AMENDMENT NO. 3398

(PURPOSE: TO LIMIT THE USE OF FUNDS PENDING ESTABLISHMENT OF THE POSITION OF DEPUTY UNDER SECRETARY OF DEFENSE FOR TECHNOLOGY SECURITY POLICY)

Mr. KYL. Mr. President, if it is in order, I would like to send an amendment to the desk.

The PRESIDING OFFICER. The clerk will report.

Mr. KYL. And ask for its immediate consideration.

The bill clerk read as follows:

The Senator from Arizona [Mr. Kyl] proposes an amendment numbered 3398.

Mr. KYL. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

The PRESIDING OFFICER. Without objection, it is so ordered.

The amendment is as follows:
On page 99, between lines 17 and 18, insert the following:
Sec. 8104. (a) None of the funds appropriated by this Act may be obligated or expended for the establishment or operation of the Defense Threat Reduction Agency until the Secretary of Defense takes the following actions:

(1) Establishes within the Office of the Under Secretary of Defense for Policy the position of Deputy Under Secretary of Defense for Technology Security Policy and designates that official to serve as the Director of the Defense Security Technology Agency with only the following duties:

(A) To develop for the Department of Defense policies and positions regarding the appropriate export control policies and procedures that are necessary to protect the national security interests of the United States.

(B) To supervise activities of the Department of Defense relating to export controls.

(C) As the Director of the Defense Security Technology Agency--

(i) to administer the technology security program of the Department of Defense;

(ii) to review, under that program, international transfers of defense-related technology, goods, services, and munitions in order to determine whether such transfers are consistent with United States foreign policy and national security interests and to ensure that such international transfers comply with Department of Defense technology security policies;

(iii) to ensure (using automation and other computerized techniques to the maximum extent practicable) that the Department of Defense role in the processing of export license applications is carried out as expeditiously as is practicable consistent with the national security interests of the United States; and

(iv) to actively support intelligence and enforcement activities of the Federal Government to restrain the flow of defense-related technology, goods, services, and munitions to potential adversaries.

(2) Submits to Congress a written certification that--

(A) the Defense Security Technology Agency is to remain a Defense Agency independent of all other Defense Agencies of the Department of Defense and the military departments; and

(B) no funds are to be obligated or expended for integrating the Defense Security Technology Agency into another Defense Agency.
(b) The Deputy Under Secretary of Defense for Technology Security Policy may report directly to the Secretary of Defense on the matters that are within the duties of the Deputy Under Secretary.
(c) Not later than 10 days after the Secretary of Defense establishes the position of Deputy Under Secretary of Defense for Technology Security Policy, the Secretary shall submit to the Committees on Armed Services and on Appropriations of the Senate and the Committees on National Security and on Appropriations of the House of Representatives a report on the establishment of the position. The report shall include the following:

(1) A description of any organizational changes that have been made or are to be made within the Department of Defense to satisfy the conditions set forth in subsection (a) and otherwise to implement this section.

(2) A description of the role of the Chairman of the Joint Chiefs of Staff in the export control activities of the Department of Defense after the establishment of the position, together with a discussion of how that role compares to the Chairman's role in those activities before the establishment of the position.
(d) Unless specifically authorized and appropriated for such purpose, funds may not be obligated to relocate any office or personnel of the Defense Technology Security Administration to any location that is more than five miles from the Pentagon Reservation (as defined in section 2674(f) of title 10, United States Code).

Mr. KYL. Mr. President, might I ask of the distinguished chairman whether this would be an appropriate time to discuss briefly the amendment or whether we should lay it aside and move to other business? What would be the chairman's pleasure?

Mr. STEVENS. Mr. President, I just delivered a copy of the Senator's amendment to the minority and other committees affected. He is at liberty to make such comments he wishes to make, but we will not be able to have final consideration of the matter until we have heard back from Senator Inouye and his people on his side of the aisle. The Governmental Affairs Committee is also considering this issue.

Mr. KYL. What I might do then, Mr. President, since we want to handle this in a way agreeable to the chairman, if there is no one else to present an amendment right now, rather than defer business, I will go ahead and describe the amendment but do it briefly and then, when the chairman is ready to proceed with other business, lay it aside and handle it in that fashion, if that is agreeable with the chairman.

Mr. STEVENS. Fine.

PRIVILEGE OF THE FLOOR

Mr. KYL. Mr. President, in that event, let me first ask unanimous consent that two fellows from my office, John Rood and David Stephens, be granted floor privileges for the debate on this matter.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. KYL. I thank the Chair.

Mr. President, I will describe this amendment briefly.

Frankly, this came out of the revelations concerning the alleged transfer of certain technology to the Chinese Government as a part of the process of launching American satellites on Chinese rockets, the so-called Loral-Hughes matter. But it really goes beyond that. It is a question of whether or not the Defense Department has in process an adequate way of reviewing the requests for export licensure and the conditions attached to those licenses to ensure that national security is not jeopardized.

That role has in the past been played by an agency of the Defense Department called the Defense Technology Security Agency. It goes by the name of DTSA for the people who understand it. The point of this memorandum is to ensure that DTSA will continue to have a prominent role in the evaluation of export licenses and the kinds of conditions that would be attached to them.

In fact, we ensure as a result of this amendment that the role is prominent by restoring the position of the Deputy Under Secretary for Technology Security Policy within the Office of the Under Secretary of Defense for Policy, and thereby ensure, as I say, a prominent role for this agency. The Deputy Under Secretary would have access to both the Under Secretary of Policy and the Secretary of Defense himself.

This is important, Mr. President, for the following reasons:

No. 1, DTSA is the single agency in the Government reviewing the national security implications of an item for export;

No. 2, DTSA coordinates input from the services, military branches, the Joint Chiefs and the defense agencies;

No. 3, DTSA routinely supports the Department of State in its investigations of these matters;

No. 4, creating a Deputy Secretary of Technology Security will ensure that the Department of Defense is represented at a sufficiently high level at the interagency meetings that occur to discuss these export licenses.

And, finally, providing the Deputy Under Secretary with the authority to interact directly with the Secretary of Defense will enable the Deputy Secretary to bring items of immediate concern directly to the Secretary to discuss with the Secretary of Commerce and the President.

The Department of Defense is the only agency with the expertise, the personnel, and the ability to assess the impact of exports on the national security of the United States, and this ought to be our No. 1 concern. The Persian Gulf war demonstrated the value of the United States maintaining a technical edge on the battlefield. Maintaining that edge in the future is dependent upon keeping sensitive technologies out of the hands of potential adversaries.

Questions regarding the appropriate role of the Department of Defense in considering exports of dual-use items have obviously been of concern for a number of years. But, as I said, the alleged transfer technology to the Chinese Government has really elevated this concern to the point that there are those of us in Congress who want to ensure that the Department of Defense continues to have an important role here.

Early in the 1990s, Congress examined the problems with export control and how it was possible that American companies, with the knowledge of the Department of Commerce, could have contributed to the Iraqi arms buildup, as we know occurred. We learned, for example, that between 1985 and the imposition of the U.N. embargo on Iraq in August of 1990, the Department of Commerce approved for sale to Iraq 771 export licenses for dual-use goods. Some of these sales involved technologies that very probably helped the Iraqis develop ballistic missile, nuclear, and chemical weapons. In some cases, Commerce approved the sale over strong objections from Defense or without even consulting the Department of Defense at all.

In 1994, the Export Administration Act expired and in 1996 dissolved, leaving no overarching legal forum to guide the export control policies of the United States. Export controls were at that point directed by Executive order. And this resulted in relaxed control over national-security-related equipment and technologies. The GAO has documented potential problems with changes that occurred in 1996 and with the Department of Commerce retaining the primary responsibility for oversight of important national security equipment or technology.

Let me just give a couple of examples here. On September 14, 1994, the Department of Commerce approved an export of machine tools to China. The tools had been used in a plant in Ohio that produced aircraft and missiles for the U.S. military. Some of the more sophisticated machine tools were diverted to a Chinese facility engaged in military production, possibly cruise missile production.

Under current referral practices, the majority of applications for the export of categories related to stealth are not sent to the Department of Defense or the Department of State for review. Without such referrals, it cannot be ensured that export licenses for militarily significant stealth technology are properly reviewed and controlled.

A third example: Commercial jet engine hot section technology was transferred to the Department of Commerce in 1996. Defense officials are concerned about the diffusion of technology and the availability of hot section components that could negatively affect the combat advantage of our aircraft and pose a threat to U.S. national security concerns. So the Defense Department must have an active role and a strong position in advising the President about the national security implications of exporting these and other important dual-use technologies.

In order to do this, the Secretary of Defense must have the best advice available. This amendment will ensure that Secretary Cohen and all subsequent Secretaries have that advice.

Mr. President, at the appropriate time I hope we can engage in further discussion of this to ensure that the national security of the United States is not impaired.

At this time, unless there is anyone else who would like to discuss it, I am happy to have the chairman or the ranking member move to other business.

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Mr. STEVENS. Mr. President, I ask this amendment be set aside for later consideration so we may have consultation with other committees and Members involved in this subject. We did not have this on our list and have not distributed it until just now. I ask unanimous consent it be put aside until other Members have a chance to review it.

The PRESIDING OFFICER. Without objection, it is so ordered.