27 January 1999
Source: http://www.access.gpo.gov/su_docs/aces/aaces002.html

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[DOCID: f:hr839.105]
From the House Reports Online via GPO Access
[wais.access.gpo.gov]

                                                 Union Calendar No. 480

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105th Congress                                                   Report
  2d Session            HOUSE OF REPRESENTATIVES                105-839
_______________________________________________________________________


SURVEY OF ACTIVITIES OF THE PERMANENT SELECT COMMITTEE ON INTELLIGENCE
                       DURING THE 105TH CONGRESS

                               __________

                              R E P O R T

                                 OF THE

               PERMANENT SELECT COMMITTEE ON INTELLIGENCE

<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

January 2, 1999.--Committed to the Committee of the Whole House on the
              State of the Union and ordered to be printed

                               --------

                    U.S. GOVERNMENT PRINTING OFFICE
69-006                     WASHINGTON : 1999

                         LETTER OF TRANSMITTAL

                              ----------

                          House of Representatives,
                Permanent Select Committee on Intelligence,
                                   Washington, DC, January 2, 1999.
Hon. Newt Gingrich,
Speaker of the House,
The Capitol, Washington, DC.
    Dear Mr. Speaker: Pursuant to the Rules of the House, I am
pleased to transmit herewith an activity report of the
Permanent Select Committee on Intelligence, titled ``Committee
Activity Report for the 105th Congress.'' The report includes a
summary of oversight activities and findings of the Committee
during the course of the 105th Congress.
            Sincerely yours,
                                          Porter J. Goss, Chairman.

                                                 Union Calendar No. 480

105th Congress                                                   Report
 2d Session             HOUSE OF REPRESENTATIVES              106-5/839

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

SURVEY OF ACTIVITIES OF THE PERMANENT SELECT COMMITTEE ON INTELLIGENCE
                       DURING THE 105TH CONGRESS

                                _______


January 2, 1999.--Committed to the Committee of the Whole House on the
              State of the Union and ordered to be printed

                                _______

    Mr. Goss, from the Permanent Select Committee on Intelligence,
                        submitted the following

                              R E P O R T

    This report covers the activities of the House Permanent
Select Committee on Intelligence during the One Hundred Fifth
Congress. Porter J. Goss (Republican, Florida) served as
Chairman; Norman D. Dicks (Democrat, Washington) served as the
Ranking Democratic Member.
    In carrying out its mandate from the House regarding
oversight of U.S. intelligence and intelligence-related
activities, the Committee created two subcommittees:

 Subcommittee on Human Intelligence, Analysis, and Counterintelligence

Bill McCollum (R-Florida),          Julian Dixon (D-California),
  Chairman                            Ranking
Bud Shuster (R-Pennsylvania)        David E. Skaggs (D-Colorado)
Michael N. Castle (R-Delaware)      Nancy Pelosi (D-California)
Sherwood Boehlert (R-New York)      Sanford D. Bishop (D-Georgia)
Charles F. Bass (R-New Hampshire)
Jim Gibbons (R-Nevada)

          Subcommittee on Technical and Tactical Intelligence

Jerry Lewis (R-California)          David E. Skaggs (D-Colorado),
                                    Ranking
C.W. Bill Young (R-Florida)         Norm D. Dicks (D-Washington)
Michael N. Castle (R-Delaware)      Jane Harman (D-California)
Sherwood Boehlert (R-New York)      Ike Skelton (D-Missouri)
Charles F. Bass (R-New Hampshire)
Jim Gibbons (R-Nevada)

    The stated purpose of H. Res. 658 of the 95th Congress,
which created the House Permanent Select Committee on
Intelligence, was to establish a committee ``to oversee and
make continuing studies of the intelligence and intelligence-
related activities and programs of the United States Government
and to submit to the House appropriate proposals for
legislation and report to the House concerning such
intelligence and intelligence-related activities and
programs.''
    H. Res. 658 also indicated that the Committee ``shall make
every effort to assure that the appropriate departments and
agencies of the United States provide informed and timely
intelligence necessary for the executive and legislative
branches to make sound decisions affecting the security and
vital interests of the Nation. It is further the purpose of
this resolution to provide vigilant legislative oversight over
the intelligence and intelligence-related activities of the
United States to assure that such activities are in conformity
with the Constitution and laws of the United States.''

                       SCOPE OF COMMITTEE REVIEW

    U.S. intelligence and intelligence-related activities under
the jurisdiction of the Committee include the National Foreign
Intelligence Program (NFIP), the Joint Military Intelligence
Program (JMIP) and the Department of Defense Tactical
Intelligence and Related Activities (TIARA).
    The National Foreign Intelligence Program consists of
activities in the following departments, agencies or other
intelligence elements of the government: (1) the Central
Intelligence Agency (CIA); (2) the Department of Defense; (3)
the Defense Intelligence Agency (DIA); (4) the National
Security Agency (NSA); (5) the National Reconnaissance Office
(NRO); (6) the Departments of the Army, Navy, and Air Force;
(7) the Department of State; (8) the Department of Treasury;
(9) the Department of Energy; (10) the Federal Bureau of
Investigation (FBI); and (11) the National Imagery and Mapping
Agency (NIMA).
    The Joint Military Intelligence Program (JMIP) was
established in 1995 to provide integrated program management of
defense intelligence elements that support defense-wide or
theater-level consumers. Included within JMIP are aggregations
created for management efficiency and characterized by
similarity, either in intelligence discipline (for example,
Signals Intelligence, Imagery Intelligence) or function (for
example, satellite support or aerial reconnaissance). The
programs comprising JMIP also fall within the jurisdiction of
the National Security Committee.
    The Department of Defense Tactical Intelligence and Related
Activities (TIARA) are a diverse array of reconnaissance and
target acquisition programs that are a functional part of the
basic military force structure and provide direct information
support to military operations. TIARA, as defined by the Joint
Chiefs of Staff and the Secretary of Defense, include those
military intelligence activities outside the defense
intelligence program that respond to requirements of military
commanders for operational support information as well as to
national command, control, and intelligence requirements. The
programs comprising TIARA also fall within the jurisdiction of
the National Security Committee.

                          Oversight Activities

    The House Permanent Select Committee on Intelligence
(HPSCI), under the leadership of Chairman Porter Goss, has--
          Promoted the education of Members of Congress and the
        public on the several distinct roles intelligence plays
        in our country's national security;
          Worked to enlist the trust and cooperation of other
        committees in performing oversight for issues that
        cross committee jurisdiction, such as terrorism,
        narcotics, etc.;
          Worked diligently to promote the awareness of
        national security issues far more broad and diverse
        than those emphasized during the past 50 years;
          Worked with the Intelligence Community (IC) to
        enhance the notification process, resulting in more
        timely and accurate notification to the committee
        leadership;
          Spearheaded a community-wide study to assess current
        intelligence capabilities; and
          Focused on the strategic needs of the IC
    The Committee has been specifically concerned that
intelligence capabilities be able to meet the future needs of
United States foreign and national security policies. The
Committee has continued to reach out to the Administration,
through the National Security Council (NSC), to ensure that
planning for these capabilities is consistent. Unfortunately,
dialogue between the Committee and the NSC on these issues is
virtually non-existent, despite repeated attempts by the
Committee's senior Members. Thus, the Committee has found a
lack in focus and planning on national security issues by the
NSC and the relationship between the NSC and this Committee is
unsatisfactory.
    The Committee identified five areas of concern and made
several prescriptive recommendations in its two Intelligence
Authorization bills. Those recommendations, which are currently
in the process of being implemented by the IC include: steps to
improved analytic capabilities; ensuring human intelligence
(HUMINT) capabilities are equipped to fill intelligence gaps;
promoting technological flexibility in meeting diverse
intelligence needs; rebuilding and diversifying covert action
capabilities; and developing an IC that is quick to respond in
depth to a crisis, while maintaining its long term strategic
focus.
    The Committee has prudently endeavored to direct taxpayer
investment in the programs and infrastructure that will sustain
the IC well into the 21st century. The Committee took the
initial steps to address the overabundance of the unmet needs
found throughout the IC; and urged the development of a leaner,
more corporate, and increasingly efficient community.

     INTELLIGENCE AUTHORIZATION ACTS FOR FISCAL YEARS 1998 AND 1999

    During the 105th Congress, the Committee authorized funding
and personnel levels for fiscal years 1998 and 1999. This
activity was carried out at both the full committee and
subcommittee levels.
    The Committee conducted detailed and extensive reviews of
the President's fiscal year 1998 and fiscal year 1999 budget
requests for intelligence and intelligence-related activities.
These reviews included substantive and programmatic hearings,
Member briefings and numerous staff briefings. The Committee
conducted hearings organized across functional lines within the
IC rather than by agency. This permitted the Committee to take
a broader view of each of the issues and analyze how the
various intelligence functions relate to one another.
    Testimony on the President's budget submission was taken
from the Director of Central Intelligence (DCI); the Assistant
Secretary of Defense for Command, Control, Communications and
Intelligence (C<SUP>3</SUP>I); the Directors of the DIA, NSA,
NIMA, NRO, the FBI; and other major intelligence program
managers.
    The Committee began its review of these budget submissions
with the view that the recommended authorization levels for the
past several years had been driven to some degree by political
considerations as to an ``acceptable'' intelligence budget
level. For the fiscal years 1998-1999, the Committee emphasized
both current and future needs, believing firmly that the U.S.
must start building now for the 21st century.
    In the two budget authorization bills, enacted during the
105th Congress, the Committee invested in a recapitalization
and modernization of US SIGINT capabilities; continued to
invest in all-source analysis in establishing a ``global,''
strategic outlook which will allow for proper indications and
warnings for policymakers throughout the government; and funded
the return of more intelligence officers. Additionally the
Committee has sought to rebuild covert action capabilities,
invest in advanced research and development programs, and
addressed the risk aversion engendered by previous CIA
management.
    As a result of these findings and recommends, the Committee
sought very modest increases for both fiscal years in order to
reverse the decline of past years and to create the stability
necessary for the IC so that intelligence program managers can
formulate appropriate plans for the future.
    The ``Intelligence Authorization Act for Fiscal Year 1998''
(P.L. 105-107) included a provision to bring cost-based
accounting, specifically the Central Services Program (CSP), to
certain operational activities of the Central Intelligence
Agency. The CSP is anticipated to develop more efficient and
cost-saving methods to provide administrative support for
Agency activities. Additionally P.L. 105-107 included more
funding for the Department of Defense Counterintelligence
Programs that are responsible for force protection,
counterterrorism programs, and general DOD counterintelligence
activities. As a result of the Committee's actions and interest
in these programs, the DOD has taken action to provide a large
increase in counterintelligence positions and has supported
continued investment in a Defense Counterintelligence
Information Management System. Finally, the fiscal year 1998
Intelligence Authorization bill included provisions that apply
specific attention to the IC's satellite-based collection
programs with particular emphasis on system cost and utility.
    The ``Intelligence Authorization Act for Fiscal Year 1999''
(P.L. 105-272) included the ``Intelligence Community
Whistleblower Protection Act of 1998'' (H.R. 3829) as Title VII
of the bill. The bill also amended the Foreign Intelligence
Surveillance Act to authorize court ordered access to common
carrier records, pen registers, and trap and trace devices in
the course of an authorized foreign counterintelligence and
international counterterrorism investigation. Additionally,
P.L. 105-272 amended title 18 U.S.C. Sec. 2518 to permit the
use of multipoint wiretaps for criminal investigations where
the criminal targets' actions have the effect of thwarting a
traditional wiretap investigation.

                       AREAS OF SPECIAL INTEREST

    The following issues were of special interest to the
Committee during the 105th Congress:

``Intelligence Community Whistleblower Protection Act of 1998''

    H.R. 3829 was included as Title VII of H.R. 3694 (P.L. 105-
272) enacted provisions to protect and promote whistleblowers
within the IC wishing to report serious problems with the House
and Senate Intelligence Committees. Enactment of this
legislation precluded a presidential veto of the bill H.R. 3694
``Intelligence Authorization Act for Fiscal Year 1999.''

Counternarcotics Efforts

    H.R. 4300 ``Western Hemisphere Drug Elimination Act
(WHDEA)'' Chairman Goss and Human Intelligence and Analysis
Subcommittee Chairman Bill McCollum worked closely with the
Speaker and the Drug-Free America Task Force Chairman Dennis
Hastert to pass this legislation in the House by a vote of 389-
89. The bill authorizes $2.34 billion during fiscal years 1999-
2001 covering a range of new counternarcotics initiatives
designed to reduce the global supply of coca and opium poppy;
enhance counternarcotics efforts in the source countries of
Bolivia, Peru and Colombia; and to improve US intelligence
capabilities in the detection and interdiction of narcotics
traffickers and money laundering. An amended version of the
WHDEA was included as part of the Omnibus Appropriations bill,
H.R. 4328 (P.L. 105-277).

Encryption

     H.R. 695 ``Safety And Freedom through Encryption (SAFE)
Act'' With near unanimity, the Committee reported to the Full
House an amendment in the nature of a substitute to the
Goodlatte version of the encryption bill. With the Committee's
action on this issue, the legislative debate finally included
debate on compelling public safety and national security risks
attendant to the complete and immediate deregulation of
encryption exports.

Iran/Bosnia

    On April 5, 1996, the Los Angeles Times published an
article, ``U.S. OK'd Iran Arms for Bosnia, Officials Say,''
alleging that, in 1994, the Clinton Administration gave a
``green light'' for Iranian arms shipments to Bosnia to transit
Croatia. This decision came despite the United Nations arms
embargo imposed on the former Yugoslavia that the United States
had pledged to uphold and despite the Administration's policy
of isolating Iran internationally. On April 23, 1996, the HPSCI
initiated an investigation into ``those aspects of the transfer
of arms to Bosnia that fall within the committee's
responsibilities to conduct oversight of the intelligence
activities of the United States Government.''
    On October 9, 1998 the Committee issued committee report
number 105-804, concluding its investigation of this matter.
Among its findings were:
          The ``no instructions'' instruction constituted a
        change in U.S. policy.
          The Clinton Administration failed to inform Congress
        about its decision to allow Iranian arms to transit
        Croatia into Bosnia.
          Policymakers did not keep their own senior
        intelligence officials informed of U.S. policy
        concerning these arms shipments.
          When the U.S. ambassador in Croatia asked the
        Intelligence Community Representative in Croatia to
        pass on the U.S. position on these Iranian arms
        shipments, the ICR acted properly and responsibly in
        refusing to carry out this request and informing his
        superiors.
          The Committee found that there was no unauthorized
        covert action to arm the Bosnian Muslims.
          Based on the available evidence, the Committee cannot
        conclude that any U.S. official crossed the line into
        covert action. However, questions remain about whether
        any U.S. official exceeded the ``no instructions''
        policy and actively facilitated a weapons shipment to
        Bosnia in September 1995.

CIA Drug Trafficking Investigation

    In August 1996, the San Jose Mercury News published a
series of articles regarding the introduction, financing, and
distribution of crack cocaine into communitiesof Los Angeles.
The articles alleged that one of the drug trafficking rings responsible
for introducing crack cocaine to Los Angeles was operated by a
Nicaraguan who used some of his drug profits to provide lethal and non-
lethal assistance to the Contras. Furthermore the Mercury News articles
implied that the CIA either backed, or at least condoned, the drug
trafficking activity. In September 1996, the Committee began a formal
investigation into these allegations. Separate investigations were also
begun by the Inspectors General (IG) of the Department of Justice and
the CIA.
    The scope of the Committee's investigation focuses on the
following questions:
          Were any CIA operatives/assets involved in the supply
        or sale of drugs in the Los Angeles area?
          If CIA operatives or assets were involved, did the
        CIA have knowledge of the supply or sales of drugs in
        the Los Angeles area by anyone associated with the
        Agency?
          Did any other U.S. Government agency or employee
        within the Intelligence Community have knowledge of the
        supply or sale of drugs in the Los Angeles area between
        1979-1996?
          Were any CIA officers involved in the supply or sales
        of drugs in the Los Angeles area since 1979?
          Did the Nicaraguan Contras receive any financial
        support, through the sale of drugs in the United
        States, during the period when the CIA was supporting
        the Contra effort? If so, were any CIA officials aware
        of this activity?
          What is the validity of the allegations in the San
        Jose Mercury News?
    Since the beginning of its investigation, the Committee has
engaged in many activities to gather information, including:
tasking the Congressional Research Service for background data
related to the Iran-Contra investigations; tasking the IGs of
the Department of Justice and CIA to provide access to all
material that they compile in the course of their
investigations, conducting several interviews in Washington,
Los Angeles, and Nicaragua; and attending and participating in
two ``town hall'' meetings in South Central Los Angeles. The
Committee has also received and is reviewing the results of the
CIA and Department of Justice IG investigations, as well as an
investigation by the Los Angeles County Sheriff's office.
    The Committee's investigation will continue during the
106th Congress, with much data reviewed and interviews
conducted. The CIA IG identified over 6000 documents for
Committee review. The Committee expects to complete its
investigation in early 1999.

U.S. Dual-Use Technology Transfers to China

    The Chairman and Ranking Democratic Member, along with
selected staff, participated in the hearings, briefings, and
other business meetings of the Select Committee on U.S.
National Security and Military/Commercial Concerns with China,
and they fully support the Committee's findings. The Select
Committee was initially mandated to investigate allegations
that two U.S. companies, Hughes Aircraft and Space Systems
Loral, illegally transferred dual-use technology to China that
improved Beijing's space launch vehicles and ballistic
missiles. It concluded that the transfers in question did
indeed take place and that Chinese capabilities were improved,
but the extent to which both firms were knowingly complicit was
not clearly established. The Select Committee expanded its
investigation into other areas, such as the role of the space
insurance industry in the Hughes and Loral cases, the issue of
lax site security for U.S.-manufactured satellites being
launched in China, trends in the U.S. export control regime,
China's acquisition of U.S. high performance computers, its
illegal diversion of McDonnell-Douglas' precision machine tools
and of jet engines manufactured by Garrett Jet Engine
Corporation, and Chinese espionage at U.S. Department of Energy
facilities. The capabilities of China's missile and space
forces were assessed, as were Beijing's targeting techniques
and other activities related to the acquisition of restricted
technologies from U.S. sources. Numerous recommendations were
made to improve America's regulatory and enforcement
capabilities related to future technology transfers. In the
106th Congress the Intelligence Committee will follow up on
several of the matters discussed in the Select Committee's
final report.

                         COMMITTEE FACTFINDING

    Hearings and briefings play an important role in advising
the Committee, however, good oversight demands much more than
simply taking what is given in the way it is packaged by the
Executive Branch. On-site oversight, examination, and
inspection are essential to delve into detail and develop
unambiguous, firsthand knowledge of which IC activities are
working well and which are not. That is the case even more
since a significant portion of the IC--particularly its
collection, operations, and military support elements--is
located outside the Washington, D.C. area. Accordingly, in the
105th Congress, Committee Members and staff inspected over 50
intelligence and intelligence-related facilities within the
U.S. as well as examined U.S. intelligence activities and
intelligence-related issues in over thirty countries overseas.
    In August 1997, Committee Members visited Pyongyang,
Democratic People's Republic of Korea, where they engaged North
Korean leadership on the perils and pitfalls of the DPRK's
continued intransigence on security and humanitarian issues.
    In December 1997, Committee Members traveled to the United
Kingdom where they discussed oversight issues falling within
the jurisdiction of the IC. These discussions included such
topics as: encryption, NATO expansion, proliferation of weapons
of mass destruction, Bosnia, and the role of British oversight
committees in collection and production.
    In late January early February 1998, Committee Chairman
Goss and Human Intelligence and Analysis Subcommittee Chairman
Bill McCollum traveled to Mexico City, Mexico and Panama City,
Panama. Chairman Goss and Mr. McCollum participated in
discussions with the Attorney General of Mexico, and various
other officials of the Mexican Ministry of Foreign Affairs,
during which the necessity of fighting the drug war on a
bilateral basis was reinforced. The Members also had an
opportunity to participate in an opium poppy eradication
operation with the Mexican Military's 9th Brigade. In Panama,
Chairman Goss and Mr. McCollum reviewed the national security
and intelligence issues affected by the impending departure of
the American military pursuant to the terms of the Panama Canal
Treaty.

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