PURPOSE OF THE BILL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89B00297R000300700009-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 31
• Document Creation Date: December 23, 2016
• Document Release Date: December 1, 2011
• Sequence Number: 9
• Content Type: REPORT

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99TH CONGRESS 1
2d Session J
( REPORT
Sl 99-307
AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 1987 FOR INTELLI-
GENCE ACTIVITIES OF THE UNTTED STATES GOVERNMENT, THE INTEL-
LIGENCE COMMUNITY STAFF, THE CENTRAL INTELLIGENCE AGENCY
RETIREMENT AND DISABILITY SYSTEM (CIARDS), AND FOR OTHER PUR-
POSES
MAY 21 (legislative day MAY 19), 1986.-Ordered to be printed
Mr. DURENBERGER, from the Select Committee on Intelligence,
submitted the following
REPORT
[To accompany S. 24771
The Select Committee on Intelligence, having considered the
original bill (S. 2477) authorizing appropriations for fiscal year 1987
for intelligence activities of the U.S. Government, the Intelligence
Community Staff, the Centeral Intelligence Agency Retirement and
Disability System, and for other purposes, reports favorably there-
on without amendment and recommends that the bill do pass.
PURPOSE OF THE Bn.I.
This bill would:'
(1) Authorize appropriations for fiscal year 1987 for (a) intel-
ligence activities of the United States, (b) the Intelligence Com-
munity Staff, and (c). the CIA Retirement and Disability
System;
(2) Authorize the personnel ceilings as of September 30, 1987
for (a) the Central Intelligence Agency, (b) the Intelligence
Community Staff, and (c) the other intelligence activities of the
U.S. Government;
(3) Authorize the Director of Central Intelligence to make
certain personnel ceiling adjustments when necessary to the
performance of important intelligence functions;
(4) Make several legislative changes designed to enhance in-
telligence and counterintelligence capabilities and to promote
the more effective and efficient conduct of intelligence and
counterintelligence activities.
71-oi0 0
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OVERALL SUMMARY OF COMMITTEE ACTION
(b neliow d soars]
Fecal W 1986 Fag w* 1981 csasnittr
WW Mow d_W
Intelligence Commw* staff_.__ $22.1 $229
0AROS.......__._. 101.4 125.8 $125.80
Total ..-....._..........
THE CLAsswm n SUPPLzmzNT TO THE Comww E REPORT
The classified nature of U.S. intelligence activities prevents the
Committee from disclosing the details of its budgetary recommen-
dations in this Report.
The Committee has prepared a classified supplement to the
Report, which describes the full scope and intent of its action. The
Committee intends that the classified supplement, although not
available to the public, will have the full force of a Senate Report,
and that the Intelligence Community will comply fully 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.
SCOPE OF CoNmnTrEE REViEw
The Committee conducted a detailed review of the Intelligence
Community's fiscal year 1987 budget request. This included:
-Hearings involving some 9 hours of testimony from major con-
sumers of intelligence product, including: the Secretary of De-
fense; the Commander in Chief Strategic Air Command; the
Director of Operations for the Joint Chiefs of Staff; and the As-
sistant Secretary of State for European Affairs.
-Hearings involving some 30 hours of testimony from the princi-
pal program managers for U.S. Intelligence, including: the Di-
rector and Deputy Director of Central Intelligence; the Direc-
tor, Intelligence Community Staff; the Director, Defense Intel-
ligence Agency; the Director, National Security Agency, senior
officials of the Military Departments; the Director, Federal
Bureau of Investigation; and the Director, State Department
Bureau of Intelligence and Research;
-Hearings involving some 9 hours of testimony from senior De-
fense tactical intelligence program managers and Directors of
Defense Department. and other governmental Security pro-
grams;
-Detailed examination of over 3,000 pages of budget justification
material provided by national and tactical intelligence pro-
gram managers and all major governmental security activities;
-Review of written answers from various officials to several
hundred questions for the record; and,
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3
-Numerous briefings and interviews with officials on major
topics of interest.
The Committee conducted a long range examination of the U.S.
intelligence system through a careful review of the National Intel-
ligence Strategy prepared by the Director of Central Intelligence.
This Strategy, specifically requested by the Conferees in conjunc-
tion with the Fiscal Year 1986 Intelligence Authorization Act, pro-
jected the challenges and requirements that will face U.S. intelli-
gence over the. next decade, identified the intelligence programs
and activities necessary to meet those challenges, and set forth a
plan for the acquisition of needed capabilities taking into account
the tight fiscal environment faced by all government activities.
During the course of this review, the Committee focused careful
attention on the following major intelligence requirements:
--The provision of detailed information required for the United
States to maintain an effective, assured, nuclear deterrent in
the years ahead;
-The provision of timely and focused information in support of
U.S.' military operations and diplomacy worldwide;
-The monitoring of foreign events.to provide the senior U.S. pol-
icymakers with adequate warning of developments inimical to
U.S. or allied interests, so as to permit development of effective
policy options; and,
-Protection of U.S. foreign policy and military activities from
an increasingly sophisticated foreign intelligence threat.
COMbu'rrEE Fmn)INas AND RECOMMENDATIONS
In previous years the Committee has reported its judgment that
intelligence activities must be assigned a very high priority in over-
all national security investment. The Congress has heeded this
advice and provided significant 'increased investment in intelli-
gence programs in all but one of the last 7 years. These invest-
ments are now beginning to pay off in the provision of effective in-
telligence support in an increasingly dangerous world environment.
However, in order to bring. to fruition the improved intelligence
system these investments anticipated, and develop other new capa-
bilities demanded by the activities of our adversaries, additional.
continued investment will be required.
The Committee is deeply concerned about the future health of
U.S.. intelligence, largely due to constraints now facing the Defense
budget, where, for reasons of security, Intelligence programs are fi-
nanced. In Fiscal Year 1986, Intelligence Community investment
actually declined in real terms, forcing -the cancellation of a
number of important activities and deferral and stretchout of
many others. This situation, coupled with the tragic loss of the
Space Shuttle Challenger and the consequences arising from the
Titan 34D launch vehicle explosion in April 1986, combine to place
U.S. intelligence in its most serious crisis in decades.
The Committee's review of the DCI's National Intelligence Strat-
egy, his Fiscal Year. 1987 budget request, and the requirements
levied by the Defense and foreign policy community on intelligence
program managers, convince the Members that Intelligence invest-
ment must be protected from arbitrary limits on government
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spending in general and Defense spending in particular. We come
to this conclusion with great difficulty and with full knowledge
.that similar claims will be made about other government programs
in this time of fiscal constraint. However, it must be remembered
that the secrecy required for the conduct of effective intelligence
and security programs leaves these activities by necessity with only
one constituency; namely, those on the Intelligence Committee who
must review intelligence plans behind closed doors.
The recommendations set forth by the Committee in the Classi-.
fled Supplement to this report represent the minimum essential in-
vestments that must be made to preserve and improve U.S. Intelli-
gence in a manner consistent with the world environment facing
U.S. national security. This judgment is objective, bipartisan, and
strongly held.
SECTION-BY-SECTION ANALYsxs
TITLE I-INTELLIGENCE ACTIVITIES
Section 101 lists the departments and agencies for whose intelli-
gence activities the bill authorizes appropriations for fiscal year
1987.
Section 102 makes clear that, with the exception of sections 201,
202(a), and 301, the amounts authorized to be appropriated and the
personnel ceilings established by the . bill for fiscal year 1987 are
contained in a classified Schedule of Authorizations. This Schedule
of Authorizations is incorporated into the bill by this section.
CENTRAL INTELLIGENCE AGENCY RESERVE FOR CONTINGENCIES
The Committee would review with great concern the use of the
Central Intelligence Agency's reserve fund for contingencies to sup-
port covert actions when such proposed actions have not received
the concurrence of at least one of the two intelligence oversight
committees. In the event one of the committees objects to a pro-
gram, the President should take that committee's concerns fully
into account in his final decision.
The Committee believes that the Executive branch should not
proceed with a covert action program that is opposed by both intel-
ligence committees. If such action were to be taken by the Admin-
istration, the Committee would consider placing statutory restric-
tions on use of the reserve fund.
Section 101 permits the Director of Central Intelligence to au-
thorize the personnel strength of any intelligence element to
exceed its fiscal year 1987 authorized personnel level by no more
than 2 percent if he. determines that doing so is necessary for the
performance of important intelligence functions. The Director must
notify the two intelligence committees promptly of any exercise of
authority under the section.
It is to be emphasized that the authority conveyed by this section
is not intended to permit the wholesale raising of personnel
strength in each or any intelligence component. Rather, the section
provides the Director of Central Intelligence with flexibility to
adjust personnel end strength temporarily for contingencies and
for overages caused by an imbalance between hiring of new em-
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ployees and attrition of current employees for retirement, resigna-
tion, etc. The Committee does not expect the Director of Central In-
telligence to allow heads of intelligence components to plan to
exceed personnel levels set in the schedule of authorizations except
for the satisfaction of clearly identified hiring needs which are con-
sistent with the authorizations of personnel strengths in this bill.
In no case is the authority in section 103 to be used to provide for
positions denied by the Congress.
TITLE II-INTELLIGENCE COMMUNITY STAFF
Section 201. authorized the appropriation of $22,338,000 for the
Intelligence Community Staff. After careful review of the budget
request, the Committee believes that this amount is sufficient for
the staff to meet its responsibility of providing the Director of Cen-
tral Intelligence with staff assistance to
carry out Community responsibilities. The Staff supports e his Intelligence
.cution of his responsibilities to develop,revew, and am the exe-
National Foreign Intelligence Program budget, to evaluate the the
formance of foreign intelligence activities, and to develo ues~,
goals, and other required guidelines for the Intelligence p issues,
ty, lligence Communi-
Section 202 and 208 provide certain administrative authorities
for the Intelligence Community Staff. Section 202(a) authorizes full-
time personnel for the staff as of September 30, 1987. The Intelli-
gence Community unity Staff is composed of a permanent cadre, detailed
The ~ personnel, and contract hirees.
who are Intelligence Community Staff is now made up of personnel
permanent employees of the Staff and others who are de-
tailed for several years from various intelligence elements. The
purpose of section 202(b) is to authorize this staff approach and to
require that detailed employees represent all appropriate elements
of the Government.
Section 202(c) requires that personnel be detailed on a reimbursa-
ble basis except for temporary situations. The Staffs authorized
size, in the opinion of the Committee, is sufficient for the duties
which the Staff performs. This provision is intended to insure that
its ranks are not swelled by detailees, the personnel costs for whom
are not reimbursed to their parent agency.
Section 203 provides that the Director of Central Intelligence
shall use certain statutory authority to manage the activities and
to pay the personnel of the Intelligence Community Staff. Howev-
er, it is the Committee's intent that in the case of detailed person-
nel, the DCI's authority to discharge personnel shall only extend to
~h qty Staff and not from Federal service employment at the Intelligency
service. or r military
INTELLIGENCE COMMUNITY STAFF
Amoo FuMme
(miMM) Per=u .
1986 Drogrom....... .___.._._.................................................... 521.0
1987 ......._................. 227
D-oBmm..._.._.._ .................. .....
......................................... _.............. _........._...... 12.9 246
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INTEWGENCE COMMUNITY STAFF-Continued
Mpunt FW4time
(mAne) Dersoenel
Committee recommended chan
TITLE III-CENTRAL INTELLIGENCE AGENCY RETIREMENT AND
DISABILITY SYSTEM
Section 301 authorizes appropriations for the Central Intelligence
Agency Retirement and Disability System (CIARDS) in the amount
of $125,800,000 for fiscal year 1987. The Central Intelligence
Agency Retirement, Act of 1964 for Certain Employees (Public Law
The benefits structure of CIARDS is essentially the same as for .
the Civil Service Retirement System, with several special provi-
sions..These special CIARDS provisions are: (a) annuities based
upon a straight 2 percent of high 3-year average salary for . each
year of service, not exceeding 35; (b) under stipulated conditions a
participant may retire at age 50 with .20 years of service, or -a par-
ticipant with 25 years of service may be retired by the Director. re-
gardless of age; and (c) retirement is mandatory at age 65 for per-
sonnel receiving compensation at the rate of GS-18 or above, and
at age 60 for personnel receiving compensation at a rate less than
GS-18, except that the Director may, in the public interest, extend
service up to 5 years.
Annuities to beneficiaries are provided exclusively from the
CIARDS fund, which is maintained through:' (a) contributions, cur-
rently at the rate of 7 percent, deducted from basic salaries of par-
ticipants; (b) matching Agency (employer) contributions from the
appropriation from which salaries are paid, based on the actual
rate of contributions received from participants; (c) transfers from
the Civil Service Retirement and Disability Fund representing em-
ployee and matching employer contributions for service of Agency
employees prior to the date of their participation in CIARDS, and
contributions for service of integrated Agency employees included
in CIARDS following termination of integrated status; (d) income
on investments in U.S. Government securities; and (e) beginning in
1977, direct appropriations consistent with the provisions of Public
Law 94-552. .
Central Intelligence Agency Retirement and Disability System
Fiscal year. - Million
1986 program ........................................................................................................... $101.4
1987 request........... ................................................................................................... 125.8
Committee recommended change .....
Committee recommendation ............................................................................. 125.8
qualified beneficiaries.
88-643) authorized the establishment of CIARDS for a limited
number of Agency employees and authorized the establishment
and maintenance of a fund from which benefits would be paid to
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TITLE IV-ADMINISTRATIVE PROVISIONS RELATED TO ITELLIGENCE
AGENCIES
Section 401 exempts classified Central Intelligence Agency and
National Security Agency record destruction schedules from the re-
quirement contained in subsection 3303a of Title 44, United States
Code, that the Archivist may approve records disposal requests
only after publication of notice in the Federal Register and an op-
portunity for interested persons to submit comments thereon.
The requirement that the Archivist publish record disposal re-
quests in the Federal Register was added by subsection 204 of the
National Archives and Records Administration Act of 1984. Requir-
ing the Archivist to provide notice in the Federal Register gives the
public an opportunity to comment on the schedule of records pro-
posed for destruction. While the purpose of the provision was to.
give the public a role in determining what records should be de-
stroyed, the legislative history makes clear that Congress did "not
intend . for such public notice to be a paperwork burden for any
affected parties or to unreasonably delay the disposal of such
records." (House Report 98-1124, pp. 29-30; this is the Conference
Report on the legislation.).
Unfortunately, the requirement for publication in the Federal
Register has become a paperwork burden for CIA and NSA that
has unreasonably delayed disposal of these agencies' records. The
problem arises because the CIA and NSA record control schedules
submitted to the National Archives and Records Administration
(NARA) are classified. NARA has determined that the Federal Reg-
ister notice concerning classified records schedules will be limited
to the identity of the requesting agency, the NARA job number as-
signed to the schedule, and the reason the schedule is excluded
from public disclosure.
Because CIA and NSA. record destruction schedules geiaerally are
classified the. statutory requirement that the Archivist publish
notice of them in the Federal Register serves little purpose. Fur-
thermore, this requirement delays approval by the Archivist of
NSA and CIA record destruction schedules, because the public is
given 60 days to comment on the notice in the Federal Register.
Exempting classified CIA and NSA record destruction schedules
from the provision requiring notice in the Federal Register of re-.
quests to destroy records would expedite the process of approval of
requests to dispose of records, and would not deprive the public of
any meaningful information. Section 401 would have no affect on
unclassified record disposition schedules.
Section 402 extends by two fiscal years certain authority of the
Secretary of Defense granted by subsection 501(a) of the Intelli-
gence Authorization Act for Fiscal Year 1985, P.L. 98-618. This leg-
islation authorized the Secretary of Defense to terminate the em-
ployment of any civilian officer or employee of the Defense Intelli-
gence Agency (DIA) whenever such action was considered by the
Secretary to be in the best interests of the United States and he
determined that the termination procedures otherwise authorized
by law could not be "invoked in a manner consistent with the na-
tional security." As enacted, paragraph 1604(eXl) of Chapter 83 of
title 10, United States Code, granted this authority to the Secretary
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of Defense for fiscal year 1985 and 1986. Regulations were subse-
quently written to implement the authority and are now in the
final stages of coordination within the Department of Defense. The
extension of authority is designed to allow DIA an opportunity to
have two full fiscal years of experience under the implementing
regulations. Then, as the end of the. extended time period draws
near, a determination can be made as to whether the termination
authority should be modified and/or enacted into permanent law.
The Committee. notes with displeasure that. the Department of De-
fense has taken a year and a half to come up with regulations to
implement a statutory grant of authority the enactment of which
was represented to be a matter of considerable urgency when the
Committee considered this matter in 1984. Failure to implement
such authorities in a timely fashion subsequent to enactment
cannot help but adversely affect the Committee's attitude toward
future legislative proposals of this kind.
Section 408 clarifies and enacts into permanent law authority for
the Department of Defense, through the Defense Mapping Agency
(DMA), to conduct mapping activities in conjunction with foreign
countries. Currently, DMA has 185 international executive agree-
ments with 75 countries concerning the exchange, collection, and
production of mapping data. Some of these agreements have been
in existence since the early 1940's. Specifically, these agreements
permit (1) the exchange of maps, charts and other geodesic infor-
mation, (2) co-production and collection of mapping data, (3) loan of
DMA equipment so' that foreign mapping agencies can produce raw
data more efficiently and accurately, (4) DMA training of foreign
personnel, and (5) access to foreign countries.
DMA finds it necessary to deal with foreign map agencies to the
extent that U.S. technical collection systems cannot provide accu-
rate cartographic data. To fill such gaps, DMA can send teams of
U.S. personnel to do necessary work on the ground. The cost of de-
ployments of U.S. personnel can, however, be prohibitive. It is far.
ess expensive to use local foreign mapping agencies. When local
mapping personnel are used, the U.S. sends them the specialized
equipment and provide the necessary training as set forth in the
executive agreement.
In exchange, the United States gets significant raw 'mapping
data as well as access to the territory of another sovereignty. Over
the years this has been a low cost, reliable, and convenient way for
DMA to fulfill its mission. It should also be emphasized that in
many instances this is the only practical way to get mapping data
from foreign countries. The data and other materials provided to
the United States through such agreements is estimated to be
.valued in excess of $80 million annually.
The authority of DMA to engage in such arrangements with
other countries has, however, been called into question. Technical-
ly, DMA lacks explicit statutory authority to undertake these
agreements, and it currently relies exclusively on inherent execu-
tive authority. Recent changes in statutory law have introduced an
element of uncertainty in this reliance. P.L. 97-113 prohibits no-
cost loan of defense equipment. In addition; both the Arms Export
Control Act and the Foreign Assistance Act require foreign govern-
ments to reimburse the Defense Department for any foreign train-
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ing. Neither the cost avoidance of DMA's use of foreign ppeersonnel,
nor the $80 million valuation of mapping data provided b foreign
countries can be calculated as reimbursement. In combination,
these laws render DMA's reliance on inherent executive authority
as the legal basis for its international agreements somewhat uncer-
tain. To remedy this problem section 403 grants DMA explicit stat-
utory authority to continue to exchange mapping data, supplies
and services with foreign countries.
Section 404 provides DIA with authority to pay for necessary
medical evacuations of DIA civilian employees stationed overseas.
Section 501 of the Intelligence Authorization Act for Fiscal Year
1984, P.L. 98-215, authorized allowances and benefits for certain
employees of DIA stationed overseas comparable to those provided
to officers and employees of the Foreign Service serving overseas.
However, the authority to pay the costs or expenses incurred for a
medical evacuation of a civilian employee when there is no suitable
person or facility in the overseas locality to provide necessary med-
ical care was not included in the list of benefits provided by section
501. The authorities in section 501 of P.L: 98-215 were reenacted as
Section 1605 of title 10, United States Code, by subsection (a) of sec-
tion 1302 of the Department of Defense Authorization Act, 1986,
P.L. 99-145. The medical evacuation ' authority is currently avail-
able with respect to Foreign Service officers and employees, and to
CIA and NSA civilian employees (see section 4 of the CIA Act of
1949, 50 U.S.C. 403(e) and paragraph 9(bXl) of the National Securi-
ty Agency Act of 1959, 50 U.S.C. 402 note, respectively). While it is
fortunate that there is rarely the need to have such authority, DIA
has experienced necessary medical evacuations of its civilian em-
ployees stationed overseas. Should similar circumstances arise. in
the future, payment for medical evacuation of DIA civilian employ-
ees should be handled on the same basis as for other civilian intel-
ligence and diplomatic employees similarly situated.
Section 405 would permit the use of proceeds from military coun-
terintelligence operations to offset necessary. and reasoable ex-
penses incurred in these kinds of operations. Current law (31
U.S.C. 3302) can be interpreted to require that funds paid by a for-
eign counterintelligence service to a counterintelligence double
agent must be deposited in the U.S. Treasury. However, the estab-
lished practice by counterintelligence components of the U.S. mili-
tary has been to.use such funds for double agent operations.
An opinion by the General Counsel of the Defense Department
advises that under current permanent law the proceeds from
double agent operations should be paid into the Treasury. Legisla-
tion is therefore required to make clear that money paid by foreign
counterintelligence services to our military counterintelligence
double agents can be used to defray reasonable. and necessary oper-
ational expenses.. Such usage is important to operational security
maintenance of agent bona fides, and for compensating double
agents for legitimate expenses associated with operational activity.
Section 405 also will avoid having to use appropriated funds to pay
operational expenses that have previously been defrayed by using
money paid to double agents by foreign intelligence services.
An exemption from 31 U.S.C. 3302 for fiscal year 1986 was en-
acted for. Defense counterintelligence components under Section
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701 of the Intelligence Authorization Act for Fiscal Year 1986. Sec-
tion 405 makes this provision permanent.
Section 406 provides survivor benefits for certain former spouses
of CIA employees. who did not benefit from the Central Intelligence
Agency Spouses' Retirement Equity Act of 1982 (P.L. 97-269, Title
VvII) because they were divorced prior to the effective date of that
Act (November 15, 1982).
The CIA Spouses' . Retirement Equity Act granted certain former
spouses of CIA employees a presumptive entitlement, subject to re-
vision by spousal agreement or by State courts in divorce proceed-
ings, ? to a pro rata share of the employees' retirement annuities,
survivor benefits, and lump-sum disbursements paid. from the re-
tirement fund. Former spouses qualified for the presumptive enti-
tlement were those married to a CIA employee during at least ten
years of the employee's creditable government service, at least five
years of which they spent outside the United States. The Congress
provided the benefits to these spouses in recognition of their years
of support of the unusual professional activities abroad of their CIA'
employee spouses and their. own direct 'contributions to fulfillment
of the. mission of the CIA. Both the requirements of their support
to their CIA employee spouses and their direct contributions often
prevented the former spouse from acquiring marketable job skills
and pension rights and imposed familial pressures and tensions
which often contributed to the breakdown of their
When. the Committee considered the legislation es.
the CIA Spouses' Retirement Equity whic became
benefits of the Act were pp Act, it noted that , because the
the effective date of the Act would not~fibenefit, despite t divorced prior r-heir =* tant contribution. The committee noted that ". . . at some future
date the Congress may wish to consider providing additional bene-
fits to this group in recognition of their important service." (S.
Rept. 97-484, p. 15) The Committee believes that the time has ar-
rived to provide to this group of former spouses of CIA
the benefits they deserve and thus includes Section 407 in he bill.
Section 406(a) adds a new Section 224 to the Central Intelligence
Agency Retirement Act of 1964 for Certain Employees (50 U.S.C.
403 note) to provide survivor benefits for certain former spouses of
CIA personnel divorced prior to November 15, 1982.
Section 224(a) of the CIA Retirement Act as contained in the bill
provides a survivor annuity to a "former spouse" of a CIA employ-
ee who was a participant or former participant in the CIA Retire-
ment and Disability System (CIARDS), if they were divorced prior
to November 15, 1982, the effective date of the CIA Souses' Retire-
ment Equity Act of 1982. The term "former spouse' as defined in
Section 224(b) of the CIA Retirement Act includes only a former
wife or ' husband of a present or former CIARDS participant who
was married to the participant during at least 10 years of his cred-
itable service, at least 5 years of which were spent together outside
the United States. The survivor annuity is paid in an amount equal
to 55% of the greater of (1) the full amount of the present or
former participant's annuity or (2)' the full amount of what the
present or former participant's annuity would have been if not for
the participant's withdrawal of lump-sum portions of contributions
made with respect to the participant's annuity; the amount is re-
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duced by the amount of any federal government annuity (other
than Social Security benefits) the former spouse receives that is at-
tributable to the former spouse's own. employment by the United
States.
Section 224(b) of the CIA Retirement Act as contained in the bill
disqualifies an othewise qualified former spouse from receiving the
survivor annuity benefit if (1) the present or former participant to
whom the former spouse was married has elected under Section
223 of the CIA Retirement Act to provide a survivor annuity to the
former spouse, (2) the former spouse remarries before age 55, or (3)
the former spouse is less than 50 years of age.
Section 224(c) of the CIA Retirement Act as contained in 'the bill
specifies rules for determining the dates upon which the survivor
annuities to former spouses shall commence and terminate and
provides for application to the Director of Central Intelligence for
such annuities.
Section 224(d) of the CIA Retirement Act as contained in the bill
requires the DCI to issue implementing regulations and, to the
extent practicable, notify former spouses of their rights under Sec-
tion 224: Regulations issued,by DCI under Section 224(d) will be
submitted to the intelligence committee of the Congress before they
take effect, as required. by Section 201(a) of the CIA Retirement
Act.
Section 406(b) of the bill makes a conforming amendment to Sec-
tion 14(a) of the CIA Act of 1949. to ensure that former spouses of
CIA employees who participated in a federal retirement system
other than the CIA Retirement and. Disability System (CIARDS),
receive the same benefits as former spouses if CIA employees who
participated in the CIARDS on the same basis. The same benefit
eligibility requirements regarding years of marriage and overseas
service that applied under the CIA Spouses' Retirement Equity Act
of 1982 apply to benefits for former spouses of both CIARDS and
non-CIARDS employees under the amendments made by Section
407.
Section 406(c) provides for funding the survivor benefits granted
by the amendments to the CIA Retirement Act of 1964 for' Certain
Employees and the CIA Act of 1949 by subsections 407(a) and (b).
Section 406(d) provides an effective date of October 1, 1986 for
the amendments made by section 407 to the CIA Retirement Act of
1964 for Certain Employees and the CIA Act of 1949.
Section 407 adds a new Section 16 to the Central Intelligence
Agency Act of 1949 permitting a former spouse of a CIA employee
to enroll in a federal employee health benefits plan (see chapter 89
of title 5, United States Code) if they were divorced prior to May 7,
1985. To qualify, the former spouse must have been married to the
CIA employee during at least 10 years of the employee's creditable
service, at least 5 years of which were spent together outside the
United States, and must have been covered under a federal health
benefits plan as a member of the family of the CIA employee at
some. time during the 18 month period before the divorce or annul-
ment became final. The eligible former "spouse need not enroll in
the same plan as that which covered the spouse at some time
during that 18 month period..
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The eligible former spouse may enroll for self alone or self and
family during a special enrollment period beginning on the date of
enactment of this legislation and ending 6 months thereafter,
except that the Director of the Office of Personnel Management
shall. waive the 6 month limitation when the Director of Central
Inte
The lligence notifies him that circumstances so warrant.
from enrolling disqualifies an otherwise eligible former spouse
g in a health plan if (1) the spouse remarries- before
age 55 or (2) the spouse already is enrolled in a federal health bene-
fits plan.
The Director of the Office of. Personnel Management is to pre-
scribe the regulations for enrollment and payment by eligible
former spouses. DCI will determine the identities and addresses of
eligible former spouses and notify them of their health plan benefit
rights.
The Committee limited the eligibility for health plan enrollment
under this section to former spouses divorced prior to May 7, 1985
because similarly situated former spouses divorced after that date
are eligible already for such benefits under the Civil Service
Spouse Retirement Equity Act of 1984 (P.L. 98-615).
For health plan coverage under the amendment made by Section
407 the former spouse pays both the amount a federal employee
would pay for the same benefit and the amount that the federal
government would contribute on behalf of the federal employee.
Thus, since the former spouses pay the equivalent of both an em-
ployee's contribution and the government's associated contribution,
the former spouses receive the health plan benefit at no cost to the
government, other than incidental costs associated with adminis-
tration.
Section 408 enacts a new section 11 to the National Security
ency Act of 1959 to provide for effective physical security of
NSA installations within the United States. Currently, officers of
the Federal Protective Service of the General Services Administra-
tion (GSA) provide physical security at NSA facilities. For a
number of reasons, the General Services Administration has been
unable to handle this function adequately. It would be preferable.
for NSA to assume from GSA responsibility for the physical securi-
ty of NSA installations. Section 408 grants to NSA physical securi-
ty personnel powers currently exercised by GSA personnel per-
forming that function. Thus, Section 408 will enable the NSA to
assume from the General Services Administration responsibility for.
physical security at NSA installations.
NSA expects to realize significant budget savings by providing its.
own physical security in lieu of paying GSA to do so. It is expected
that NSA physical security personnel positions will be counted
within the authorized end-strengths for NSA personnel provided in
the annual intelligence authorization acts.
The .transfer of physical. security authority and responsibility
from GSA to NSA could be accomplished by GSA delegating its au-
thority to the CIA. The Departments of Justice, Labor, and Trans-
portation, for example, provide their own physical security under
delegations of authority from GSA. The Committee believes, howev-
er, that it is more appropriate to provide a clear legislative grant of
. these powers to NSA physical security personnel.
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Section 408 will give NSA physical security personnel designated
by the Director the same limited law enforcement powers that GSA
special policemen, which is the statutory term for Federal Protec.
tion Officers, currently possess under Section 318 of title 40, United
States Code. NSA physical security personnel will have those limit-
ed powers only when they are within the boundaries of installa-
tions owned, leased, occupied, or otherwise used by the NSA.
Under Section 408, the Director of the National Security Agency
is authorized to issue rules and regulations with respect to NSA
property and to establish penalties for their violation. Designated
NSA security personnel will be responsible for enforcing such rules
and regulations. It is expected that the Director will adopt regula.
tions which are as similar as possible to those promulgated by the
Administrator of General Services with respect to other federal in-
stallations, consistent with the functions and requirements of NSA
installations. Section 408 specifies that the penalties established by
the Director for violations of the rules and regulations promulgated
with respect to NSA installations shall not exceed those specified
in 40 U.S.C. 318(c) with respect to other federal installations.
Section 408 requires that NSA security personnel performing the
physical security functions at NSA installations be clearly identifi-
able as United States Government security personnel. This. require.
ment ensures that members of the public entering upon any NSA
installations will have due notice of the legal authority of the des-
ignated NSA physical security personnel.
Section 408 will enable NSA guards to stop, detain, and question
persons found on Agency property without reasonable explanation,
and to conduct physical searches and make arrests on Agency fa-
cilities in appropriate circumstances. But the limited authority con-
ferred by Section 408. does not extend beyond Agency facilities. For
example, NSA security officers would not be empowered under.sec-
tion 408 to conduct physical searches of persons and property locat-
ed outside Agency premises in connection with an investigation of
stolen classified documents. Nor does section 408 authorize any ex-
pansion of Agency intelligence collection activities that are gov-
erned by Executive Order 12333 and related procedures.
It is expected that the Director will submit any regulations he
may adopt pursuant to section 408 to the intelligence committees
at least 30 days before they are intended to become effective.
It also is expected that the Agency will give prior notice to the
intelligence committees before deploying its own guards to any lo-
cations other than the NSA headquarters complex.
Present section 11 of the National Security. Agency Act author.
izes the Director of NSA to call upon the GSA to provide the
Agency with FPS guards, and 40 U.S.C. subsection 318(b) author-
izes the GSA to provide such guards when called upon to do so.
Section 408 repeals existing section 11 and substitutes a new sec-
tion as described above.
The new section 11 of the NSA Act is patterned directly on sec-
tion 15 of the CIA Act of 1949 (50 U.S.C. 503o), which was enacted
in section 401 of .the Fiscal Year 1985 Intelligence Authcrization
Act. .
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COAST GUARD ATrAcHis
The Committee endorses the assignment of Coast Guard person-
nel to Defense Attache Offices whenever their assignment can help
obtain information important to the Attaches' responsibilities.
Coast Guard personnel assigned in this manner will be subject to
all applicable provisions of law and the provisions of E.O. No.
12,333 on intelligence activities, and fully accountable to the Com-
mittee for oversight purposes.
TITLE V-ENEUNCED FBI CO GENCE AUTHORITIES
The Select Committee on Intelligence announced in June, 1985,
that it was conducting a comprehensive review of the Soviet intelli-
gence threat and U.S. counterintelligence and security programs.
As part of the review, the Committee held a series of closed hear-
ings to examine the nature and extent of the hostile intelligence
threat and the need for improvements in U.S. counterintelligence
and security programs. In response to Members' requests, FBI Di-
rector Webster agreed to submit proposals for new legislation nec-
essary to enhance the FBI's counterintelligence capabilities. Direc-
tor Webster identified as the FBI's highest priorities: (1) improved
access to financial records in counterintelligence investigations; (2)
improved access to telephone toll records in counterintelligence in-
vestigations; and (3) improved access to state and local' criminal
records in background investigations. The Administration subse-
quently endorsed these proposals, which are the basis for the provi-
sions of this title to enhance FBI counterintelligence authorities.
FINANCIAL RECORDS
Section 501 amends Section 1114(a) of the Right to Financial Pri-
vacy Act of 1978 (12, U.S.C. 3414(a)) to grant the FBI authority to
obtain a customer's or entity's records from a financial institution
for counterintelligence purposes if the Director of the Federal
Bureau of Investigation (or the Director's designee) finds that there
are specific and articulable facts giving reason to believe that the
customer or entity is or may. be a foreign power or an agent of a
foreign power as defined in the Foreign Intelligence Surveillance
Act of 1978 (50 U.S.C. 1801). The FBI bears primary responsibility
for counterintelligence in the United States and thus devotes sub-
stantial resources to countering espionage activities and interna-
tional terrorism activities of hostile foreign powers.
For hostile foreign powers to create, support, and operate an. es-
pionage network or terrorist network takes money. Financial
records relating to espionage or terrorist activities can provide the
FBI with the information it needs to prevent such -activities or
render them ineffective. The FBI does not currently possess manda-
tory authority for access to the financial records of foreign powers
and their agents under the Right to Financial Privacy Act of 1978
(12 U.S.C. 3401 et seq.), which governs access. to customers' records
held by financial institutions. Section 501 provides the mandatory
access the FBI needs to perform its counterintelligence functions
effectively. (United States v. Miller, 425 U.S. 435 (1976)) In response
.to the Supreme Court's decision, the Congress enacted the Right to
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Financial Privacy Act (RFPA) of 1978 (12 U.S.C. 3401 et seq.). That
Act generally provides that, when the Government seeks the
records of a customer of a financial institution which' are relevant
to a legitimate law enforcement inquiry, it must employ a subpoe-
na or formal written request reviewable in court, or obtain a
search warrant. Thus, the customer receives notice of the Govern-
ment's request for the records and an opportunity to contest the
Government's request in court.
In contrast to the general provisions of the RFPA which require
notice to the customer of a governmental request for records and
an opportunity to litigate, Section 1114(a) of the RFPA governing
intelligence and counterintelligence agencies' requests for financial
records does not provide for notice and an opportunity to litigate
and, indeed, prohibits financial institutions from giving notice to
the customers whose records are requested. The FBI could not ef-
fectively monitor and counter the clandestine activities of hostile
espionage agents and terrorists if it had to notify them that the
FBI sought their financial records for a counterintelligence investi-
gation.
Currently under Section 1114(a) of the RFPA, to gain access to
financial records for counterintelligence investigations, the FBI
issues a letter, called a "national security letter," signed by an ap-.
propriate supervisory official and certifying compliance with the
applicable provisions of the RFPA, seeking financial records rele-
vant to FBI counterintelligence activities. The RFPA requires the
financial institution receiving the request to keep secret that the
FBI sought or obtained access to the records. Section.1114 current-
ly does not, however, mandate that financial institutions comply
with FBI requests for access to the financial records under the in-
telligence provisions of the RFPA; it merely permits the banks to
do so if they so choose, without regard to other provisions of the
RFPA.
The FBI has stated that most financial institutions cooperate
with the FBI in making financial records available in accordance
with Section 1114(a) of the RFPA. However, the FBI has advised
the Committee that in certain significant instances, financial insti-
tutions have declined to grant the FBI access to financial records
in response to requests under Section 1114(a). The FBI informed
the Committee that the problem occurs particularly in States
which have State constitutional privacy protection provisions or
State banking privacy laws. In those States, financial institutions
decline to grant the FBI access because State law prohibits. them
from granting such access and the RFPA, since it permits but does
not mandate such access, does not override State law. In such a sit-
uation, the concerned financial institutions' which might otherwise
desire to grant the FBI access to a customer's records will not do
so, because State law does not allow such cooperation, and coopera-
tion might expose them to liability to the customer to. whose
records the FBI sought access. Section 510, by providing for manda-
tory FBI access to a customer's or entity's financial records for
counterintelligence purposes in certain circumstances, preempts
State law to the contrary which otherwise would not permit such
access. The mandatory nature of the provisions also protects finan-
cial institutions from the possibility of liability to customers or en-
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tities under State privacy law. The Committee notes also that fi-
nancial institutions located in the United States which are orga-
nized- or doing business in foreign countries may be subject to, or
may believe themselves to be subject to, foreign bank secrecy laws.
The Committee intends that the mandatory provisions contained in
section 501 of the bill override conflicting foreign law.
Section 501 amends Section 1114(a) of the Right to Financial Pri-
vacy Act of 1978 (12 U.S;C. 3414(a)) by adding to it a new para-
graph (5).
Paragraph 1114(aX5XA) as added by section 501 provides that fi-
nancial institutions shall comply with an FBI request for access to
financial records upon receiving the certificate in writing of the Di-
rector of the FBI (or the Director's designee) that the FBI seeks the
records for foreign counterintelligence purposes and that there are
specific and articulate facts giving reason to believe that the cus-
tomer or entity whose records are sought is or may be a foreign
power or an agent of a foreign power as defined in the Foreign In-
telligence Surveillance Act of. 1978 (50 U.S.C. 1801). The provision
provides for mandatory access to financial records not only of a
"customer" (which under the limited definition in Section. 1105 of
the RFPA includes only individuals and partnerships of five or
fewer individuals), but also to records of an "entity," which in-
cludes all. forms of organization,' such as partnerships, associations,
corporations, and governments. The term "foreign counterintelli-
gence purposes" includes both the purpose of countering the intelli-
gence activities of foreign powers and their agents and the purpose
of countering international terrorist activities.
The Committee expects that, if the Director of the FBI delegates
his function under this provision for mandatory access, he will del-
egate it no further down the FBI chain of command than the level
of Deputy Assistant Director.
The new mandatory FBI authority for counterintelligence access
to records is in addition to, and leaves in place, the existing non-
mandatory scheme for FBI access under Section 1114(a)(1). Although
the existing non-mandatory authority under Section Section 1114(a) to re-.
quest a customer's financial records for counterintelligence activi-
ties apparently implicitly requires only that such ' records be rele-
vant to such activities regardless of the status or activities of the
customer, the Committee believes it important in establishing the
additional authority for mandatory FBI access to limit that manda-
tory authority to use only to obtain a customer's or entity's records
when there are specific and articulable facts giving reason to be-
lieve that the customer is or may be a foreign power or an agent of
a foreign power. The Committee notes that the requirement of
"reason to believe" that the customer is or may be a foreign power
or an agent of a foreign power is less stringent than the require-
ment of "probable cause." Statutes and executive orders governing
intelligence activities have used the "probable cause" standard
when intelligence methods or techniques the government proposes
to use intrude into zones of privacy protected by the fourth amend-
ment. Since, as the Miller case held, governmental access to a cus-
tomer's financial records held by a bank does not implicate a con-
stitutionally protected right of privacy, the Committee concluded
that the "probable cause standard was not warranted. Neverthe-
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less, the Committee believed that satisfaction of an elevated stand-
ard should be a predicate for a mandatory FBI access to financial
records, . in light of the judgment of the Congress embodied in the
RFPA that financial records should be afforded a measure of. priva- i
cy against governmental inquiry. Accordingly, the Committee 1
agreed to require a determination that there are specific and arti-
culable facts giving "reason to believe" that the customer or entity
whose records the FBI seeks is or may be a foreign power or an
Paragraph 1114(a)(5XB) of the RFPA as added by section 501 of
the bill provides that the ? FBI may disseminate information ob-
tained pursuant to the mandatory access provisions only as provid-
ed in the Attorney General Guidelines for FBI Foreign Intelligence
Collection and Foreign Counterintelligence Investigations, and,
with respect to dissemination to an agency of the United States,
such as another federal law enforcement or intelligence agency,
only if the FBI determines that such information is clearly rele
vant to the authorized responsibilities of such agency. The require-
ment of clear relevancy for dissemination. to another federal
agency ensures that the FBI will not automatically and routinely'
disseminate information the FBI obtains from a customer's or enti-
ty's financial records using the mandatory procedures.
Paragraph 1114(a)(5XC) of the RFPA as added by section 501 of
the bill requires the FBI Director to report semiannually. to the in-
telligence committees of the Congress concerning all FBI requests
for access to financial records made pursuant to the mandatory
provisions added to the REPA by Section 501. This reporting re- .
quirement is in addition to the, requirements contained in Title V
of the National Security Act of 1947, which concerns, congressional.
oversight of intelligence activities. The report :should follow the
model of the semiannual report required under. the Foreign. Intelli-
gence Surveillance Act.
Paragraph 1114(aX5XD) ensures that no financial institution,. or
officer, employee, or agent of such institution, will disclose to
anyone that the Federal Bureau of Investigation has sought or ob-
tained access to a customer's or entity's financial records under the
mandatory access provisions. The effective conduct of FBI counter-
intelligence activities requires such non-disclosure. The Committee
expects the FBI, in implementing the new 'mandatory authority, to
ensure that certificates . executed pursuant. to Paragraph
1114(aX5XA). by the Director of the FBI (or his designee) and shown
to a financial institution to gain access to records, remain on file
with the FBI, both to satisfy internal and congressional oversight
needs and to provide protection from any possible legal liability for
the financial institution.
STATE AND LOCAL CRIMINAL RECORDS
Section 502 would allow access for the. FBI to state and local
criminal records for national security purposes similar to that
granted to the CIA, DOD, and OPM in the Intelligence Authoriza-
tion Act for Fiscal Year 1986. The FBI has also faced difficulties in
recent years in obtaining criminal records information from state
and local agencies for purposes of conducting background investiga-
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tions, primarily because of state and local legislation triggered by,
and similar to, the Privacy Act.
An example of the difficulty in obtaining criminal history record
information for purposes of conducting a background investigation
can be found in one State' where the FBI's offices have been pre-
cluded from access.to the criminal justice information system for
the purpose of conducting background investigations because the
State's Department of Justice has interpreated the State's Freedom
of Information/Privacy Acts, which prohibit use of information de-
veloped by law enforcement agencies for other than law enforce-
ment purposes, to exclude background investigations from the
realm of law enforcement purposes. Even with a release from the
applicant, some information has been withheld.
Other states have similar laws restricting the use of criminal
record information for employment purposes. To date these laws
have not been interpreted to preclude FBI access to the records for
the purpose of conducting background investigations. There is no
guarantee, however, that these states may not take a different posi-
tion in the future. A change in position by these states to deny the
FBI these records could drastically reduce the ability of the FBI to
obtain complete criminal record information for background inves-
tigations.
To address these current and potenital problems section 502 adds
the FBI to those agencies entitled under section 9101 of title 5,
United States Code, to obtain access to state and local criminal his-
tory records. This will ensure that the FBI can adequately fulfill its
responsibilities in conducting background investigations.
TELEPHONE TOLL RECORDS
Section 503 amends chapter 33.of title 28, United States Code, to
grant the FBI authority to obtain telephone subscriber information
or toll billing record information from a communications common
carrier for counterintelligence purposes if the Director of the Fed-
eral Bureau of Investigation (or the Director's designee) finds that
there are specific and articulable facts giving reason to believe that
the person or entity to whom the information sought pertains is or
may be a foreign power or an agent of a foreign power as defined
in the. Foreign Intelligence Surveillance Act of 1978 (50 U.S.C.
1801).
The legislative history of the Foreign Intelligence Surveillance
Act explains the vital importance to the FBI of information about
the communications used by persons engaged in espionage or inter-
national terrorism. That Act provides authority - for the FBI to
monitor such communications by acquiring the contents of a wire
communication or by other means that would require a warrant
for law enforcement purposes. The FBI does not currently possess
any similar mandatory authority for access to telephone subscriber
information or toll billing record information. Section 503 provides
the mandatory access the FBI needs to perform its counterintelli-
gence functions effectively.
The FBI has stated that most communications common carriers
cooperate voluntarily with the FBI in making available telephone
subscriber information or toll billing record information. Currently,
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to gain access to such records, the FBI issues a letter, called a "na-
tional security letter," signed by an appropriate supervisory official
and seeking telephone subscriber information or toll billing record'
information relevant to FBI counterintelligence activities: Pursu-
ant to an agreement reached approximately ten years ago between
the Department of Justice and AT&T, national security letters are
generally sufficient to provide access to such information without
use of subpoenas in counterintelligence investigations. However,
the FBI has advised the Committee that" in certrain significant in-
stances, communications common carriers have declined to grant
the FBI access to such records. The FBI informed the Committee
that the problem occurs particularly in States which have laws or
regulatory bodies prohibiting communications comon carriers from
granting such access.
Section 503, by providing for mandatory FBI access to telephone
subscriber information or toll billing record information for coun-
terintelligence purposes in certain circumstances, preempts State
laws or 'regulatory orders to the contrary which otherwise would
not permit such access. The mandatory nature of the provisions
also protects communications common carriers from the possibility
of liability under State privacy law.
Section 503 amends chapter 33 of title 28, United States Code, by
adding to it a new section 538 on "Counterintelligence Access to
Telephone Toll Records."
Subsection 538(a) as added by section 503 of the bill provides that
communications common carriers shall comply with an FBI re-
quest for access to telephone subscriber information or toll billing
record information upon receiving the certificate in writing of the
Director of the FBI (or the Director's designee) that the FBI seeks
the records for foreign counterintelligence purposes and that there
are specific and articulable facts giving reason to believe that the
person or entity to whom the information sought pertains is or
may be a foreign power or an agent of a foreign power as defined
in the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C.
1801). The term "entity" includes all forms of organizations, such
as partnerships, associations,. corporations, and governments. The
term "foreign counterintelligence purposes" includes both the pur-
pose of countering intelligence activities of foreign powers and,
their agents and the purpose of countering international terrorist
and activities.
The Committee expects that, if the Director of the FBI delegates
his function under this provision, he will delegate it no further
down the FBI chain of command than the level of Deputy Assistant
Director. The Committee also recognizes that the Director may del-
egate to the head or acting head of an FBI field office the authority
to make the required certification in exigent circumstances where
time is of the essence, provided that the Director is notified as soon
as ssible of the circumstances involved.
The new mandatory FBI authority for counterintelligence access
to records is in addition to, and leaves in place, existing non-man-
datory arrangements for FBI access based on voluntary agreement
of communications common. carriers. Although the existing FBI
non-mandatory arrangements require only that a "national securi-
ty letter" state that the requested information is relevant to FBI
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counterintelligence activities regardless of the status or activities of
the person to whom the information pertains, the Committee be-
lieves it important in establishing the additional authority for
mandatory FBI access to limit 'that mandatory authority to use
only to obtain records where there are specific and articulable facts
giving reason to believe that the person or , entity to whom the in-
.formation sought pertains is or may be a foreign power or an agent
of a foreign power. The Committee notes that the requirement of ,
"reason to believe" is less stringent than the requirement of "prob-
able cause" which is used as the standard for authorization of elec-
tronic surveillance under the Foreign Intelligence Surveillance Act.
The federal courts have not required either a judicial warrant or a
probable cause standard for access to telephone subscriber informa-
tion or toll billing record information. Reporter's Committee for
Freedom of the Press v. AT&T, 593 F2d 1030 (D.C. Cir. 1978), cert.'
denied, 440 U.S. 949 (1979). The Committee believes that both First
and Fourth Amendment principles are fully satisfied by requiring
a determination that there are specific and articulable facts giving
"reason to believe" that the person or entity to whom the informa-
tion sought by the FBI pertains is or may be a foreign power or an
agent of a foreign power.. The meaning of "reason to believe" in
section 503 is the same as in section 501..
In addition, the Committee recognizes that in some circum-
stances. the target of an investigation may use the. telephone of an-
other person. Therefore, the Foreign Intelligence Surveillance Act
authorizes the surveillance of a telephone line based on its use by a
foreign agent, whether or not the telephone is listed in the foreign
agent's name. For the same reason, section 503 authorizes access to
telephone subscriber information or toll billing record information
which pertains to a foreign power or an agent of a foreign power
who is believed to use a particular telephone, whether or not the
telephone is listed in the name of the foreign power or agent of a
foreign power.
Subsection 538(b) as added by section 503 of the bill provides that.
the FBI may disseminate. information obtained pursuant to the
mandatory access provisions only as provided in the Attorney Gen-
eral Guidelines for FBI Foreign Intelligence Collection and Foreign
Counterintelligence Investigations, and, with respect to dissemina-
tion to an agency of the United States, such as another federal law
enforcement or intelligence agency, only if the FBI determines that
such information is clearly relevant to the authorized - responsibil-
ities of such agency. The requirement of clear relevancy for. dis-
semination to another federal agency ensures that the FBI will not
automatically and routinely disseminate telephone' subscriber in-
formation or toll billing record information the FBI obtains from a
communications common carrier using the mandatory procedures.
Subsection 538(c) as added by section 503 of the bill requires the
FBI Director to report semiannually to the intelligence committees
of the Congress concerning all FBI requests for access to telephone
subscriber information or toll billing record- information made pur-
suant to the mandatory provisions added. to title 28 by section 503.
This reporting requirement is in addition to the requirements con-
tained in Title V of the National Security Act of 1947, which con-
cerns congressional oversight of intelligence activities. The report
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should follow the model of the semiannual report required under
the Foreign Intelligence Surveillance Act.
Subsection 538(c) ensures that no communications common Gam-
er, or officer, employee, or agent thereof, will disclose to anyone
that the FBI has sought or obtained access to telephone subscriber
information or toll billing record information under the mandatory
access provisions. The effective conduct of FBI counterintelligence
activities requires such non-disclosure. The Committee expects the
FBI, in implementing the new mandatory authority, to ensure that
certificates executed pursuant to subsection 538(a) by.the Director
of the FBI (or his designee) and shown to a communications
common carrier to gain access to information, remain on file with
the FBI, both to satisfy internal and congressional oversight needs
and to provide protection from any possible legal liability for the
communications common carrier.
TITLE VI-PROTECTION OF UNITED STATES INTERESTS
Since 1984, the Committee has sought the establishment of. na-
tional policies to restrict the presence in the United States of intel-
ligence officers from the Soviet Union and other nations whose in-
telligence activities within. the United States are contrary to our
national, interests. The Intelligence Authorization Act for FY 1985
contained a requirement that the President submit annual reports
on the numbers and treatment of official representatives in the
United States from those countries and on the numbers and treat-
ment of U.S. representatives in those countries. The Intelligence
Authorization Act for FY 1986 " contained a provision offered by
Senators Leahy and Cohen which establish a policy that the
number of Soviet embassy and consular officials in the United
States should be substantially equivalent to the number of U.S. em-
bassy and consular officials in the USSR. The fundamental purpose
of these provisions was to achieve, through a policy of equivalence,
a lessenuing of the burdens placed on FBI counterintelligence by the
large nmber of intelligence officers operating under official cover
in the United States.
. While the Administration has taken some steps in this direction,
the Committee is very disappointed with the response to the two
legislative requirements. The first Presidential report under the
FY 1985 Act was due in November, 1985, but has not yet been sub-
mitted to the Committee. The Committee has received from the
Secretary of State and the Attorney General the plan for achieving
"substantial equivalence" between U.S. and Soviet embassy and
consular officials, but the plan does not meet the intent of the
Committee* as set forth in the. Committee Report on the FY 1986
Act. The Report stated that the Executive branch should develop
"an approach for attaining equivalence within a '.reasonable time'
.through attrition of Soviet personnel in the United. States, an in-
crease in the number of American personnel in the Soviet Union,
or a combination of both." The plan submitted to the Committee
fails to reduce the number of Soviet embassy and consular officials
in the United States. Instead, the plan provides for an increase in
the numerical ceiling on Soviet personnel on the grounds that the
Soviets need additional positions for their new consulate in New
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York. Any additional staffing required for the New York consulate
should be accomplished within the current 320 ceiling, and the ceil-
ing itself should be gradually reduced by attrition.
To carry forward these efforts, the Committee is proposing three
additional initiatives in this bill to control the hostile intelligence
presence by broadening the scope of the Foreign Missions Act, by
establishing' a policy of "substantial equivalence" for the Soviet
and U.S. Missions of the United Nations, and by requiring the reg-
istration of foreign-controlled commercial enterprises most likely to
serve as cover for hostile intelligence or technology transfer oper-
ations.
FOREIGN MISSIONS ACT AMENDMENT
Section 601 contains the text of S. 1947, a bill introduced by
Chairman Durenberger and Vice Chairman Leahy in December,
1985, to enhance the protection of United States interests under
the Foreign Missions Act.
The legislation is designed to ensure that the national security
interests of the United States are safeguarded from the activities of
corporations or other commercial entities controlled by foreign ele-'
ments hostile to our country. Section 601 would clarify the defini-
tion of "foreign mission" in the Foreign Missions Act so as. to
remove any doubt that such commercial entities can be subjected
to the controls in that act.
The adversaries of the United States have become adept at using
commercial cover and business dealings for 'espionage purposes.
The Select Committee on Intelligence and the Permanent Subcom-
mittee on Investigations focused on counterintelligence issues
throughout 1985. Senator Roth, the chairman of the Committee on .
Governmental Affairs and of the Permanent Subcommittee on In-
vestigations, and Senator Nunn, the ranking minority member of
that subcommittee, also are members of the Intelligence Commit-
tee, and there was excellent cooperation between the committees as
both sought to identify, in concert with the executive branch, ac-
tions that could be taken to improve U.S. counterintelligence and
security protections.
A number of important steps were taken during 1985, including
an expansion of the Foreign Missions Act definition of "foreign.
mission" that was included in section 127 of the Foreign Relations
Authorization Act for Fiscal Years 1986 and 1987 (Public Law 99-
93, August 16, 1985). That change substituted the phrase "mission
to or agency in" for the more restrictive term "official mission."
Thus; while there may have been ambiguity previously, it now is
clear that Foreign Missions Act controls can be applied to Soviet
and Warsaw Pact state trading organizations such as the Soviet
company AMTORG, because such organizations clearly are foreign
The remaining problem involves commercial entities that may
not fall under the rubric of an agency or may not, at least ostensi-
bly, be involved in diplomatic, consular, or other governmental ac-
tivities, even if they are owned or controlled by foreign govern-
ments or organizations. The record indicates that such commercial
entities are capable of engaging in or providing cover for, activities
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just as inimical to the United States as some of the activities of
state. trading companies.'
In order to prevent. potentially dangerous commercial establish-
ments from continuing to avoid Foreign Missions Act controls, sec-
tion 601 makes several changes in the. act's definition of "foreign
missions." First the phrase "or entity" is added, so that the defini-
tion would state that foreign mission means any mission to or
agency or entity in the United States. This would permit commer-
cial establishments to be designated as "foreign missions" by cate-
gorizing them as "entities" rather than as missions or agencies.
Next, section 601 would strike the word "governmental" from the
text above clause (A) in 22 U.S.C. 4302(aX4) and substitute the
phrase "which is involved in" for the word "involving." This
change would enable commercial entities to be subject to Foreign
Missions Act restrictions on* the basis of their involvement in any
"activities" of a foreign government or organization; the current
redundant and confusing specification that such activities must be
diplomatic, consular, or governmental would be eliminated. Final-
ly, the phrase "or which is substantially owned or effectively con-
trolled by" is added to the definition, so that a commercial entity
can also be subjected to Foreign Missions Act restrictions strictly
.on the basis of an ownership or control test.
The Committee believes that these-changes are advisable to clari-
fy the ability of the Secretary of State to apply`'Foreign Missions
Act controls to commercial entities operating in the United States
which are involved in the activities of foreign governments or orga-
nizations, or which are owned or controlled by such governments
or organizations. It is clear that certain of these commercial estab-
lishments . may be performing activities which pose a threat to U.S.
national security. Those charged with defending U.S. interests
must have the tools that they need to deal effectively with such
threats.
It should be emphasized that section 601 would not require appli-
cation of Foreign Missions Act controls to. any commercial estab-
lishment. Instead the amendment made by section 601 would
enable the Secretary of State to apply such controls in appropriate
circumstances. Thus, commercial establishments engaged exclusive-
ly in legitimate business activities will not be affected. Section 601
would impact only on commercial establishments whose activities
on behalf of foreign governments or-organizations are inimical to
'U.S national security. interests.
SOVIET MISSION AT THE UNITED NATIONS
Section. 602 expresses the policy of Congress that the number of
Soviet nationals admitted to the United States to serve as members
of the Soviet Missions at the United Nations (SMUN) shall not sub-
stantially exceed- the number of U.S. personnel who serve as mem-
bers of the U.S. Mission at the United Nations. The U.S. govern-
ment can, of course, easily increase the U.S. staff available for
work in connection with activities at U.N. Headquarters by'assign-
See discussion of section 603, requiring that agents of Soviet bloc nations who are engaged in
business register with the Attorney General. This provision is designed to enable counterintelli,
gence agencies to identify and accumulate information about such commerical entities.
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ing personnel from Washington on temporary duty, and therefore
it is not practicable to seek absolute equivalence between the size
of the U.S. and Soviet missions. For purposes of this section, the
number of Soviet personnel at the SMUN would substantially
exceed the number of American personnel at the USUN if it were
one-third or more greater than the annual average number of U.S.
personnel permanently assigned to the U.S. Mission to the U.N. or
its specialized agencies in New. York City.
The President could continue to admit a greater, number of Sovi-
ets than allowd under this policy, but only if he determined that
such admission of Soviet nationals would be in- the interests of the
United States. In the event a greater number continued to be ad-
mitted, the Secretary of State would be obliged to transmit to the
intelligence and foreign relations committees of the Senate and
House of Representatives six months after enactment and every six
months thereafter a report setting forth the number of Soviet na-
tionals admitted during the previous six-month. period and a de-
scription of their duties with the SMUN. Further more, the Secre-
tary of State and Attorney General are requested to prepare a
report within six months of enactment of this section setting forth
a plan to ensure compliance with the policy that the number. of
members of the SMUN not substantially exceed the number of
members of the U.S. Mission.
The staff of the SMUN for purposes of this section include all
members of the mission included in the definition of the term
"members of the mission" in Article 1(b) of the Vienna Convention
on Diplomatic Relations, done April 18, 1961-i.e., the head of the
mission and the members of the staff of the mission, including the
members of the diplomatic staff, of the administrative and techni-
cal staff and of the service staff. This is to make clear that, in im-.
plementing this section, the State Department in the computation
of the number of members of the SMUN must include all its per-
sonnel.
A mission of a country to the United Nations includes all the
missions of,such country to the U.N. in New York City and in-
cludes missions in New York City to specialized agencies of the
U.N. In the case of the 'Soviet Union, the SMUN specifically in-
cludes the missions to the United Nations of the Union of Soviet
Socialist Republics, the Byelorussian Socialist Republic and the
Ukrainian Socialist Republic.
A key part of the Soviet official presence in the United States is
the large staff of the Soviet mission to the United Nations (SMUN)
in. New York City. The SMUN currently- has a staff of some 295,
about 260 of which are assigned to the primary Soviet mission and
the others to the missions of the so-called Ukrainian and Byelorus-
sian Soviet Socialist Republics. This is in addition to the more than
300 Soviet citizens who work for the U.N. Secretariat in New York.
Combined with other categories of Soviet representatives-press
correspondents, commercial representatives, . exchange scholars and
the like-this adds up to well over 600 Soviets currently assigned
to the New York area, in addition to their families.
Counterintelligence specialists, especially in the FBI, say that the'
SMUN in New York City is one of the chief havens for Soviet spies
in the United States. With its large staff, the SMUN provides a
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major operational center for the KGB and GRU in their activities
throughout the United States.
The Soviet mission greatly exceeds the size of other delegations
to the United Nations. The next largest is the U.S. mission with a
staff of about 130. China is third with a total of 125. All other mis-
sions to the United Nations-including many countries with exten-
sive activities there-are well below this.
Not only does the size of the Soviet mission greatly exceed the
others, but its structure differs as well. The SMUN has a bloated
"support" staff of 120, many of whom do not have duties directly.
related to the United Nations. In fact, the United States Govern-'
ment has little official information on the nature of the activities
pursued by the Soviets at their mission to the United Nations. The
Soviets provide only the sketchiest information about the identities
of personnel being sent to the SMUN, their positions in the mis-
sion, and their duties with respect to the United Nations.
The FBI believes that as with other Soviet organizations in. the
United States, more than one-third of the Soviet personnel at their
U.N. mission-at least 100 people-are professional intelligence of-
ficers. The chief damage of this large intelligence component is es-
pionage and other clandestine collection by the Soviets of defense,
science and technology, and national security information within
the Unites States. Their large presence at the United Nations also
provides the Soviets a great opportunity to attempt to recruit for-
eign officials at the United Nations as their agents.
It is extremely difficult for the. FBI to. cope with the large
number of Soviet officials and their family members in New York
City-over 800 people. Operational conditions for the FBI in New
York are poor. The FBI has difficulty getting its best agents to
work in New York due to the high cost of living in the area. As a
result, the FBI cannot effectively monitor the activities of all the
Soviet officials stationed in New York in one capacity or another.
If Soviet espionage is to be controlled, there must be substantial re-
duction in the size of the Soviet U.N. mission.
Chairman Durenberger and Vice Chairman Leahy, in a state-
ment to the Permanent Subcommittee on Investigations on October
22, 1985, indicated that the Committee's ongoing review of counter-
intelligence and security problems had revealed that a key element
in reducing the occurrence of espionage in the U.S. is reduction
and restriction of the hostile intelligence presence in the U.S. For
the most part, foreign intelligence officers in thy: U.S. operate
under the cover of foreign diplomatic establishments and other offi-
cial or quasi-autonomous entities controlled by foreign govern-
ments.
Members of the Intelligence Committee have been active in
recent years in limiting the hostile intelligence presence in the
U.S. The Huddleston-Leahy Amendment to the Fiscal Year 1984
Intelligence Authorization bill declared the policy of Congress to be
that the numbers and treatment of diplomatic officials from coun-
tries engaged in intelligence activities against the U.S. should not
exceed the equivalent numbers and conditions of American officials
assigned to those countries. The Leahy-Cohen Amendment to the
Fiscal Years 1986 and 1987 Foreign Relations Authorization Act
further established in statute that with respect- particularly to the
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Soviet. Union, the number of Soviet diplomatic and consular per-'
sonnel admitted to the U.S.. shall not substantially exceed the
equivalent number of U.S. personnel in the Soviet Union. The Roth
Amendment to the same Act authorized the Office of Foreign Mis-
sions of the State Department to regulate the travel of all U.N. em-
ployees outside the U.N. Headquarters District and in general di-
rected- the State Department, to apply the same restrictions to U.N.
employees as are applied. to the foreign missions of their home
countries.
Section 602 derives from S: 177', a bill to limit the size of the
SMUN. This bill was originally introduced by Senators Leahy and
Cohen, and has nineteen additional Senate co-sponsors.-The bill to
limit the size of the SMUN was a logical successor to the earlier
Leahy-Cohen bill on diplomatic equivalence and reciprocity with
the Soviet Union. This is because by far the largest Soviet official
establishments in the U.S. are the Soviet embassy and consulate,
currently at 320 persons, and the Soviet mission to the United' Na-
tions.
The combination of these two measures will greatly impair the
ability, of the. Soviet Union to conduct human intelligence oper-
ations in the U.S. As Stanislav Levchenko, a former high level off.-
der in the KGB who defected several years ago, stated. recently
(Washington Times, Oct. 1, 1985):.
The most practical means of disrupting KGB operations
in America is to require parity in the number of Soviet
Diplomats in the United States and American diplomats in'
the Soviet Union, and to limit drastically the size and op-
erations of the huge Soviet mission to the United Nations.
If such steps lead to a reduction of 100 or more Soviet
officials, KGB activities in the United States would be seri-
ously damaged. The KGB would lose many officers who .
otherwise would be handling active cases. But Moscow still
would need to maintain contact with various offices of the
U.S. government. So more of the remaining officials would
be occupied with legitimate diplomatic activities, rather
than with espionage.
On March 7, 1986, the State Department announced that it
would require the Soviet Union to reduce the number of personnel
at the SMUN from 275 to 170 by April .1, 1988.. The. Department
has indicated that if the Soviets do not comply voluntarily with the
order, then the Department will proceed to implement it through
denials of new requests for admission to the United States of mem-
bers of the SMUN. In taking this action, the State Department was
acting on a mandate developed by the Administration through the
National Security Council.
Enactment of Section 602 remains necessary. even after the
.recent action of the State Department. As 'an administrative meas-
ure the State Department decision is subject to modification in the
future. Over .the years, a large number of Soviets have been per-
mitted to enter the U.S. as diplomats and consular officers, mem-
bers of the SMUN, representatives assigned to quasi-nongovern-
mental entities such as trade associations and press bureaus, and ,
visiting officials. It is, therefore, desirable to apply definite statuto-
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ry 'limitations on such admissions whenever possible. In the case of
the SMUN, there is no difficulty in establishing reasonable limits
on-its size, vis-a-vis and U.S. Mission, by requiring that the size of
the SMUN be substantially equivalent to that of the U.S. Mission,
taking into account that as a result of the special circumstances,
the size of the SMUN may be considered substantially equivalent
to that of the U.S. Mission provided it does not exceed it by more
than one-third.
The clear authority of the U.S. to take such an action on nation-
al security grounds rests largely on previous Congressional atten-
tion to this matter. Specifically (as explained in greater length
below), Congress adopted legally binding reservations to both of the
principal international agreements governing the status of the
U.N. and national missions to it in the United States. These reser-
vations were designed to preserve the U.S. right to protect its na-
tional security through reasonable limitations on the privileges of
the U.N. organization and national missions to the U.N.
The basic principles governing the obligations of the United
States toward the United Nations and national missions to the or-
ganization are the general Convention on the Privileges and Immu-
nities of the United Nations-the general convention-adopted in
1946 but' not ratified by the United States until 1970, and the
agreement between the United Nations and the United States of
America Regarding the Headquarters of the United Nations-the
headquarters agreement-adopted by joint resolution of the Senate
and the House or Representatives in 1947.
Neither of these agreements, as submitted to the, Congress, con-
tained explicit provisions permitting the United States to restrict
the activities of the U.N. organization or the national missions to
the United Nations based on national security grounds. But Con-
gress, in approving the agreements, adopted legally binding reser-
vations to both the general convention and the headquarters agree-
ment p=7810 ng U.S. rights to protect its security. Section 6 of
Public -357 which adopted the headquarters agreement,
states:
Nothing in this agreement shall be construed as *in any
way diminishing, abridging, or weakening the right. of the
United States to safeguard its own security.
The U.S. Government has specifically maintained, both in princi-.
ple and through its actions, that section 6 permits the U.S. Govern-
ment to control the entry of foreign nationals into the United
States in. connection with the United Nations, including not only
national missions to the United Nations but also employees and in-
vitees of the United Nations itself. A valuable collection of materi-
als on the development of U.S.. policy in this regard is contained on
pages 195-312 of the State Department publication, "Foreign Rela-
tions of the United States 1952-1954," volume III, United Nations
affairs (1979).
The claim has been advanced from time to time that the U.S.
may act against the admission of particular persons to the U.N. or
national missions to the U.N., but not with.respect to the overall
size of missions. As host country for U.N. Headquarters, however,
the U.S. retains the inherent-power (as well as the legal authority
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28
arising from Congressionally-mandated reservations to the perti-
nent international agreements) to regulate such missions when
their size and the conduct of their personnel raise legitimate na-
tional security concerns. The State Department has now agreed to
this proposition through its recent action.
The key. issue is the principle of reasonableness in interpreting
the responsibilities of the U.S. Government under the general con-
vention. and the headquarters agreement. The agreements simply
cannot be read to prevent the United States from taking reasona-
ble measures to protect its national security by refusing to tolerate
an abnormally large mission serving as a base for highly damaging
espionage. There are an extraordinary number of Soviet officials
assigned to the SMUN, many of whom appear too highly qualified
for their official work as janitors, groundkeepers, and the like. The
United States clearly has the right under our agreements concern-
ing the United Nations to take an overall look at this situation and
put restraints on the size of the SMUN that would ensure that it
remains reasonable in light of its structure. and legitimate activi-
ties at the United Nations.
Further information concerning the legal situation on limiting
the size of the SMUN can be found among the materials, printed in
the Congressional Record at the time the original bill S. 1773 was
introduced. (See Cong. Rec., October 8, 1985, pp. S13573-S13583.)
REGISTRATION OF AGENTS OF CERTAIN FOREIGN GOVERNMENTS
Section 603 amends 18 U.S.C. 951, which makes it a_ criminal of-.
fense for an agent of a foreign government to fail to register with
the Attorney General. Current law exempts diplomats and other of-
ficials as well as one engaged in a "legal commercial transaction."
Section 603 would' narrow the exemptions by adding new subsec-
tion (e), which would require registration by those engaged in com-
mercial . transactions who are agents' of the Eastern bloc nations, .
specifically, the Soviet Union, East Germany, Hungary, Czechoslo-
vakia, Poland, Bulgaria, Romania, or Cuba, or those who have been
convicted of espionage or export law violations.
The section derives from S. 1900, which was introduced by Sena-
tor Roth (for himself and Senators Nunn and Cohen) on December
2, 1985. S. 1900 would have amended the Foreign Agents. Registra-
tion Act (FARA), which, like 18 U.S.C. Section 951, requires that
agents of foreign nationals register with the Attorney. General.
(FARA likewise exempts diplomatic and other officials and those
engaged in commercial transactions.) Senator Roth, as Chairman of
the Permanent Subcommittee on Investigations, held hearings and
heard testimony that commercial entities. are regularly used as
fronts by Soviets. and their bloc allies. Current reporting statutes
are intended to provide the Government with information about
the activities of foreign agents. But they impose no such require-
ment on Soviet and Soviet-bloc businesses or even persons convict-
ed of espionage violations. While those businesses are. ostensibly en-
gaged in non-political activity, it is common knowledge that the
businesses are used as cover for espionage operations. S. 1900 was
intended to provide information to the Government to enable it to
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protect itself and its citizens from the activities of agents of hostile
foreign powers.
Following discussions with the Department of Justice, Senator
Roth agreed that because there are a number of reporting statutes,
a better approach would be to amend the Code section directed at
those engaged in espionage.' Accordingly, Senator Roth developed
an alternative proposal, now included as Section 603. The section
accomplishes the two goals of S. 1900-requiring the registration of
those engaged in business but working for Soviet bloc nations and
also those previously convicted of espionage violations-but pre-
serves the distinction between registration requirements for politi-
cal representatives and spies. Section 951 of title 18, U.S.C. currently. requires prior notification
to the Attorney General by any person who acts in the United
States as an agent of .a foreign government, with four exemptions
spelled out in subsection (d), which defines "agent of a foreign gov-
ernment" to mean:
an individual who agrees to operate within the United States
subject to the direction or control of a foreign government of
official, except that such term does not include-
(1). a duly accredited diplomatic or consular officer of a
foreign government, who is so recognized by . the : Depart-
ment of State;
(2) any officially and publicly acknowledged and spon-
sored official or representative of a foreign government;
(3) any officially and publicly acknowledged and spon-
sored member of the staff of, or employee of, an officer, of-
ficial, or representative described in paragraph (1) or (2),
who is not a . United States citizen; or
(4) any person engaged 'in a legal commercial transac-
tion.
Under current law, the Attorney General is authorized to pro-
mulgate rules and regulations establishing. requirements for notifi-
cation. In addition, the Attorney General is required, upon receipt,
promptly to transmit one copy of each notification statement filed
under section 951 to the Secretary of State for such comment and
use as the Secretary of State may determine to be appropriate from
the point of view of the foreign relations of the United States. Fail-
ure of the Attorney General to do so is not a bar to prosecution
under section 951. Violations are punishable by a fine of not more
than $75,000 or imprisonment for not more than ten years, or both..
Section 603 of this bill amends section 951 of title 18 by adding a
new subsection (e) which provides that, notwithstanding the exemp-
tion in paragraph (d)(4) for persons engaged in legal commercial
.transactions, a person engaged in such a transaction shall be con-
sidered an agent of a foreign government. if such person agrees to
operate within the United States subject to the direction or control
of a foreign government or official and such person meets one of
two criteria. The first is that the person is anagent of the Soviet
FARA was originally aimed at subversives and propagandists, and required that all repre?
.sentatives of foreign governments register. Over time, it has been limited to those who attempt
to influence public opinion or government action. Other laws, including 18 U.S.C. 951 and 50
U.S.C. 85-1, have focused on subversives and those engaged in espionage.
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30
Union, the German Democratic Republic, Hungary, Czechoslova-
kia, Poland, Bulgaria, Romania, or Cuba, unless the Attorney Gen-
eral after consultation with the Secretary of State determines and
so reports to the Congress that the national security of foreign
policy interests of the United States_ require that the provisions of
section 951 should not apply in specific circumstances to agents of
such countries. The second criterion is that the person has been
convicted of, or has entered a plea of nolo contendere with respect
to, any offense under sections 792 through 799, 831, or 2381 of title
18 ,r under section 11 of the Export Administration Act of.1979, or
is the employer of such a person, except that the provisions of sec-
tion 951 shall not apply to such a person or employer for a period
of more than five years beginning on the date of the conviction or
the date of the entry of the plea of nolo contendere.
The, Committee intends that the registration of a person under
subsection (e) should be the basis for the State Department to
impose appropriate requirements under the Foreign Mission Act,
as amended by section 601 of this bill. The Committee also recog-
nizes that the Attorney General has the authority under subsection
(b) of section 951 to establish whatever requirements for notifica-
tion he may deem justified.
The Committee further intends that the requirement for notifica-
tion by a person engaged in a legal commercial transaction should
apply to a person.employed by a commercial entity that transacts
business in the United States, without regard to whether such
person might be considered an officially and publicly acknowledged
and sponsored official or representative of aforeign government
under subsection (d)(2) or a member of the staff, or employee of,
such an official or representative under subsection (dX3). The pur-
pose is- to require notification by officials, representatives, staff
members, and employees of commercial entities, whenever such
persons engage in commercial enterprises and agree to operate in
the United States under the direction or control of one of the
named countries. The current exemptions in subsections (d)(2). and
(dX3) should not be applied to defeat the objective of this bill to en-
hance U.S. counterintelligence efforts.
TITLE VU-GENERAL PROVISIONS
Section 701 provides that the authorization of appropriations by
the fiscal year 1987 Intelligence Authorization 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 702 provides advance authorization for such additional
appropriations as may be necessary for increases in Federal em-
ployee compensation and benefits which are authorized by current
or subsequently enacted law during fiscal year 1987. Section 702 ob-
viates the necessity, for separate authorizations for such matters
during the fiscal year.
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COMMITTEE ACTION
On May 15, 1986, the Select Committee on- Intelligence, a
quorum being present, approved the bill as amended and ordered it
favorably reported.
EVALUATION OF REGULATORY IMPACT
In accordance with Paragraph 11(b) of Rule XXVI of the Stand-
ing Rules of the Senate, the Committee finds no regulatory impact
will be incurred in implementing the provisions of this legislation.
CONGRESSIONAL BUDGET AND IMPOUNDMENT CONTROL ACT
The Committee has complied with Section 403 of the Congres-
sional Budget and Impoundment Control Act of 1974 to the extent
possible.
CHANGES IN EXISTING LAW
In the opinion of the Committee, it is necessary to dispense with
the requirements of Section 12 of Rule XXVI of the. Standing Rules
of the Senate in order to expedite the business of the Senate.
Declassified and Approved For Release 2011/12/01: CIA-RDP89B00297R000300700009-8