(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91B00874R000100060007-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 36
• Document Creation Date: January 12, 2017
• Document Release Date: June 14, 2011
• Sequence Number: 7
• Publication Date: June 13, 1985
• Content Type: MISC

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Senate Select Committee
on Intelligence
DAVE DURENBERGER. MINNESOTA. CHAIRMAN
PATRICK LEAKY, VERMONT. VICE CHAIRMAN
WILLIAM V. ROTH JR.. DELAWARE
WILLIAM S COHEN. MAINE
ORRIN HATCH. UTAH
FRANK MURKOWSKI. ALASKA
ARLEN SPECTER. PENNSYLVANIA
CHIC MECMT, NEVADA
MITCH MCCONNELL KENTUCKY
LLOYD BENTSEN. TEXAS
SAM NUNN. GEORGIA
THOMAS F EAGLETON. MISSOURI
ERNEST F HOLLINGS. SOUTH CAROLINA
DAVID L BOREN, OKLAHOMA
SILL BRADLEY. NEW JERSEY
ROBERT DOLE. KANSAS. EX OFFICIO
ROBERT C BYRD, WEST VIRGINIA, EX OFFICIO
BERNARD F MCMAHON, STAFF DIRECTOR
ERIC 0. NEWSOM. MINORITY STAFF DIRECTOR
FOR IMMEDIATE RELEASE CONTACT: DAVE HOLLIDAY
JUNE 13, 1985 202
22
Senate Intelligence Committee
Hearings on National Intelligence Strategy
Senator Dave Durenberger (R-Minn.), Chairman, Senate Select Committee on
Intelligence, said today that had a long range national strategy for intelli-
gence been in place at the proper time, past upheavals in the intelligence
community could have been avoided. "If the true objectives of covert action
had been thought through and articulated, the misunderstandings that have
developed over this activity could have been avoided", Durenberger said.
"Regionally, a long range strategy would have pinpointed the difficulties
that we inherited in Central America. The shortfalls that we have experienced
in our intelligence abilities in this vital section of the world might not
have occurred in the first place or might have been anticipated and planned
for," Durenberger continued.
Durenberger also expressed concern that the lack of a long range national
strategy could give rise to future difficulties. "Correctly handling the
problems of terrorism, narcotics interdiction, and verification of future
arms control agreements demands a well thought out, long range strategy if
intelligence gaps are to be avoided and policy makers are to have the adequate
and timely information their decisions require", Durenberger said.
Durenberger's comment was contained in an opening statement delivered
at a meeting of the Intelligence Committee which marked the beginning of a
series of hearings by that committee designed to establish a national
intelligence strategy.
Durenberger went on to say that he believes the intelligence community
itself will be far better able to make its case to a skeptical public and
their representatives if it begins to articulate its plans in terms of an
overall strategy, explicitly noting the relevance of plans and operations to
national policy.
"At a time when the resources we can devote to national security are
being increasingly strained, and the potential requirements of policy appear
to grow every day, the Congress and the public must have confidence that our
overall security policy is based on a sense of priorities envisioned,"
Durenberger said.
Durenberger said it was not possible to know today what conclusions the
committee may reach at the end of these hearings. "We may find that the
intelligence community is considering, and considering well, the kinds of
questions about future investments that we begin to explore today,"
Durenberger said.
Durenberger said the committee planned to produce guidelines for a
national intelligence strategy to the intelligence community by October 1, 1985
and the committee expected to see those guidelines implemented prior to the
start of the next budget cycle.
"It is the firm expectation of this committee that the next budget request
it considers will be accompanied by a statement which permits the committee to
assess the relationship between our overall security policy and the intelligence
strategy which serves it," Durenberger concluded.
( )
4-171 ---
Ex; Reaistrv
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99TH CONGRESS
1ST SESSION
5.1271
[Report No. 99-79]
To authorize appropriations for fiscal year 1986 for intelligence activities of the
United States Government, the Intelligence Community Staff, the Central
Intelligence Agency Retirement and Disability System, and for other pur-
poses.
IN THE SENATE OF THE UNITED STATES
JUNE 11 (legislative day, JUNE 3), 1985
Mr. DURENBERGER, from the Select Committee on Intelligence, reported the fol-
lowing original bill; which was read twice and (pursuant to the order of June
6, 1985), referred jointly to the Committees on Armed Services, the Judici-
ary, Governmental Affairs, and Foreign Relations for the 30-day time period
provided in section 3(b) of Senate Resolution 400, 94th Congress, provided
that the Committee on the Judiciary be restricted to the consideration of title
V, the Committee on Governmental Affairs be restricted to the consideration
of section 603, and the Committee on Foreign Relations be restricted to the
consideration of section 604 and title VII; provided that if any of said com-
mittees fails to report said bill within the 30-day time limit, such committee
shall be automatically discharged from further consideration of said bill in ac-
cordance with section 3(b) of Senate Resolution 400, 94th Congress
A BILL
To authorize appropriations for fiscal year 1986 for intelligence
activities of the United States Government, the Intelligence
Community Staff, the Central Intelligence Agency Retire-
ment and Disability System, and for other purposes.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
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1 That this Act may be cited as the "Intelligence Authoriza-
2 tion Act for fiscal year 1986".
3 TITLE I-INTELLIGENCE ACTIVITIES
4 AUTHORIZATION OF APPROPRIATIONS
5 SEC. 101. Funds are hereby authorized to be appropri-
6 ated for fiscal year 1986 for the conduct of the intelligence
7 activities of the following elements of the United States Gov-
8 ernment:
9 (1) The Central Intelligence Agency.
10 (2) The Department of Defense.
11 (3) The Defense Intelligence Agency.
12 (4) The National Security Agency.
13 (5) The Department of the Army, the Department
14 of the Navy, and the Department of the Air Force.
15 (6) The Department of State.
16 (7) The Department of the Treasury.
17 (8) The Department of Energy.
18 (9) The Federal Bureau of Investigation.
19 CLASSIFIED SCHEDULE OF AUTHORIZATIONS
20 SEC. 102. The amounts authorized to be appropriated
21 under section 101, and the authorized personnel ceilings as of
22 September 30, 1986, for the conduct of the intelligence ac-
23 tivities of the elements listed in such section, are those speci-
24 fied in the classified Schedule of Authorizations prepared by
25 the Select Committee on Intelligence of the Senate. That
26 Schedule of Authorizations shall be made available to the
SIM is
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1 Committees on Appropriations of the Senate and the House
2 of Representatives, and to the President. The President shall
3 provide for suitable distribution of the schedule, or of appro-
4 priate portions of the schedule, within the executive branch.
5 CONGRESSIONAL NOTIFICATION OF EXPENDITURES IN
6 EXCESS OF PROGRAM AUTHORIZATIONS
7 SEC. 103. During fiscal year 1986, funds may not be
8 made available for any intelligence activity unless such funds
9 have been specifically authorized for such activity or, in the
10 case of funds appropriated for a different activity, unless the
11 Director of Central Intelligence or the Secretary of Defense
12 has notified the appropriate committees of Congress of the
13 intent to make such funds available for such activity, except
14 that in no case may reprogramming or transfer authority be
15 used by the Director of Central Intelligence or the Secretary
16 of Defense unless for higher priority intelligence activities,
17 based on unforeseen requirements, than those for which funds
18 were originally authorized, and in no case where the intelli-
19 gence activity for which funds were requested has been
20 denied by Congress.
21 PERSONNEL CEILING ADJUSTMENTS
22 SEC. 104. The Director of Central Intelligence may au-
23 thorize employment of "civilian personnel in excess of the
24 numbers authorized for fiscal year 1986 under sections 102
25 and 202 of this Act when he determines that such action is
26 necessary to the performance of important intelligence func-
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1 tions, except that such number may not, for any element of
2 the Intelligence Community, exceed 2 per centum of the
3 number of civilian personnel authorized under such sections
4 for such element. The Director of Central Intelligence shall
5 promptly notify the Permanent Select Committee on Intelli-
6 gence of the House of Representatives and the Select Com-
7 mittee on Intelligence of the Senate whenever he exercises
8 the authority granted by this section.
9 AUTHORIZATION OF APPROPRIATIONS FOR DESIGN AND
10 CONSTRUCTION OF A RESEARCH AND ENGINEERING
11 FACILITY AT THE NATIONAL SECURITY AGENCY
12 HEADQUARTERS COMPOUND
13 SEC. 105. The National Security Agency is authorized
14 to secure the design and construction of a research and engi-
15 neering facility at its headquarters compound at Ft. Meade,
16 Maryland. A single continuous contract may be employed to
17 facilitate completion of the building authorized by this sec-
18 tion, and the Secretary of Defense is authorized to contract
19 for design and construction in advance of appropriations
20 therefor, but the cost of such facility may not exceed
21 $75,064,000. Of the amounts authorized to be appropriated
22 under section 101(4) of this Act, there is authorized to be
23 appropriated for fiscal year 1986 the sum of $21,364,000 for
24 design and construction of the facility authorized by this sec-
25 tion during fiscal year 1986.
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1 TITLE II-INTELLIGENCE COMMUNITY STAFF
2 AUTHORIZATION OF APPROPRIATIONS
3 SEC. 201. There is authorized to be appropriated for the
4 Intelligence Community Staff for fiscal year 1986 the sum of
5 $22,283,000.
6 AUTHORIZATION OF PERSONNEL END STRENGTH
7 SEc. 202. (a) The Intelligence Community Staff is au-
8 thorized two-hundred-and-thirty-three full-time personnel as
9 of September 30, 1986. Such personnel of the Intelligence
10 Community Staff may be permanent employees of the Intelli-
11 gence Community Staff or personnel detailed from other ele-
12 ments of the United States Government.
13 (b) During fiscal year 1986, personnel of the Intelli-
14 gence Community Staff shall be selected so as to provide
15 appropriate representation from elements of the United
16 States Government engaged in intelligence activities.
17 (c) During fiscal year 1986, any officer or employee of
18 the United States or a member of the Armed Forces who is
19 detailed to the Intelligence Community Staff from another
20 element of the United States Government shall be detailed on
21 a reimbursable basis, except that any such officer, employee,
22 or member may be detailed on a nonreimbursable basis for a
23 period of less than one year for the performance of temporary
24 functions as required by the Director of Central Intelligence.
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1 INTELLIGENCE COMMUNITY STAFF ADMINISTERED IN
2 SAME MANNER AS CENTRAL INTELLIGENCE AGENCY
3 SEC. 203. During fiscal year 1986, activities and per-
4 sonnel of the Intelligence Community Staff shall be subject to
5 the provisions of the National Security Act of 1947 (50
6 U.S.C. 401 et seq.) and the Central Intelligence Agency Act
7 of 1949 (50 U.S.C. 430a et seq.) in the same manner as
8 activities and personnel of the Central Intelligence Agency.
9 TITLE III-CENTRAL INTELLIGENCE AGENCY
10 RETIREMENT AND DISABILITY SYSTEM
11 AUTHORIZATION OF APPROPRIATIONS
12 SEC. 301. There is authorized to be appropriated for the
13 Central Intelligence Agency Retirement and Disability Fund
14 for fiscal year 1986 the sum of $101,400,000.
15 TITLE IV-GENERAL PROVISIONS
16 AUTHORITY FOR THE CONDUCT OF INTELLIGENCE
17 ACTIVITIES
18 SEC. 401. The authorization of appropriations by this
19 Act shall not be deemed to constitute authority for the con-
20 duct of any intelligence activity which is not otherwise au-
21 thorized by the Constitution or laws of the United States.
22 INCREASES IN EMPLOYEE COMPENSATION AND BENEFITS
23 AUTHORIZED BY LAW
24 SEC. 402. Appropriations authorized by this Act for
25 salary, pay, retirement, and other benefits for Federal em-
26 ployees may be increased by such additional or supplemental
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1 amounts as may be necessary for any increases in such em-
2 ployee compensation or benefits authorized by law.
3 TITLE V-FACILITATING NATURALIZATION OF
4 CERTAIN FOREIGN INTELLIGENCE SOURCES
5 IMMIGRATION AND NATIONALITY ACT AMENDMENT
6 SEC. 501. Section 316 of the Immigration and Nation-
7 ality Act (8 U.S.C. 1427) is amended by adding at the end
8 thereof the following new subsection:
9 "(g)(1) Whenever the Director of Central Intelligence,
10 the Attorney General and the Commissioner of Immigration
11 determine that a petitioner otherwise eligible for naturaliza-
12 tion has made an extraordinary contribution to the national
13 security of the United States or to the conduct of United
14 States intelligence activities, the petitioner may be natural-
15 ized without regard to the residence and physical presence
16 requirements of this section, or to the prohibitions of section
17 313 of this Act, and no residence within the jurisdiction of
18 the court shall be required.
19 "(2) A petition for naturalization may be filed pursuant
20 to this subsection in any district court of the United States,
21 without regard to the residence of the petitioner. Proceedings
22 under this subsection shall be conducted in a manner consist-
23 ent with the protection of intelligence sources, methods and
24 activities.
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1 "(3) The number of aliens naturalized pursuant to this
2 subsection in any fiscal year shall not exceed fifteen. The
3 Director of Central Intelligence shall notify the Select Com-
4 mittee on Intelligence of the Senate and the Permanent
5 Select Committee on Intelligence of the House of Represent-
6 atives each time a determination is made to apply the provi-
7 sions of this subsection.".
8 TITLE VI-ADMINISTRATIVE PROVISIONS
9 USE OF PROCEEDS FROM DEFENSE DEPARTMENT
10 COUNTERINTELLIGENCE OPERATIONS
11 SEC. 601. (a) During fiscal year 1986, the Secretary of
12 Defense may authorize use of proceeds from counterintelli-
13 gence operations conducted by components of the Military
14 Departments to offset necessary and reasonable expenses in-
15 curred in such operations without regard to the provisions of
16 section 3302 of title 31, United States Code.
17 (b) As soon as the net proceeds from any such counter-
18 intelligence operation are no longer necessary for the conduct
19 of that operation, such proceeds shall be deposited into the
20 Treasury as miscellaneous receipts.
21 RETIREMENT BENEFITS FOR CERTAIN CENTRAL INTELLI-
22 GENCE AGENCY EMPLOYEES SERVING IN UNHEALTH-
23 FUL AREAS
24 SEC. 602. Section 251 of the Central Intelligence
25 Agency Retirement Act of 1964 for Certain Employees (50
26 U.S.C. 403 note) is amended by inserting "(a)" after "SEC.
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1 251." and by adding at the end thereof the following new
2 subsection:
3 "(b) The Director of Central Intelligence may from time
4 to time establish, in consultation with the Secretary of State,
5 a list of places which by reason of climatic or other extreme
6 conditions are to be classed as unhealthful posts. Each year
7 of duty at such posts, inclusive of regular leaves of absence,
8 shall be counted as one and a half years in computing the
9 length of service of a participant under this Act for the pur-
10 pose of retirement, fractional months being considered as full
11 months in computing such service. No extra credit for service
12 at such unhealthful posts shall be credited to any participant
13 who is paid a differential under section 5925 or 5928 of title
14 5, United States Code, for such service.".
15 COMPENSATION OF DIRECTOR AND DEPUTY DIRECTOR OF
16 CENTRAL INTELLIGENCE
17 SEC. 603. (a) Section 5312 of title 5, United States
18 Code, is amended by adding at the end thereof the following:
19 "Director of Central Intelligence.".
20 (b) Section 5313 of title 5, United States Code, is
21 amended by inserting "Deputy" before "Director of Central
22 Intelligence."
23 (c) Section 5314 of title 5, United States Code, is
24 amended by striking out "Deputy Director of Central
25 Intelligence.".
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1 APPLICATION OF FOREIGN MISSIONS ACT TO INDIVIDUALS
2 ON SECONDMENT TO THE UNITED NATIONS SECRE-
3 TARIAT
4 SEC. 604. The Secretary of State is directed to apply to
5 all individuals who are on secondment from their respective
6 governments to the United Nations Secretariat any and all
7 terms, limitations, restrictions, or conditions applicable to in-
8 dividuals pursuant to the Foreign Missions Act of 1982 (22
9 U.S.C. 4301 et seq.), as may from time to time be applied to
10 members of the consulates, embassies, or missions to the
11 United Nations of those respective governments in the
12 United States, pursuant to the Foreign Missions Act.
13 TITLE VII-DIPLOMATIC EQUIVALENCE AND
14 RECIPROCITY
15 SHORT TITLE
16 SEC. 701. This title may be cited as the "Diplomatic
17 Equivalence and Reciprocity Act of 1985".
18 POLICY
19 SEC. 702. (a) It is the policy of the United States that
20 the number of nationals of the Soviet Union admitted to the
21 United States who serve as diplomatic or consular personnel
22 of the.Soviet Union in the United States shall not exceed the
23 number of United States nationals admitted to the Soviet
24 Union who serve as diplomatic or consular personnel of the
25 United States in the Soviet Union unless the President deter-
26 mines and so certifies to the Congress that additional admis-
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1 sions of such personnel would be in the best interests of the
2 United States.
3 (b) The policy contained in subsection (a) shall not apply
4 to dependents or spouses who do not serve as diplomatic or
5 consular personnel.
6 REPORTING REQUIREMENT
7 SEC. 703. Not later than six months after the date of
8 enactment of this title, the Secretary of State and the Attor-
9 ney General shall prepare and transmit to the Committee on
10 Foreign Relations and the Select Committee on Intelligence
11 of the Senate and the Committee on Foreign Affairs and the
12 Permanent Select Committee on Intelligence of the House of
13 Representatives a report setting forth a plan for ensuring that
14 the number of Soviet nationals described in section 701 does
15 not exceed the limitation described in such section.
16 DEFINITIONS
17 SEC. 704. For purposes of this title-
18 (1) the term "diplomatic or consular personnel"
19 means the members of the diplomatic mission or the
20 members of the consular post, as the case may be;
21 (2) the term "members of the diplomatic mission"
22 is used within the meaning of article 1(b) of the Vienna
23 Convention on Diplomatic Relations, done on April 18,
24 1961; and
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1 (3) the term "members of the consular post" is
2 used within the meaning of article 1(g) of the Vienna
3 Convention on Consular Relations, done April 24,
4 1963.
0
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99TH CONGRESS I
1st Session
( REPORT
1 99-79
AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 1986 FOR INTELLI-
GENCE ACTIVITIES OF THE U.S. GOVERNMENT, THE INTELLIGENCE
COMMUNITY STAFF, THE CENTRAL INTELLIGENCE AGENCY RETIRE-
MENT AND DISABILITY SYSTEM [CIARDS], AND FOR OTHER PURPOSES
Mr. DURENBERGER, from the Select Committee on Intelligence,
submitted the following
REPORT
[To accompany S. 1271]
The Select Committee on Intelligence, having considered the
original bill (S. 1271) authorizing appropriations for fiscal year 1986
for intelligence activities of the U.S. Government, the Intelligence
Community Staff, the Central Intelligence Agency Retirement and
Disability System, and for other purposes, reports favorably there-
on without amendment and recommends that the bill do pass.
This bill would:
(1) Authorize appropriations for fiscal year 1986 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, 1986
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.
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OVERALL SUMMARY OF COMMITTEE ACTION
[in mdbons of doears]
Fixallyex 186 Fiscal b dget Comm nd r cwfttlee
SS request chm`es
Intelligence activities ..............................................................................................................................................................................
Intelligence Community Staff .................................................................. $21.0 $21.9 $22.3 +$0.4
CIARDS .................................................................................................... 99.3 101.4 101.4 0
Total .........................................................................................................................................................................................
THE CLASSIFIED SUPPLEMENT TO THE COMMITTEE 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 COMMITTEE REVIEW
The Committee conducted a detailed review of the Intelligence
Community's fiscal year 1986 budget request. This included:
-Hearings involving some 25 hours of testimony, which included
the Director of Central Intelligence, the principal program
managers, and senior officials from the Department of Defense,
the Department of State, and the FBI;
-Detailed examination of over 3,000 pages of budget justification
material;
-Review of written answers from the Intelligence Community to
several hundred questions for the record;
-Numerous briefings and interviews with officials on major
topics of interest.
The Committee examined the U.S. intelligence system through a
combination of functional and component program reviews. In-
depth hearings were conducted to examine key initiatives in pro-
grams involving: technical and human collection; counterintelli-
gence; defense intelligence activities; and covert action. The Com-
mittee also held a detailed hearing on the subject of intelligence
targets, including: the Soviet Union, counterterrorism, and arms
control monitoring.
During the course of its review, the Committee focused on the
following major areas:
-Key challenges facing the Intelligence Community over the
longer term to include countermeasures to U.S. technical col-
lection, improved methods of monitoring arms control agree-
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ments, and growing requirements for intelligence on a global
basis;
-The ability of the Community to meet these challenges, major
upgrades required, and the adequacy of outyear plans;
-Major gaps in current and programmed capabilities;
-Steps proposed in the FY 1986 budget to overcome existing de-
ficiencies and to improve the Community's long term perform-
ance; and
-Efforts by the Community to improve counterterrorism capa-
bilities.
COMMITTEE FINDINGS AND RECOMMENDATIONS
By the late 1970's, resource constraints and the effects of infla-
tion had seriously degraded the Intelligence Community's capabil-
ity to adequately support U.S. foreign policymaking objectives. Ad-
ditional funding, beginning in the late 1970's and continuing
through fiscal year 1985, improved that situation significantly.
Major investments have been continued in the fiscal year 1986
budget to sustain development of advanced collection systems,
expand human source collection abroad, improve analysis, enhance
counterintelligence and counterterrorism capabilities, and modern-
ize the support apparatus upon which all intelligence capabilities
depend.
The Committee believes that the enhancement of U.S. intelli-
gence capabilities must remain among the nation's highest prior-
ities. The Committee has consistently supported major investments,
proposed over the past few years, needed to ensure that the Intelli-
gence Community can successfully respond to the challenges U.S.
foreign policylnakers are likely to face in the late 1980's and into
the 1990's. This assessment has not changed, because no lessening
of tension with our principal adversaries is expected. Simultaneous-
ly, developments in Third World countries, combined with issues of
global significance, will continue to grow in importance.
Two-YEAR BUDGET CYCLE
The Committee believes it is important that Congress consider a
two year cycle for authorization and appropriation of funds for the
Intelligence Community. The Armed Services Committee recently
adopted a provision in the Department of Defense Authorization
Act for Fiscal Year 1986 (section 909 of S. 1160) which requires the
President to submit a two year defense budget beginning in fiscal
year 1988. This will require coordination between the Secretary of
Defense and the Director of Central Intelligence as to their respec-
tive budgets.
The.burdens of the annual budget process have become too cum-
bersome, both for the Intelligence Community and the Congress.
Virtually all aspects of the intelligence and defense budgets are
now subject to annual authorizations. There are dozens of procure-
ment programs and hundreds of research and development pro-
grams. Reviewing each program in detail every year is providing
more and more time consuming. Forcing all programs into an
annual review also is unnecessarily disruptive. More important,
however, by using its time to review virtually every line item in
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the budget, both the Congress and the Intelligence Community
forego opportunities to focus on more fundamental issues of intelli-
gence policy.
There is widespread consensus on the desirability of a two year
cycle. The Secretary of Defense repeatedly has endorsed the idea
and indicated his willingness to cooperate to achieve it. The Tem-
porary Select Committee to Study the Senate Committee System
endorsed the concept of the two year budget cycle.
Although there is widespread consensus on its desirability, no
one has outlined the specific details that need to be analyzed in
order to accomplish this change. In particular, there may be cer-
tain unique items in the intelligence budget area that should not
be handled on a two year basis. However, the move to a two year
budget is a step in the right direction. In order to fully assess the
implications of a two year budget and to insure adequate coordina-
tion with the Secretary of Defense as he prepares his report on the
two year budget concept, the Director of Central Intelligence is di-
rected to coordinate with the Secretary of Defense to submit either
a separate report or an annex to the Defense report by July 1, 1986
(1) The advantages and disadvantages of operating the Intel-
ligence Community on a two year budget cycle;
(2) How the Intelligence Community would plan to convert to
a two year budget cycle; and
(3) A description of any impediments, statutory or otherwise,
to converting the operations of the Intelligence Community to
a two year budget cycle beginning with fiscal year 1988.
SECTION-BY-SECTION ANALYSIS
TITLE I-INTELLIGENCE ACTIVITIES
Section 101 lists the department and agencies for whose intelli-
gence activities the bill authorizes appropriations for fiscal year
1986.
Section 102 makes clear that, with the exception of sections 201,
201(a), and 301, the amounts authorized to be appropriated and the
personnel ceilings established by the bill for appropriated
year 1986 are
contained in a classified Schedue of Authorizations. This Schedule
of Authorizations is incorporated into the bill by this section.
Section 103 provides that no funds may be appropriated or other-
wise made available for any intelligence activity unless the funds
are specifically authorized or the appropriate Congressional com-
mittees have been given notice of the intent to make the funds
available. The Committee intends that specifically authorized intel-
ligence activities be considered as those activities described in
annual budget justification material as modified by the Congress.
The notification requirement is not intended to apply to repro-
grammings below agreed-to dollar thresholds, releases from author-
ized contingency funds, or the Economy Act transactions for specif-
ic activities otherwise authorized by law. In the case of items of
specific congressional interest, however, notice would be required.
Notification required under this section normally should be made
at least 15 days prior to completion of the funding transaction, but
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it is recognized that circumstances may occasionally require later
notification.
Section 103 also provides that transfers or reprogrammings that
trigger the notification requirement must always be for a higher
priority program. This stipulation restates the most important re-
quirement for all reprogrammings or transfers. A further proviso is
that in no event may funds be reprogrammed or transferred to sup-
port a program denied with prejudice by the Congress. This also is
a longstanding limitation, but it is not meant to prohibit the repro-
Er amming or transfer of funds to support an activity materially dif-
rent from that previously denied.
Although section 103 does not constitute a statutory notification
requirement with respect to releases from the CIA's Reserve for
Contingencies, the Committee expects the Agency to continue to
adhere to the longstanding practice of providing such notification
when a request for a reserve is made to the Office of Management
and Budget. Releases from the Reserve for Contingencies are not to
be used to fund programs denied with prejudice by the Congress,
but such releases may be employed if the activity to be supported is
materially different from that previously denied.
Should questions arise as to circumstances in which prior notifi-
cation of an activity would appear to be required by section 103,
but in which prior notification would not be required by section 501
of the National Security Act of 1947, it is expected that resolution
will be guided by the principles of comity and mutual understand-
ing set forth in the legislative history accompanying the statutory
intelligence oversight provisions enacted in 1980, and that the pro-
cedures governing reporting to the Senate Select Committee on In-
telligence on covert action, agreed to by the Director of Central In-
telligence and the Chairman and Vice Chairman of the Committee
on June 6, 1984 as a means of better discharging the respective re-
sponsibilities of the executive and legislative branches under those
provisions, will be strictly adhered to.
Section 104 permits the Director of Central Intelligence to au-
thorize the personnel strength of any intelligence element to
exceed its fiscal year 1986 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-
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 104 to be used to provide for
positions denied by the Congress.
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Section 105 authorizes the National Security Agency to secure
the design and construction of a research and engineering facility
at its Fort Meade Headquarters compound. The Agency's research
and engineering needs have outgrown current spaces, whose dis-
persed locations and other inadequacies impede effective manage-
ment of this critical function. The Committee is pursuaded that it
will be significantly less costly to build the required facility than to
lease comparable space with the special characteristics that NSA
needs for its research and engineering work. The Committee in-
tends that the facility authorized by section 105 include all appro-
priate special structural, equipment, and security features.
Section 105 authorizes the design and construction of the entire
facility. Use of a single continuous contract to accomplish comple-
tion of the building is explicitly authorized, and the Secretary of
Defense is authorized to contract for design and construction in ad-
vance of appropriations therefor. The Committee expects to author-
ize funds for the project incrementally over a three fiscal year
period. Accordingly, appropriations for fiscal year 1986 are author-
ized only for $21,364,000. The Committee strongly recommends that
funds appropriated for the project in fiscal year 1986 and succeed-
ing fiscal years remain available for use until the project is com-
pleted.
TITLE II-INTELLIGENCE COMMUNITY STAFF
Section 201 authorizes the appropriation of $22,283,000 for the
Intelligence Community Staff, which provides the Director of Cen-
tral Intelligence with staff assistance to carry out his Intelligence
Community responsibilities. The Staff supports the DCI in the exe-
cution of his responsibilities to develop, review, and approve the
National Foreign Intelligence Program budget, to evaluate the per-
formance of foreign intelligence activities, and to develop issues,
goals, and other required guidelines for the Intelligence Communi-
ty.
The request from the Intelligence Community Staff was in the
amount of $21,900,000. This budget request incorporated the Presi-
dent's proposed 5 percent civilian pay cut, which would be effective
January 1, 1986. Congressional action on the President's proposal is
not yet final, but the Committee anticipates that Congress will
eventually approve a pay freeze rather than a pay cut. According-
ly, the Committee has incorporated an increase of $383,000 for the
Intelligence Community Staff.
Sections 202 and 203 provide certain administrative authorities
for the Intelligence Community Staff. Section 202(a) authorizes 233
full-time personnel for staff as of September 30, 1986. The Intelli-
gence Community Staff is composed of a permanent cadre, detailed
community personnel, and contract hirees.
The Intelligence Community Staff is now made up of personnel
who are 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.
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Section 202(c) requires that personnel be detailed on a reimbursa-
ble basis except for temporary situations. The Staff's 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 authority to manage the activities and to pay the
personnel of the Intelligence Community Staff. However, it is the
Committee's intent that in the case of detailed personnel, the DCI's
authority to discharge personnel shall only extend to discharging
detailed personnel from service at the Intelligence Community
Staff and not from Federal employment or military service.
Fiscal fir:
1985 pro`ram .................................................................................................................................
$21.0
207
1986 request ..................................................................................................................................
21.9
233
Committee recammOM dop .............................................................................................................
.4
0
TITLE III-CENTRAL INTELLIGENCE AGENCY RETIREMENT AND
DISABILITY SYSTEM
Section 301 authorizes appropriation for the Central Intelligence
Agency Retirement and Disability System (CIARDS) in the amount
of $101,400,000 for fiscal year 1986. The Central Intelligence
Agency Retirement Act of 1964 for Certain Employees (Public Law
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
qualified beneficiaries.
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 with the consent of the Director, or at his
direction be retired at age 50 with 20 years of service, or a partici-
pant 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
appropriations from which salaries are paid, based on the actual
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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 participant 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
1985 program ........................................................................................................... $99.3
1986 request ............................................................................................................. 101.4
Committee recommended change ............................................................................... 0
Committee recommendation ............................................................................. 101.4
TITLE IV-GENERAL PROVISIONS
Section 401 provides that the authorization of appropriations by
the fiscal year 1986 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 402 provides advance authorization for such additional
appropriations as may be necessary for any increases in Federal
employee compensation and benefits which are authorized by cur-
rent or subsequently enacted law during fiscal year 1986. Section
402 obviates the necessity for separate authorizations for such mat-
ters during the fiscal year.
TITLE V-FACILITATING NATURALIZATION OF CERTAIN FOREIGN
INTELLIGENCE SOURCES
Section 501 amends section 316 of the Immigration and National-
ity Act (8 U.S.C. 1427) to improve the ability of the United States
to obtain foreign intelligence by authorizing the waiver of three re-
quirements for naturalization for certain persons who have made
extraordinary contributions to the national security or to the con-
duct of U.S. intelligence activities. The requirements are general
residency and physical presence, the additional waiting period im-
posed on members of certain organizations, and the requirement
that the naturalization petition be filed in the court which has ju-
risdiction over the petitioner's place of residence.
The Congress has established a number of conditions on the
granting of United States citizenship. These are set forth in Chap-
ter 2 of Title III of the Immigration and Nationality Act, 8 U.S.C.
1421 et seq. The Congress has recognized, however, that when nec-
essary to other governmental interests, certain of these require-
ments should be modified of waived entirely. Nevertheless, there
remain some requirements of the Immigration and Nationality Act
which prevent complete recognition of extraordinary contributions
to the national security or to the conduct of U.S. intelligence activi-
ties, and which limit the ability of the United States to recruit po-
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tential foreign intelligence sources. The amendment in section 501
seeks to remedy this situation by addressing three requirements
which currently stand in the way of expeditious naturalization of
individuals making such contributions. Under the amendment,
waivers would be authorized in recognition of extraordinary contri-
butions to the United States and of the fact that the character and
quality of service to the United States by certain individuals dem-
onstrates that there is no need for them to serve a probationary
period of residence to prove their fitness for citizenship.
The waivers authorized by new subsection 315(g) of the Immigra-
tion and Nationality Act are limited in nature. They would become
operative only after the requisite finding by the Director of Central
Intelligence (), the Attorney General, and the Commissioner of
the Immigration Service (INS). Waivers would be authorized only
for three specific requirements for naturalization. Individuals
granted such waivers would have to comply with all other natural-
ization requirements.
Residence and physical presence
Section 316 of the Immigration and Nationality Act sets forth
the residency and physical presence requirements which must be
met by a petitioner. The establishment of these residency require-
ments reflects a determination by the Congress that such proba-
tionary periods are necessary in order for a petitioner to demon-
strate his fitness for citizenship. Nevertheless, the Congress has
also determined that for certain classes of petitioners these require-
ments are neither necessary not appropriate. Thus, the Congress
has determined that in certain cases the service which an individ-
ual has rendered to the United States demonstrates his fitness to
become a citizen and merits expedited consideration. Among the
classes of persons afforded such special treatment under the Immi-
gration and Nationalit Act in recognition of their service to the
United States are: individuals employed overseas by the United
States Government, an American corporation engaged in the devel-
opment of foreign trade or commerce, or an American institution
of research (? 316(b)); employees of the United States Government
employed abroad (? 316(c)); merchant seamen on United States flag
ships (? 330)6 and; persons who have served in the Armed Forces of
the United States (? 328 and 329).
It also is clear that one of the classes of persons which the Con-
gress has determined merits special consideration under the immi-
gration and naturalization laws for their service to the United
States are persons who have contributed to the national security.
This determination is embodied in section 7 of the Central Intelli-
gence Agency Act of 1949, 50 U.S.C. 403h. Section 7 permits the im-
mediate admission of a limited number of persons to permanent
resident alient status if the DCI, the Attorney General, and the
Commissioner of INS determine that such admission would be "in
the interest of national security or essential to the furtherance of
the national intelligence mission."
The Congress also has recognized that there must be some flexi-
bility concerning naturalization of such persons. Accordingly, in
subsection (c) of section 316 of the Immigration and Nationality
Act, the Congress has relaxed certain residency requirements for
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the naturalization of persons who are employed by or contractors
of the Central Intelligence Agency. In the case of Victor Ivanovich
Belenko, the Soviet Air Force pilot who defected to the West, the
Congress enacted special legislation waiving residency require-
ments for naturalization as well as the impediments to naturaliza-
tion imposed by Mr. Belenko's prior membership in the Communist
Party and the requirement as to the place of filing his petition.
(Private Law 96-62; see Senate Report 96-963).
The private bill procedure, however, lacks sufficient security and
certainty to serve as a complete solution to the problem of appro-
priately recognizing extraordinary contributions to the national se-
curity of the United States. A private bill reveals that an individ-
ual who has made such a contribution is in the United States, and
its consideration by the Congress requires extensive dissemination
of information, possibly including classified information, -concern-
ing the merits of the initiative.
Consideration of a private bill would entail explaining the indi-
vidual's contribution and why it merits expeditious naturalization.
This may be impossible, in certain cases, because sometimes even
the slightest publicity would jeopardize the individual's security
and could diminish the value of information or other services pro-
vided to the United States. This is particularly true when the
United States is taking affirmative measures to conceal an individ-
ual's identity or the nature of his contribution to intelligence ac-
tivities.
In addition, the outcome of the private bill procedure is not pre-
dictable. Other legislative business or the timing of the bill may
result in its failure to pass for reasons wholly unrelated to its
merits. The hit-or-miss nature of the private bill procedure pre-
vents U.S. intelligence from offering the prospect of expedited citi-
zenship to attract key foreign sources to service for the United
States, because U.S. intelligence cannot now offer expedited citizen-
ship with confidence that this inducement can actually be fulfilled
when the time comes. Current law thus limits the opportunity to
stimulate future contributions to our national security by those
who might be encouraged to cooperate with the United States on
account of the availability of a smooth and swift transition to U.S.
citizenship.
The amendment made by section 501 will provide the United
States with the ability to offer the inducement of expedited natu-
ralization to potential foreign intelligence sources. This will aid in
the efforts of our intelligence services to recruit sources with access
to information that may be vital to the national security of the
United States.
New paragraph 316(gXl) establishes a regular method of recog-
nizing the importance of services rendered to the United States by
certain individuals, by permitting the Director of Central Intelli-
gence, the Attorney General and Commissioner to waive the resi-
dency and physical presence requirements of section 316 in appro-
priate cases. This waiver would recognize the contributions of these
individuals by allowing them to petition immediately for natural-
ization without having to -endure an unnecessary probationary
period. The individuals who would benefit from the proposed
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waiver authority would already have demonstrated their fitness to
become citizens and their commitment to the United States.
Paragraph (gXl) is consistent with the existing structure of the
naturalization laws, which alre ady permit the waiver of these re-
quirements for other classes of individuals who have rendered spe-
cial service to the United States. Further, it builds upon the Con-
gressional recognition, embodied in Section 7 of the Central Intelli-
gence Agency Act of 1949, subsection (c) of Section 316, and the Be-
lenko legislation, that the requirements of the immigration and na-
tionality laws should be flexible in application to persons who
make a substantial contribution to the national security or to the
national intelligence mission.
Membership in prohibited organizations
Section 313 of the Immigration and Nationality Act, 8 U.S.C.
1424, prohibits the naturalization of individuals who are members
of certain prohibited organizations or who espouse certain political
ideologies. Its principal thrust is directed against persons who are
members of Communist parties in any of their various forms world-
wide, in effect barring them from naturalization.
Subsection 313(c), however, provides an exception to this general
exclusion. It permits petitioners who otherwise would be barred by
Section 313 to petition for naturalization provided that, at the time
of petitioning, more than ten years have elapsed since termination
of their membership in the prohibited organization. This is, in
effect, a ten year probationary period for former members of the
Communist Party, during which they must demonstrate that they
have shed their attachment to the Party, its principles and goals,
and are otherwise fit for citizenship.
Section 313 imposes special difficulties vis-a-vis United States in-
telligence activities, in that some of the most important contribu-
tions to those activities have been made by individuals who were
members of the Communist Party. Indeed, their ability to contrib-
ute to the national security of the United States may have hinged
directly on their Communist Party membership. New paragraph
316(gXl) would permit waiver of this ten year bar for persons who
have made significant contributions to the national security or to
the conduct of U.S. intelligence activities.
As with the residency requirements of Section 316, the probation-
ary period established by Section 313(c) is not needed in the case of
these individuals. People of good character in hostile countries who
risk their lives and livelihood to provide vital intelligence to the
United States will have proved their fitness for citizenship by that
service. A foreign intelligence source whose actions contribute sub-
stantially to the security of the United States merits special consid-
eration.
Residence within the jurisdiction
Section 316(a) of the Immigration and Nationality Act, 8 U.S.C.
1427(a), taken together with other sections of that Act, requires a
petitioner to file his petition for naturalization in the court which
has jurisdiction over his place of residence. In effect, this means
that the petitioner must file in the State in which he spends the
last six months of required State residency.
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Waiver of the physical presence and residency requirements of
Section 316 would be ineffective in practice without a waiver of
this procedural requirement. Petitioners benefiting from a waiver
of the physical presence and residency requirements most likely
will not have a permanent place of residence at the time of filing
their petitions; hence, there will be no court with jurisdiction over
the place of residence. Section 328 of the Immigration and Nation-
ality Act is illustrative in this regard. In Section 328 the Congress
waived the physical presence and residency requirements on the
basis of service in the armed forces, and the requirement for resi-
dence within the jurisdiction has been waived as well.
A waiver of the Section 316(a) requirement for individuals who
have made extraordinary contributions to the national security or
to the conduct of U.S. intelligence activities alos follows from the
circumstances of individuals involved. Not only might they lack es-
tablished residences, but it may be inadvisable for the United
States, for reasons of security, to have the petition filed at a par-
ticular location.
Proceedings under this subsection
Paragraph (gX2), together with the last sentence of paragraph
(g)(1), make it clear that a naturalization petition which arises
under new subsection (g) may be filed in any district court. Para-
graph (gX2) also mandates that the naturalization proceeding and
associated documentation be handled so as to insure the protection
of intelligence sources, methods and activities from unauthorized
disclosure.
As noted above, the petitioner in such cases often has not had
the opportunity to establish residency in a particular location in
the United States. In addition, security concerns and the interests
of the governments may require that the individual reside in a par-
ticular place or not reside in other places. Accordingly, paragraph
tgx2) provides that a naturalization petition in such cases can be
filed in any district court in the United States, and that such peti-
tions are to be accepted for adjudication by the court in which they
are filed.
Information involved in such naturalization proceedings will, by
definition, be quite sensitive and realing of the national intelli-
gence mission. All information necessary to the adjudication of the
petition must, of course, be presented to the court. Yet, at the same
time, information concerning intelligence sources, methods and ac-
tivities must be protected from unauthorized disclosure. No par-
ticular procedure is required. It is left to the discretion of the court
and the government to insure that appropriate procedures, e.g.,
sealing of the record, are utilized.
Limitations and congressional notification requirements
Paragraph (g)(3) provides that no more than fifteen naturaliza-
tions per fiscal year may take place pursuant to subsection 316(g).
The Committee believes that in nearly all of the extraordinary
cases in which the authority granted by subsection 316(g) will be
used, the individual involved will have worked on behalf of the
United States for a significant period of time under difficult cir-
cumstances. Paragraph (g)(3) provides for notice to the two Con-
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13
gressional intelligence committees each time a determination is
made to apply the provisions of subsection (g). Thus, the Committee
expects to be notified when the Director of Central Intelligence, the
Attorney General and the Commissioner of Immigration have
made the requisite determination to utilize the authority contained
in paragraph (g)(1). No special form or content of notification has
been specified, because detailed information on the circumstances
of an individual case might be quite sensitive. The notification re-
quirement does, however, require notice to the intelligence commit-
tees before final action by the responsible federal officials to inform
the court that certain requirements for naturalization have been
waived. This will permit the committees to obtain further informa-
tion as required for effective oversight. The exact nature of the in-
formation that would be supplied in response to requests for fur-
ther details would be agreed upon between the committees and the
DCI on a case-by-case basis.
TITLE VI-ADMINISTRATIVE PROVISIONS
Use of proceeds from Defense Department counterintelligence oper-
ations
Section 601 provides to the military counterintelligence compo-
nents of the Department of Defense the same statutory authority
to use the proceeds of operations to offset expenses as has been pro-
vided to the FBI since 1979. It exempts military counterintelligence
operations from the provisions of section 3302 of title 32, United
States Code, which can be interpreted as requiring that funds paid
by a foreign intelligence service to a counterintelligence double
agent must be deposited in the Treasury. The established practice
of the counterintelligence components of the Military Departments
has been to use those funds to pay the expenses of their double
agent operations.
In 1978 the Office of Legal Counsel in the Department of Justice
rendered an opinion that the FBI was required to pay into the
Treasury all the income generated by its undercover activities.
This opinion did not specifically apply to the counterintelligence
components of the. Department of Defense. In the case of the FBI,
legislation wa8 needed to permit the Bureau to use the roceeds
from its undercover operations to offset their expenses. The alter-
native was to appropriate additional funds to pay those expenses.
Since 1979 the Congress has provided such legislation for the FBI
in the annual Department of Justice appropriations bills. The Ad-
ministration proposed permanent FBI legislation in 1983, but Con-
gress has continued to address the issue on an annual basis.
The Defense Department's Office of General Counsel has advised
DOD counterintelligence officials that the statutory requirement to
pay income into the Treasury should apply to military counterin-
telligence double agent operations. Legislation thus is required to
make clear that money paid by foreign intelligence services to mili-
tary counterintelligence double agents can be used to defray oper-
ational expenses. Such usage is important to operational security,
the maintenance of agent bona fides, and for compensating double
agents for legitimate expenses associated with operational activity.
Section 601 also will avoid having to use appropriated funds to pay
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operational expenses that have previously been defrayed by using
money paid to double agents by foreign intelligence services.
The authority provided by Section 601 will resolve this problem
for fiscal year 1986. The Secretary of Defense could authorize use
of proceeds from military counterintelligence double agent oper-
ations to offset necessary and reasonable expenses incurred in such
operations without regard to the statute requiring payment into
the Treasury. As soon as the net proceeds from any such operation
are no longer necessary for its conduct, such proceeds would have
to be deposited in the Treasury.
It is the intent of the Committee that the counterintelligence
components of the Military Departments should continue their cur-
rent fiscal practices with regard to the use of funds acquired in
double agent operations. For this reason, the term "operation" in
subsection (b) is not limited to the activities associated with a
single double agent, but rather includes the activities of double
agents having the same or closely related objectives. The counterin-
telligence component of each -Service should continue to account
for its expenditures authorized pursuant to this provision.
The Committee expects to be informed before any significant
change in the use of proceeds to offset expenses, such as use of
funds other than payments to double agents or expenditures for
purposes other than double agent expenses.
The Committee believes that military counterintelligence double
agent operations make a significant. contribution to the defense of
the United States against Soviet bloc and other foreign intelligence
services. On April 16, 1985, an Army Sergeant who had been a
double agent against the Soviet KGB for more than ten years testi-
fied before the Permanent Investigtions Subcommittee of the
Committee on Government Affairs. Me described the pervasiveness
of Soviet intelligence efforts against American military and govern-
ment personnel. Over the course of the operation, the Sergeant re-
ceived almost $25,000 from Soviet intelligence. This legislation will
ensure that such finds continue to be available to defray the cost of
these operations.
The counterintelligence components of the Military Departments
are the Army Intelligence and Security Command, the Naval In-
vestigative Service, and the Air Force Office of Special Investiga-
tions.
Retirement benefits for certain Central Intelligence Agency employ-
ees serving in unhealthful areas
Section 602 amends the Central Intelligence Agency Retirement
Act of 1964 for Certain Employees (50 U.S.C. 403 note) to provide
an additional retirement credit in lieu of a post differential for
service by Agency employees at unhealthful posts. Section 817 of
the Foreign Service Act of 1980 (22 U.S.C. 4057) provides partici-
pants in the Foreign Service Retirement and Disability System
with the ability to elect an extra credit towards retirement in lieu
of a post differential for service at an unhealthful post. Agency em-
ployees serving overseas at unhealthful posts live under the same
arduous conditions as State Department employees. While subsec-
tion 4(b) of the CIA Act of 1949 authorizes the DCI by regulation to
provide Agency employees with benefits and allowances compara-
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ble to those paid to Foreign Service personnel, the legislative histo-
ry of that provision does not indicate that Congress considered For-
eign Service retirement entitlements to be "allowances and bene-
fits" within the meaning of that subsection. Section 602 thus au-
thorizes the DCI to designate from time to time, in consultation
with the Secretary of State, a list of places which by reason of cli-
matic or other extreme conditions are to be considered unhealthful
posts. Section 602 permits Agency employees who are CIARDS par-
ticipants in computing their length of service to elect to receive a
retirement credit of one and a half years for each year of service at
such posts in lieu of a post differential. It is to be emphasized that
this additional retirement credit is to be used only in computing a
CIARDS participant's length of service under Section 251, and is
not to be added to or considered in computing the 60-month period
of qualifying service required before an employee can participate in
CIARDS. Under Section 602, in computing an employee's length of
service at an unhealthful post, fractional months are to be consid-
ered as full months and regular leaves of absence are to be includ-
ed in this computation. These computation methods are identical to
those contained in section 817 of the Foreign Service Act of 1980.
Compensation of Director and Deputy Director of Central Intelli-
gence
Section 603 adjusts the annual rates of basic pay for the positions
of Director and Deputy Director of Central Intelligence. Section
5312 of Title 5, United States Ccde, currently lists fourteen posi-
tions which have an annual rate of basic pay at Level I of the Ex-
ecutive Schedule. Subsection 603(a) would add the Director of Cen-
tral Intelligence to the list. Section 5313 of Title 5, United States
Code, sets forth those positions which have an annual rate of basic
pay at Level II of the Executive Schedule. The Director of Central
Intelligence is presently included in this listing. Subsection 603(b)
would change the listed position of Director of Central Intelligence
to Deputy Director of Central Intelligence. Given the addition of
the Deputy Director of Central Intelligence to the Executive Sched-
ule Level II position listed in Section 5313, it becomes necessary to
amend Section 5314 of Title 5, United States Code, to strike the
Deputy Director of Central Intelligence from the positions listed as
receiving an annual rate of basic pay at Level III of the Executive
Schedule. Subsection 603(c) accomplishes this.
Application of Foreign Missions Act to individuals on secondment
to the United Nations Secretariat
Section 604 is a provision included in the bill at the behest of
Senator William Roth. Information available to the Select Commit-
tee indicates that approximately one-quarter of the Soviet nation-
als on the staff of the United Nations Secretariat are trained intel-
ligence officers. Over the past fifteen years, four Soviet employees
of the United Nations Secretariat have been arrested on espionage
charges. Other have been expelled from the United States because
of their intelligence activities.
One of the most important actions by the Congress in recent
years to control Soviet and other foreign intelligence operations in
the United States was the Foreign Missions Act of 1982, which au-
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thorizes the State Department to limit travel, property acquisition,
and other conditions for foreign officials in the United States. The
aim of this law is to enforcethe principle of reciprocity as a means
to improve the treatment of U.S. officials abroad and to protect the
national security. An amendment sponsored by Members of the
Senate Select Committee on Intelligence specifically affirmed the
importance of the objective of using the Act to enhance the U.S.
Government's ability to deal with threats to the national security,
such as espionage and other foreign intelligence operations.
The State Department has not used the authority provided by
the Foreign Missions Act to place controls on employees of the
United Nations Secretariat, despite the evidence that the Soviet
Union and other foreign governments . assign trained intelligence
officers to these positions. To remedy this problem, the Select Com-
mittee has included as section 604 in the Intelligence Authorization
Act for fiscal year 1986 an amendment offered in Committee by
Senator William Roth. This amendment requires the Secretary of
State to apply to all individuals who are on a secondment from
their respective governments to the United Nations Secretariat any
and all terms, limitations, restrictions, or conditions applicable to
individuals pursuant to the Foreign Missions Act of 1982, as may
from time to time be applied to members of the consulates, embas-
sies, or missions to the United Nations of those respective govern-
ments in the United States, pursuant to the Foreign Missions Act.
The reference to "individuals who are on secondment" reflects
the fact that U.N. Secretariat positions fall into two categories.
Some are regular employees under full control of the Secretariat,
while others are seconded to the Secretariat by their governments
and thus have a degree of divided allegiance. The purpose of the
amendment is to require that employees seconded to the Secretar-
iat by their governments be treated in the same manner as diplo-
matic and consular officials of such governments in the United
States. Soviet nationals and others who may be foreign intelligence
officers are more likely to fall in this category.
Imposition of Foreign Missions Act requirements upon seconded
Secretariat employees is fully consistent with U.S. obligations to
the United Nations dating to the action of Congress in 1947 regard-
ing the U.N. Headquarters Agreement. On November 21, 1947, the
United States Representative to the United Nations, Warren R.
Austin, exchanged Notes with the Secretary General of the United
Nations b ' the Headquarters Agreement into effect. The U.S.
Note informed the Secretary General that "the Government of the
United States is prepared to apply the above-mentioned Headquar-
ters Agreement subject to the provisions of Public Law 357."
Section 6 of Public Law 80-357, enacted in 1947 by the 80th Con-
gress, states that "nothing in the [Headquarters] Agreement shall
be construed as in any way diminishing, abridging or weakening
the right of the U.S. to safeguard its own "Section 6
further states that the Headquarters Agreement in no way denies
the U.S. the right "completely to control the entrance of aliens into
any territory of the U.S. other than the headquarters district and
its immediate vicinity." Although the United States has not previ-
ously exercised its rights under Section 6 to limit activities such as
travel and acquisition -of real property by personnel covered by the
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Headquarters Agreement, there is no question that the broad reser-
vation of U.S. national security interests in Section 6 of Public Law
80-357 was a legal precondition to U.S. acceptance of the Head-
quarters Agreement. Therefore, conditions such as those which
may be imposed pursuant to section 604 are wholly consistent with
U.S. obligations under the Headquarters Agreement.
The application of the Foreign Missions Act to seconded U.N.
Secretariat employees is also consistent with the intent of that Act.
The State Department has already applied the Act to the missions
of foreign governments to the United Nations, and employees of
those governments who are seconded to the U.N. Secretariat
should be treated in the same manner as employees of the U.N.
Missions of those governments.
Finally, the Select Committee notes that former Ambassador
Jeanne Kirkpatrick, who represented the United States at the
United Nations during the period 1981-1985, has testified on this
matter recently before the Permanent Subcommittee on Investiga-
tions of the Committee on Governmental Affairs. Ambassador
Kirkpatrick explained the serious problem for FBI counterintelli-
gence officials created by the presence of Soviet and other foreign
intelligence officers in U.N. Secretariat positions. She urged that
more vigorous action be taken by the U.S. government to control
the activities of such U.N. personnel in the United States who are
abusing the privileges granted to the United Nations. Senator Roth
brought Ambassador Kirkpatrick's testimony to the attention of
the Select Committee. The Committee has asked the FBI to submit
a classified paper explaining the problems created by the use of
U.N. Secretariat positions by foreign intelligence services and de-
scribing benefits to FBI counterintelligence that will result from
applying Foreign Missions Act requirements to employees on se-
condment to the Secretariat.
TITLE VII-DIPLOMATIC EQUIVALENCE AND RECIPROCITY WITH THE
SOVIET UNION
Last year, the Committee favorably reported, and the Congress
passed, Title VI of the Intelligence Authorization Act for Fiscal
Year 1985 (Public Law 98-618) dealing with counterintelligence
and official representation. Through this law, Congress expressed
its sense that numbers and conditions (status, privileges and immu-
nities, travel, accommodation, and facilities) of official representa-
tives to the United States of "any foreign government that engages
in intelligence activities within the United States harmful to the
national security" should not exceed the respective numbers and
circumstances applied in such countries to U.S. officials. The Presi-
dent was asked to report to the foreign relations and intelligence
committees of the Congress each year on the numbers and condi-
tions and any action taken with respect to them.
In its report accompanying the bill S. Rpt. 98-481, the Committee
stated that the intent of this provision was "to provide bipartisan
Congressional support for Executive branch efforts to strengthen
U.S. counterintelligence capabilities by reducing disparities be-
tween the official representation in the U.S. foreign governments
that engage in intelligence activities harmful to our national secu-
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rity and U.S. official representation in such countries." The Com-
mittee indicated that current mechanisms would not necessarily
lead toward reducing such disparities:
The Foreign Missions Act does not regulate the number
of official representatives of foreign governments in the
U.S., nor does the Office of Foreign Missions play a direct
role in determining the size of either fore ign missions in
the U.S. or U.S. missions abroad. The question of whether
to set a goal of eliminating disparities in this area is a
matter for high-level policy decision.
The Committee's report demonstrated that there was a direct
connection between diplomatic reciprocity and national security in
terms of "counterintelligence" capabilities-i.e., the ability of the
United States government to resist hostile intelligence activities.
On the one hand, the number of foreign officials in the United
States from countries conducting such activities is of great concern
due to the danger they pose of espionage within our country. On
the other hand, the limited U.S. official representation and the
practice of employing large numbers of local nationals abroad pre-
sents opportunities for foreign intelligence to breach the security of
U.S. diplomatic facilities and operations.
In its report of last year, the Committee took note of an FBI esti-
mate that some 40 percent of the official representatives of Soviet
Bloc countries in the United States are intelligence officers. The
Committee indicated that all forms of espionage had resulted, espe-
cially against national secrets and private technological data with
military applications, and that the activities of foreign intelligence
officers had done "severe and extensive damage to U.S. national se-
curity.". The Committee also stated that even the enhanced coun-
terintelligence capabilities encouraged and approved by Congress
in recent years "will not be adequate to -provide full coverage for
these operations."
There are few indications that this situation has improved in the
intervening year. There has been no significant decline in the
number of officials from these countries resident in the United
States. New cases and new information meanwhile countinue to
reveal the extent of hostile intelligence activities in the United
States. Arkady Shevchenko, the highest ranking Soviet defector to
date, whose story was revealed last year, stated in his recent book
that "nine out of twelve Soviets" under his supervision were intel-
ligence "professionals."
The Committee also took particular note last year of the "sub-
stantial imbalance in the number of Soviet nationals permanently
assigned to embassy and consulate positions in the United States,
and the number of U.S. nationals permanently assigned to embassy
and consulate positions in the Soviet Union." The situation has not
changed meaningfully in this regard. The Soviets,continue to have
some 300 personnel at their diplomatic facilities here and the
United States approximately 200 such personnel in the Soviet
Union. About 220 Soviet and other foreign personnel are employed
in our Embassy and consulates in the Soviet Union performing a
wide range of clerical, administrative and service functions, while
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the Soviets hire only a handful of Americans on a limited basis,
primarily as language teachers.
Recent press accounts show the danger of employing Soviet and
other foreign nationals in U.S. diplomatic facilities, particularly in
countries like the Soviet Union which engage in hostile intelligence
activities against the United States. The Committee notes, for ex-
ample, the stories that have appeared concerning the systematic
"bugging" of the U.S. Embassy in Moscow over a period of years
through devices implanted in its typewriters. The Committee has
determined that typrewriters and other pieces of office equipment
have regularly been sent through ordinary freight channels to
their destinations at U.S. facilities in the Soviet Union and that
Soviet employees of our Embassy and consulates there are involved
in their assignment and use by U.S. officials.
Since passage of the Foreign Missions Act and the Committee's
action of last year, the Executive branch has begun to remedy the
disparity between official representation by the United States and
foreign countries, including the Soviet Union, which engage in in-
telligence activities harmful to our national security. Under the
Foreign Missions Act of 1982, the State Department has begun to
take steps to equalize the conditions of foreign diplomats in the
United States with those of U.S. representatives in their countries.
Reciprocal restrictions on the travel of such officials with the
United States are especially helpful in assisting the FBI and other
agencies with counterintelligence responsibilities to monitor their
movements and activities.
The first annual report called for by subsection (b) of last year's
provision on this subject is not due until one year after enactment
of the Fiscal Year 1985 Intelligence Authorization Act, on Novem-
ber 8, 1985. The Committee has been informed that the Adminis-
tration continues to be internally divided over how to respond to
the sense of Congress expressed through last year's provision. It is
considering ways to address the problem of disparities in represen-
tation between the U.S. and certain foreign countries, particularly
the Soviet Union. The Secretary of State has the lead in developing
a policy on behalf of the Administration that will be coordinated
with other federal agencies that have diplomatic and intelligence
missions. However, despite evidence that the Administration is at
least discussing possible remedies, the Committee views the coun-
terintelligence situation with respect to foreign officials in the
United States and U.S. officials abroad as so serious that further
action should be taken by Congress immediately to stimulate deci-
sions and action by the Executive branch. The Committee has de-
cided, therefore, to report favorably Title VII of the Intelligence
Authorization Act for Fiscal Year 1986, proposed in Committee by
Senators Leahy, Cohen, Bentsen, Hollings, McConnell, Boren and
Hatch.
Upon enactment of Title VII, it would be the policy of the United
States that the number of nationals of the Soviet Union serving as
diplomatic or consular personnel in the United States shall not
exceed the equivalent number of U.S. nationals serving at posts in
the Soviet Union unless the President certified to Congress that al-
lowing additional Soviet personnel to serve in this country would
be in the best interests of the United States. Within six months of
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enactment of this provision, the Secretary of State and the Attor-
ney General would be required to submit a report to the intelli-
gence and foreign relations committees of Congress setting forth a
plan to ensure that the number of Soviet officials does not exceed
the limitation. This would give the Executive branch ample time to
prepare an approach for attaining equivalence within a reasonable
period throuch attrition of Soviet personnel in the United States,
an increase in the number of American personnel in the Soviet
Union, or a combination of both.
Section 701 provides that this title of the FY 1986 Intelligence
Authorization Act is entitled the "Diplomatic Equivalence and Rec-
iprocity Act of 1985."
Section 702 subsection (a) states the policy of the United States
that the number of nationals of the Soviet Union admitted to the
United States who serve as diplomatic or consular personnel of the
Soviet Union in the United States shall not exceed the number of
United States nationals admitted to the Soviet Union who serve as
diplomatic or consular personnel of the United States in the Soviet
Union unless the President determines and so certifies to the Con-
gress that additional admissions of such personnel would be in the
best interests of the United States.
Subsection (b) of this section specifies that the policy in the previ-
ous subsection does not apply to dependents or spouses who do not
serve as diplomatic or consular personnel.
Section 703 requires that the Secretary of State and the Attorney
General, not later than six months after the date of enactment of
this title, shall prepare and transmit to the Committee on Foreign
Relations and the Select Committee on Intelligence of the Senate
and the Committee on Foreign Affairs and the Permanent Select
Committee on Intelligence of the House of Representatives a report
setting forth a plan for ensuring that the number of Soviet nation-
als described in Section 702 does not exceed the limitation de-
scribed in that section.
Section 704 contains definitions for terms used in this title. Sub-
section (1) provides that the term "diplomatic or consular person-
nel" shall prefer to the members of the diplomatic mission or the
members of the consular post. Subsection (2) refers to the Article
1(b) of the Vienna Convention on Diplomatic Relations, done April
18, 1961, 23 U.S.T. 3227, TIAS No. 7502, for the meaning of the
term "members of the diplomatic mission." Under this article, the
members of the mission are "the head of the mission and the mem-
bers of the staff of the mission." Under Article 1(c) of the same
Convention, the members of the staff of the mission include "the
members of'the diplomatic staff, of the administrative and techni-
cal staff and of the service staff." Subsection (3) refers to Article
1(g) of the Vienna Convention on Consular Relations, done April
24, 1963, 21 U.S.T. 77, TIAS No. 6820, for the meaning of the term
"members of the consular post". Under this article, members of the
consular post includes "consular officers, consular employees and
members of the service staff." The Committee is aware that the
status of U.S. and Soviet official representatives in the other coun-
try is also governed by bilateral agreements. It is the intention of
the Committee that the definitions contained in Section 704 be ap-
plied on their face, except that they may be applied mutatis mu-
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tandis in the event their scope is explicated by such agreements.
(The Committee does not, however, believe it likely that the terms
of any such Executive Agreements of a bilateral nature will signifi-
cantly depart from the definitions contained in the Vienna Conven-
tions cited.)
The Administration, while taking certain steps to achieve diplo-
matic equivalence and reciprocity, has not yet adopted a formal
policy on this subject. Executive branch agencies have been unwill-
ing to support, in their preliminary responses to Committee inquir-
ies, further legislative actions in the area of diplomatic representa-
tion, citing primarily the danger of retaliation if the United States
moved unilaterally to reduce the presence of Soviet or other for-
eign officials in the United States.
The Committee believes, however, that its action when imple-
mented by the Executive branch will not necessarily result in re-
taliatory action against the best interests of the United States in
conducting our diplomatic functions abroad. As the Committee has
noted, our key problem in achieving reciprocity with certain coun-
tries is the presence of their nationals as employees in our diplo-
matic facilities located there. In the case of the Soviet Union, over
200 such personnel are retained by the United States government.
The Committee is of the view that nearly all these personnel
should be replaced as speedily as possible with American employ-
ees. The number of American officials in the Soviet Union would
have to be increased. If the number of Soviet officials in the United
States remained above the number of Americans in the Soviet
Union after such measures were taken, then and only then would
the Soviet presence here have to be reduced in line with the policy
adopted in this provision. The retention of additional American
personnel in the Soviet Union could, of course, result in extra ex-
penses for the State Department and other agencies despite the re-
duction in administrative and support staff hired in the Soviet
Union or elsewhere. The Committee believes that, if necessary, the
State Department should seek and the Congress should provide suf-
ficient legislative authorization and appropriations to cover such
additional expenses in the future.
The Committee's action does not apply either to Soviet officials
assigned to quasi-official trade organizations or to Soviet nationals
serving as employees of the United Nations. It also does not apply
to members of the Soviet Mission to the United Nations. The Com-
mittee recognizes that all of these persons potentially pose an intel-
ligence threat to the United States. There is, however, no practical
way at present of controlling the numbers of such persons admitted
to this country vis-a-vis the number of U.S. officials assigned to
posts in the Soviet Union.
The issue of the numbers of U.S. and Soviet diplomatic and con-
sular personnel is, however, an important issue that can and
should be addressed independently. The danger to U.S. national se-
curity entailed by larger-than-necessary numbers of Soviet diplo-
matic and consular officials in the U.S. and Soviet personnel at our
Embassy and consulates in the Soviet Union requires immediate
action. The Committee has been informed that senior policymakers
in the Administration are personally committed to resolution of
this issue, but the Committee has to date seen little sign of move-
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22
ment from Executive branch agencies to address the disparity in
diplomatic and consular representation between the United States
and the Soviet Union.
The Committee is prepared to work constructively with the Ad-
ministration to see to it that his problem is resolved in the most
effective way. For the present, however, the Committee sees no
convincing reason why it should not be made the explicit policy of
the United States government that the number of Soviet diplomat-
ic and consular officials in the United States may not exceed the
number of equivalent U.S. officials stationed in the Soviet Union.
Accordingly, the Committee favorably reports Title VII of this Act,
the Diplomatic Equivalence and Reciprocity Act of 1985, which
makes clear that this is the policy of the United States and re-
quires the Secretary of State and the Attorney General to submit
within six months a plan for ensuring that this policy is given
effect.
COMMITTEE ACTION
On June 11, 1985, the Select Committee on Intelligence, a
.quorum being present, approved the bill as amended and ordered it
favorably reported by voice vote.
EVALUATION OF REGULATORY IMPACT
In accordance with Paragraph 11(b) of Rule XXVI of the Stand-R wwill beules of the Senate, the incurred in implementing Committee
the provisions of this llation.
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 XXVI of the Standing Rules of
the Senate in order to expedite the business of the Senate.
O
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