[CRS Issue Brief for Congress]

Intelligence Issues for Congress

Updated June 4, 2001

Richard A. Best, Jr.
Foreign Affairs and National Defense Division
Order Code IB10012

CONTENTS

SUMMARY

MOST RECENT DEVELOPMENTS

BACKGROUND AND ANALYSIS

CIA and the Israeli-Palestinian Accord
The Intelligence Community and Iraq
The Intelligence Community and Missile Defense
Kosovo/Operation Allied Force
Covert Actions
Counterintelligence

Selected 106th Congress Legislation

CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS


SUMMARY

The U.S. Intelligence Community continues to adjust to the post-Cold War environment. Congressional and executive branch initiatives have emphasized enhancing cooperation among the different agencies that comprise the Community by giving greater managerial authority to the Director of Central Intelligence (DCI).

Priority continues to be placed on intelligence support to military operations and on involvement in efforts to combat terrorism and narcotics trafficking. Intelligence from both national and tactical sources has in recent years become an integral part of military operations at virtually every level. Growing concerns about transnational threats such as narcotics smuggling and terrorist operations are leading to increasingly close cooperation between intelligence and law enforcement agencies. This relationship is complicated, however, by differing roles and missions as well as statutory charters. Concern about the quality of intelligence analysis was heightened by the unexpected tests of nuclear weapons by India and Pakistan in mid-1998. Intelligence Community leadership and congressional committees have expressed determination to enhance analytical capabilities. A major concern is an imbalance between resources devoted to collection and those allocated to analysis, with collected data much exceeding analytical capabilities.

There are several regional crisis areas where the role of the U.S. Intelligence Community is especially important. Provisions for U.S. intelligence to monitor security arrangements between Israelis and Palestinians have been a significant factor in efforts to resolve Middle East tensions. Intelligence efforts have also been important in attempting to enforce U.N. sanctions on Iraq and monitoring peace agreements in Bosnia. Cruise missile and bomb attacks on Serbian targets during the Kosovo crisis were heavily dependent upon precise targeting data provided by intelligence sensors. The mistaken attack on the Chinese Embassy in Belgrade resulted from faulty information provided by the Intelligence Community.

A particular concern for many in Congress has been the Intelligence Community’s assessment of the missile attack capabilities of foreign countries, especially North Korea. Some believe that U.S. vulnerability to missile attack may arrive sooner than has been estimated by intelligence agencies.


MOST RECENT DEVELOPMENTS

According to May 2001 media reports, the Administration has directed a comprehensive review of the U.S. intelligence effort. The assessment, mandated by National Security Presidential Directive 5, will be conducted by two panels, one of current officials and one of outside experts, and will address consolidating intelligence programs, reducing duplication of effort, and improving the acquisition process for major systems.


BACKGROUND AND ANALYSIS

The end of the Cold War, now a decade past, continues to reverberate throughout the United States Intelligence Community. Since the beginning of the first Bush Administration, intelligence agencies have been reduced in size (reportedly by some 30%) and priorities shifted away from the Soviet Union and its erstwhile allies. Yet the post-Cold War world has its own complexities—political, economic, and technological—that continue to require the attention of intelligence agencies. Policymakers and military commanders continue to seek detailed and accurate information on potential trouble spots or troublemakers. The Intelligence Community is challenged by the variety of topics on which information is needed, changing technologies that may limit success in acquiring information, and, not least, by temporary and not-so-temporary needs for expertise in many different foreign languages.

Changes in the nature of the world beyond U.S. borders, the sole focus of intelligence agencies, have required a shift in the purposes and goals of the Intelligence Community. Gone is the relentless focus on Soviet submarines, missile silos, and conventional military capabilities; new threats include terrorism, transfers of Weapons of Mass Destruction (WMD), and political, ethnic, and social upheavals in a variety of regions. Gone also is the massive military infrastructure of the Soviet Union that could be observed by overhead imagery platforms. Intelligence agents must be able to move beyond contacts with foreign government officials and tap into political sects and terrorist cells often having no perceptible infrastructure.

As a result, some observers believe that intelligence agencies may be in for a period of transition and adaptation exceeding the one that followed immediately upon the dissolution of the Soviet Union and the Warsaw Pact. In particular, it is argued that the three major “INTs,” the major intelligence disciplines—signals intelligence (sigint), imagery intelligence (imint), and human intelligence (humint)—will have to be fundamentally reinvented and this process will have major technical and organizational ramifications. There will have to evolve, it is further argued, a coherent community-wide managerial structure that will respect the varied and changing needs of military and civilian intelligence consumers while keeping costs within bounds and avoiding unnecessary duplication of effort. Making some of these changes may not save money, and may even require budgetary enhancements; according to this argument, a failure to confront changed realities may result in substantial waste of the $27+ billion now invested in intelligence and intelligence-related activities.

Sigint collection is the responsibility of the National Security Agency (NSA) at Fort Meade, Maryland. Sigint operations are classified, but there is little doubt that the need for intelligence on a growing variety of nations and groups that are increasingly using sophisticated—and rapidly changing--encryption systems requires a far different sigint effort than the one prevailing for several decades. In 1998 the House Intelligence Committee concluded that “very large changes in the National Security Agency’s culture and method of operations need to take place ....” Some observers believe that an inevitable restructuring of NSA will be required at the cost of many billions. The Senate Intelligence Committee acknowledged that “NSA’s core mission is an essential national capability, and must be dramatically rejuvenated” but added that some new initiatives, already underway, will require “a significant infusion of funds.” Observers credit the current Director of NSA, Lt. Gen. Michael Hayden, with launching a long-overdue reorganization of the Agency, but adapting it to changed technological and geopolitical conditions will remain a significant challenge.

Several reports sponsored by the European Parliament have alleged that NSA operates an international sigint collection effort, known as Echelon, that intercepts communications worldwide in order to provide economic intelligence to U.S. corporations. On July 5, 2000, the European Parliament voted to undertake a further investigation of Echelon; the resultant draft report on Echelon was made public on May 18, 2001. Maintaining that NSA operates in accordance with existing statutes and executive orders, senior U.S. officials have strongly disputed claims that intelligence agencies assist U.S. corporations competing with foreign firms. They acknowledge, however, that intelligence agencies collect information regarding the use of bribery and other illegal efforts by foreign firms in competition with U.S. corporations. Indications of such foreign efforts are provided to the State and Commerce Departments. (See CRS Report RS20444, Project Echelon: U.S. Electronic Surveillance Efforts, by Richard A. Best, Jr.; Updated March 2, 2000.)

A second major intelligence discipline, imagery or imint is also facing profound changes. Imagery is collected in essentially three ways, satellites, manned aircraft, and unmanned aerial vehicles (UAVs). (See CRS Report 98-495, Intelligence Collection Platforms: Satellites, Manned Aircraft, and UAVs, by Michael F. Miller and Richard A. Best, Jr., May 21, 1998.) The satellite program that covered Soviet Union and acquired highly accurate intelligence of submarines, missiles, bombers and other military targets is perhaps the greatest achievement of the U.S. Intelligence Community. The demise of the Soviet Union and experience in the Persian Gulf War have indicated that there is likely to be a greater number of collection targets than in the Cold War and that more maneuverable satellites may be required. At the same time, the advent of high-quality commercial satellite imagery has raised many questions about whether at least some coverage can be obtained less expensively from the private sector. (See the discussion of India’s nuclear tests below.) Concern has been widely expressed, especially in November 1999 House floor debates, that imagery architecture is unbalanced, that acquiring collection platforms has been emphasized at the expense of analytical and dissemination efforts.

Imagery as a collection discipline has been affected by the establishment in 1996 of the National Imagery and Mapping Agency (NIMA) to manage imagery processing and dissemination to national decisionmakers and combat commanders. NIMA is composed of agencies with disparate backgrounds, including the Defense Mapping Agency, which was never a member of the Intelligence Community. Inevitably, there have been start-up problems, especially in terms of financial management.

Manned aircraft—the U-2 and other aircraft used by the services for tactical intelligence collection—remain important sources of imagery. The SR-71, which flew at very high altitudes, has been retired, and no replacement is apparently envisioned. The U-2s, the earliest of which were procured in the 1950s, are being upgraded with new interception capabilities and new navigational equipment, but some observers express concern that a follow-on will not be available because of a questionable assumption that they can be completely replaced with unmanned aerial vehicles. Limited inventories of airborne platforms that are in high demand have led some industry officials to suggest business-class jets equipped with a number of sensors for use in military missions.

UAV procurement has been a continuing source of difficulties. Some UAVs were used during the Vietnam War, the advantages of these pilotless craft have been more generally appreciated in the last decade or so when they have been equipped with electro-optical devices and real-time communications. Since the Persian Gulf War, they have been widely recognized as relatively inexpensive sources of tactical imagery that do not place the lives of U.S. personnel at risk; they have been widely used to monitor peacekeeping operations in Bosnia. UAV procurement efforts, however, have been beset by problems. Several systems have been canceled after millions of dollars were spent without producing operational platforms. The UAV effort has been perceived by many in Congress as lacking in focus and unable to meet operational requirements. The Global Hawk UAV, currently undergoing testing, is the most promising approach to obtaining a high-altitude, long-endurance unmanned platform; see CRS Report RL30727, Airborne Intelligence, Surveillance & Reconnaissance (ISR): the U-2 Aircraft and Global Hawk UAV Programs, by Christopher Bolkcom and Richard A. Best, Jr.; updated December 1, 2000.

A long-standing criticism of the Intelligence Community’s imint effort has been an imbalance between collection and analysis: that far more imagery is collected than can ever be evaluated with large quantities remaining “on the cutting room floor.” Intelligence budgets moreover reflect an emphasis on the procurement of collection systems with fewer resources allocated to processing and analysis. Some also argue that priority is given to the concerns of operational military forces rather than to matters of interest to senior political leaders, e.g., it has been alleged that in 1995 imagery analysts were concentrating on Serb air defenses to an extent that delayed finding evidence of mass grave sites of acute interest to the State Department. The House intelligence committee has concluded that, “the emphasis on collection at the expense of downstream activities [i.e., processing and analysis] permeates the [Intelligence Community] at all levels and in most collection disciplines.” During House floor consideration of FY2000 intelligence authorization legislation, concern for a better balance between collection and analysis was reiterated: “In this bill, Congress has told the administration enough is enough. We have said that, unless there is a plan implemented that will process the satellite data ..., we will not buy the satellite system as currently proposed.”

Intelligence from human contacts--humint--is the oldest intelligence discipline and the one that is most often written about in the media. (Humint collection is to be distinguished from covert actions although they may on occasion involve the same agents; see CRS Report 96-844, Covert Action: An Effective Instrument of U.S. Foreign Policy?, by Richard A. Best, Jr., October 21, 1996.) The Central Intelligence Agency (CIA), which is responsible for most humint collection, had important successes during the Cold War; disaffected Soviets and others provided invaluable help in providing information about weapons programs and political intentions that were not obtainable from any other source. In large measure, targets of U.S. humint collection during the Cold War were government officials and military leaders. Intelligence agency officials working under cover as diplomats could approach such potential contacts at receptions or in the context of routine embassy business. Today, however, the challenge is making contacts with influential figures in heretofore obscure third world states, clandestine groups, or narcotics traffickers who speak a variety of foreign languages. Humint regarding such sources can be especially important as there may be little evidence of activities or intentions that can be gathered from imagery and their communications may be carefully limited.

Contacts with such persons usually cannot be made in the course of embassy business or in diplomatic receptions; in many cases contacts between a U.S. embassy and terrorist figures or narcotics smugglers would be unacceptable to either side. Placing U.S. intelligence officials in foreign countries under “non-official cover”—in businesses or other private capacities—is possible but it presents significant challenges to the agencies. Administrative mechanisms are vastly more complicated; special arrangements have to be made for pay, allowances, retirement, and healthcare. The responsibilities of operatives under non-official cover to the parent intelligence agency have to be reconciled with those to private employers and there is an unavoidable potential for many conflicts of interest or even corruption. Any involvement with terrorist groups or smugglers has an inevitable potential for major embarrassment to the U.S. government and, of course, physical danger to those immediately involved.

A related problem is the availability of personnel trained in appropriate languages. Cold War efforts required a supply of linguists in a relatively finite number of foreign languages, but in recent years the Intelligence Community has needed experts in a wider range of more obscure languages and dialects. Various approaches have been considered: use of civilian contract personnel, military reservists with language qualifications, and substantial bonuses for agency personnel who maintain their proficiency.

A fourth INT, measurement and signatures analysis--masint, has received greater emphasis in recent years. A highly technical discipline, masint involves the application of more complicated analytical refinements to information collected by sigint and imint sensors. It also includes spectral imaging by which the identities and characteristics of objects can be identified on the basis of their reflection and absorption of light. A key problem has been retaining personnel with expertise in masint systems who are offered more remunerative positions in private industry.

Radically restructuring the “INTs” will be difficult, given the amounts of money that will probably be involved and the large and complex organizations whose primary responsibilities will be affected. By law, the Director of Central Intelligence (DCI), currently George Tenet, has the authority to set priorities and propose budgets for all agencies in the U.S. Intelligence Community. In reality, however, most DCIs have concentrated most of the attention to the one agency over which they have direct control, the CIA, and have limited their attempts to exert managerial control of other intelligence agencies, most of which are part of the Department of Defense (DOD), viz. the National Security Agency, the National Imagery and Mapping Agency, and the Defense Intelligence Agency.

Whether the statutory authorities of the DCI are adequate is subject to debate; proposals to transfer all intelligence agencies to the operational control of the DCI have not gained pervasive support in either the executive or legislative branches. The budgetary authorities of the DCI, enhanced in the Intelligence Authorization Act of FY1997 (P.L. 104-293), allow him to prepare a consolidated national intelligence budget that in turn permits making tradeoffs among different INTs and programs before budgets are submitted to Congress. This authority, however, can realistically be exercised only with the cooperation of the Defense Department, given the location of intelligence agencies within DOD and the enormous influence exercised by the Pentagon over intelligence spending. Although extensive readjustments have been made by Congress, some argue that they could be more efficiently undertaken within the executive branch.

The widespread use of computers and new communications systems means that although there is a greater need for coordinating the INTs at the Washington level, intelligence products are used at many different levels of government and that quite low-level users can access information from Washington-area agencies. In addition, there has been increased availability of tactical intelligence collectors—sigint systems, aircraft and UAVs—that are operated by military commanders who are also the immediate recipients of the information acquired. Some observers express concern about excessive emphasis on tactical intelligence, arguing that national priorities may be downgraded. Others note, on the other hand, that organizational structures, traditionally focused on providing information from each “INT” to the Washington agency in charge of that “INT” (a practice known as “stovepiping”) do not adequately serve current needs of military commanders. Observers suggest that there will be increasing needs to share national and tactical intelligence and for organizational and individual flexibility.

Another issue is funding. Some alternatives to current platforms and procedures may produce cost savings, but observers suspect that they may be outweighed by increases found necessary in other areas. Satellites will remain high-cost programs, greater numbers of UAV systems and human collectors will have to be supported and trained. Observers generally expect that intelligence activities will probably continue to absorb some 10% of the defense budget in any given year. It is uncertain whether such percentages will be adequate to accommodate major changes in NSA’s operations, the acquisition of additional imagery platforms, and a reorganized humint effort.

Although much of the restructuring that arguably is required could be accomplished by executive branch initiative, Congress remains responsible for appropriations and for oversight. Even at a time of budgetary surpluses, significant increases in intelligence spending will have to be balanced against other national priorities. In recent years Congress has emphasized the need for expanded humint capabilities and has insisted upon a major role in the acquisition of new imagery collection platforms. Other concerns—and directives—are undoubtedly expressed in the classified annexes to intelligence authorization bills. Even if Congress and the leadership of the Intelligence Community concur on the need for major changes in these and other areas, ensuring the reorienting of long-established organizations is a difficult task.

Implementation of other changes enacted in 1996 remains an ongoing process. In May 1998, Joan Dempsey, a career intelligence official, was confirmed by the Senate to fill the newly established position of Deputy DCI for Community Management. Two other positions, designated as requiring Senate confirmation, have been filled without formal Senate action as a result of an understanding reached between the Administration and the Senate Intelligence Committee.

For budgetary purposes, intelligence spending is divided between the National Foreign Intelligence Program (NFIP), which covers Washington-based agencies and Tactical Intelligence and Related Activities (TIARA) (also known as intelligence-related activities), which covers programs supporting the operating units of the armed services, and the Joint Military Intelligence Program (JMIP), which covers programs, non-necessarily tactical, that are of primary concern to the Defense Department. Jurisdiction over these programs is somewhat different in the House and the Senate, but in both chambers members of both intelligence and armed services committees are involved in oversight efforts.

For a number of years some Members have sought to make public total amounts of intelligence and intelligence-related spending; floor amendments for that purpose were defeated in both chambers during the 105 th Congress. In response, however, to a lawsuit filed under the Freedom of Information Act, DCI Tenet stated on October 15, 1997 that the aggregate amount appropriated for intelligence and intelligence-related activities for FY1997 was $26.6 billion. He added that the Administration would continue “to protect from disclosure any and all subsidiary information concerning the intelligence budget.” In March 1998, DCI Tenet announced that the FY1998 figure was $26.7 billion. Figures for FY1999 have not been released and the Administration has thus far prevailed against legal efforts to force release of intelligence spending figures. On May 23, 2000, the House voted 175-225 to defeat an amendment calling for annual release of an unclassified statement on aggregate intelligence spending. (Arguments on both sides of the issue of making intelligence spending public are described in CRS Report 94-261, Intelligence Spending: Should Total Amounts Be Made Public? by Richard A. Best, Jr. and Elizabeth B. Bazan.) Some have suggested that if intelligence spending totals were made public it would no longer be necessary to “hide” intelligence programs within the Defense Department budget; national programs at least could broken out and consolidated under the DCI and the two intelligence committees. Others contend that the current system ensures that national intelligence programs are closely related to military operations and are considered in conjunction with defense programs.

A significant concern continues to be the need to provide intelligence support to operating military forces. In 1997, the House intelligence committee noted that “intelligence is now incorporated into the very fiber of tactical military operational activities, whether forces are being utilized to conduct humanitarian missions or are engaged in full-scale combat.” The Persian Gulf War demonstrated the importance of intelligence from both tactical and national systems, including satellites that had been previously directed almost entirely at Soviet facilities. There were, nonetheless, numerous technical difficulties, especially in transmitting data in usable formats and in a timely manner. Many of these issues have since been addressed with congressional support, but many observers believe that significant technical and organizational challenges remain. Among issues of concern are capabilities to disseminate imagery rapidly, the procurement and use of unmanned aerial vehicles (both tactical and high altitude) and manned reconnaissance aircraft, along with associated sensors and communications systems. Expressing concern about “substantial mismanagement and lack of communication,” the Senate Intelligence Committee has called for a report identifying “specific actions that have been taken or are being taken to enhance cooperation between Department of Defense and the Intelligence Community by improving the provision, handling, and use of intelligence information in preparation for, during, and after battle.”

Making usable intelligence available to military commanders in a timely fashion has been a principal preoccupation of the Intelligence Community since the Persian Gulf War. Further efforts will undoubtedly be necessary, given the Defense Department’s increasing emphasis on “dominant battlefield awareness” as reflected in Joint Vision 2010 and the Quadrennial Defense Review (QDR). Operational concepts now under consideration in the Department of Defense (DOD) clearly will require even greater intelligence support for precision targeting, bomb damage assessment, and other purposes. The House committee noted, however, that the QDR did not project increased intelligence funding, and, in fact, called for the reduction in the procurement rate of the Joint Surveillance and Target Attack Radar System (JSTARS) aircraft. The Senate committee also noted inadequate manned reconnaissance platforms and indicated a need for a long-term airborne reconnaissance recapitalization plan. DOD has been asked to review airborne collection assets, including the U-2s and tactical UAVs, and make recommendations that can be considered in the FY2002 defense budget.

The House intelligence committee has given special attention to weaknesses in analysis, expressing concern about “a largely inexperienced workforce; lack of language skills and limited in-country familiarity ...; and a predominant focus on current intelligence that is eroding the [Intelligence Community’s] ability to conduct comprehensive strategic analysis.” The bureaucratic tendency to emphasize current intelligence over long-term analysis has been noted for many years. It has been enhanced by the shift from enduring targets such as the Soviet Union to the disparate and fluctuating concerns of the post-Cold War period. The House committee advocates the establishment of core groups of analysts to undertake research-oriented projects aimed at assessing strategic issues. It further expressed support for a civilian intelligence reserve program that would utilize the expertise of former intelligence officials as well as civilian experts and linguists. Provisions authorizing competitive analysis of intelligence products having national importance and for quadrennial intelligence reviews to complement the Quadrennial Defense Review were included in the FY1999 Intelligence Authorization Act.

The Intelligence Community’s failure to provide advance notice of India’s nuclear tests in May 1998 produced searching reviews of analytical efforts and capabilities both in the executive branch and Congress. The initial review, undertaken by Admiral David Jeremiah, former vice chairman of the Joint Chiefs of Staff, has not been made public, but in a press conference Admiral Jeremiah described his conclusions. Although the Indian government that took office in late March 1998 had indicated its intention to “exercise the option to induct [sic] nuclear weapons,” most observers believed that India would conduct a lengthy assessment prior to undertaking tests. Admiral Jeremiah concluded that “both the intelligence and policy communities had an underlying mindset going into these tests that the BJP [the party heading the new Indian government] would behave as we behave.” The Indians also undertook various efforts to mask their intentions and to hide their test preparations. The Intelligence Community provided more detailed information on the follow-on Pakistani tests.

Admiral Jeremiah called for more rigor in analysts’ thinking and urged that outside experts be brought into the analytical process. There is, he maintained, a need for “greater collaboration and coordination of intelligence agencies and disciplines.” There is also, he pointed out, an imbalance between the vast quantities of imagery collected and limits on numbers of analysts. “In everyday language, that means there is an awful lot of stuff on the cutting room floor at the end of the day that we have not seen.” In essence, Jeremiah concluded that the DCI needs to ensure greater coordination among intelligence agencies in regard both to collection and analysis.

DCI Tenet has stated that he accepts all of Admiral Jeremiah’s recommendations. Appreciating that no system can prevent any future intelligence surprise or “failure,” many observers believe that inadequate coordination may have contributed significantly to the inability to monitor Indian nuclear efforts more closely. (See CRS Report 98-672, U.S. Intelligence and India’s Nuclear Tests: Lessons Learned, by Richard A. Best, Jr.)

Further concerns about the quality of intelligence analysis resulted from the North Korean launch of a three-stage Taepo Dong 1 missile on August 31, 1998. The Intelligence Community had long anticipated a two-stage Taepo Dong missile launch, but its capability to be used as a space launch vehicle with potential for striking some U.S. territory was unexpected.

Some observers have also criticized the conclusions reached by the Intelligence Community regarding the pharmaceutical plant in the Sudan that the U.S. attacked on August 20, 1998. Administration officials indicated confidence in information linking the plant to the production of chemical weapons, but outside observers remain skeptical. In May 1999 the U.S. Treasury unfroze the assets of the Saudi businessman who owns the Sudanese facility, an action some observers describe as a tacit admission that the U.S. struck the wrong target. Nonetheless, a lawsuit was filed in a U.S. federal court in July 2000 by the businessman.

Congress remains concerned with the potential for abuses by intelligence agency personnel and has addressed the question of whistleblower protection for officials working in intelligence agencies who may not be covered by other whistleblower legislation. The FY1999 Intelligence Authorization Act established procedures by which an intelligence agency official (or contractor) who seeks to provide information to Congress with respect to an urgent concern would first report such concern to the inspector general of his or her agency. The IG in turn would forward the information to the agency head within 14 days. The agency head would then forward it to the congressional intelligence committees within seven days. If the IG does not transmit the information (or does so inaccurately) the complainant could forward it to the intelligence committees directly if the agency head is notified. The conference report noted that “an intelligence committee Member or staff employee receiving such complaints or information must abide by the rules of the intelligence committees.”

Encryption remains an important legislative concern that has significant intelligence implications. Given advances in technology that may make obsolete the current controls on the export of encryption systems, bills have been introduced in both the House and the Senate to create a new regulatory framework. One proposal, H.R. 850, would loosen export controls on sophisticated encryption systems. Officials in intelligence and law enforcement agencies have expressed concerns that such liberalization would serve to provide protection to the communications of international terrorists and rogue states. The Senate Intelligence Committee expressed concern in May 1999 that loosening export restrictions “may severely damage the Intelligence Community’s ability to perform its SIGINT mission.” On July 15, 1999, the House Intelligence Committee unanimously adopted an amendment to H.R. 850 that would provide broader grounds for the President to control exports of encryption; see the Intelligence Committee’s report, Encryption for the National Interest Act, H.Rept. 106-117, Part 5. In September the Administration announced changes to its encryption policy making products exportable (after a technical review) to any country except seven terrorist states. A request for comments on an interim final rule revising regulations on the export of encryption items was published on January 14, 2000 (65FR2492-2502). (For further background on the encryption question, see CRS Issue Brief IB96039, Encryption Technology: Congressional Issues, and CRS Report 98-905, The Encryption Debate: Intelligence Aspects, by Keith G. Tidball and Richard A. Best, Jr.)

With the end of the Cold War, U.S. policymakers have become increasingly concerned about transnational threats, including narcotics smuggling, terrorism, and especially the possibility that terrorist groups might obtain access to weapons of mass destruction. Since such transnational threats are often best dealt with in law enforcement channels, greater cooperation between intelligence and law enforcement agencies has been encouraged in recent years. This cooperation has raised a number of difficult issues: potential duplication of effort, the use of information obtained by intelligence agencies in court trials, the danger that the methods of covert intelligence collectors might be used routinely in law enforcement cases, the undermining of legitimate foreign policy and defense initiatives. (For additional background, see CRS Report RL30252, Intelligence and Law Enforcement: Countering Transnational Threats to the U.S., by Richard A. Best, Jr., updated January 16, 2001.)

Congress remains concerned about intelligence support provided to the government’s counter-narcotics effort. The Explanatory Statement accompanying the FY1998 intelligence authorization conference report expressed concern about funding the National Drug Intelligence Center (NDIC) through the National Foreign Intelligence Program inasmuch as NDIC functions within the Department of Justice. Nonetheless, NDIC funding has continued to be incorporated in defense authorization and appropriation acts.

In February 2000 the Clinton Administration announced the establishment of an interagency Counter Drug Intelligence Coordinating Group composed of representatives of major federal law enforcement and intelligence agencies. The Group’s responsibility will be to ensure coordination in the narcotics intelligence efforts of federal departments and agencies. An interagency staff, the Counterdrug Intelligence Executive Secretariat, with some 30 personnel has been created to support the Group and roles and missions have been assigned to the four major national narcotics intelligence centers–the DCI’s Crime and Narcotics Center (CNC), the National Drug Intelligence Center (NDIC), the El Paso Intelligence Center (EPIC), and the Financial Crimes Enforcement Network (FinCen).

Although most observers acknowledge the need for close coordination among intelligence and law enforcement agencies in regard to narcotics intelligence, some questions exist about the implications of the creation of this interagency structure for the DCI’s statutory responsibilities for the national intelligence effort. Questions also remain concerning policy guidelines and procedures for the use of intelligence information for law enforcement purposes. Concern has also been expressed about the role of U.S. intelligence agencies in support of counter-narcotics efforts in South America, with some observers expressing concern about the value of the contribution and others noting the danger of involving the U.S. in local insurrections fueled by drug money. Others have pointed to the dangers involved in U.S. intelligence officials or contractors providing intelligence to foreign countries who use this data to attack suspicious civilian aircraft. Section 1012 of the FY1995 Defense Authorization Act (P.L. 103-337) provided official immunity for U.S. agents involved in authorized support to foreign counter-narcotics efforts, but some observers call for a review of the whole policy in light of the April 2001 attack by a Peruvian aircraft on a missionary plane with the loss of two lives.

For some years concerns have been expressed about issues of secrecy and classification. Some argue that classification and declassification authorities and procedures should be more closely based in statutory law. Others believe that far too much government information is classified and withheld from the public, especially given the end of the Cold War. A Commission on Protecting and Reducing Government Secrecy, chaired by Senator Moynihan, recommended in 1997 a series of measures to establish the basic principles of security classification and declassification. These measures were incorporated in legislation introduced in the 105th Congress (H.R. 1546/S. 712), but the bills did not receive floor consideration in either chamber. Similar legislation (S. 22) was introduced in the 106th Congress and eventually incorporated into the Intelligence Authorization Act for FY2001 (P.L. 106-567). (For additional background, see CRS Report 98-298, Managing Secrecy: Security Classification Reform--the Government Secrecy Act Proposal, by Harold C. Relyea.)

Other provisions of the FY2001 intelligence authorization bill would have established criminal penalties for the unauthorized disclosure of properly classified information. Previous legislation established penalties only for disclosure of specific types of classified material, e.g. codes and cryptographic devices and information related to nuclear programs. Proponents of the provision maintained that recent leaks of highly sensitive intelligence information have not only risked the loss of valuable collection capabilities but also jeopardized important security interests. Critics argued that the provisions in H.R. 4392 were overly broad and would preclude the type of leaks that in the past have ultimately benefitted the public. The bill was vetoed by President Clinton on November 4, 2000, and another version (S. 5630) with the unauthorized disclosure provisions deleted was enacted on December 27, 2000, as P.L. 106-567.

CIA and the Israeli-Palestinian Accord. The accord between Israeli and Palestinian leaders (known as the Wye River Memorandum) signed in Washington on October 23, 1998, provided for a Trilateral Security Committee composed of high-ranking Israeli, Palestinian, and U.S. officials to oversee the implementation of the agreement and coordinate efforts to combat terror and terrorist organizations. Media accounts indicated that, as a result of ongoing efforts by CIA officials to assist in the establishment of security arrangements, both the Israeli and Palestine leadership support a more formal role for the Agency as more extensive territories are placed under Palestinian control.

The accord assumes that CIA officials will continue liaison efforts, which have been ongoing for several years, to improve communications between the two sides on security matters and to enhance the professionalism of Palestinian security forces. According to DCI Tenet, however, CIA officials will not interpose themselves between the two sides, conduct interrogations, or assume a direct role on the ground. Some observers expressed concern that CIA officials might become responsible for making judgments as to whether “violations” had occurred, a responsibility that, holders of this view maintain, should be reserved to policymakers.

In the final stages of negotiations of the Wye Accord, Israeli Prime Minister Netanyahu pressed President Clinton to pardon Jonathan Pollard, a former Navy Intelligence analyst, who was convicted of spying on behalf of Israel in 1986. Subsequent Israeli leaders have also pressed Pollard’s case. Media reports indicate that many Intelligence Community officials, including DCI Tenet, strongly oppose any presidential pardon and opposition has been expressed by Members of both intelligence committees. (See CRS Report RS20001, Jonathan Pollard: Background and Considerations for Presidential Clemency, by Richard A. Best, Jr. and Clyde Mark.)

The Intelligence Community and Iraq. Persisting difficulties between the United States and Iraq present major challenges to intelligence agencies. Collecting information about the secretive Iraqi regime is difficult enough, but devising a covert strategy to remove Saddam Husayn from power has proven thus far to be insurmountable. According to information available in the media, intelligence agencies have had little success in penetrating Iraqi leadership circles. Intelligence agencies supported the efforts of U.N. inspectors charged with determining Iraqi compliance with U.N. resolutions requiring Iraq to end any programs for the acquisition or deployment of weapons of mass destruction, but such efforts have been resisted by the Iraqi government. There are, in addition, allegations that U.S. intelligence officials may have improperly interfered with U.N. inspector teams. The United States openly seeks a new regime in Bagdad and funding has reportedly been included for covert assistance to opposition elements in recent legislation, but intelligence agency officials are reportedly skeptical of providing aid to any of the existing groups working against Saddam. (See CRS Report 98-179, Iraq’s Opposition Movements, by Kenneth Katzman; also, CRS Issue Brief IB94049 Iraq-U.S. Confrontation: 1997-1999 by Alfred Prados and Kenneth Katzman.)

The Intelligence Community and Missile Defense. A key Cold War-era intelligence mission that endures in the post-Cold War era is collection targeted at foreign missile capabilities, especially those capable of delivering weapons of mass destruction (WMD). As noted above, the unanticipated North Korean testing of the Taepo Dong 1 missile raised questions about intelligence collection capabilities. In addition, the July 1998 report of the Commission to Assess the Ballistic Missile Threat to the United States (known as the Rumsfeld Commission) concluded: “A new strategic environment now gives emerging ballistic missile powers the capacity, through a combination of domestic development and foreign assistance, to acquire the means to strike the U.S. within about five years of a decision to acquire such a capability (10 years in the case of Iraq). During several of those years, the U.S. might not be aware that such a decision had been made. Available alternative means of delivery can shorten the warning time of deployment nearly to zero.” Although more pessimistic than much-criticized Intelligence Community estimates, this assessment underscored the vital importance of intelligence efforts in this area, especially given its key role in the debate over missile defense systems.

Kosovo/Operation Allied Force. The highly successful airstrikes against Serbian military targets, the centerpiece of Operation Allied Force, taxed U.S. intelligence capabilities. Intelligence enabled NATO to use precision munitions to destroy Serbian targets with no NATO combat casualties and with relatively limited losses of civilian lives. Nonetheless, some observers suggest that difficulties in relaying targeting data, the need for communications “workarounds,” and escalating requirements for additional aircraft reflect a serious failure in the years since the Persian Gulf War to address increased requirements for imagery collection platforms for use in conjunction with precision guided munitions.

In addition to uncertainties about the future government satellite programs, critics note that DOD has been unable to acquire significant numbers of unmanned aerial vehicles (UAVs) as a result of the managerial problems that have long been subjects of congressional censure. Further, they cite the absence of plans for follow-ons to U-2 aircraft, first developed in the Eisenhower Administration, as well as a limited inventory of JSTARS aircraft with ground-radar capabilities. The FY2000 Defense Appropriations Act (P.L. 106-79) provided an increase of $15 million for the Global Hawk UAV program and requested studies on UAVs and other “low density/high demand” platforms. (See CRS Report RL30727, Airborne Intelligence, Surveillance and Reconnaissance (ISR): The U-2 Aircraft and Global Hawk UAV Programs, by Richard A. Best, Jr. and Christopher Bolkcom, updated December 1, 2000.) Testing of the Global Hawk continues; in April 2001 the test vehicle flew from California to Australia non-stop.

Further decisions on UAVs and manned reconnaissance aircraft, including the Air Force’s U-2s and the Navy’s P-3's, are likely to be made in the context of FY2001 budget decisions. Some observers express concern that investment in new and upgraded reconnaissance platforms may be inadequate in light of the high tempo of operations that may occur in the next decade.

According to official accounts, the mistaken attack on the Chinese Embassy in Belgrade on May 7th resulted from the use of outdated maps and databases. The Yugoslav Federal Directorate of Supply and Procurement, a military supply facility, was the intended target, but it was confused with a nearby and similarly-sized building that was actually China’s embassy. Although embassies were on “no-strike” lists for Operation Allied Force, along with hospitals, churches, and mosques, U.S. databases did not reflect the location of the current Chinese Embassy in Belgrade. Secretary of Defense William Cohen has announced several steps to prevent future targeting errors; the State Department will be responsible for reporting to the Intelligence Community whenever embassies move or new embassies are built, new procedures for developing target information, including procedures for updating maps will be established, and the Defense Intelligence Agency (DIA) and the National Imagery and Mapping Agency (NIMA) will establish new rapid response procedures for updating critical databases for no-strike targets.

Official spokesmen, without excusing the error, have noted the daunting challenge of maintaining a current and accurate database for a city the size of Belgrade. They also note the fact that imagery and mapping efforts, largely the responsibility of NIMA, have been affected by resource cuts in the last few years. In May 1998, the House Intelligence Committee severely criticized NIMA’s management and financial accounting: “The Committee is concerned that NIMA either simply does not want to tell Congress of its dealings, or it simply doesn’t know how money is being spent and managed. Neither option is good. Generally, the committee is skeptical regarding whether NIMA has the ability to forecast, manage, and execute its budget.” The report accompanying the Senate version of the FY2000 intelligence authorization bill urged NIMA to increase its use of commercial imagery. DCI Tenet subsequently acknowledged in congressional testimony that, “We have diverted resources and attention away from basic intelligence and database maintenance, to support current operations too long.”

Counterintelligence. Allegations that U.S. classified information regarding design of missile warheads may have been provided to Chinese officials by a scientist at the Los Alamos National Laboratory (part of the Energy Department) led to charges of lax security especially in regard to visits by foreign nationals. An Intelligence Community damage assessment, released in April 1999, concluded that China obtained by espionage classified U.S. nuclear weapons information that “probably accelerated” its program to develop future nuclear weapons. According to the assessment, China obtained at least basic design information on several modern U.S. nuclear reentry vehicles, including the Trident II (W88). A report of the Select Committee on U.S. National Security and Military/Commercial Concerns with the People’s Republic of China concluded that U.S. information accelerated Chinese nuclear weapon modernization and “helped the PRC in its efforts to fabricate and successfully test its next generation of nuclear weapons designs. These warheads give the PRC small, modern thermonuclear warheads roughly equivalent to current U.S. warhead yields.”

(For additional information, see CRS Report RL30143, China: Suspected Acquisition of U.S. Nuclear Weapon Data, by Shirley A. Kan, April 22, 1999; and CRS Report RL30220, China’s Technology Acquisitions: Cox Committee’s Report--Findings, Issues and Recommendations, June 8, 1999. For more recent developments, see CRS Report RL30569, Department of Energy: Status of Legislated Security and Counterintelligence Measures, by Jonathan Medalia, October 17, 2000.)

Reflecting concern about shortcomings in the investigation of potential espionage against Energy Department laboratories, amendments to the Foreign Intelligence Surveillance Act (FISA) were included in the Senate version of the FY2001 Intelligence Authorization bill (H.R. 4392) to establish specific provisions for the review by the Attorney General of requests for surveillance and searches under FISA. The legislation would also encourage closer cooperation between the FBI and national security agencies. Title VI of the resulting Intelligence Authorization Act for FY2001 (P.L. 106-567) included provisions designed to enhance the FBI’s capabilities to undertake counterintelligence investigations and authorized $7 million in additional funding for FY2001.

In light of the arrest in February 2001of FBI Special Agent Robert Hanssen for suspicion of espionage on behalf of the former Soviet Union and Russia, Congress is expected to monitor the results of the judicial processes and undertake its own review of counterintelligence efforts. Some observers advocate more extensive use of polygraph testing of U.S. intelligence officials while others criticize the reliability of such tests.


Selected 106th Congress Legislation

P.L. 106-120 / H.R. 1555. Intelligence Authorization Act for FY2000. Introduced April 26, 1999; referred to Permanent Select Committee on Intelligence. Reported to the House April 28. Passed House (voice vote, amended) May 13. Passed Senate, amended, July 21. Conference report (H.Rept. 106-457) passed House (voice vote) November 9, 1999. Signed into law December 3, 1999.

P.L. 106-567/H.R. 5630 (Goss). Intelligence Authorization Act for FY2001. Introduced and passed by House, November 13, 2000. Passed Senate, amended, December 6, 2000. Passed House, as amended by the Senate, December 11, 2000. Signed into law December 27, 2000.

H.R. 850 (Goodlatte). Security and Freedom Through Encryption (SAFE) Act. Introduced February 25, 1999; referred to Committees on Judiciary and International Relations. Reported by Judiciary Committee, April 27; referred to Committees on Armed Services, Commerce, and Intelligence. Reported by the Judiciary Committee, April 27 (H.Rept. 106-117, Part 1). Reported, amended, by the Permanent Select Committee on Intelligence (H.Rept. 106-117, Part 5) July 23, 1999.

H.R. 2616 (Goss). Clarifies U.S. policy with respect to the use and export of encryption products. Introduced July 27, 1999, and referred to the Committees on Judiciary, International Relations, and Government Reform.

H.R. 4392 (Goss). Intelligence Authorization Act for FY2001. Introduced May 8, 2000; referred to the Permanent Select Committee on Intelligence. Reported May 16, 2000. Passed House, amended, May 23, 2000. Passed Senate, amended, October 2, 2000. Conference report (H.Rept. 106-969) passed Senate and House, October 12, 2000. Vetoed by the President, November 4, 2000.

S. 1009 (Shelby). Intelligence Authorization Act for FY2000. Original measure reported May 11, 1999. Referred to Committee on Armed Services, May 13; discharged June 11. Passed Senate, amended (as H.R. 1555), July 21, 1999. (See P.L. 106-120/H.R. 1555.)

S. 2507 (Shelby). Intelligence Authorization Act for FY2001. Original measure reported May 4, 2000 (S.Rept.106-279). Amended version reported by Armed Services Committee, June 29, 2000 (S.Rept. 106-325). Passed Senate on voice vote, October 2, 2000; replaced all after the enactment clause of H.R. 4392.

S. 2089 (Specter). Counterintelligence Reform Act of 2000. Introduced February 24, 2000. Referred to the Committee on the Judiciary; reported, amended without written report, May 23, 2000. Referred to the Select Committee on Intelligence, May 23, 2000; reported, amended, July 20, 2000 (S.Rept. 106-352). Placed on Senate Calendar, July 20, 2000.


CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS

U.S. Commission on the Role and Capabilities of the United States Intelligence Community, Preparing for the 21st Century: An Appraisal of U.S. Intelligence, March 1, 1996.

U.S. Congress, House of Representatives, 104th Congress, Permanent Select Committee on Intelligence, IC21: Intelligence Community in the 21st Century, Staff Study, April 9, 1996.

U.S. Congress, House of Representatives, 105 th Congress, 2d session, Permanent Select Committee on Intelligence, Intelligence Authorization Act for Fiscal Year 1999, H.Rept. 105-508, May 5, 1998.

U.S. Congress, House of Representatives, 105 th Congress, 2d session, Committee of Conference, Intelligence Authorization Act for Fiscal Year 1999, H.Rept. 105-780, October 5, 1998.

U.S. Congress, House of Representatives, 106 th Congress, 1 st session, Committee of Conference, Intelligence Authorization Act for Fiscal Year 2000, H.Rept. 106-457, November 8, 1999.

U.S. Congress, House of Representatives, 106 th Congress, 2d session, Committee of Conference, Intelligence Authorization Act for Fiscal Year 2001, H.Rept. 106-969, October 11, 2000.

U.S. Congress, House of Representatives, 106 th Congress, 1 st session, Permanent Select Committee on Intelligence, Encryption for the National Interest Act, H.Rept. 106-117, Part 5, July 23, 1999.

U.S. Congress, Senate, 105 th Congress, 2d session, Select Committee on Intelligence, Authorizing Appropriations for Fiscal Year 1999 for the Intelligence Activities of the United States Government and the Central Intelligence Agency Retirement and Disability System and for Other Purposes, S.Rept. 105-185, May 7, 1998.

U.S. Congress, House of Representatives, 106 th Congress, 1 st session, Permanent Select Committee on Intelligence, Intelligence Authorization Act for Fiscal Year 2000, H.Rept. 106-130, Part 1, May 7, 1999.

U.S. Congress, House of Representatives, 106 th Congress, 2d session, Permanent Select Committee on Intelligence, Intelligence Authorization Act for Fiscal Year 2001, H.Rept. 106-620, May 16, 2000.

U.S. Congress, Senate, 106 th Congress, 1 st session, Select Committee on Intelligence, Authorizing Appropriations for Fiscal Year 2000 for the Intelligence Activities of the United States Government and the Central Intelligence Agency Retirement and Disability System, S.Rept. 106-48, May 11, 1999.

U.S. Congress, Senate, 106 th Congress, 2d session, Select Committee on Intelligence, Authorizing Appropriations for Fiscal Year 2001 for the Intelligence Activities of the United States Government and the Central Intelligence Agency Retirement and Disability System, S.Rept. 106-279, May 4, 2000.

U.S. Congress, Senate, 106 th Congress, 2d session, Committee on Armed Services, Intelligence Authorization Act for FY 2001, S.Rept. 106-325, June 29, 2000.

U.S. Congress, Senate, 106 th Congress, 2d session, Select Committee on Intelligence, Counterintelligence Act of 2000, S.Rept. 106-352, July 20, 2000.

U.S. President’s Foreign Intelligence Advisory Board, Special Investigative Panel, Science at Its Best, Security at its Worst: A Report on Security Problems at the U.S. Department of Energy, June 1999.