[Senate Report 106-352]
[From the U.S. Government Publishing Office]
Calendar No. 701
106th Congress Report
SENATE
2d Session 106-352
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THE COUNTERINTELLIGENCE REFORM ACT OF 2000
_______
July 20, 2000.--Ordered to be printed
_______
Mr. Shelby, from the Select Committee on Intelligence, submitted the
following
R E P O R T
[To accompany S. 2089]
The Select Committee on Intelligence, to which was referred
the bill (S. 2089) to amend the Foreign Intelligence
Surveillance Act of 1978 to modify procedures relating to
orders for surveillance and searches for foreign intelligence
purposes, and for other purposes, having considered the same,
reports favorably thereon with amendments and recommends that
the bill as amended do pass.
PURPOSE
The proposed legislation is intended to improve
coordination within and among the U.S. Government agencies
investigating and prosecuting espionage cases and other cases
affecting national security. The legislation clarifies in
statute the obligations of each of the affected agencies,
ensures accountability in decisionmaking by relevant agency
heads, and codifies current law and practice with respect to a
determination of ``probable cause'' under the statute.
SCOPE OF COMMITTEE REVIEW
The Committee conducted a detailed review of the
Counterintelligence Reform Act of 2000. The Committee conducted
hearings and received comments from the affected agencies of
the intelligence and law enforcement communities. The following
report explains the Committee's amendments to the bill as
reported by the Judiciary Committee on May 23, 2000, and
highlights several additional issues that the Committee
considered in the course of its evaluation of S. 2089.
Background
Investigations into espionage by the People's Republic of
China (PRC) against Department of Energy (DOE) nuclear weapons
laboratories and other U.S. Government facilities have
identified extensive problems and shortcomings in the
government's response to this critical counterintelligence
threat.\1\ At the structural level, attention has focused
primarily on reforming and reorganizing DOE security,
counterintelligence, and national security structures and
programs, as well as altering attitudes toward security among
DOE scientists. Concern over PRC espionage, in particular the
PRC's use of sophisticated, non-traditional methods, has also
fueled existing concerns over the adequacy of government wide
counterintelligence structures, programs, and policies to
address both emerging threats and traditional adversaries using
cutting edge technologies and tradecraft in the 21st century.
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\1\ PRC espionage and the U.S. Government's response have been the
subject of investigations by, inter alia, the Senate Select Committee
on Intelligence, the House Select Committee on U.S. National Security
and Military/Commercial Concerns with the People's Republic of China,
the President's Foreign Intelligence Advisory Board (PFIAB), the Senate
Committee on Governmental Affairs, the Senate Judiciary Subcommittee on
Administrative Oversight and the Courts, and most recently, the
Attorney General's Review Team (``Bellows Report'').
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At the operational level, investigations into PRC nuclear
espionage have identified extensive problems in the DOE and FBI
investigations into the compromise of classified information on
the W-88 warhead and other U.S. nuclear weapons, including:
the FBI's failure to devote adequate
resources and attention to this critical investigation;
extensive failures in coordination,
information-sharing, and follow-through, both within
and between the DOE and the FBI, that led to many
missed opportunities and critical failures to act; and
problems in the Department of Justice's
response to the FBI's application for surveillance
pursuant to the Foreign Intelligence Surveillance Act
of 1978 (FISA).
Since March 1999, the Senate Select Committee on
Intelligence (SSCI) held numerous hearings and briefings on PRC
espionage against DOE labs and the resulting damage to U.S.
national security; the DOE and FBI investigations, including
the use of the FISA; longstanding DOE security and
counterintelligence problems; and DOE reorganization. In
addition, the Committee held three hearings and Member
briefings on counterintelligence policies and programs
government wide, including two sessions on the Administration's
draft counterintelligence reorganization plan entitled
``Counterintelligence for the 21st Century.''
In response to some of the issues identified in the
investigation of espionage at the DOE labs, on February 24,
2000, Senators Specter, Torricelli, Thurmond, Biden, Grassley,
Feingold, Helms, Schumer, Sessions and Leahy introduced the
``Counterintelligence Reform Act of 2000'' (S. 2089). In early
April 2000, the SSCI held a closed hearing to receive testimony
on S. 2089 and other issues involving the FISA. The bill was
considered by the Senate Judiciary Committee on May 18, 2000,
and ordered favorably reported with an amendment in the nature
of a substitute. On May 23, S. 2089 was reported to the Senate
and immediately referred to the SSCI for consideration.
The Office of Intelligence Policy and Review
The Office of Intelligence Policy and Review (OIPR) in the
Department of Justice is responsible for advising the Attorney
General on matters relating to the national security of the
United States. As part of its responsibilities, the OIPR
prepares and presents to the Foreign Intelligence Surveillance
Court (FISC) all applications for electronic surveillance and
physical searches under the Foreign Intelligence Surveillance
Act of 1978.
In June 2000, the National Commission on Terrorism
(referred to as the Bremer Commission) issued its report
entitled, ``Countering The Changing Threat of International
Terrorism.'' One of the significant findings of the Bremer
Commission was that the Department of Justice applies the FISA
statute in a ``cumbersome and overly cautious manner.'' Based
on testimony before the Select Committee on Intelligence and
agency discussions, the Committee agrees with the conclusions
of the Bremer Commission regarding the Justice Department's
application of the FISA statute. Agencies have informed the
Committee that the FISA application process, as interpreted by
the OIPR is administratively burdensome and, at times,
extremely slow. Many applications undergo months of scrutiny
before submission to the court because the OIPR prescribes
standards and restrictions not imposed by the statute.
In its substitute amendment to S. 2089, the Judiciary
Committee added a provision authorizing a substantial increase
in funds for the OIPR. While the Committee agrees that the OIPR
must act immediately to address the issues highlighted above,
the Committee doubts that the significant infusion of funds
authorized in Section 6, by itself, will remedy the majority of
these problems. Since many of these problems stem from policy
restrictions rather than resource constraints, the Committee
expects the OIPR to conduct a review of the way it conducts
business, including a ``zero-based'' review of all requirements
and restrictions imposed upon the FISA application process to
ensure they are specifically mandated by the statute. In order
to ensure that the OIPR is properly addressing these issues,
the Committee has prohibited the expenditures of funds
authorized in Section 6 until the OIPR submits a report to the
appropriate committees setting forth how it will utilize these
additional funds to remedy the issues addressed above, and the
results of the ``zero-based'' review described above.
Prior agent relationships
Sections 2(a) and 3(a), as adopted by the Judiciary
Committee, require FISA applications for counterintelligence
purposes to include a detailed description of any current or
relevant prior relationship of the subject of an investigation
with any intelligence or law enforcement agency. Although these
sections were deleted in the Intelligence Committee mark, the
Committee believes that a current relationship between an
agency within the U.S. Intelligence Community and the subject
of a counterintelligence investigation should be acknowledged,
to the extent practicable and with due regard for the
protection of sources and methods, in any FISA request
targeting that particular subject.
The Committee also notes that, in certain cases, prior
relationships between an agency within the U.S. Intelligence
Community and the subject of a counterintelligence
investigation may be useful in the consideration of a request
for a FISA order targeting that subject. The Committee expects
that any agency requesting an order to conduct electronic
surveillance or physical searches under the FISA will fully
inform the OIPR, to the extent practicable and with due regard
for the protection of sources and methods, of any current or
relevant prior relationship between the agency and the target
of the FISA application.
Past activities in establishing probable cause
The Department of Justice has been criticized for its
failure, in the summer of 1997, to approve for submission to
the FISC the FBI's application for FISA surveillance of Dr. Wen
Ho Lee and his wife, Sylvia Lee, suspects in the FBI
investigation into the compromise of classified information
relating to the W-88 warhead. In particular, the OIPR has been
criticized for an overly restrictive interpretation of the FISA
``currency'' requirement. This is the issue of how recent a
subject's activities must be to support a finding of probable
cause that the subject is engaged in clandestine intelligence
gathering activities.
Subsection 2(c) of S. 2089 amends the FISA to state
explicitly that past activities of a target may be considered
in determining whether there is probable cause to believe that
the target of electronic surveillance is an ``agent of a
foreign power.'' Subsection 3(c) adds an identical provision
governing FISA applications for physical searches.
While existing law does not specifically address ``past
activities,'' it does not preclude, and legislative history
supports, the conclusion that past activities may be part of
the totality of circumstances considered by the FISC in making
a probable cause determination. This reflects the practical
consideration, well-known to the drafters of the FISA, that
espionage is by its very nature clandestine, and that to
maintain cover, a clandestine agent may lie dormant, often for
years, between espionage activities.
The OIPR and the FBI have informed the Committee that in
their view, this provision represents a codification of current
law and practice. This is precisely the Committee's intent: to
clarify and make explicit, for the benefit of future FBI
agents, OIPR attorneys, and FISC judges, that the FISA
contemplates, and always has contemplated, that the past
activities of a target may be considered in a determination of
probable cause.
Classified Information Procedures Act
Originally, an additional amendment to S. 2089 was proposed
by one of the bill's cosponsors for consideration when the bill
reached the full Senate that would have amended the Classified
Information Procedures Act (CIPA) (18 U.S.C. App.) to address
concerns about the handling of the Dr. Peter H. Lee case by the
Department of Justice, the Department of Defense, and the U.S.
Navy. Lee, a former employee of Los Alamos and Lawrence
Livermore Nuclear Laboratories and TRW Inc., in December 1997
pled guilty to transmitting classified national defense
information to the PRC in violation of 18 U.S.C. 793(d) and
making false statements about his contacts with PRC nationals
in violation of 18 U.S.C. 1001.\2\
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\2\ Dr. Peter Lee was sentenced to 12 months in a halfway house, a
$20,000 fine, and 3,000 hours of community service.
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The proposed amendment reflected a belief that there was a
lack of coordination and cooperation between the Department of
Justice and other agencies that affected adversely the
decision-making process in the case. This Committee is
concerned that the original proposed amendment would allow
excessive intrusion into the prosecutorial function.
In light of this Committee's concerns with the potential
impacts of the proposed amendment, the Committee agreed to
include a much narrower amendment to the bill in Committee.
Accordingly, Section 7 of S. 2089 codifies existing practice
followed by Department of Justice prosecutors in cases
involving classified information. Section 7 requires the
Assistant Attorney General for the Criminal Division and the
United States Attorney, or their designees, to provide
briefings to the head of the agency that originated the
classified information at issue in the case. These briefings
will begin as soon as practicable and appropriate, consistent
with rules governing grand jury secrecy, and will continue
thereafter, as needed, to keep the agency head fully and
currently informed. The purpose of the briefings is to make
sure that the agency head understands the scope and volume of
the CIPA procedures. In addition, the agency head will have an
opportunity at various stages of the case to make his or her
views known to the prosecutors as to whether sources and
methods and other classification concerns are receiving
adequate protection. The Committee notes that a successful
prosecution depends on informed prosecutors, and believes that
this provision will aid in ensuring an appropriate flow of
information between prosecutors and affected agencies.
The Committee believes that the Department of Justice has a
responsibility to ensure that its prosecutors, and affected
agency officials, are fully aware of, and understand, the CIPA
procedures. The CIPA has proven to be a successful mechanism
for enabling prosecutions that involve national security
information to proceed in a manner that is both fair to the
defendant and protective of classified information. Before the
CIPA, the United States Government sometimes had to make the
difficult choice between either dismissing a criminal case or
proceeding in the face of the risk that classified information
might be made public. Neither alternative was in the best
interests of the intelligence or law enforcement agencies--or
of the American people. The CIPA provided pre-trial procedures
for the court to resolve in camera and ex parte these issues in
a manner that protects both the national security and the
defendant's right to a fair trial. The government may take an
immediate appeal of adverse rulings and, if the issues cannot
be resolved in a manner that protects national security, may
then make informed decisions on whether to dismiss some or all
of the charges.
In any case in which classified information is at issue,
the so-called ``victim agency'' that originated the information
is the agency whose equities are most directly implicated. The
head of that agency is responsible for protecting the
information and, accordingly, will have a strong interest in
the key decisions made by the prosecutors as the case develops.
The Committee believes that, in the vast majority of cases, the
lawyers from the Department of Justice and the United States
Attorneys Offices who are responsible for making the
prosecutorial decisions consult on a regular basis with the
agency head or his or her designee. While prosecutorial
discretion ultimately rests with Department of Justice
officials, it stands to reason that in cases designed to
protect the national security--such as espionage and terrorism
cases--prosecutors should ensure they do not make decisions
that, in fact, end up harming the national security.
Sharing within the Intelligence Community of information collected
under FISA court orders
By definition, information collected pursuant to a court
order issued under the Foreign Intelligence Surveillance Act is
foreign intelligence not law enforcement information.
Accordingly, the Committee wants to clarify that the FISA
``take'' can and must be shared by the Federal Bureau of
Investigation with appropriate intelligence agencies. For the
intelligence mission of the United States to be successful,
there must be a cooperative and concerted effort among
intelligence agencies. Any information collected by one agency
under foreign intelligence authorities that could assist
another agency in executing its lawful mission should be shared
fully and promptly. Only then can the United States Government
pursue aggressively important national security targets
including, for example, counterterrorist and counternarcotics
targets.
The Committee has been briefed on the recent efforts by the
Federal Bureau of Investigation and the Central Intelligence
Agency to enhance their ability to share valuable information
collected under FISA orders. The Committee commends these
efforts and expects them to continue and to be broadened to
include all areas of the foreign intelligence mission. Only
when an efficient and effective program is in place to ensure
full sharing of information possessed by the United States
Government will the Committee be satisfied that the national
security needs of the country are being protected.
SECTION-BY-SECTION ANALYSIS AND EXPLANATION
Section 1. Short title
The bill is entitled the ``Counterintelligence Reform Act
of 2000.''
Section 2. Orders for electronic surveillance under the Foreign
Intelligence Surveillance Act of 1978
Subsection 2(a) of S. 2089 requires the Attorney General to
review personally any application to conduct electronic
surveillance under the Foreign Intelligence Surveillance Act
(FISA), if requested to do so in writing by the Director of
Central Intelligence, the Director of the Federal Bureau of
Investigation, the Secretary of Defense, or the Secretary of
State. If the Attorney General disapproves the application, the
disapproval must be in writing and must set forth the
modifications, if any, to the application that would be
necessary for the DOJ to forward the request to the FISC.
Delegation of either the request or the review may occur in
cases where the agency head is disabled or otherwise
unavailable. The Committee adds a technical amendment to ensure
the delegation authority functions as intended. The Committee
notes that this provision is intended to be an extraordinary
authority, permitting an opportunity for the heads of the
enumerated agencies and departments to appeal a decision to the
Attorney General, who ultimately is charged by statute to
approve FISA applications for review by the FISA court. The
Committee will monitor implementation of this provision to
ensure it remains a process for appeal of FISA applications
that are particularly sensitive and warrant personal review by
the Attorney General.
Subsection 2(b) amends the FISA to state explicitly that
past activities of a target may be considered in determining
whether there is probable cause to believe that the target of
electronic surveillance is an ``agent of a foreign power.''
Current law does not specifically address ``past activities,''
but nothing precludes, and legislative history supports, that
past activities be part of the probable cause determination.
The Committee understands that the FISC will assess the
relevance of past activities in determining probable cause.
Section 3. Orders for physical searches under the Foreign Intelligence
Surveillance Act of 1978
Subsection 3 of S. 2089 adds the identical requirements, as
described in Subsection 2, for applications relating to
unconsented physical searches.
Section 4. Disclosure of information acquired under the Foreign
Intelligence Surveillance Act of 1978 for law enforcement
purposes
The Committee modifies Section 4 as adopted by the
Committee on Judiciary and replaces the provision with an
amendment to current semi-annual reporting requirements under
Section 108(a) of the Foreign Intelligence Surveillance Act of
1978 (50 U.S.C. 1808(a)). The Attorney General will be required
to track the use of FISA material for law enforcement purposes,
either as leads or as evidence at trial, and to include such
data in the Attorney General's Semi-Annual report to the
Committees on Intelligence. Additionally, the Attorney General
is directed to submit a report on the authorities and
procedures utilized by the Department of Justice for
determining whether to disclose information acquired under the
FISA for law enforcement purposes. This report will be
submitted to the House and Senate Committees on Intelligence
and the Judiciary.
Section 5. Coordination of counterintelligence with the Federal Bureau
of Investigation
Section 5 of S. 2089 establishes specific procedures
regarding the conduct and coordination of counterintelligence
investigations. The Committee believes that the determination
of whether to leave a subject in place should be retained by
the host agency. The Committee modifies subsection 5(a) to
require the FBI to provide a written assessment of the
potential impact of agency actions on a counterintelligence
investigation, rather than a written finding that the subject
of a counterintelligence investigation should be left in place.
The host agency shall use the assessment as an aid in
determining whether a target should be retained in place, and,
if so, under what circumstance, and provide written
notification of the determination to the FBI. The Committee
envisions that there will be a give-and-take between the two
agencies in reaching the best result.
Subsection 5(b) adds ``in a timely manner'' to the
statutory requirement that the FBI provide information and
consultation to a concerned agency or department regarding an
espionage investigation pertaining to the personnel,
operations, or information of such agency or department.
Subsection 5(c) requires the FBI to notify appropriate
executive branch officials of the commencement of a full field
espionage investigation of an executive branch employee. The
head of a department or agency is required by this subsection
to consult and coordinate with the FBI prior to conducting a
polygraph examination, interrogation, or other action that is
likely to alert a subject of an investigation.
Section 6. Enhancing protection of national security at the Department
of Justice
At the request of the OIPR, the Judiciary Committee added
Section 6 of S. 2089 which authorizes additional resources to
meet increased personnel demands to process FISA applications,
combat terrorism, participate effectively in counterespionage
investigations, provide policy analysis on national security
issues, and enhance secure computer and telecommunications
facilities. The Committee amends the provision in a manner that
does not change authorization requirements, but adds the
Intelligence Committees as recipients of the Attorney General's
report required by the section.
The Committee notes that the OIPR received $4.089 million
for fiscal year 2000. Due to the substantial increase in funds
authorized by this provision for the OIPR, the Committee
further amends Section 6 to make the authorization of
additional resources subject to the Attorney General submitting
a report to the appropriate committees on how these resources
will be used by the OIPR to improve and strengthen its
oversight of field offices, streamline and increase efficiency
of the FISA application process, and address issues identified
in the April 2000 semiannual report of the Attorney General to
the Intelligence Committees under section 108(a) of Foreign
Intelligence Surveillance Act of 1978.
Section 7. Coordination requirements relating to the prosecution of
cases involving classified information
Section 7 amends the Classified Information Procedures Act
to require the Department of Justice to brief senior officials,
including the agency head or his designee, of an affected
agency as soon as practicable after the prosecution team
determines that a case involving classified information could
result in a prosecution, and at such other times as to ensure
that appropriate officials are fully and currently informed
regarding the status of the case.
Section 8. Severability
This section is simply a savings clause that ensures that
any section in the Act that is held invalid will not prejudice
any other provision of the Act.
COMMITTEE ACTION
On July 18, 2000, by a vote of 15-0, the Select Committee
on Intelligence approved the bill with amendments and ordered
that it be favorably reported as amended.
ESTIMATE OF COSTS
No Congressional Budget Office estimate was available at
the time the report was filed. The Committee will publish the
estimate in the Congressional Record as soon as it is received
from the Congressional Budget Office.
EVALUATION OF REGULATORY IMPACT
In accordance with paragraph 11(b) rule XXXVI of the
Standing Rules of the Senate, the Committee finds that no
regulatory impact will be incurred by implementing the
provisions of this legislation.
CHANGES IN EXISTING LAW
It is the opinion of the Committee that it is necessary to
dispense with the requirements of section 12 of rule XXVI of
the Standing Rules of the Senate in order to expedite the
business of the Senate.