CERTAIN ARMY
FACILITIES.

Section 506 of the conference report is intended to assist
the Department of the Army as it assumes executive agent
responsibility for the Bad Aibling, Germany and Menwith Hill,
England stations. Specifically, this provision would permit
the Department of the Army to use up to $2 million of
appropriated operations and maintenance funds to rectify
infrastructure and quality of life problems at Menwith Hill
and Bad Aibling. At the present time, the Army is prohibited
by statute from using appropriated funds to support certain
activities. Section 506 was added to the Senate amendment in
floor action. The House bill did not include a similar
provision.

Title VI--Federal Bureau of Investigation

SEC. 601. DISCLOSURE OF INFORMATION AND CONSUMER REPORTS TO
FBI FOR COUNTERINTELLIGENCE PURPOSES.

Section 601 of the conference report would amend the Fair
Credit Reporting Act (FCRA) (15 U.S.C. 1681f) to grant the
Federal Bureau of Investigation (FBI) access to certain
information in consumer credit records in counterintelligence
investigations.
A similar provision was included in the Intelligence
Authorization Act for FY 1995 as reported by the Senate
Select Committee on Intelligence. The provision was dropped
in conference at the request of the House Committee on
Banking, Finance, and Urban Affairs upon assurances that it
would pursue similar legislation. The U.S. House of
Representatives ultimately adopted H.R. 5143 which was
substantially the same as section 601 of this Act. The bill
was never acted upon by the Senate during the last Congress.
The conferees have recently received a letter from the
Chairman of the House Committee on Banking and Financial
Services in support of this provision. The language of that
letter is as follows:

House of Representatives, Committee on Banking and
Financial Services,
Washington, DC, October 11, 1995.
Hon. Newt Gingrich,
Speaker, House of Representatives,
Washington, DC.
Dear Mr. Speaker: I am writing concerning H.R. 1655, the
``Intelligence Authorization Act for Fiscal Year 1996'' on
which the House will soon appoint conferees to reconcile
differences with the Senate. Section 601 of H.R. 1655, as
added by the Senate amends the Fair Credit Reporting Act
(FCRA) and thereby falls under the jurisdiction of the
Committee on Banking and Financial Services, as provided for
under Rule X of the Rules of the House of Representatives.
Section 601 of the Senate reported bill amends the FCRA to
allow the FBI greater access to consumer reports when
investigating foreign terrorism. The FCRA imposes certain
obligations and liabilities on consumer reporting agencies in
assembling, evaluating and maintaining consumer credit
reports. Section 601 amends the FCRA to grant authority to
the FBI to obtain certain information from a consumer report
on a suspected terrorist without a court order.
The section is carefully crafted to protect consumers'
rights to privacy while allowing law enforcement agencies to
obtain necessary information in order to conduct authorized
foreign counterintelligence investigations. This issue was
considered by the Banking Committee in the last several
Congresses and a provision similar to section 601 was passed
by the full House in the 103rd Congress. In addition, Banking
Committee conferees were appointed by the House to the
Intelligence Authorization conference (H.R. 4299) last
Congress on this issue. Given past precedent of the House and
the fact that the language of this section was developed in
consultation with the House Banking Committee.
I would strongly urge the House conferees to recede to the
Senate on Section 601 or to consult with the Banking
Committee in the event of any substantive modifications.
Sincerely,
James A. Leach,
Chairman.

This provision would provide a limited expansion of the
FBI's authority in counterintelligence investigations
(including terrorism investigations), to obtain a consumer
credit report with a court order. In addition, it would allow
the FBI to use a ``National Security Letter,'' i.e. a written
certification by the FBI Director or the Director's designee,
to obtain from a consumer credit agency the names and
addresses of all financial institutions at which a consumer
maintains an account, as well as certain identifying
information.
Under current law, when appropriate legal standards are
met, FBI is able to obtain mandatory access to credit records
by means of a court order or grand jury subpoena (see the
FCRA, 15 U.S.C. 168b(1)), but such an option is available to
the FBI only after a counterintelligence investigation has
been converted to a criminal investigation or proceeding.
Many counterintelligence investigations never reach the
criminal stage but proceed for intelligence purposes or are
handled in diplomatic channels.
In addition, FBI presently has authority to use the
National Security Letter mechanism to obtain two types of
records; financial institution records (under the Right to
Financial Privacy Act, 12 U.S.C. 3414(a)(5)) and telephone
subscriber and toll billing information (under the Electronic
Communications Privacy Act, 18 U.S.C. 2709). Expansion of
this extraordinary authority is not taken lightly by the
conferees, but the conferees have concluded that in this
instance the need is genuine, the threshold for use is
sufficiently rigorous, and, given the safeguards built in to
the legislation, the threat to privacy is minimized.
Under a provision of the Right to Financial Privacy Act
(RFPA) (12 U.S.C. 3414(a)(5)), the FBI is entitled to obtain
financial records from financial institutions, such as banks
and credit card companies, by means of a National Security
Letter when the Director or the Director's designee certifies
in writing to the financial institution that such records are
sought for foreign counterintelligence purposes and that
there are specific and articulable facts giving reason to
believe that the customer or entity whose records are sought
is a foreign power or an agent of a foreign power, as those
terms are defined in section 101 of the Foreign Intelligence
Surveillance Act of 1978 (50 U.S.C. 1801 et seq.).
The FBI considers such access to financial records crucial
to trace the activities of suspected spies or terrorists. The
need to follow financial dealings in counterintelligence
investigations has grown as foreign intelligence service
increasingly operate under non-official over, i.e., pose as
business entities or executives, and as foreign intelligence
service activity has focused increasingly on U.S. economic
information.
FBI's right of access under the Right of Financial Privacy
Act cannot be effectively used, however, until the FBI
discovers which financial institutions are being utilized by

[[Page H15234]]
the subject of a counterintelligence investigation. Consumer reports
maintained by credit bureaus are a ready source of such
information, but, although such report are readily available
to the private sector, they are not available to FBI
counterintelligence investigators. Under section 608 of the
Fair Credit Reporting Act, without a court order, FBI
counterintelligence officials, like other government
agencies, are entitled to obtain only limited information
from credit reporting agencies--the name, address, former
addresses, places of employment, and former places of
employment, of a person--and this information can be obtained
only with the consent of the credit bureau.
FBI has made a specific showing to the conferees that the
effort to identify financial institutions in order to make
use of FBI authority under the Right to Financial Privacy Act
can not only be time-consuming and resource-intensive, but
can also require the use of investigative techniques--such as
physical and electronic surveillance, review of mail covers,
and canvassing of all banks in an area--that would appear to
be more intrusive than the review of credit reports. FBI has
offered a number of specific examples in which lengthy,
intensive and intrusive surveillance activity was required to
identify financial institutions doing business with a
suspected spy or terrorist.
Section 601 of the instant legislation would amend FCRA by
adding a new section 624, consisting of 13 paragraphs.
Paragraph 624(a) of the amended FCRA requires a consumer
reporting agency to furnish to the FBI the names and
addresses of all financial institutions at which a consumer
maintains or has maintained an account, to the extent the
agency has that information, when presented with a written
request signed by the FBI Director or the Director's
designee, which certifies compliance with the subsection. The
FBI Director or the Director's designee may make such
certification only if the Director or the Director's designee
has determined in writing that such records are necessary for
the conduct of an authorized foreign counterintelligence
investigation and that there are specific and articulable
facts giving reason to believe that the person whose consumer
report is sought is a foreign power, a non-U.S. official of a
foreign power, or an agent of a foreign power (as defined in
Section 101 of the Foreign Intelligence Surveillance Act of
1978 (50 U.S.C. 1801 et seq.)) and is engaged in terrorism or
other criminal clandestine intelligence activities.
The requirement that there be specific and articulable
facts giving reasons to believe that a U.S. person is an
agent of a foreign power before FBI can obtain access to a
consumer report is consistent with the standards in the Right
to Financial Privacy Act, U.S.C. 3414(a)(5)(A), and the
Electronic Communications Privacy Act, 18 U.S.C. 2709(b).
However, in contrast to those statutes, the conferees have
drafted the FCRA certification requirement to provide that
the FBI demand submitted to the consumer reporting agency
make reference to the statutory provision without providing
the agency with a written certification that the subject of
the consumer report is believed to be an agent of a foreign
power. FBI would still be required to record in writing its
determination regarding the subject, and the credit reporting
agency would be able to draw the necessary conclusion, but
the conferees believe that this approach would reduce the
risk of harm from the certification process itself to the
person under investigation. A similar approach is taken in
paragraph 624(b), described below.
Section 605 of the FCRA, 15 U.S.C. 1681c, defines
``consumer report'' in a manner that prohibits the
dissemination by credit reporting agencies of certain older
information except in limited circumstances. None of these
excepted circumstances would apply to FBI access under
proposed FCRA paragraph 624(a) (or proposed FCRA paragraph
624(b)). Accordingly, FBI access would be limited to
``consumer reports'' as defined in section 605.
The term ``an authorized foreign counterintelligence
investigation'' includes those FBI investigations conducted
for the purpose of countering international terrorist
activities as well as those FBI investigations conducted for
the purpose of countering the intelligence activities of
foreign powers. Both types of investigations are conducted
under the auspices of the FBI's Intelligence Division, headed
by an FBI Assistant Director.
As is the case with the FBI's existing National Security
Letter authority under the Right to Financial Privacy Act
(see Senate Report 99-307, May 21, 1986, p. 16; House Report
99-952, October 1. 1986, p. 23), the conferees expect that,
if the Director of the FBI delegates this function under
paragraph 624(a), as well as under paragraph 624(b) discussed
below, the Director will delegate it no further than the
level of FBI Deputy Assistant Director. (There are presently
two Deputy Assistant Directors for the National Security
Division, one with primary responsibility for
counterintelligence investigations and the other with primary
responsibility for international terrorism investigations.)
Paragraph 624(b) would give the FBI mandatory access to the
consumer identifying information--name address, former
addresses, places of employment, or former places of
employment--that it may obtain under current section 608 only
with the consent of the credit reporting agency. A consumer
reporting agency would be required signed by the FBI Director
or the Director's designee, which certifies compliance with
the subsection. The Director or the Director's designee may
make such a certification only if the Director or the
Director's designee has determined in writing that such
information is necessary to the conduct of an authorized
foreign counterintelligence investigation and that there is
information giving reason to believe that the person about
whom the information is sought has been or is about to be, in
contact with a foreign power or an agent of a foreign power,
as defined in Section 101 of the Foreign Intelligence
Surveillance Act of 1978 (50 U.S.C. 1801 et. seq.).
FBI officials have indicated that they seek mandatory
access to this identifying information in order to determine
if a person who has been in contact with a foreign power or
agent is a government or industry employee who might have
access to sensitive information of interest to a foreign
intelligence service. Accordingly, the conferees have drafted
this provision to require that such limited information can
be provided only in circumstances where the consumer has been
or is about to be in contact with the foreign power or agent.
The conferees have also drafted paragraphs 624(a) and
624(b) in a manner intended to make clear the conferees'
intent that the FBI may use this authority to obtain this
information only as regard those persons who either are a
foreign power or agent there of or have been or will be in
contact with a foreign power or agent. Although the consumer
records of another person, such as a relative or friend of an
agent of a foreign power, or identifying information
respecting a relative or friend of a person in contact with
an agent of a foreign power, may be of interest to FBI
counterintelligence investigators, they are not subject to
access under paragraphs 624(a) and 624(b).
It is not the intent of the conferees to require any credit
reporting agency to gather credit or identifying information
on a person for the purpose of fulfilling an FBI request
under paragraphs 624(a) and 624(b). A credit reporting
agency's obligation under these provision is to provide
information responsive to the FBI's request that the credit
reporting agency already has in its possession.
Paragraph 624(c) provides that, if requested in writing by
the FBI, a court may issue an order ex parte directing a
consumer reporting agency to furnish a consumer report to the
FBI upon a showing in camera that the report is necessary for
the conduct of an authorized foreign counterintelligence
investigation and that there are specific and articulable
facts giving reason to believe the consumer is an agent of a
foreign power and is engaged in international terrorism or
clandestine intelligence activities that may involve a crime.
Paragraph 624(d) provides that no consumer reporting agency
or officer, employee, or agent of such institution shall
disclose to any person, other than those officers, employees
or agents of such institution necessary to fulfill the
requirement to disclose information to the FBI under
subsection 624, that the FBI has sought or obtained a
consumer report or financial institution, or identifying
information respecting any consumer under paragraphs 624, nor
shall such agency, officer, employee, or agent include in any
consumer report any information that would indicate that the
FBI has sought or obtained such information. The prohibition
against including such information in a consumer report is
intended to clarify the obligations of the consumer reporting
agencies. It is not intended to preclude employees of
consumer reporting agencies from complying with company
regulations or policies concerning the reporting of
information, nor to preclude their complying with a subpoena
for such information issued pursuant to appropriate legal
authority.
Paragraph 624(d) departs from the parallel provision of the
RFPA by clarifying that disclosure is permitted within the
contacted institution to the extent necessary to fulfill the
FBI request. The conferees have not concluded that, or
otherwise taken a position whether, disclosure for such
purpose would be forbidden by the RFPA; indeed,
practicalities would dictate that the provision not be
interpreted to exclude such disclosure. However, the
conferees believe that clarification of the obligation for
purposes of the FCRA is desirable.
Paragraph 624(e) requires the FBI, subject to the
availability of appropriations, to pay to the consumer
reporting agency assembling or providing credit records a fee
in accordance with FCRA procedures for reimbursement for
costs reasonably necessary and which have been directly
incurred in searching for, reproducing, or transporting
books, papers, records, or other data required or requested
to be produced under section 624. The FBI informs the
Committee that such reports are commercially available for
approximately $7 to $25 and that FBI could expect to pay fees
in approximately that range. FBI officials have advised the
conferees that the costs of such reports would be easily
recouped from the savings afforded by the reduced need for
other investigative techniques aimed at obtaining the same
information.
Paragraph 624(f) prohibits the FBI from disseminating
information obtained pursuant to section 624 outside the FBI,
except as may be necessary for the approval of conduct of a
foreign counterintelligence investigation, or, where the
information concerns military service personnel subject to
the Uniform Code of Military Justice, to appropriate
investigation authorities in the military department
concerned as may be necessary for the conduct of a joint
foreign

[[Page H15235]]
counterintelligence investigation with the FBI. Since the military
departments have concurrent jurisdiction to investigate and
prosecute military personnel subject to the Uniform Code of
Military Justice, paragraph 624(g) permits the FBI to
disseminate consumer credit reports it obtains pursuant to
this section to appropriate military investigative
authorities where a foreign counterintelligence investigation
involves a military service person and is being conducted
jointly with the FBI.
Paragraph 624(g) provides that nothing in section 624 shall
be construed to prohibit information from being furnished by
the FBI pursuant to subpoena or court order, or in connection
with judicial or administrative proceeding to enforce the
provisions of the FCRA. The paragraph further provides that
nothing in section 624 shall be construed to authorize or
permit the withholding of information from the Congress.
Paragraph 634(h) provides that on a semiannual basis the
Attorney General shall fully inform the Permanent Select
Committee on Intelligence and the Committee on Banking,
Finance, and Urban Affairs of the U.S. House of
Representatives, and the Select Committee on Intelligence and
the Committee on Banking, Housing, and Urban Affairs of the
U.S. Senate concerning all requests made pursuant to section
624.
Semiannual reports are required to be submitted to the
intelligence committees on (1) use of FBI's mandatory access
provision of the RFPA by section 3414(a)(5)(C) of title 15,
United States Code; and (2) use of the FBI's
counterintelligence authority, under the Electronic Privacy
Communications Act of 1986, to access telephone subscriber
and toll billing information by section 2709(e) of title 18,
United States Code. The conferees expect the reports required
by FCRA paragraph 624(h) to match the level of detail
included in these reports, i.e., a breakdown by quarter, by
number of requests, by number or persons or organizations
subject to requests, and by U.S. persons and organizations
and non-U.S. persons and organizations.
Paragraphs 624(i) through 624(m) parallel the enforcement
provisions of the Right to Financial Privacy Act, 12 U.S.C.
3417 and 3418.
Paragraph 624(i) establishes civil penalties for access or
disclosure by an agency or department of the United States in
violation of section 624. Damages, costs and attorney fees
would be awarded to the person to whom the consumer reports
related in the event of a violation.
Paragraph 624(j) provides that whenever a court determines
that any agency or department of the United States has
violated any provision of section 624 and that the
circumstances surrounding the violation raise questions of
whether an officer or employee of the agency or department
acted willfully or intentionally with respect to the
violation, the agency or department shall promptly initiate a
proceeding to determine whether disciplinary action is
warranted against the officer or employee who was responsible
for the violation.
Paragraph 624(k) provides that any credit reporting
institution or agent or employee thereof making a disclosure
of credit records pursuant to section 624 in good-faith
reliance upon a certificate by the FBI pursuant to the
provisions of section 624 shall not be liable to any person
for such disclosure under title 15, the constitution of any
State, or any law or regulation of any State or any political
subdivision of any State.
Paragraph 624(l) provides that the remedies and sanctions
set forth in section 624 shall be the only judicial remedies
and sanctions for violations of the section.
Paragraph 624(m) provides that in addition to any other
remedy contained in section 624, injunctive relief shall be
available to require that the procedures of the section are
compiled with and that in the event of any successful action,
costs together with reasonable attorney's fees, as determined
by the court, may be recovered.
Section 601 is identical to section 601 of the Senate
amendment. The House bill did not contain a similar
provision.

Title VII--Technical Amendments

SEC. 701. CLARIFICATION WITH RESPECT TO PAY FOR DIRECTOR OR
DEPUTY DIRECTOR OF CENTRAL INTELLIGENCE
APPOINTED FROM COMMISSIONED OFFICERS OF THE
ARMED FORCES.

Section 701 of the conference report amends section
102(c)(3)(C) of the National Security Act of 1947 to make
clear that a retired military officer appointed as Director
or Deputy Director of Central Intelligence can receive
compensation at the appropriate level of the Executive
Schedule under 5 U.S.C. Sec. 5313 (Director) or 5 U.S.C.
Sec. 5314 (Deputy Director). This was clearly the intent of
the drafters of this provision. The conferees are aware of
the restriction on compensation that applies to active duty
military personnel appointed as DCI or DDCI, and in no way
wish to change this restriction. Section 701 is similar to
Section 601 in the House bill and Section 701 in the Senate
amendment.

SEC. 702. CHANGE OF DESIGNATION OF CIA OFFICE OF SECURITY.

Section 702 of the conference report amends the CIA
Information Act of 1984 to reflect the recent reorganization
of the CIA Office of Security into the Office of Personnel
Security and the Office of Security Operations. The amendment
will ensure that the Office of Personnel Security, where the
records intended to be subject to the Act are kept, will
continue to receive the benefit of the Act's exception from
search and review under the Freedom of Information Act.
Section 701 is similar to Section 602 in the House bill and
Section 702 in the Senate amendment.

Provisions Not Included in the Conference Report

The Senate amendment included, at Section 404, a
requirement for an annual report on liaison relationships.
While the Conferees are committed to ensuring that the
oversight committees are appropriately informed on liaison
relationships, they do not believe that a statutory reporting
requirement is the best way to achieve that result.
Consequently, the conferees agreed to delete section 404.

As additional conferees from the Committee on National
Security, for consideration of defense tactical intelligence
and related activities:
Floyd Spence,
Bob Stump,

As additional conferees from the Committee on International
Relations, for consideration of section 303 of the House
bill, and section 303 of the Senate amendment, and
modifications committed to conference:
Benjamin A. Gilman,
Christopher Smith,
Howard L. Berman,
Managers on the Part of the House.