LETTER TO LEE H. HAMILTON FROM WILLIAM J. CASEY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87M01007R000200670005-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 8
• Document Creation Date: December 22, 2016
• Document Release Date: September 27, 2010
• Sequence Number: 5
• Publication Date: July 17, 1985
• Content Type: LETTER

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STAT
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Von, o c 205075
17 JUL 1985
ER-2094/1
The Honcrable Lee H. Hamilton
Chairman
Permanent Select Committee on Intelligence
House of Representatives
Washington, D.C. 20515
This is it response to your request of 21 !ay 1985 for the
views of this Agency and the Intelligence Community concerning
H.R. 2419, the Intelligence Authorization Act for Fiscal Year
1986. Pursuant to your request, we have circulated the bill
and the Conaittee's accompanying report within the Agency and
to other intelligence Community agencies. Of particular concern
to the Community,, after reviewing the bill, are sections 104,
105, 401 and 402. We believe that these provisions either
unnecessarily limit Intelligence Community activities
(sections 104 and 105), rigidify existing reporting practices
by permanently codifying these arrangements in the National
Security Act of 1947 (section 401), or require a potentially
duplicative report in an unrealistically short time frame
(section 402). Our comments concerning the provisions of the
bill are set forth below in more detail.
Our first comment concerns section 104 and the parenthetical
language contained in that section limiting the Director of
Central Intelligence's (DCI) authority to exceed authorized
personnel ceilings. This section provides that the DCI
may authorize civilian personnel in excess of authorized
personnel ceilings except that this increase may not "for any
element (or offices, agencies or subelements thereof) of the
Intelligence Community exceed two per centua? of the number of
personnel authorized" for such element. Given the need for the
DCI to have flexibility to adjust personnel temporarily to
respond to various emergencies, we are opposed to the inclusion
of this parenthetical language and the additional limitations
it places on the ability to effectively shift and. transfer
personnel within an agency to meet the changing circumstances
and needs confronting the intelligence Community. We would
prefer that the language of the "except" clause not contain the
present parenthetical qualification, but instead state, as have
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the equivalent provisions in previous authorization acts, as
follows: "Except that such number may not, for any element of
the intelligence Community, exceed two per centum of the number
of civilian personnel authorize6...for such element". All
prior authorization acts containing this two per centum ceiling
have used the tern. "element" without modification. This term
is universally understood to mean program element of the NFIP.
This should continue to be the case in the absence of any
problems identified in the use or implementation of this
authority.
With respect to section 105, we object to this provision
which contains a prohibition on providing material assistance
to the Nicaraguan democratic resistance for FY-86. This
section would prohibit the provision of funds, goods, equipment,
civilian or military supplies, or any other materiel to the
Nicaraguan democratic resistance during FY-86. This section
would permit, however, the provision of intelligence
information and advice to the Nicaraguan democratic resistance.
We object to this provision because we believe it unduly limits
the President's ability to deal effectively with the security
interests of the United States in Central America, and
restricts the flexibility required by the President to fully
pursue United States policy objectives in this area. Moreover,
there is an inconsistency between this provision and the
House's own recently expressed judgment as to the agencies
which can be involved in administering this assistance to the
Nicaraguan democratic resistance. As you know, the House in
the 1985 Supplemental Appropriations Bill approved the
provision of $27 million in humanitarian aid to the Nicaraguan
resistance which includes the provision of food, medicine,
clothing and other humanitarian aid for these purposes. This
bill, H.R. 2577, permits this aid to be administered by any
agency except the Central Intelligence Agency (CIA) or the
Department of Defense (DOD). H.R. 2419, on the other hand,
would prohibit any agency or entity involved in intelligence
activities from providing material assistance to the Nicaraguan
resistance. We believe that section 105 and its broader
limitations on the furnishing of material assistance to the
Nicaraguan resistance should be deleted from the bill.
Section 401(a) of the bill provides that funds available to
an intelligence agency may be obligated or expended for an
intelligence activity only if those funds are specifically
authorized or if certain other criteria are met. The Agency
opposes permanent codification of this provision in the
National Security Act of 1947. In view of the Committee's
expressed intent to simply codify previous language contained
in earlier authorization bills wherein funds made available by
the Congress through the authorization and appropriation
process have been strictly controlled as to use, we see no
particular virtue in converting the annual authorization
language into a more basic statute.
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he believe this provision is best omitted because it is too
limiting and is better suited for inclusion in annual
authorization acts. As the Committee's report notes, similar
provisions have been included in-the annual intelligence
Authorization Act for the past several years and have been a
matter addressed by mutually agreeable procedures prior to that
time. Evidence of the value of keeping this provision in the
authorization bill is shown in the number of times this
particular language has been amended since its first appearance
in 1961. Inclusion of such provisions in the annual
authorization process or by agreement between the Committee and
this Agency allows for inevitable fine tuning and modification
in this area without the need to amend the National Security
Act each time a change of procedures is contemplated.
A review of the intelligence authorization act process in
recent years clearly demonstrates the utility of this process
in providing needed flexibility and required change in the
reporting practices expected by the Committee in this area.
Since the 1981 Intelligence Authorization Act, a provision has
been included in the annual authorization till which states
that no funds may be appropriated or otherwise made available
through transfer or reprogramming unless specifically
authorized or unless by notification. While the notification
required under this provision was expected to be made at least
15 days prior to completion of the funding transaction, the
Committee has recognized that circumstances may require later
notification. Beginning with the 1984 Intelligence
Authorization Act, the Committee expanded this provision to
require that the transfer of funds from one account to another
which would trigger the notification requirement, must be for a
higher priority program or must be based on unforeseen
requirements. This amended provision additionally required
that in nc event could funds be spent for intelligence programs
which had been denied by Congress. Further, the report
language accompanying this provision for the last several years
has made clear that in circumstances in which prior notice of
an activity would be required by this section, but not required
by the Intelligence Oversight Act (section 501 of the National
Security Act) that the notification provided to the Committee
should be determined by the principles of comity and mutual
understanding as set forth in the legislative history
accompanying the 1980 Intelligence Oversight Act. As the above
discussion indicates, the authorization process has proven to
be a workable arrangement in which the Committee's need for
prompt notification concerning the use of reprogramming or
transfer authority has been provided while allowing a crtain
needed flexibility. We believe the working relationship'
and longstanding practice that have developed between the
Committee and the Agency concerning these notification
procedures and the available annual intelligence authorization
process make permanent codification of these provisions in the
National Security Act of 1947 unnecessary and undesirable.
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The Agency is equally concerned about section 401(b) of the
bill which addresses the covert transfer of defense articles or
services exceeding $1 million i'n value. We believe that the
present reporting requirerr,er.ts Contained in section 501 of the
National Security Act are adecuate and satisfy the objective of
keeping the Committee fully and currently informed of
significant covert arms transfers. This is particularly true
in light of present reporting which covers a considerably wider
range of military equipment, and the nearly completed efforts
between the Agency and the Committee to establish formal covert
action reporting procedures which specifically address the
reporting of covert arms transfers well beyond the type
contemplated by this provision. In light otthis effort to
work out mutually agreeable procedures of greater significance,
we do not perceive any need to codify in a statute what should
be a flexible and workable agreement.
On this same matter, we believe it is particularly
inappropriate to include portions of the yet-to-be-agreed-upon
procedures in the classified annex and to state the Committee's
expectation that the type of activities described in these
procedures will require prior notice to the Committee. while
we hope shortly to reach final agreement on these procedures,
the Agency and the Coiuiittee have yet to reach a full
understanding as to the exact meaning and scope of the language
now contained in the classified annex and as to what kinds of
activities would require prior notice under these procedures.
Given this uncertainty as to what is required to be reported
under these procedures, the potential for the type of
misunderstanding which these procedures are intended to avoid
is greatly increased by including the procedures in the
classified annex and expressing the expectation that the
Agency is to report pursuant to them. We would recommend
against the adoption of these procedures by the Conference
Committee when they consider the classified annex pending a
final resolution, which we believe is imminent, between the
Agency and the Committee concerning the procedures. We will,
of course, continue to keep the Committee informed of any matter
of significance or of Committee interest.
More importantly, we believe that this type of detailed,
statutorily-mandated reporting on covert arms transfers will
unnecessarily limit the flexibility required by the President
in responding to and taking advantage of rapidly changing
international events. Given recent terrorist episodes such as
the highjacking of Flight 847, the need for this country to be
able to fully cooperate with other nations and their security
services is particularly evident and should not be hampered by
unnecessary reporting obligations which do not further
congressional oversight, but do inhibit the community's ability
to respond to unique opportunities, unforeseen circumstances,
or crisis situations. This is a time during which the
Community and the Committee should be searching for ways to
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t
better respond to terrorist and other external threats. Our
joint efforts in improving intelligence capabiities in this
area require that all options in responding to these situations
be available for use without the need to invoke additional
unnecessary reporting requirements, and we are aware of no
problems under the current reporting scheme that these
statutory requirements would solve. On the contrary, the
proposal, which better suits formal overt foreign assistance
transactions, saddles the Executive Branch with additional and
unnecessary burdens.
For example, we have some difficulty with the manner in
which the valuation of this equipment-is to be undertaken
according to the Committee's report. "-"the Committee would
require that the valuation of equipment be based on original.
acquisition cost. However, with respect to foreign weapons
acquired at no cost to the Agency, there would be no
acquisition cost although there likely would be a replacement
cost. Because the Committee requires that equipment
replacement cost be used as a valuation method, this would
require prior notice of Agency equipment transfers in
.circumstances in which no technologically important item, of
equipment or significant transfer requiring prior notification
occurs. This requirement for reporting of defense services
also would appear to raise substantial problems for the Agency,
given the breadth of the Agency's covert programs and the
standard Agency, accounting practices, because of the
Committee's requirement that the computation of transportation
and other expenses associated with any United States personnel
providing the service be included in the valuation of such
services. The Committee action by imposing these requirements
and attempting to legislate conformity with FNS procedures and
requirements, will mandate additional bureaucratic mechanisms
unduly hampering an efficient, flexible and workable system.
. Section 401(b) also provides that arms transfers are not to
be considered significant if the transfer is being made to
another federal agency so long as there is no subsequent
retransfer of the defense article or service outside the United
States. This suggests that, in a joint operation in which the
Defense Department is providing military equipment to the
Agency, where the Agency intends to transfer the articles or
service to a foreign recipient pursuant to an authorized
covert action program, the Defense Department must report to
the Intelligence Committees before the equipment can even be
transferred to the CIA. We do not believe this is a necessary
requirement, since the Agency can acquire the equipment from
the Department of Defense pursuant to applicable authority and
should assume responsibility for reporting to Congress prior to
any transfer abroad. Finally, we would take exception with the
statement contained on page 9 of the Committee's report which
notes that "if such transfers are made covertly or clandestinely
they are in effect covert action. As such, they must be
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reported under the Intelligence Oversight Act." This
characterization of transfers of military.,-equipment by the CIA
is not accurate in all instances. There are instances where
transfers of military equipment are made clandestinely, but
unrelated to any covert action program; rather they are
undertaken as part of a foreign intelligence exchange.
In summary, we believe Section 401's reporting requirements
remove certain needed flexibility in the oversight process by
codifying unnecessarily existing workable arrangements. As the
Committee itself noted, in commenting on the oversight process
during its consideration of the Intelligence Oversight Act of
1980:
True conflicts of policy between the executive
and legislative branches are best disposed of by
the traditional means of continued interplay, not
reliance on statutory provisions which, it ought
to be recognized, cannot and should not seek to
resolve all future issues of congressional
oversight.
Such disputes should be left in the only arena
which can effectively solve them, political
give and take. It is there that resolve and
consensus rule. In intelligence in particular,
no other solutions are practical.
H.R. Rep. 96-1153, Part 1, 96th Cong., 2d Sess. 13 (1980).
As to section 402, while this proposal for a counter-
intelligence vulnerability survey of confidential United States
Government 4ctivities abroad has some merit, the proposed
language contained in this section lacks specificity, and is
clearly more suitable for report language than for inclusion as
part of the bill itself. The scope of the inquiry requires
further definition, both in terms of the United States
activities to be covered and in terms of the security and
counterintelligence disciplines to be addressed in this report.
Additionally, the Secretary of State has had an adviscry
panel, headed by Admiral Bobby Inman, conducting a review of
overseas security for the past year. The advisory panel's
report has just recently been issued. It would be advisable to
closely review the results of that effort to see if it is
responsive to what you are seeking. The task, as proposed,
represents an extremely large undertaking. There are some
twenty countries which are considered to have a hostile
environment, plus another twenty-one with Communist -
intelligence service ties. To conduct a vulnerability survey
of that proportion would not be feasible within the time
allocated, and would require the suspension of other priority
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security services in order to service this one which, as noted,
may be duplicative of Admiral Inmast'?s effort. I suggest we
await careful consideration and'review of Admiral Inman's
report. Following this review,'we can then determine what, if
any, follow-up action is required, how it is to be done, and,
since such a survey would impact on the interest of a number of
agencies, who should be tasked to carry it out.
We appreciate the opportunity'to comment on the Committee's
bill. We believe that our comments and input would have been
more helpful had they been requested and an opportunity
provided for such input while the bill was still being
considered by the Committee. While none of the provisions
contained in the AdmFnisti'etion's proposed bill were included
in H.R. 2419, I believe that these proposals have considerable
merit and hope that the Committee will reconsider and take
appropriate action with respect to these initiatives at some
future date.
Sincerely,
%a!. W13larn J. Casey
William J. Casey
Director of Central Intelligence
Distribution:
Original - Addressee
1 - DCI
1 - DDCI
1 - D}DIR
1 - ER (Your #2094)
- D/IC Staff
1 - Comptroller
1 - D/OLL
1 - DD/OIL
1 - CSLL Czrono
1 - LEG Subject
1 Si er
OIL/LDG? (17 July 1985)
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