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Managing America: Intelligence Appropriations

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Week Ending October 5, 2007

S.1538 An original bill to authorize appropriations for fiscal year 2008 for the intelligence and intelligence-related activities of the United States Government, the Intelligence Community Management Account, and the Central Intelligence Agency Retirement and Disability System, and for other purposes.

The bill provides appropriations for the operations, personnel levels and programs of the 13 intelligence and intelligence-related agencies of the US government adds the US Coast Guard as an intelligence community agency. The bill also requires increased accountability through the installation of Inspector Generals, determinations regarding the declassification of information and requests information going back as far as 1997 that led to decisions regarding Iraq.

Foreign Intelligence Act, Iraq information and Freedom of Information restrictions

The Act is amended to direct the Attorney General to submit to the intelligence and judiciary committees copies of decisions, orders or opinions of the FISA Court or the FISA Court of Review that include significant construction or interpretation of the Act within 45 days. The DNI must also submit to congressional intelligence committees the President’s Daily Brief of the CIA Director during the period beginning on January 20, 1997 through March 13, 2003 that refers to Iraq or otherwise addresses Iraq in any fashion.

The CIA Director is directed to ‘prepare and make available to the public a version of the Executive Summary of a report concerning CIA accountability before and after the terrorist attacks of September 11, 2001.’

The Public Interest Declassification Board is authorized, on the request of Congress to review and make recommendations with respect to the declassification of information contained in two reports on prewar intelligence regarding Iraq. The recommendations must be submitted to the president and congressional leaders. The Board itself is extended through 2012.

Operational files provided by the Intelligence Community and held by the DNI are not available for search, review, publication and disclosure under the FIOA. There are some exceptions. The DNI is required every ten years to review the files exempted and determine if they can be released. Allegations that records are being improperly exempted will be reviewed by the judiciary.

The DNI must report to Congress on measure taken to comply with detention and interrogation provisions of the Detainee Treatment Act of 2005. The report was to have been submitted by September 1, 2007.

The authority to protect intelligence sources and methods from unauthorized disclosure is extended to the Deputy DNI, the Chief Information Officer of the Intelligence Community and any IC elements.

Space and other intelligence gathering

The bill establishes under the DNI, a National Space Intelligence Office that will be directed by the National Intelligence Officer for Science and Technology. The Office will coordinate and provide policy direction for the management of space assets and space intelligence and prioritize collection activities. The provision is based on concerns that the US has not kept up with security requirements to protect satellite resources

The NGIA is required to analyze, disseminate and incorporate into the National System for Geospatial-Intelligence likeliness, videos and presentations produced by ground-based platforms, including handheld or clandestine photography taken by or on behalf of human intelligence organizations or available as open-source information.

Accountability

An Office of Inspector General is established that must notify the DNI whenever the IG becomes aware of serious or flagrant problems, abuses, or deficiencies relating to matters within the authority and responsibility of the DNI. The IG will be appointed by the president with advice and consent of the Senate. The IG will have subpoena authority. An Intelligence Community employee or contractor who intends to report to Congress on an urgent matter must first report to the IG who will determine if the complaint or information appears credible. The IG will forward his findings to the DNI who will then forward them to the congressional committees.

NSA, along with the NRO, DIA and NGIA are required to appoint an independent inspector General with authorities equal to other Federal agency IGs. The DNI, however, can prohibit those IGs from initiating, carrying out or completing an audit or investigation if the DNI determines that the prohibition is necessary to protect vital US national security interest. Congress must be notified of the prohibition.

Matters known to the IG relating to violations of Federal criminal law in an IC unit or between them must be reported to the Attorney General.

The maximum prison term for disclosure of agent information after access to agent-identifying, classified information is increased from ten to fifteen years. The prison term for someone who, as a result of having authorized access to classified information, learns the identity of an agent and discloses the identity is increased from five to ten years.

CIA

A Deputy Director of the CIA position is established and will be filled by presidential appointment. The DNI will recommend a candidate for the position. CIA Protective Services personnel are authorized to make arrests without warrant for any offense against the US committed in their presence or when they have reasonable cause to believe that the person has committed or is committing a felony. The authority does not extend to allowing investigations. The provision frees the CIA from relying on federal, state and local law enforcement when protecting officials. The CIA Director can make Protective Services personnel available to the DNI.

National Security Agency

The NSA Director may assign NSA personnel to perform protective functions for the Director and authorizes the personnel to make arrests without a warrant for any offense against the US committed in their presence or when having reasonable cause to believe that the person arrested has or is committing a felony.

Personnel

The Director of National Intelligence (DNI) is authorized to employ civilian contractors up to 5% over previously authorized numbers when necessary for important intelligence functions, to convert activities currently performed by contract employees, and to convert competitive service positions within an IC element to excepted service positions; and establish the classification and ranges of pay for the converted positions. The decision is based on the conclusion that contract employees cost the government more than twice the salary and benefit cost of a government employee. The DNI is given greater flexibility in filling critical employment positions without competitive hiring requirements.

The DNI can set a higher rate of pay only with respect to a position that requires and extremely high level of expertise and is critical to an important mission and can recruit or retain an exceptionally qualified individual for the position.

Congress and the president are required to disclose to the public each year the amount of money requested for the National Intelligence Programs.

The length of time a government employee can be detailed to the Intelligence Community is increased from one to three years. An annual assessment of Intelligence Community personnel is required.

The bill requires a report from the CIA Director to Congress ‘on the advisability of providing federal retirement benefits to U.S. citizens for their service before 1977 as employees of Air America or an associated company while such company was owned or controlled by the U.S. government and operated or managed by the CIA.’

The NSA is authorized to establish and undergraduate training program to facilitate recruitment of individuals with skills critical to its mission. A provision requiring the NSA to disclose to universities which students are participating is removed to protect intelligence sources and other matters that would endanger the life or safety of the student or restrict their ability to perform intelligence functions.

Miscellaneous

If the DNI does not provide to Congress information required to be provided under law regarding covert and other actions, he must notify Congress the reasons why.

The DNI is required to conduct an initial vulnerability assessment of any National Intelligence Program element and conduct subsequent assessment. The DNI is required to conduct accountability reviews of IC elements or personnel in relation to significant failures or deficiencies within the IC; and establish guidelines and procedures for conducting such reviews, and make funds available for other Federal departments and agencies to address deficiencies or needs in intelligence information access or sharing capabilities.

The DNI is directed to develop and implement enterprise architecture to cover all IC business systems, their functions and activities supported. The architecture incorporates an agency's financial, personnel, procurement, acquisition, logistics, and planning systems into one interoperable system. Congress must be notified if any major system cost has increased by at least 20% compared to its baseline cost with a description of the increase and its relevance to national security. The IC Science and Technology Committee is directed to identify basic, advanced, and applied research programs to be carried out by IC elements. Reports to Congress are required.

The DNI must submit to Congress an estimate on the anticipated geopolitical effects of global climate change and the implications of such effects on US national security.

Authorization of funds in the bill are not to be seen as authorizing an intelligence activities not otherwise authorized by the Constitution. A reserve fund for contingencies is established and requires that before the funds cane be used the DNI must notify Congress and may not use the funds for 15 days after the notification. The fund is limited to $50 million and can be used to support emergent needs, improve program efficiency and effectiveness. The DNI is also authorized to provide funds to non-IC activities to address critical gaps in intelligence information access or sharing

Sponsor:  Senator John D. Rockefeller IV (D-WV)

Vote:

Cost to the taxpayers: Committee deems it impractical to include an estimate of the costs incurred in carrying out the provisions of this report due to the classified nature of the operations conducted pursuant to this legislation

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COMMITTEE COMMENTS

CIA Detention and Interrogation Program

The fiscal year 2008 intelligence authorization bill is the first passed by the Committee in which all members were briefed on the CIA's detention and interrogation program. While the program has been briefed from its outset to the Committee's Chairman and Vice Chairman, the Administration's decision to withhold the program's existence from the full Committee membership for five years was unfortunate in that it unnecessarily hindered congressional oversight of the program.

Significant legal issues about the CIA detention and interrogation program remain unresolved. The Department of Justice has not produced a review of aspects of the program since the Supreme Court's Hamdan decision and the passage into law of the Detainee Treatment Act in 2005 and the Military Commissions Act of 2006. The Committee urges prompt completion of such a legal review as soon as possible, regardless of whether the program is currently being used. The Committee expects that such review will be provided to the Committee as a part of its ongoing oversight of the program.

The Committee recognizes that the program was born in the aftermath of the attacks of September 11, when follow-on attacks were expected. The Committee acknowledges that individuals detained in the program have provided valuable information that has led to the identification of terrorists and the disruption of terrorist plots. More than five years after the decision to start the program, however, the Committee believes that consideration should be given to whether it is the best means to obtain a full and reliable intelligence debriefing of a detainee. Both Congress and the Administration must continue to evaluate whether having a separate CIA detention program that operates under different interrogation rules than those applicable to military and law enforcement officers is necessary, lawful, and in the best interests of the United States.

Moreover, the Committee believes that the demonstrated value of the program should be weighed against both the complications it causes to any ultimate prosecution of these terrorists, and the damage the program does to the image of the United States abroad.

Foreign Intelligence Surveillance Act Modernization and Liability Defense

The Committee remains committed to giving careful consideration to the issues involved in the Administration's legislative proposal to amend the Foreign Intelligence Surveillance Act and the proposal to provide liability protection to telecommunications companies who are alleged to have assisted the Intelligence Community in carrying out the President's surveillance program.

The Committee's review of the Administration's proposals and possible alternatives cannot be completed, however, until it receives key documents at the heart of the surveillance program: the President's orders authorizing the warrantless surveillance and the Department of Justice opinions on the legality of the program. The Administration's refusal to satisfy these document requests span over a year and hampers the Committee's ability to move forward on the legislation before it.

The Committee is also concerned about continued Administration requests to limit access by Committee staff to information related to the program. Limited staff access impedes congressional oversight as well as the Committee's ability to consider legislation related to the Foreign Intelligence Surveillance Act. Access to the program should therefore be expanded to the Committee's professional staff, including all Members' designees.

Oversight of major acquisition programs

A major concern of the Committee is the need for significant reform of the processes that govern the creation and continuation of major acquisition programs. When Congress and the President created the DNI, it gave the DNI milestone decision authority for all major systems acquisitions funded exclusively within the National Intelligence Program and shared milestone decision authority with the Secretary of Defense for major systems acquisitions within the Department of Defense.

The Committee is concerned that there is an inadequate management structure within the ODNI to prioritize national requirements, consider possible alternatives for proposed systems, and determine mission-based requirements as they relate to major systems acquisition programs. In essence, it appears that there is a lack of rigor in the planning, development, and management of such programs.

Although the bill does not contain a provision that addresses the management structure with respect to such programs, the Committee intends to continue to explore issues relating to major acquisition programs. Accordingly, the Committee requests that the DNI review the current management structure within the Intelligence Community relating to the approval of major acquisition programs, including all requirements, priorities, and procedures for approval. Particular attention should be given to the desirability of creating an Intelligence Resources Oversight Council within the ODNI to assist the DNI in exercising his authority over such programs. A report with any conclusions and recommendations on this concept should be forwarded to the Committee no later than December 1, 2007.

In addition, the Intelligence Reform Act contained a requirement for the DNI to provide the Congress with a report on the status of major intelligence systems funded within the National Intelligence Program. Specifically, the DNI was required to ensure the development and implementation of a program management plan for each major system acquisition. The plans were to contain cost, schedule and performance goals, and program milestone criteria.

The Committee received the DNI's first report, titled 2006 Annual Report to Congress, Intelligence Community Program Management Plans, in February 2007, and applauds the effort of the Office of the DNI in producing this document. For the first time there is a single source for information on the status of the Intelligence Community's major systems acquisitions. The report contains not only details on the status of individual programs, but valuable summary information on the acquisition shortcomings of the individual agencies. For example, the report highlights the lack of meaningful baseline data for a number of NSA programs and the NRO's need to more prudently align program baselines with anticipated budget resources. It is likely that the availability of such information in prior years would have helped prevent or contain cost overruns and schedule delays.

The 2006 report was used by the Committee in preparing this authorization bill. It will be used for further inquiry by the Committee's budget and audit staffs and will be a baseline that allows the Congress and DNI to derive trend data from future reports. The Committee supports plans to expand the report's coverage to include additional major systems, significant programs that do not meet the threshold to be categorized as major systems, and joint Intelligence Community and Department of Defense programs. The Committee suggests that the DNI consider using these reports to identify both positive acquisition practices that should employed throughout the Intelligence Community and unsuccessful practices that should be eliminated.

The Committee also believes that the report could be improved by adding more information on accountability. Future versions of the report should present greater detail on the DNI's perspective, propose solutions to the issues raised in the report, and identify specific actions to be taken in response to the failure to meet the milestones conveyed in prior reports.

The Committee has also adopted two statutory requirements for assessments and reporting to Congress on major systems acquisition. In Section 314 of the bill, the Committee requires the DNI to conduct an initial vulnerability assessments of major systems proposed for inclusion in the National Intelligence Program and subsequent assessments under certain circumstances. The Committee also has created a mechanism for IC major system acquisitions similar to the Nunn-McCurdy process that applies to major defense acquisition programs in Sections 317 and 318.

Intelligence Community personnel growth and contractor support

The Committee in Section 103 recommends that the DNI have greater flexibility in determining personnel levels for elements of the Intelligence Community in order to allow the DNI to better manage the balance of government and contractor employees. The Committee, however, continues to have concerns over the lack of hard data on the IC's personnel structure, size, and cost over the short, medium, and long terms. It is essential that the DNI be able to explain what criteria should be used to determine the proper mix of government and contractor employees within the Intelligence Community. The Committee continues to emphasize that the best analysis and collection will not be attained by simply increasing the quantity of analysts and collectors, but by also increasing the quality of analysts, collectors and their support networks. The DNI must also be able to explain the trade-offs that occur with hiring more people, as opposed to using the same appropriations to purchase other capabilities.

The Committee supports the DNI's efforts to survey and better understand the use of contractors in the Intelligence Community, and was encouraged that the April 2007 report entitled IC Core Contractor Inventory provided a preliminary snapshot of the total number of full time equivalent (FTE) contractors by expenditure center. The report is a good first step, but still more needs to be done.

A Committee audit of Intelligence Community personnel found that end strength has grown by about 20 percent since the attacks of September 11, 2001; unfortunately, significant shortages in training capacity and secure office space, along with inadequate planning for administrative, logistical, and technical support have accompanied that growth. The Committee in its audit has recommended that no future personnel growth should take place until the challenges experienced in implementing the past growth have been addressed. The Committee continues to be concerned about the rate of growth in total personnel costs as a percentage of the overall intelligence budget and the lack of planning being done by the Executive branch to control that growth for the future.

In Section 315, the Committee addresses the need for additional information on personnel and contractor levels with the requirement for the DNI to prepare an annual personnel level assessment for each element of the Intelligence Community by January of each year.

Auditable financial statements

For a number of years, the Committee has encouraged the Intelligence Community to modernize its financial system architecture to allow for auditable financial statements. The Committee was pleased that the DNI's United States Intelligence Community 100 Day Plan for Integration and Collaboration of April 2007 included a serious commitment to improving financial management. The Committee is also encouraged by the hard work the ODNI put into the report Financial Statement Auditability Plan, also of April 2007. The report outlines the current state of the IC's financial management systems and explains the challenges to achieving clean audits. The report fails, however, to provide certain key pieces of information, including timelines on when and how independent audit assessments of important milestones will be conducted, when the IC will reach the proposed architecture, and whether the retention of outside experts would help address workforce competency shortfalls at certain agencies.

Further, the Committee remains concerned that the proposal for unqualified audit opinions, referred to as clean audits, by 2012 does not convey the urgent nature of the challenges facing our country's intelligence elements when it comes to managing and accounting for their

resources efficiently and effectively. The NGA, NRO, NSA, CIA, and DIA all have been given ample opportunity, first with the President's relevant guidance in 1997 and again with the Committee's fiscal year 2002 intelligence authorization bill, to address this issue using their current authorities. Unfortunately, other than the NRO using first year estimates to receive a one-time clean audit opinion, these organizations have repeatedly failed to achieve tangible results on this important topic.

The Committee now turns to the DNI to provide much needed leadership. Such leadership will be essential in conducting the follow-on study on the `way ahead' required in the Financial Statement Auditability Plan in a meaningful way. The Committee expects this study to evaluate impartially not only the objectives stated in the report, but also:

The authority of the Director of National Intelligence on this topic;

The role and responsibilities of the IC's Chief Information Officer in overseeing the integration of the business enterprise architecture;

Financial considerations, including the most cost effective system solution based on the future direction of the software industry;

Operational considerations and change management issues related to the workforce `unlearning' and `relearning' critical skills;

Risk considerations and the counterintelligence implications from foreign ownership of software providers;

Ideal system integrator structure and software upgrade considerations, including dates when the IC will have interface and business process standards for major feeder systems, and accounting code standards;

The findings of IC information technology assessments and Inspector General reports completed over the last five years; and

Intellectual property rights concerns.

This study should also examine whether it would be best for the IC to outsource the oversight of implementing the chosen `way ahead' to the experts currently working in the Department of Defense's Business Transformation Agency, or if the IC should immediately hire its own `highly qualified employees' or `special advisors' to oversee the future implementation.

Additionally, based on the Committee's research with private sector experts and key personnel from the Business Transformation Agency, and a review of the best of breed model found at the Department of Transportation, the Committee is not convinced that the two-system approach outlined in the Financial Services Auditability Plan report is the most cost effective and efficient path. The Committee is concerned that the two-system solution rests too heavily on past decisions and sunk costs of the individual agencies, and does not fully embrace the shared service model endorsed by the OMB. Therefore, by December 1, 2007, the Committee requests that the DNI, in coordination with the Director of OMB, provide the Committee with the follow-on plan that includes the information described above and offers a specific timeframe and critical milestones for the IC to move to a single shared services financial system that will be used by the NGA, NRO, NSA, CIA, DIA, and the Office of the DNI.

The follow-on plan should help inform the implementation of Section 316 of the bill for a proposed Business Enterprise Architecture to be provided to the oversight committees by March 1, 2008. These documents will assist in the goal of executing a realistic plan to achieve sustainable, clean audits and provide the added benefit of integrating the IC's business management systems. Such integrated systems will build on the positive steps the Office of the DNI has already taken by creating the IC's single Human Resources Information System and single budget system called the Intelligence Resource Information System. This business architecture will minimize expensive and complex system interfaces and provide a cost-conscious solution that will promptly provide valuable data for future Directors of National Intelligence and agency heads. Also, this course of action will leverage the best private sector practices and allow the IC to benefit from the research and development dollars industry has already invested in these business management tools.

Finally, the Committee believes that both the Congress and the DNI would benefit from the creation of a consolidated National Intelligence Program financial statement. Such a statement would provide valuable macro-level data and, once established, offer insight into financial trends within the Intelligence Community. Therefore, the Committee requests that the DNI begin preparing a consolidated financial statement for the National Intelligence Program beginning with fiscal year 2010. In accordance with the DNI's Financial Statement Auditability Plan, by fiscal year 2012, this consolidated financial statement should be based on the fully auditable data provided by each of the Intelligence Community agencies. As such, a separate audit will not be required for the consolidated statement.

Intelligence Community contracting

The Committee is concerned about apparent conflicts of interest within the intelligence acquisition community. Despite provisions in the Federal Acquisition Regulation intended to preclude such conflicts, the Committee is concerned that organizational conflicts of interest may have adversely impacted major acquisitions.

The Executive Branch is relying increasingly on contractors to assist in managing or integrating complex acquisitions. Contractor advisory and assistance service (CAAS) and systems, engineering, and technical assistance (SETA) contracts are often used to perform what would otherwise be inherently governmental functions. There are merits to the government utilizing the technical and program management expertise which exists in the private sector. Close relationships, however, between CAAS/SETA contractors and their parent, affiliate, or subsidiary companies could bias those contractors in providing advice to the government.

Where a program's prime contractor has a contractor affiliate working in the program office setting program requirements, assisting in source selections, and determining award and incentive fees for the same program, there is strong potential for conflicts of interest. An Inspector General report from an element of the Intelligence Community expressed concern about such apparent conflicts which were negatively impacting the interests of that particular element. Indeed, the Committee notes that several major prime contractors have corporate affiliates supporting government program offices in the management of major Intelligence Community acquisitions. The Committee believes this practice is undesirable, and should be fully addressed by the Inspectors General of the respective elements of the Intelligence Community, including the Office of the Director of National Intelligence.

Supplemental budgeting

The Committee remains concerned over the Administration's continued use of supplemental appropriations bills to request funding for intelligence operations. Since the terrorist attacks of September 11, 2001, the Intelligence Community has expended significant resources in supplemental funding on the effort to defeat al Qa'ida and related terrorist groups, and on intelligence operations in support of the conflict in Iraq. While initially the costs associated with these two efforts may have been unforeseen or unknowable, the Committee believes the Intelligence Community has for some time been able to anticipate and budget effectively on an annual basis for its operations against terrorists and in Iraq, yet this has not been reflected in the regular budget requests. The Committee is further concerned that the Executive branch has misused the supplemental process to request funding for long-term acquisition and research and development programs, as well as numerous projects of questionable value.

The Committee supports the Administration's decision to request more funding for the Global War on Terrorism and Iraq requirements in the fiscal year 2008 budget request. The Committee, however, has many concerns regarding the continued use of supplemental funding outside the regular budget process to fund some counterterrorism operations. The conflict against al Qa'ida and its supporters has proceeded for more than five years, and many analysts and observers have concluded that it may span a generation or more before it is over. Due to the likely length of this effort, the Committee believes the Intelligence Community should plan, budget, and fund its counterterrorism operations for the long-term. This is not possible if supplemental funding continues. Supplemental requests introduce uncertainty into funding plans. Instead of encouraging discipline, supplemental requests present opportunity for gamesmanship. Instead of allowing for steady employment of experienced personnel, supplemental requests force the use of more expensive and more transient contractor employees. The Committee believes that the practice of budgeting by supplementals must end to better enable the Intelligence Community to protect our citizens at home and defeat those that threaten United States interests both here and abroad.

The Committee expects the Presidential request funds for all counterterrorism operations in the base budget beginning with the fiscal year 2009 request.

Al Qa'ida

The Committee is concerned with recent assessments that indicate al-Qa'ida has regenerated and resumed its operational planning against western targets from its relative safe-haven in the tribal areas of Pakistan. Despite the apprehension and death of key leaders, al-Qa'ida continues to train operatives and expand its reach, as evidenced by the 2007 North Africa attacks by the newly named `al-Qa'ida in the Maghreb.'

The resurgence of al-Qa'ida, nearly six years after the terrorist attacks of September 11, 2001, suggests the Intelligence Community should reevaluate its current strategy to defeat the al-Qa'ida network. The Committee addresses this issue further in the classified annex.

Long-term strategic planning for the FBI National Security Branch

The Committee remains concerned that the Federal Bureau of Investigation (FBI) is not properly conducting long-term strategic planning, especially in regard to the growth of the National Security Branch (NSB) and the transformation of the NSB into an intelligence-driven organization.

Many of the reforms required to appropriately transform the NSB into a premier intelligence organization that can effectively meet the intelligence needs of our post 9/11 world within the United States remain in the planning and implementation phases, when those reforms should be in the evaluation and refinement stages.

The FBI is the premier law enforcement agency of the nation and it has a strong foundation on which to build the NSB; however, the Committee believes more should be done to define and focus the intelligence mission of the NSB. This effort should not impede information sharing or create new stove pipes within the FBI, but rather recognize the sophistication, unique training, and cultural change required to effectively address the current threat environment.

The FBI has provided the Committee with an unclassified five-page `Counterterrorism Strategy,' but it fails to adequately address the transformation that must take place at the FBI, or the urgency by which that change needs to occur.

A long-term strategic plan should be developed in conjunction with the ODNI that examines: (1) NSB growth; (2) how that growth is threat aligned; (3) how the NSB plans to recruit personnel with intelligence expertise; (4) how the NSB will identify training needs, implement training programs, and measure the success of training; (5) how the NSB will manage career paths--including a transparent career ladder--and elevate the Intelligence Analyst position; and (6) how the NSB will develop and utilize benchmarks and metrics to measure the growth and success of all NSB programs and personnel.

Furthermore, the plan should describe what will drive the NSB's allocation of analytical resources at headquarters and across FBI field offices and evaluate the impact that the National Intelligence Program (NIP) and non-NIP appropriations have on the NSB.

Additionally, the plan should comprehensively address how the FBI will use the increased funding authorized by the bill for Counterterrorism Division (CTD) training and travel. The increased funding is intended for Supervisory Special Agents, Intelligence Analysts, and other Professional Staff in those CTD units that provide oversight, management support, and guidance to FBI field offices addressing international terrorism and related matters.

Therefore, the Committee requests a comprehensive National Security Branch long-term strategic plan be completed by the FBI in conjunction with the ODNI that includes, but is not limited to, the requirements above. The plan should be unclassified, and if necessary, contain a classified annex. The plan should be provided to the intelligence committees by March 1, 2008.

Department of the Treasury intelligence activities

The Committee is concerned that the roles and responsibilities of the various components of the Office of Terrorism and Financial Intelligence (TFI) at the Department of Treasury are not sufficiently delineated in the area of intelligence analysis. The Committee requests that by no later than February 1, 2008, the Secretary of the Treasury, in coordination with the Director of National Intelligence, submit a report to the congressional intelligence committees on intelligence analysis within the TFI.

The report should include a description of the roles of the Office of Intelligence and Analysis (OIA), the Office of Foreign Assets Control (OFAC), and the Financial Crimes Enforcement Network (FinCEN) with regard to analysis of intelligence information and analytic support for sanctions, designations, and assistance to law enforcement conducted pursuant to the authorities of the Department.

The report should also include the guidelines and policies governing analysts at the OIA, OFAC and FinCEN related to access to intelligence information, specifically: (1) sharing of intelligence information within TFI; (2) direct sharing of intelligence information between OFAC and FinCEN and the Intelligence Community; and (3) sharing of intelligence information by the TFI with federal agencies outside of the Intelligence Community, as well as with state and local authorities and law enforcement.

In addition, the report should include a description of databases of financial information and information on financial transactions maintained by the TFI and the Intelligence Community. The report should include: (1) the legal authorities governing the collection, maintenance and use of such databases; (2) the purpose of such databases; (3) authorities and policies governing direct access to such databases as well as search parameters and the use of analytical tools; (4) authorities and policies governing dissemination of information from such databases as well as minimization requirements; (5) authorities and policies related to the use of such databases in coordination with each other; and (6) issues related to privacy and United States person information with respect to these databases.

Science and technology leadership

The Intelligence Community Chief Technology Officer (IC CTO), known in statute as the Director for Science and Technology (S&T), is the chief S&T advisor for the Director of National Intelligence. After the reorganization announced by the DNI in April 2007, the IC CTO reports indirectly, through two other positions, to the DNI, whereas other chief advisor positions such as the Chief Information Officer and Chief Financial Officer are empowered to report directly to the DNI. Though the Committee appreciates the potential benefits of having the IC CTO report to the DNI's acquisition leadership to improve technology transition, the Committee notes that the IC CTO has a broad portfolio of important responsibilities beyond those directly related to acquisition. The Committee continues to see a significant need for an IC CTO to directly influence IC policy and strategy regarding S&T issues, as originally set forth in the Intelligence Reform Act. Though the Committee understands that the DNI is still working on the details of his organization plan, there is concern that S&T may not be able to get the attention it deserves in the Office of the DNI.

One of the IC CTO's principal responsibilities is to guide IC research and development, and one of the CTO's major achievements to date is the establishment of the Intelligence Advanced Research Projects Activity (IARPA). The IARPA has been well-represented in the DNI's 100 Day Plan and in the DNI's statements supporting community research and development. Studies by distinguished independent advisory groups such as the Intelligence Science Board and the Committee's Technical Advisory Group emphasize the need for an IARPA. In strongly supporting the establishment of the IARPA, created with some of the best practices of the Defense Advanced Research Projects Agency (DARPA) in mind, the Committee intends to nurture high-priority (and sometimes high-risk and long-term) community research and development activities by allowing an independent organization to manage and sustain them over time, insulated from agency-specific operational pressures that frequently threaten research and development resources.

The IARPA Director is expected to face significant challenges inherent to the position in areas such as budget control, relationships with the ODNI and IC leadership, and translation of mission requirements into research and development priorities. Further, the first IARPA Director, as head of a new community research and development activity, is expected to face significant challenges from the entrenched bureaucracy and the operations-focused agencies. It is critical that the DNI hire a uniquely qualified person to fill this position. The Committee is concerned, however, that the IARPA will not be able to attract the best candidates for Director if the position is deeply buried in the Office of the DNI organization. In the DARPA model, the DARPA Director reports to the Secretary of Defense's deputy for research and engineering, who reports to the Secretary of Defense. The Committee is concerned that the DNI's new organizational plan does not follow a similar model empowering the IARPA Director to report to the DNI's CTO who would report to the DNI, and instead places the IARPA under officials with other priorities. The Committee encourages the IC leadership to take full advantage of the rare opportunity created by the establishment of the IARPA and to strengthen S&T leadership at all levels.

Another of the IC CTO's responsibilities is to improve coordination and integration of S&T activities across the IC, and to that end the IC CTO must ensure that IARPA activities are well-coordinated with IC agency activities. The Committee requests that the IC CTO and the National Intelligence Science and Technology Committee (composed of the principal S&T officers of the National Intelligence Program) present by October 1, 2007 a unified plan clearly describing the division of research and development responsibilities and the processes for effective coordination among the agencies and the IARPA. Section 407 of the bill addresses additional duties that the Committee believes the Director of Science and Technology and the

National Intelligence Science and Technology Committee should address.

Further, following the recommendations that were made by the Committee's Technical Advisory Group, the Committee requests that the IARPA present by October 1, 2007 a concept of operations to include how research ideas will be solicited and selected for funding; a strategy for technology insertion into operational organizations in the IC; and a plan for flexible hiring of the necessary S&T experts from industry and academia, with particular attention to additional authorities or resources that may be required.

Civil Liberties Protection Officer

The Intelligence Reform Act mandated the creation of a Civil Liberties Protection Officer, with significant statutory responsibilities. While the current Civil Liberties Protection Officer has made a commendable effort to carry out these responsibilities since his appointment, he has been unnecessarily hampered by a lack of staff and resources, as well as a lack of relevant security clearances.

The Committee is recommending an increase in resources for the Civil Liberties Protection Office in the classified annex to this Act. The Committee also urges the DNI to ensure that the Civil Liberties Protection Officer and his staff have adequate access to all intelligence activities that have the potential to impact the privacy and civil liberties of United States persons, so that the Office is able to fulfill its mandate.

The Armed Forces Medical Intelligence Center

The Armed Forces Medical Intelligence Center (AFMIC) is the only medical intelligence organization in the United States and is without peer worldwide. AFMIC is the recognized expert on infectious disease and the consequences of pandemic outbreaks and weapons of mass destruction (WMD) incidents. For this reason, the AFMIC has significant new responsibilities for supporting the Department of Homeland Security, just as it has taken on a significant share of the lead for the United States Government in assisting other nations in efforts to prepare for and respond to potential pandemic disease outbreaks or large-scale WMD incidents.

Although the commanders and chief executives of AFMIC historically have been officers of exceptional skill and undeniable quality, at the rank of colonel, the Committee believes AFMIC's new interagency responsibilities and growing international visibility suggest the need for a more senior level of leadership. Should there be a catastrophic biological or chemical attack or the spread of a pandemic disease, the leader of AFMIC will need to have the rank to serve as a principal advisor at the most senior levels of the government.

Therefore, the Committee requests that the Under Secretary of Defense for Intelligence, the Director of the Defense Intelligence Agency, and the Director of National Intelligence develop a plan for installing a senior executive service officer or military officer of flag rank to lead AFMIC and report to the congressional oversight committees on such a plan by September 1, 2007.

Senior Defense Intelligence Officers

The Committee believes intelligence personnel serving within the Department of Defense should provide direct and continuous expert intelligence information and advice to senior Department officials, specifically those of the Office of the Under Secretary of Defense for Policy [USD(P)]. The Committee believes building trust and confidence in intelligence requires time and contact with policymakers.

At present, the Defense Intelligence Agency has identified senior intelligence officers to support the policy apparatus, but these personnel are based at DIA facilities at Bolling A.F.B., not at the Pentagon. Comparatively junior officers with little or no standing with the senior officials they support are detailed to distribute finished intelligence to policy makers through their policy staff. These officers attend meetings as back-benchers and take carefully-crafted notes, which are passed up to the offices of the DIA Director through a bureaucratic network. The Committee does not believe this is an optimum way to manage the interaction of intelligence and policy.

Policymakers need ready access to dedicated, senior-level, expert intelligence advisors who are guided, managed and empowered by the Under Secretary of Defense of Intelligence [USD(I)] and the Director of the DIA to speak for the defense intelligence community. These experts should be fully integrated and routinely available to address policymaker questions regarding current intelligence, intelligence community capabilities, threat concerns, strategic warning, outstanding requests for intelligence, collection requirements and a myriad of issues that require more than what finished intelligence products delivered by action officers and routine community briefings can provide.

The Committee believes defense policy makers should not be expected to maintain an expert understanding of the complex organization and evolving capabilities of the Intelligence Community. Similarly, they cannot be expected to become aware of regional intelligence through briefings and intelligence products alone. The Committee believes a senior intelligence officer with standing within the Intelligence Community should be present during the early stages of a crisis or the development of a critical issue. Furthermore, senior intelligence officers who establish appropriate professional relationships with senior policymakers are a valuable source of insight and feedback to the USD(I) and DIA Director. This effort is of mutual benefit, in the Committee's view.

Therefore, the Committee requests that the USD(I) and Director of DIA develop a plan and report to the congressional oversight committees by January 1, 2008, to provide senior defense policymakers with intelligence support from senior defense intelligence community officers, appropriate to their responsibilities and position. The Committee recommends USD(I) work with the DIA to draw on the existing capabilities within the Senior Intelligence Executive Service and the assets of the DIA Executive Support Office, the DIA International Engagements Office, and the Joint Chiefs of Staff J2.

The USD(I) and the Director of the DIA should draw on the history of and lessons learned from the Defense Intelligence Officer (DIO) program. The Committee believes the DIO program was a viable enterprise, which was more in need of an overhaul than complete elimination. While the threat environment and intelligence community have changed dramatically since the DIOs were created, the Committee believes the DIO program was sound and could be a model for the future.

Space Radar

The Committee opposes the Space Radar program of record. The Committee is skeptical of the program's mission utility and objects to its expected costs. In addition, the Committee questions the validity of more stringent requirements being levied upon the program. Therefore, the Committee recommends that the Space Radar program be terminated and directs that no National Intelligence Program funds be spent on the program.

Space Radar--formerly known as Space Based Radar (SBR)--is a joint effort between the Department of Defense (DoD) and the IC. In January 2005, the DoD and the IC committed to pursuing a single space radar capability. According to a recent Government Accountability Office (GAO) report, however, a cost-share agreement between DoD and the IC has yet to be formalized.

Initial plans for SBR called for a constellation of many satellites. However, fiscal realities intervened, leading to a reduction in the number of intended satellites. This has only served to drive unit costs far higher while meeting only a fraction of the original requirements.

The GAO report criticized the DoD for beginning more space and weapons programs than it could afford, which led to pressure to underestimate costs and over-promise capabilities. The Committee believes that the IC has the same problem; thus, beginning another major acquisition at this time, especially one so costly and technically complex, is imprudent.

DoD's space acquisition programs continue to face substantial cost and schedule overruns. At times, cost growth has come close to or exceeded 100 percent. The GAO noted that, over the next five years, there will be approximately $12 billion less available for new systems as well as for the discovery of promising new technologies because of cost growth. Many programs are also experiencing significant schedule delays--as much as six years--that postpone delivery of promised capabilities to the warfighter and the IC.

A former head of the Air Force Space Command has commented that SBR will be developed `in a way that we don't ask it to do too much, too fast.' Yet according to the GAO, Space Radar and the Transformational Communications Architecture Satellite (TSAT) are expected to be the most ambitious, expensive, and complex space systems ever. Despite the efforts of the Space Radar program office, there is still significant inherent risk with integrating critical technologies onboard the satellites and developing the software to achieve the satellites' capabilities. Further, the DoD has a history of adding requirements to a program, even well into the acquisition.

Basic questions about the Space Radar architecture are unanswered. The cost of supporting communications systems remains unclear. According to the Congressional Budget Office (CBO), communications bandwidth comparable to that of the Air Force's planned TSAT or some other high-capacity communications system is likely to be necessary to relay Space Radar data to ground stations in a timely fashion. However, most Space Radar cost estimates do not include those expenses since the final architecture has yet to be defined.

According to the GAO, preliminary estimates of the combined cost of Space Radar and the TSAT are about $40 billion. The Committee believes, however, that the cost and schedule estimates for Space Radar will follow typical space acquisition patterns and be much higher. The CBO estimates the cost of a nine-satellite space radar constellation will cost between $34.6 billion to $77.1 billion, depending on design trades.

The Committee does not oppose a space-based radar capability developed jointly by the DoD and the IC, but believes there are other means to achieve it. The Committee considers the alternatives espoused by the Constellation Architecture Panel to offer a less risky, less costly, and more flexible acquisition strategy.

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