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107th Congress                                                   Report
                                 SENATE
 1st Session                                                     107-63

======================================================================



 
AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 2002 FOR INTELLIGENCE AND 
  INTELLIGENCE-RELATED ACTIVITIES OF THE UNITED STATES GOVERNMENT, THE 
  COMMUNITY MANAGEMENT ACCOUNT OF THE DIRECTOR OF CENTRAL INTELLIGENCE, 
  AND THE CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM, 
  AND FOR OTHER PURPOSES

                                _______
                                

               September 14, 2001.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 1428]

    The Select Committee on Intelligence (SSCI or Committee), 
having considered an original bill (S. 1428), to authorize 
appropriations for fiscal year 2002 for intelligence and 
intelligence-related activities of the United States 
Government, the Community Management Account of the Director of 
Central Intelligence, and the Central Intelligence Agency 
Retirement and Disability System, and for other purposes, 
reports favorably thereon and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose of the Bill..............................................     2
Classified Supplement to the Committee Report....................     3
Scope of Committee Review........................................     3
Committee Action on the Fiscal Year 2002 Intelligence Budget.....     4
Congress and the Intelligence Community..........................     5
    Presidential Determinations to Limit Access to Reporting of 
      Covert Action..............................................     5
    Effective Provision of Intelligence to, and Use by, Congress.     6
Intelligence Community Personnel:
    Intelligence Community Education Program.....................     7
    CIA Inspector General Report on CIA Promotion Policy.........     8
Intelligence Collection, Analysis and Dissemination:
    Review of Legal Authorities to Conduct Computer Attack and 
      Computer Intrusion Investigations..........................     8
    Counterterrorism.............................................     9
    Counterdrug..................................................    11
    Standardization of Foreign Names and Places in Intelligence 
      Community Databases........................................    12
Counterintelligence:
    Assessing the Possible Co-location of the National 
      Infrastructure Protection Center and Office of the National 
      Counterintelligence Executive..............................    12
    Department of Energy Compliance with Counterintelligence and 
      Security Initiatives.......................................    13
    Storage of Sensitive Compartmented Information...............    13
    Director of Central Intelligence Guidelines for Initiation of 
      Counterintelligence Damage Assessments.....................    14
    Assessment of Alternative Technologies to the Polygraph......    14
    Status of Implementation of Recommendations Contained in the 
      ``Final Report of the Attorney General's Review Team on the 
      Handling of the Los Alamos National Laboratory 
      Investigation''............................................    15
Intelligence Community Financial Management, Planning, and 
  Performance:
    Adopotion of Baseline Accounting and Financial Statement 
      Standards..................................................    15
    Strategic Planning and Performance Goals and Measures for the 
      Intelligence Community.....................................    16
Section-by-Section Analysis and Discussion.......................    17
Committee Action.................................................    20
Estimate of Costs................................................    20
Evaluation of Regulatory Impact..................................    21
Changes in Existing Law..........................................    21

                          purpose of the bill

    This bill will:
          (1) Authorize appropriations for fiscal year 2002 for 
        (a) U.S. intelligence activities and programs; (b) the 
        Community Management Account of the Director of Central 
        Intelligence; and (c) the Central Intelligence Agency 
        Retirement and Disability System;
          (2) Authorize the personnel ceilings as of September 
        30, 2002, for intelligence activities of the U.S. 
        Government and for the Community Management Account of 
        the Director of Central Intelligence;
          (3) Authorize the Director of Central Intelligence, 
        with Office of Management and Budget approval, to 
        exceed the personnel ceilings by up to two percent;
          (4) Permit judicial review under the Foreign 
        Narcotics Kingpin Designation Act;
          (5) Modify the positions requiring consultation with 
        the Director of Central Intelligence in appointments;
          (6) Modify reporting requirements for significant 
        anticipated intelligence activities and significant 
        intelligence failures;
          (7) Modify authorities for protection of Intelligence 
        Community employees who report urgent concerns to 
        Congress;
          (8) Require the Attorney General to review the 
        protections against unauthorized disclosure of 
        classified information and to submit a report to 
        Congress;
          (9) Modify authorities relating to official immunity 
        in interdiction of aircraft engaged in illicit drug 
        trafficking;
          (10) Suspend the reorganization of the Diplomatic 
        Telecommunications Program Office;
          (11) Require Presidential approval and submission to 
        Congress of the National Counterintelligence Strategy 
        and National Threat Identification and Prioritization 
        Assessments;
          (12) Extend, for one year, the Central Intelligence 
        Agency Voluntary Separation Act;
          (13) Provide permanent authority for the central 
        services program.

             classified supplement to the committee report

    The classified nature of the United States intelligence 
activities prevents the Committee from disclosing the details 
of its budgetary recommendations in this Report. The Committee 
has prepared a classified supplement to this Report, which 
contains (a) the Classified Annex to this Report and (b) the 
classified Schedule of Authorizations which is incorporated 
reference in the Act and has the same legal status as public 
law. The Classified Annex to this report explains the full 
scope and intent of the Committee's action as set forth in the 
classified Schedule of Authorizations. The Classified Annex has 
the status as any Senate Report and the Committee fully expects 
the Intelligence Community to comply with the limitations, 
guidelines, directions, and recommendations contained therein.
    The classified supplement to the Committee Report is 
available for review by any Member of the Senate, subject to 
the provisions of Senate Resolution 400 of the 94th Congress.
    The classified supplement is made available to the 
Committees on Appropriations of the Senate and the House of 
Representatives and to the President. The President shall 
provide for appropriate distribution within the Executive 
Branch.

                       scope of committee review

    The Senate Select Committee on Intelligence (SSCI for 
Committee) conducted a detailed review of the fiscal year 2002 
budget requests for the National Foreign Intelligence Program 
(NFIP) of the Director of Central Intelligence; for Joint 
Military Intelligence Program (JMIP) of the Deputy Secretary of 
Defense; and the Tactical Intelligence and Related Activities 
(TIARA) of the military services. The Committee's review 
entailed a series of briefings and hearing with senior 
government officials, numerous staff briefings, review of 
budget justification materials, and numerous written responses 
provided by the Intelligence Community to specific questions 
posed by the Committee. The Committee also monitored compliance 
with reporting requirements contained in statute. Each report 
was scrutinized by the Committee and appropriate action was 
taken, if necessary.
    In accordance with a Memorandum of Agreement with the 
Senate Armed Services Committee (SASC), the SSCI is including 
its recommendations on both JMIP and TIARA in the Classified 
Annex. The SSCI has agreed that JMIP and TIARA issues will 
continue to be authorized in the defense authorization bill. 
The SASC has also agreed to involve the SSCI staff in staff-
level defense authorization conference meetings and to provide 
the Chairman and Vice Chairman of the SSCI the opportunity to 
consult with the SASC Chairman and Ranking member before a JMIP 
or TIARA issue is finally closed out in conference in a manner 
with which they disagree, The Committee looks forward to 
continuing a productive relationship with the SASC on all 
issues of mutual concern.
    In addition to its annual review of the Administration's 
budget request, the Committee performs continuing oversight of 
various intelligence activities and programs. The Committee's 
Audit Staff conducts in-depth audits and reviews of specific 
programs and activities identified by the Committee as needing 
close scrutiny. The Audit Staff also supports the Committee's 
continuing oversight of a number of administrative and 
operational issues. During the last year the Audit Staff 
evaluated the Central Intelligence Agency's efforts to increase 
its cadre of clandestine collectors of human source 
intelligence; examined the Intelligence Community's foreign 
materiel acquisition and exploitation programs; coordinated the 
Committee's ongoing review of the espionage activities and 
investigation of former Federal Bureau of Investigation 
employee Robert Hanssen; initiated an investigation of the 
Intelligence Community's actions in the case of Navy Lt. 
Commander Michael Speicher; and monitored the products and 
activities of the Intelligence Community's statutory and 
administrative Inspectors General. These kinds of inquiries 
frequently lead to Committee action with respect to the 
authorities, applicable laws, and budget of the activity or 
program concerned.

      committee action on the fiscal year 2002 intelligence budget

Committee priorities--a five-year plan

    The budget request submitted by the President includes a 
substantial increase for programs funded in the National 
Foreign Intelligence Program. The Committee believes this 
funding increase should represent the first installment of a 
five-year effort to correct serious deficiencies that have 
developed over the past decade in the Intelligence Community. 
As the Soviet Union dissolved and the threat from communism 
faded into history, our defense and intelligence budgets went 
into a period of steady decline through the mid-1990s. While 
the end of the Cold War warranted a reordering of national 
priorities, the continued decline in funding has left us with a 
diminished ability to address the emerging threats and 
technological challenges of the 21st Century.
    We are at a point where continuing global instability and 
uncertainty forces us to refocus our attention on the 
importance of our intelligence apparatus. Transnational threats 
such as international terrorism, global crime syndicates, 
international drug trafficking, and the proliferation of 
weapons of mass destruction and their delivery systems pose 
significant risk to this nation's interests. Yet these threats 
cannot be defeated solely with traditional military force. Our 
Intelligence Community is our first line of defense.
    In this budget, the Committee seeks to highlight four 
priority areas that must receive significant attention in the 
near term if intelligence is to fulfill its role in our 
national security strategy. Those are: (1) revitalizing the 
National Security Agency; (2) correcting deficiencies in human 
intelligence; (3) addressing the imbalance between intelligence 
collection and analysis; and (4) rebuilding a robust research 
and development program. This budget lays out a five-year plan 
for addressing each of these areas.
    The Committee's top priority last year was the 
revitalization of the National Security Agency (NSA). This 
continues to be the Committee's number one concern. Five years 
from now the NSA must have the ability to collect and exploit 
electronic signals in a vastly different communications 
environment. Along with significant investment in technology, 
this means closer collaboration with clandestine human 
collectors. The computer and telecommunications systems that 
NSA employees use to accomplish their work must be state-of-
the-art technology. Analysts must have sophisticated software 
tools to allow them to exploit fully the amount of data 
available in the future. The Committee is encouraged that the 
Administration also has made this a priority and requested 
significantly more resources for the NSA in the fiscal year 
2002 budget.
    The five-year plan for correcting deficiencies in human 
intelligence should enable this critical component of the 
Intelligence Community to meet the increasingly complex and 
growing set of collection requirements. The Central 
Intelligence Agency (CIA) will need to hire case officers 
capable of dealing with the explosion of technology, both as 
collection tools and as potential threats. These individuals 
must be able to operate effectively in the many places around 
the world where U.S. interests are threatened. To do that, the 
CIA must place even greater emphasis on the diversity of the 
new recruits. Finally, the human intelligence system must be 
integrated more closely with our other collection agencies.
    As we do a better job of collecting intelligence, we also 
must enhance our ability to understand this information. The 
percentage of the intelligence budget devoted to analysis and 
processing has been declining steadily since 1990. While 
collection systems are becoming more and more capable, our 
investment in analysis continued to decline. The disparity 
threatens to overwhelm our ability to analyze and use the 
information collected. To address this problem, the Committee 
has added funds to finance promising all-source analysis 
initiatives across the Community. The amount authorized is a 
down payment on a five-year spending profile to rebuild the 
Community's all-source analytical capability.
    The Committee's final priority, a strong research and 
development program, supports all of the other initiatives. 
Over the past decade, agencies have allowed research and 
development accounts to be the ``bill payer'' for funding 
shortfalls, and have sacrificed modernization and innovation in 
the process. The Committee has outlined a plan to reverse the 
Intelligence Community's declining investment in advanced 
research and development. The Classified Annex also includes a 
requirement for a review of several emerging technologies to 
determine what will provide the best long-term return on 
investment. The Committee continues to support and encourage a 
symbiotic relationship between the Intelligence Community and 
the private sector using innovative approaches such as the 
Central Intelligence Agency's In-Q-Tel.

                congress and the intelligence community

Presidential determinations to limit access to reporting of covert 
        actions

    The Committee is concerned with Executive Branch compliance 
in some cases with the requirement in the National Security Act 
of 1947 (50 U.S.C. 401 et seq.) to provide the intelligence 
committees with written notice of Presidential covert action 
findings.
    Section 503 of the National Security Act (50 U.S.C. 413b) 
describes the process by which the President authorizes the 
conduct of covert actions by departments, agencies or entities 
of the United States Government. Under this provision, the 
President may authorize a covert action if ``the President 
determines such an action is necessary to support identifiable 
foreign policy objectives of the United States and is important 
to the national security of the United States, which 
determination shall be set forth in a finding * * * [and] 
[e]ach finding shall be in writing. * * *'' Section 503 (a)(1) 
and (c)(1) set forth special circumstances in which the 
President is given the authority either to delay the written 
notification for 48 hours in an emergency situation, or to 
limit the access to the written finding in extraordinary 
circumstances to only eight members of Congress--the leadership 
of the House and Senate and the leadership of the intelligence 
committees. In neither of those special circumstances, however, 
is the President relieved of his statutory responsibility to 
provide a copy of the finding in writing. Section 503(c)(3) and 
(4) state clearly that whenever prior notice of a covert action 
is not given to Congress, or access is limited, the written 
finding shall state the reasons justifying those special 
circumstances.
    The Committee believes that the provision of written copies 
of the President's findings is essential to effective 
congressional oversight of covert action programs. In cases in 
which access has been limited to the leadership of the Senate 
and House of Representatives and the leadership of the 
intelligence committees--and denied, because of the extreme 
sensitivity of the program, to the other members of the 
intelligence committees who are charged with oversight of the 
activities of the Intelligence Community--section 503(c)(4) 
requires that the President provide to the Chairmen of the 
intelligence committees a copy of the finding, including the 
reasons for the limited access. Copies of these limited access 
findings, kept in accordance with accepted security practices 
in the Sensitive Compartmented Information facilities of the 
intelligence committees, will thus be available for further 
study and discussion among the few members who have been 
granted authorized access. This will allow proper oversight, as 
contemplated by the statute, of these important programs that 
the President has determined ``affect the vital interests of 
the United States.''
    The common practice of the Executive Branch, however, has 
been only to provide oral briefings on these sensitive 
programs, many of which present complicated factual and policy 
issues. The Committee expects this practice to be rectified to 
conform with the National Security Act requirement for the 
provision of a written finding to the Chairmen of the 
intelligence committees, including the specific reasons for the 
limitations on access.
    The Committee is confident that the security directors of 
the intelligence committees, in cooperation with security 
officials of the Executive Branch, will be able to develop 
procedures that will satisfy Executive Branch concerns about 
the security of, and limited access to, these sensitive covert 
action documents.

Effective provision of intelligence to, and use by, Congress

    Congress, primarily through the Senate Select Committee on 
Intelligence and the House Permanent Select Committee on 
Intelligence, conducts oversight of the Intelligence Community 
and authorizes funds for intelligence activities by the 
agencies within the community. In furtherance of these two 
goals, the members and staffs of the intelligence committees 
are given access to a wide array of intelligence products, 
including finished intelligence. However, less attention as 
been paid to another important role of Congress--its role as a 
consumer of intelligence to inform its decisionmaking on 
policy. This role is recognized both in the National Security 
Act of 1947 and in presidential executive order. Despite 
thisrecongnition, there has been little effort to develop mechanisms to 
ensure that members of Congress receive intelligence, in a form 
tailored to their unique needs, to enable them to perform their 
policymaking responsibilities efficiently and effectively.
    Accordingly, the Committee directs the Director of Central 
Intelligence to prepare a comprehensive report which, at a 
minimum, sets forth: (1) a description of existing mechanisms 
established pursuant to Section 103(a)(1)(D) of the National 
Security Act of 1947 (50 U.S.C. 403-3(a)(1)(D)) and Section 
1.5(s) of Executive Order 12333 to ensure that Congress is 
appropriately served in its policymaking role as an 
intelligence consumer; and (2) a recommendation for changes in 
such mechanisms, if needed. In preparing such report, the 
Director of Central Intelligence should consider the 
appropriateness of adopting some or all of the mechanisms, 
procedures and methodology currently used to ensure effective 
intelligence support to the Executive Branch.

                    Intelligence community personnel

Intelligence Community Education Program

    In order to develop and maintain robust intelligence 
capabilities, the Intelligence Community must hire and retain 
employees with advanced scientific and technical skills. The 
Committee notes that one of the challenges facing the 
Intelligence Community is the competition from the private 
sector for individuals with advanced science and technology 
degrees. While the Intelligence Community is often unable to 
match the financial incentives provided by the private sector, 
the challenge and excitement of intelligence work often enables 
agencies to retain technical experts once they have worked in 
the Community and have contributed to solving Intelligence 
Community technology problems. The period of time required to 
obtain security clearances, however, can sometimes cause a 
debilitating delay during which applicants accept private 
sector positions.
    While this challenge affects many elements of the 
Intelligence Community, the Committee is most concerned with 
agencies such as the National Security Agency (NSA) that are 
heavily dependent upon individuals with technical training. The 
Committee has included funds for a pilot program at the NSA to 
provide educational opportunities to recent graduates who are 
waiting for the security clearance process to be completed. 
Details of this program are included in the Classified Annex 
accompanying this bill.
    The Deputy Director of Central Intelligence for Community 
Management is directed to monitor the implementation of this 
program by the NSA and to determine the efficacy of the program 
and the advisability of expanding the program to other 
agencies. The Director of Central Intelligence shall make a 
recommendation to the Committee on the possible expansion of 
this program as part of the fiscal year 2004 budget request.

CIA Inspector General Report on CIA Promotion Policy

    The Central Intelligence Agency (CIA) must recruit and 
train a new generation of intelligence officers to complement, 
and ultimately replace, the intelligence officers nearing the 
end of their careers. The Committee places a high priority on 
the recruitment and retention of highly qualified personnel to 
staff the CIA and other components of the Intelligence 
Community. While the Committee is persuaded that the CIA is 
recruiting an impressive group of new officers, the Committee 
is less certain about the Agency's retention of experienced, 
senior intelligence officers. The Committee believes that an 
important factor contributing to attrition among the senior 
ranks is dissatisfaction with the promotion policies within 
various Agency directorates. Accordingly, the Committee directs 
the CIA Inspector General to conduct an inspection of the CIA's 
promotion policy of all Agency employees to, and within, the 
Senior Intelligence Service from 1995 to the present, and to 
provide a written report to the intelligence oversight 
committees by March 1, 2002.
    The inspection should cover promotions within all Agency 
directorates and should include, but not be limited to, an 
examination of factors such as: professional accomplishments, 
length of service, time spent in the field versus time spent at 
Headquarters, use of accelerated promotions, 
counterintelligence experience, out-of-directorate experience, 
interagency experience, level of education and training, 
management experience, age, sex, race, composition and 
effectiveness of peer review panels, and the extent to which 
promotion candidates have recourse to a clearly-defined appeal 
process. The Inspector General also shall make specific 
recommendations on how CIA management can improve the Agency's 
promotion policy to ensure that it is fair, equitable, and 
consistently-applied--both within each directorate and from one 
directorate to another--and that the policy rewards CIA 
employees with demonstrated record of achievement and 
expertise.

          intelligence collection, analysis and dissemination

Review of legal authorities to conduct computer attack and computer 
        intrusion investigations

    Over the past few years, a number of computer attack and 
intrusion cases have tested the capabilities of U.S. government 
agencies and private sector entities to investigate these 
incidents, identify those responsible, and prevent similar 
efforts in the future.
    The Federal Bureau of Investigation (FBI), Central 
Intelligence Agency (CIA), and other government agencies all 
play some role in computer attack and intrusion investigations. 
Because identifying those responsible for computer attacks and 
intrusions is difficult, and hackers can easily transcend 
traditional national boundaries, the government entities 
involved in these investigations have encountered numerous 
problems in determining their own and one another's legal 
authorities and responsibilities in computer investigations. In 
the past, these problems have been resolved through ad hoc 
interpretations of statute and regulation, cumbersome 
coordination, and over-cautious division of labor among the 
agencies. The time and effort spent resolving these issues 
detracts from the overall goal of investigating the computer 
attack and intrusion itself.
    The Committee believes that these issues should be 
resolved. Accordingly, the Committee directs the Attorney 
General, the Director of the FBI, the Director of Central 
Intelligence, and the Secretary of Defense to complete a review 
by March 1, 2002 of the legal authorities and responsibilities 
of the government entities customarily involved in 
investigations of computer attacks and intrusions which 
threaten national security interests. Additionally, the review 
should indicate whether legislative changes are necessary to 
improve the U.S. Government's capability to investigate 
computer hacking, while respecting the rights of United States 
persons. The review should also provide an assessment of the 
budget implications, if any, of the recommendations. Finally, 
this review should include a detailed plan on how to inform and 
train employees of each relevant government entity on the legal 
authorities and restrictions relevant to each agency's 
involvement in such investigations.

Counterterrorism

    The Committee notes that recent assessments of U.S. 
terrorism and structures for countering terrorism point to the 
need for increased attention to the Intelligence Community 
response to the problem of terrorism. The National Commission 
on Terrorism (``Bremer Commission'') focused specifically on 
terrorism, while the U.S. Commission on National Security/21st 
Century set terrorism within a larger context of redefining 
concepts of national security. The Advisory Panel to Assess 
Domestic Response Capabilities for Terrorism Involving Weapons 
of Mass Destruction focused on domestic, catastrophic attacks, 
and acknowledged the blurred lines between domestic and 
international terrorism.
    All three reports recognize the fundamental importance of 
intelligence in any strategy to combat and respond to 
terrorism. But all three reports also make clear that any 
effort to improve the government-wide approach to the terrorism 
problem must take into account every facet of the issue--
detection, prevention, consequence management, crisis 
management, and law enforcement, diplomatic and military 
responses. A counterterrorism intelligence program must be 
designed within this larger context. Further, in addition to 
enhancement of the central coordinating authority for terrorism 
policy, we also must have a centralized authority for managing 
the intelligence component of that policy. The Director of 
Central Intelligence needs to perform that role for the United 
States Government.
    Oversight of the intelligence component of the U.S. 
response to terrorism is the responsibility of this Committee 
and is among its highest priorities. The Committee believes a 
number of issues are of particular importance, and they are 
noted below.
    The Relationship Between Intelligence and Law Enforcement: 
The relationship between law enforcement and intelligence that 
has developed, largely on an ad hoc basis over the last decade, 
is better than it ever has been. However, the Committee 
believes that a statutory framework may be necessary to 
institutionalize and rationalize the relationships among the 
agencies. Many observers have noted that while law enforcement 
is, theoretically, only one of a set of ``tools'' to respond to 
terrorism, it has often taken a preeminent, and sometimes 
exclusive, role. The Bremer Commission recognized this, 
highlighting the ``pros and cons of the law enforcement 
approach'' in its treatment of the Pan Am 103 prosecution 
efforts. One of the other tools is intelligence, and it is 
important to create a framework within which these issues can 
be addressed.
    Sharing of Information Among Government Agencies: Effective 
sharing of information between and among the various components 
of the government-wide effort to combat terrorism is also 
essential, and is presently hindered by cultural, bureaucratic, 
resource, training and, in some cases, legal obstacles. The 
BremerCommission noted that ``[t]he law enforcement community 
is neither fully exploiting the growing amount of information it 
collects during the course of terrorism investigations nor distributing 
that information effectively to analysis and policymakers.''
    The Committee commends the Intelligence Community for 
aggressive, effective and creative intelligence efforts against 
the terrorism target. But there is room for improvement. The 
Committee remains concerned that, in the commendable rush to 
engage against the imminent threat associated with 
international terrorism, the Intelligence Community has adopted 
a crisis mentality. Ad hoc approaches to coordination and 
interaction among the agencies created during crisis situations 
become the norm after the crisis is over. International 
terrorism is not, however, in the view of the Committee, a 
``crisis,'' with its connotation of a short-lived phenomenon. 
International terrorism is a ``condition'' with which we will 
have to deal on a long-term basis. The Committee strongly 
encourages the Intelligence Community to orient itself 
accordingly by implementing policies--under the control of the 
Director of Central Intelligence--for regulating the various 
roles of the elements of the Intelligence Community that 
participate in the fight against terrorism.
    Financial Intelligence Related to International Terrorism: 
The Committee believes that intelligence related to the 
finances of foreign terrorist organizations can play a valuable 
role in efforts to combat international terrorism. Such 
intelligence can allow for a better understanding of the form, 
structure and capabilities of individual terrorist groups, and 
the relationships within and among such organizations. Such 
intelligence can also contribute to active efforts to disrupt 
terrorist organizations, including, but not limited to, law 
enforcement and regulatory mechanisms.
    The Committee endorses, in principle efforts to develop 
elements within the Intelligence Community designed to exploit 
effectively financial intelligence. One effort within the 
Department of Treasury's Office of Foreign Assets Control, is 
the ``Foreign Terrorist Asset Tracking Center'' (FTATC), which 
shows promise as a vehicle to address this need. However, the 
Committee is concerned that FTATC, to extent it will function 
as an element of the Intelligence Community, has not been 
coordinated adequately with the Director of Central 
Intelligence nor reviewed by this Committee.
    Accordingly, the Committee directs the Director of Central 
Intelligence and the Secretary of Treasury to prepare jointly a 
report assessing the feasibility and advisability of 
establishing an element of the federal government to provide 
for effective and efficient analysis and dissemination of 
foreign intelligence related to the financial capabilities and 
resources of international terrorist organizations. The report 
should include an assessment of the FTATC as a vehicle for 
addressing such a need and, if appropriate, a plan for its 
continued development.
    National Virtual Translation Center: The Committee is 
concerned that intelligence in general, and intelligence 
related to terrorism in particular, is increasingly reliant on 
the ability of the Intelligence Community to quickly, 
accurately and efficiently translate information in a large 
number of languages. Many of the languages for which 
translation capabilities are limited within the United States 
Government are the languages that are of critical importance in 
our counterterrorism efforts. The Committee believes that this 
problem can be alleviated by applying cutting-edge, internet-
like technology to create a ``National Virtual Translation 
Center''. Such a center would link secure locations maintained 
by the Intelligence Community throughout the country and would 
apply digital technology to network, store, retrieve, and 
catalogue the audio and textual information. Foreign 
intelligence could be collected technically in one location, 
translated in a second location, and provided to an 
Intelligence Community analyst in a third location.
    The Committee notes that the CIA, FBI NSA and other 
intelligence agencies have applied new technology to this 
problem. The Committee believes that these efforts should be 
coordinated so that the solution can be applied on a Community-
wide basis. Accordingly, the Committee directs the Director of 
Central Intelligence, in consultation with the Director of the 
FBI, and other heads of departments and agencies within the 
Intelligence Community, to prepare and submit to the 
intelligence committees by June 1, 2002, a report concerning 
the feasibility and structure of a National Virtual Translation 
Center, including recommendations regarding the establishment 
of such a center and the funding necessary to do so.

Counterdrug

    On April 20, 2001, a Peruvian air force fighter plane 
mistakenly shot down an American missionary plane. Two American 
citizens, Veronica Bowers and her infant daughter Charity, were 
killed and the American pilot of the missionary plane, Kevin 
Donaldson, was seriously injured. The Peruvian military plane 
involved in this incident was operating in conjunction with a 
CIA surveillance plane as part of a wider U.S.-Peru ``air 
bridge denial'' program designed to prevent drug traffickers 
from utilizing air transport routes to move cocaine from Peru 
to Colombia.
    The U.S. Government began assisting the Government of Peru 
in air interdiction efforts in the early 1990s. Legislation 
enacted in October 1994 required the President to make a 
determination that safeguards were in place in Peru to prevent 
the shoot-down of planes not involved in narcotics trafficking. 
President Clinton made that determination in December 1994. The 
legislation requiring presidential approval did not provide for 
additional periodic reviews of the safeguards.
    In the aftermath of this tragic event, the Committee 
conducted a review of U.S. Government involvement in the air 
bridge denial program. Committee staff conducted interviews 
with executives and personnel from the CIA, the Department of 
State, the Department of Defense, the Customs Service, the Drug 
Enforcement Administration, the Office of National Drug Control 
Policy, the Peruvian Air Force, Peru's aeronautical agency, and 
the Association of Baptists for World Evangelism missionary 
organization. The Committee intends to issue a report 
containing the findings and conclusions of the review. Among 
its findings, the Committee found that annual reviews of 
safeguards and procedures should be conducted if the U.S. 
Government is involved in an air interdiction program that 
includes the use of lethal force against suspected drug 
trafficking aircraft. Accordingly, the Committee included in 
the Senate Intelligence Authorization Bill for fiscal year 2002 
a provision requiring annual presidential certification and 
report to Congress concerning such programs.

Standardization of foreign names and places in Intelligence Community 
        databases

    Section 309 of the Intelligence Authorization Act for 
fiscal year 1998 (Public Law 105-107; 111 Stat. 2248; 50 U.S.C. 
403-3 note) directed the Director of Central Intelligence to 
``carry out a survey of current standards for the spelling of 
foreign names and places, and the use of geographic coordinates 
for such places, among the elements of the intelligence 
community.'' Section 309 also required a report of the findings 
of the survey be provided to Congress, and the issuance of 
guidelines to the Intelligence Community to ``ensure the use of 
uniform spelling of foreign names and places and the uniform 
use of geographic coordinates for such places.'' The report 
accompanying that statute noted the Committee finding that 
``[i]ntelligence databases maintained by various entities 
within the intelligence community are a critical national 
resource * * * [t]he Intelligence Community must standardize 
the names and places in each database to allow for effective 
and consistent support for war fighters and national security 
policy makers.''
    The Committee reaffirms its belief that intelligence 
databases are vital to the efforts of the Intelligence 
Community, and thus is concerned that the directives contained 
in the 1998 law have not been fulfilled. No formal report has 
been issued and it appears that little work has been done on 
this effort in the nearly four years since the Congress enacted 
the provision requiring such action.
    Accordingly, the Director of Central Intelligence is 
directed to comply, on an immediate basis, with the directives 
contained in Section 309 of the Intelligence Authorization Act 
for Fiscal Year 1998.

                          counterintelligence

Assessing the possible co-location of the National Infrastructure 
        Protection Center and Office of the National 
        Counterintelligence Executive

    The FBI's National Infrastructure Protection Center (NIPC) 
is charged with detecting, preventing and responding to cyber 
and physical attacks on U.S. critical infrastructures and with 
overseeing computer crime investigations conducted by FBI field 
offices. The Committee believes that there is sufficient 
similarity in the mission and interagency focus of both the 
NIPC and the Office of the National Counterintelligence 
Executive to warrant consideration of co-locating the two 
offices at one site. Accordingly, the Committee directs that no 
later than March 1, 2002, the National Counterintelligence 
Executive, the Director of Central Intelligence, and the 
Director of the FBI jointly provide to the intelligence 
oversight committees a written assessment of the desirability 
and feasibility (including a budgetary assessment) of co-
locating the NIPC and the Office of the National 
Counterintelligence Executive at one site, separate and apart 
from CIA, FBI and Department of Defense facilities.

Department of Energy compliance with counterintelligence and security 
        initiatives

    A General Accounting Office assessment of the status of the 
Department of Energy's compliance with counterintelligence and 
security initiatives announced by the President or Secretary of 
Energy indicates that a number of these eighty-eight 
initiatives have not been completed. The Committee directs the 
Secretary of Energy to provide a written report to the 
intelligence oversight committees, and other appropriate 
committees, by February 1, 2002, regarding the status of 
implementation of all outstanding counterintelligence and 
security initiatives at the Department ofEnergy (as well as the 
National Laboratories), including the time frame for implementation, 
the reason(s) for lack of implementation to date, and a detailed 
accounting of the additional resources, if any, needed to complete 
implementation of the initiatives.

Storage of Sensitive Compartmented Information

    Last year, Congress directed the Director of Central 
Intelligence to certify whether each element of the State 
Department that handles, retains or stores information that is 
classified as Sensitive Compartmented Information complies with 
all applicable Director of Central Intelligence Directives 
(DCIDs) and all applicable Executive Orders relating to the 
handling, retention, or storage of such information. This 
action was taken in response to a series of serious lapses and 
counterintelligence failures at the Department of State.
    During the past year, the Director of Central Intelligence 
has worked closely with the State Department's Bureau of 
Intelligence and Research (INR) and Bureau of Diplomatic 
Security (DS) to reduce the number of facilities used to 
discuss and store Sensitive Compartmented Information and to 
ensure that the remaining facilities meet applicable 
regulations. Although this process continues, the Committee 
believes the actions taken by the Director of Central 
Intelligence, INR and DS have improved the security posture at 
the State Department. Nevertheless, further periodic review of 
security practices and procedures at the State Department and 
other Intelligence Community agencies is necessary to ensure 
intelligence sources and methods are adequately protected.
    In June 2001, the Director of Central Intelligence directed 
that the Senior Officials of the Intelligence Community conduct 
a self-inspection of the policies and procedures in place for 
their organizations to protect Sensitive Compartmented 
Information facilities and information, and to report the 
results of the inspections to the Director of Central 
Intelligence by September 2001. The Director of Central 
Intelligence directed that these self-inspection reports shall 
address the following areas: physical security, technical 
security, personnel security, information systems security, 
visitor access controls, document control, document handling/
storage and security awareness training. The Director of 
Central Intelligence is directed to provide a written report to 
the intelligence oversight committees by February 1, 2002, 
summarizing the results of these inspections, how the Director 
of Central Intelligence plans to address any non-compliance 
with applicable DCIDs and Executive Orders, and how this will 
be addressed in the context of the fiscal year 2003 budget 
submission.

Director of Central Intelligence guidelines for initiation of 
        counterintelligence damage assessments.

    The Committee is concerned about the timeliness with which 
counterintelligence incidents (including espionage cases) have 
been referred by the Director of Central Intelligence to the 
Office of the National Counterintelligence Executive, and its 
predecessor, to conduct a damage assessment. Accordingly, the 
Director of Central Intelligence is directed to provide to the 
intelligence oversight committees, by February 1, 2002, has 
written guidelines for determining what counterintelligence 
incidents warrant a damage assessment and time frame for 
referring such matters to the Office of the National 
Counterintelligence Executive.
    One element of this issue is related to concerns that a 
formal damage assessment conducted during the pendency of a 
criminal investigation or prosecution could complicate or harm 
the investigation or prosecution. If would, of course, be the 
Committee's preference that counterintelligence damage 
assessments, including and especially in espionage cases, be 
commenced and completed as soon as possible. At the same time, 
the Committee does not want to require any action that could 
unduly complicate or harm ongoing criminal investigations or 
prosecutions. Accordingly, the Committee requests that the 
Attorney General submit a report, by February 1, 2002, setting 
forth the following: (1) an assessment of current law 
concerning the potential effect of conducting 
counterintelligence damage assessments during the pendency of a 
criminal investigation or prosecution; and (2) if such 
assessment reveals that current law prohibits, discourages, or 
delays conducting counterintelligence damage assessments during 
the pendency of a criminal investigation or prosecution, the 
recommendations of the Attorney General on specific legislation 
which could eliminate or ameliorate these impediments.

Assessment of alternative technologies to the polygraph

    The FBI, the CIA and the Department of Defense are directed 
to conduct jointly an assessment of the accuracy, reliability 
and desirability of the TruthScan technology (developed by Dr. 
Michael Tansey), particularly for counterintelligence purposes, 
as an investigative tool to supplement the use of the 
polygraph. The report should be provided to the appropriate 
oversight committees of the Congress no later than March 1, 
2002. The report should include an assessment of 
otheralternative technologies to the polygraph which have been examined 
by the FBI, the CIA or the Department of Defense and the prospects for 
their use as investigative tools.

Status of implementation of recommendations contained in the ``Final 
        Report of the Attorney General's Review Team on the Handling of 
        the Los Alamos National Laboratory Investigation''

    The Committee directs the Attorney General, with the 
cooperation of the Director of the FBI, to provide a written 
report to the appropriate committees of Congress, by February 
1, 2002, regarding the status of implementation of the 
recommendations contained in the ``Final Report of the Attorney 
General's Review Team on the Handling of the Los Alamos 
National Laboratory Investigation,'' including the time frame 
for implementation, the reason(s) for lack of implementation, 
if any, to date, and a detailed accounting of the additional 
resources, if any, needed to complete implementation of the 
recommendations.

 intelligence community financial management, planning and performance

Adoption of baseline accounting and financial statement standards

    In January 1997, a report was provided by the President on 
Executive Branch Oversight of the Intelligence Community 
Budget. The report states that Department of Defense elements 
carrying out programs and activities of the National Foreign 
Intelligence Program are subject to the requirements imposed by 
law on other elements and components of the DoD. Additionally, 
the National Security Agency (NSA), the Defense Intelligence 
Agency (DIA), and the National Reconnaissance Office (NRO) were 
directed to prepare classified financial statements beginning 
with the reporting of fiscal year 1997 financial information 
required by law.
    Since 1997, the financial statements and management 
practices of the NRO have received more scrutiny than those of 
any other DoD entity. The Inspectors General of the DoD, CIA, 
and NRO have independently or jointly conducted audits of 
various aspects of the NRO's financial management systems since 
the mid-1990s. Additionally, an independent public accounting 
firm completed an audit of the NRO's fiscal year 2000 financial 
statements in February 2001. To date, however, only fiscal year 
1998 financial data of the NSA and DIA have been audited by the 
DoD Inspector General, and only on a limited basis.
    The recent independent audit of the NRO's fiscal year 2000 
financial statements revealed significant shortcomings in its 
financial management practices. Despite the problems noted, the 
audit does afford an opportunity for the NRO's senior 
management to rectify identified deficiencies. The Committee is 
concerned that similar shortcomings may exist within other 
National Foreign Intelligence Program agencies which have not 
received the same level of financial management oversight. This 
includes the National Imagery and Mapping Agency (NIMA), and 
CIA, two agencies not discussed in the January 1997 report.
    The Committee directs the Director of Central Intelligence, 
in consultation with the Secretary of Defense, to direct the 
appropriate statutory Inspector General to perform an audit of 
the form and content of the fiscal year 2001 financial 
statements of the DIA, NSA, NIMA, and CIA, and report the 
findings of the audits to the intelligence committees by April 
1, 2002. The principal purpose of these audits will be to 
determine if agencies are preparing their financial statements 
in a manner consistent with Federal financial accounting 
standards and appropriate Office of Management and Budget (OMB) 
guidance. The audits also will specify any improvements that 
each agency must make to their financial management systems to 
enable future comprehensive audits of their financial 
statements. Thereafter, as necessary, each of these agencies is 
directed to submit an annual report to the intelligence 
committees no later than April 1 each year specifying 
improvements underway to ensure that the financial statements 
created with fiscal year 2004 data can be audited consistent 
with current law and OMB requirements.
    The Committee further directs the Director of Central 
Intelligence, in consultation with the Secretary of Defense, to 
ensure that all agencies in the DoD-NFIP aggregation, including 
the CIA, receive an audit of their financial statements by 
March 1, 2005. In addition to other items, the audits will 
assess the adequacy of internal controls over resource 
information management systems and facilities. The result of 
the audits must be reported to the intelligence committees no 
later than April 1 of the appropriate year. The audits are to 
be performed by a statutory Inspector General or a qualified 
Independent Public Accountant, at the discretion and under the 
direction of the appropriate Inspector General.
    Finally, to ensure that sufficient resources are available 
for these audits, the Committee directs the Community 
Management Staff, in coordination with the appropriate 
Inspectors General, to provide a report by May 1, 2002, to the 
intelligence committees specifying the level of resources that 
will be required and how each agency will incorporate them into 
its long-range budget to allow forcompletion of a full 
financial statement audit by the spring of 2005. The report also will 
include a proposed schedule for completion of the audits, informed by 
the results of the form and content audits of the agencies' current 
financial statements as previously described.

Strategic planning and performance goals and measures for the 
        Intelligence Community

    The Committee believes that the Intelligence Community is 
handicapped by the lack of comprehensive strategic and 
performance plans that can be used to articulate program goals, 
measure program performance, improve program efficiency and aid 
in resource planning. In the absence of such plans, the 
Committee feels that it is challenging for both the Executive 
and Legislative Branches to assess the effectiveness of 
individual intelligence agencies and programs, and the 
Intelligence Community as a whole, against Administration-
stated goals and objectives. It is particularly important to 
ensure that resources are used as efficiently and effectively 
as possible during periods of limited budgets and rapid 
technological change. The Committee commends the Director of 
Central Intelligence for issuing his Strategic Intent in March 
1999, but the inherent limits of the document, especially in 
terms of defining and measuring the Intelligence Community's 
performance, requires the production of updated plans and new 
metrics.
    The Committee directs the Director of Central Intelligence 
to produce a comprehensive Intelligence Community strategic 
plan and performance plan, as well as complementary strategic 
and performance plans for the intelligence agencies within the 
National Foreign Intelligence Program aggregation. The 
Committee anticipates that the results of the current strategic 
Intelligence Community review will inform the final strategic 
and performance plans. The Committee anticipates that final 
plans will be classified, consistent with appropriate executive 
orders, to protect intelligence information.
    The Committee directs that, within 60 days after the 
enactment of this Act, the intelligence committees be briefed 
regarding the DCI's progress in completing the strategic and 
performance plans. The briefing also will afford the 
Intelligence Community with the opportunity to solicit and 
consider the views and suggestions of Congress. The Committee 
further directs that the strategic and performance plans for 
fiscal year 2003 be completed and delivered to the intelligence 
authorization committees by March 1, 2002. Thereafter, an 
updated and revised strategic plan should be submitted at least 
once every four years, and performance plans should be updated 
and submitted annually to the intelligence committees by March 
1 of each year.
    In addition, the Committee directs the Director of Central 
Intelligence to submit a report to the intelligence committees 
detailing the fiscal year 2003 program performance of the 
overall Intelligence Community and individual National Foreign 
Intelligence Programs by March 1, 2004. Thereafter, annual 
reports on program performance for the previous fiscal year 
should be submitted to the intelligence committees by March 1 
of each year.

               Section-by-section analysis and Discussion

                    TITLE I--INTELLIGENCE ACTIVITIES


Section 101. Authorization of appropriations

    Section 101 lists departments, agencies, and other elements 
of the United States Government for whose intelligence and 
intelligence-related activities the Act authorizes 
appropriations for fiscal year 2002.

Section 102. Classified schedule of authorizations

    Section 102 states that the details of the amounts 
authorized to be appropriated for intelligence and 
intelligence-related activities and personnel ceilings for the 
entities listed in section 101 for fiscal year 2002 are 
contained in a classified Schedule of Authorizations. The 
Schedule of Authorizations is incorporated into the Act by this 
section.

Section 103. Personnel ceiling adjustments

    Section 103 authorizes the Director of Central 
Intelligence, with the approval of the Director of the Office 
of Management and Budget, in fiscal year 2002 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 necessary to the performance of important 
intelligence functions or to the maintenance of a stable 
personnel force, and any exercise of this authority must be 
reported to the intelligence oversight committees of the 
Congress.

Section 104. Community Management Account

    Section 104 provides details concerning the amount and 
composition of the Community Management Account (CMA) of the 
Director of Central Intelligence.
    Subsection (a) authorizes appropriations for fiscal year 
2002 for the staffing and administration of various components 
under the CMA. Subsection (a) also authorizes funds identified 
for the advanced research and development committee to remain 
available for two years.
    Subsection (b) authorizes full-time personnel for elements 
within the CMA for fiscal year 2002 and provides that such 
personnel may be permanent employees of the CMA element or 
detailed from other elements of the United States Government.
    Subsection (c) expressly authorizes the classified portion 
of the CMA.
    Subsection (d) requires that personnel be detailed on a 
reimbursable basis, with certain exceptions.
    Subsection (e) authorizes appropriations in the amount 
authorized for the CMA under subsection (a) to be made 
available for the National Drug Intelligence Center (NDIC). 
Subsection (e) requires the Director of Central Intelligence to 
transfer the appropriations to the Department of Justice to be 
used for NDIC activities under the authority of the Attorney 
General, and subject to Section 103(d)(1) of the National 
Security Act of 1947 (50 U.S.C. 403-3(d)(1)).

 TITLE II--CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM


Section 201. Authorization of appropriations

    Section 201 authorizes appropriations for fiscal year 2002 
for the Central Intelligence Agency Retirement and Disability 
Fund.

                     TITLE III--GENERAL PROVISIONS


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

    Section 301 provides that appropriations authorized by the 
Act for salary, pay, retirement, and other benefits for federal 
employees may be increased by such additional or supplemental 
amounts as may be necessary for increases in such compensation 
or benefits authorized by law.

Section 302. Restriction on conduct of intelligence activities

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

Section 303. Judicial review under the Foreign Narcotics Kingpin 
        Designation Act

    Section 303 amends the Foreign Narcotics Kingpin 
Designation Act (title VIII of Public Law 106-120; 113 Stat. 
1629; 21 U.S.C. 1904). This provision eliminates the 
restriction on judicial review of determinations made under 
that Act, and is in accord with recommendations made by the 
Judicial Review Commission on Foreign Asset Control.

Section 304. Modification of positions requiring consultation with 
        Director of Central Intelligence in appointments

    Section 304 removes the position of Director of the Office 
of Nonproliferation and National Security of the Department of 
Energy from those positions for which the Secretary of Energy 
is required to consult with the Director of Central 
Intelligence, and adds to the list of positions the Director of 
the Office of Intelligence of the Department of Energy and the 
Director of the Office of Counterintelligence of the Department 
of Energy. This provision brings the law into accord with the 
positions that exist currently at the Department of Energy.

Section 305. Modification of reporting requirements for significant 
        anticipated intelligence activities and significant 
        intelligence failures

    Section 305 amends the National Security Act of 1947 to 
require that notifications to Congress of intelligence 
activities and intelligence failures be made in writing and 
contain a concise statement of facts pertinent to the report 
and an explanation of the significance of the intelligence 
activity or failure covered by the report. This section also 
requires the Director of Central Intelligence to establish 
standards and procedures applicable to such reports. This 
section is designed to bring clarity and uniformity to an 
essential element of congressional oversight of the 
Intelligence Community. While not intended to increase or 
change reporting requirements, it is designed to ensure that 
reports made pursuant to the National Security Act are properly 
memorialized and consistent in form and content. The Committee 
notes that this provision is not intended to discourage prompt 
oral notifications, but requires that they be followed 
immediately by a written report fulfilling the requirements of 
this section.

Section 306. Modification of authorities for protection of Intelligence 
        Community employees who report urgent concerns to Congress

    Section 306 alters the process applied to the handling of 
complaints or information brought to the attention of the 
Central Intelligence Agency Inspector General and other 
Inspectors General of the Intelligence Community, by requiring 
that in all such cases the complaint or information be 
forwarded to the Director of the Central Intelligence, or other 
agency head, and then to the intelligence committees. Prior to 
this amendment, only complaints that the Inspectors General 
found ``credible'' were forwarded to the agency head and onward 
to the intelligence committees. Section 306 requires the agency 
heads and the intelligence committees also to receive copies of 
those complaints that an Inspector General ``does not find 
credible.''

Section 307. Review of protections against the unauthorized disclosure 
        of classified information

    Section 307 requires the Attorney General, in conjunction 
with the Director of Central Intelligence and the heads of 
other appropriate agencies, to conduct a comprehensive review 
of current laws, regulations and protections against 
unauthorized disclosure of classified information and to submit 
a report to Congress in unclassified form.

Section 308. Modification of authorities relating to official immunity 
        in interdiction of aircraft engaged in illicit drug trafficking

    Section 308 amends current law (22 U.S.C. 2291-4) relating 
to official immunity for employees and agents of the United 
States and foreign countries engaged in the interdiction of 
aircraft used in illicit drug trafficking. Under Section 308, 
the President must make an annual certification to Congress 
concerning both the existence of a drug threat in the country 
at issue and the existence in that country of appropriate 
procedures to protect against innocent loss of life. An annual 
report to Congress by the President concerning United States 
Government assistance to such interdiction programs is also 
required by Section 308.

Section 309. Suspension of reorganization of Diplomatic 
        Telecommunications Service Program Office

    Section 309 suspends until October 1, 2002 the effective 
date of the provisions in the Intelligence Authorization Act 
for fiscal year 2001 that require reorganization of the 
Diplomatic Telecommunications Service Program Office.

Section 310. Presidential approval and submission to Congress of 
        National Counterintelligence Strategy and National Threat 
        Identification and Prioritization Assessments

    In December 2000, President Clinton signed Presidential 
Decision Directive 75 outlining specific steps that will enable 
the U.S. Counterintelligence Community to fulfill better its 
mission of identifying, understanding, prioritizing and 
counteracting the intelligence threats faced by the United 
States. Section 310 requires that the President approve and 
submit to Congress the National Counterintelligence Strategy 
and each National Threat Identification and Prioritization 
Assessment, or any modifications thereof, produced pursuant to 
Presidential Decision Directive 75.

                 TITLE IV--CENTRAL INTELLIGENCE AGENCY


Section 401. One-year extension of Central Intelligence Agency 
        Voluntary Separation Pay Act.

    Section 401 extends the Central Intelligence Agency 
Voluntary Separation Pay Act for one year, to September 30, 
2003.

Section 402. Modification of Central Services Program

    Section 402 eliminates the termination date for the Central 
Intelligence Agency Central Services Program.

                            committee action

    On September 6, 2001, the Select Committee on Intelligence 
approved the bill and ordered that it be favorably reported.

                           estimate of costs

    Pursuant to paragraph 11(a) of rule XXVI of the Standing 
Rules of the Senate, the estimated costs incurred in carrying 
out the provisions of this bill for fiscal year 2002 are set 
forth in the Classified Annex to this bill. Estimates of the 
costs incurred in carrying out this bill in the five fiscal 
years thereafter are not available from the Executive Branch, 
and therefore the Committee deems it impractical, pursuant to 
paragraph 11(a)(3) of rule XXVI of the Standing Rules of the 
Senate, to include such estimates in this report. On September 
11, 2001, the Committee transmitted this bill to the 
Congressional Budget Office and requested that it conduct an 
estimate of the costs incurred in carrying out the provisions 
of this bill.

                    evaluation of regulatory impact

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee finds that no 
regulatory impact will be incurred by implementing the 
provisions of this legislation.

                        changes in existing law

    In the opinion of the Committee it is necessary to dispense 
with the requirements of paragraph 12 of rule XXVI of the 
Standing Rules of the Senate in order to expedite the business 
of the Senate.