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[Senate Hearing 107-596]
[From the U.S. Government Printing Office]

                                                        S. Hrg. 107-596

                          INTELLIGENCE AGENCY



                               before the


                                 of the

                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                          INTELLIGENCE AGENCY


                         APRIL 17 AND 25, 2002

  81-063                  WASHINGTON : 2002
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                     BOB GRAHAM, Florida, Chairman
               RICHARD C. SHELBY, Alabama, Vice Chairman
CARL LEVIN, Michigan                 JON KYL, Arizona
    Virginia                         ORRIN G. HATCH, Utah
DIANNE FEINSTEIN, California         PAT ROBERTS, Kansas
RON WYDEN, Oregon                    MIKE DeWINE, Ohio
RICHARD J. DURBIN, Illinois          FRED THOMPSON, Tennessee
EVAN BAYH, Indiana                   RICHARD G. LUGAR, Indiana
JOHN EDWARDS, North Carolina
              Thomas A. Daschle, South Dakota, Ex Officio
                  Trent Lott, Mississippi, Ex Officio
                     Alfred Cumming, Staff Director
                  Bill Duhnke, Minority Staff Director
                    Kathleen P. McGhee, Chief Clerk

                            C O N T E N T S

Hearings held in Washington, D.C., April 17, 2002 and April 25, 
  2002........................................................... 1, 19
Statement of:
    Graham, Hon. Bob, a U.S. Senator from the State of Florida...     1
    Helgerson, John L., Nominee to be Inspector General of the 
      Central Intelligence Agency................................     3
    Shelby, Hon. Richard C., a U.S. Senator from the State of 
      Alabama....................................................     2
Supplemental Materials:
    Senate Select Committee on Intelligence Questionnaire for 
      Completion by Presidential Nominees........................    21
    Comstock, Amy L., Director, Office of Government Ethics 
      Letter to the Honorable Bob Graham, Chairman, Select 
      Committee on Intelligence dated March 4, 2002..............    36
    Financial Disclosure Report of John L. Helgerson.............    37
    Rizzo, John A., Acting General Counsel, Designated Agency 
      Ethics Official CIA, letter dated March 26, 2002...........    51



                       WEDNESDAY, APRIL 17, 2002

                                       U.S. Senate,
                          Select Committee on Intelligence,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:32 p.m., in 
room SH-216, Hart Senate Office Building, the Honorable Bob 
Graham (chairman of the Committee) presiding.
    Committee Members Present: Senators Graham, Rockefeller, 
and Shelby.
    Chairman Graham. The hearing will come to order.
    Today the Committee is meeting in open session to receive 
testimony from the President's nominee for the position of 
inspector general of the Central Intelligence Agency, Mr. John 
L. Helgerson, and we thank you and welcome you, Mr. Helgerson, 
to our Committee meeting. We are delighted that you are also 
accompanied by your wife, Martha, and I understand that you've 
also brought an assistant, Lanetta Watkins. If there are any 
other guests that you would like to introduce, Mr. Helgerson, 
we'd be pleased to be introduced to them.
    Mr. Helgerson. No others, Mr. Chairman, but thank you for 
the welcome.
    Chairman Graham. Mr. Helgerson is nominated to be the only 
third Inspector General in the Central Intelligence Agency 
since this position was created by the Congress in 1989. 
Members of this Committee know well the previous two occupants 
of the Inspector General post, Mr. Fred Hitz and Mr. Britt 
Snider. The House and Senate Intelligence Committees, in fact, 
the entire Congress, as well as the American people, rely on 
the Inspector General to be a strong and tireless overseer of 
the conduct of the CIA. As chairman of this Committee, I feel a 
special responsibility to the American people to be their eyes 
and ears when it comes to oversight of the intelligence 
community, and I know that Senator Shelby and our other 
colleagues share that feeling.
    The activities of most federal agencies are scrutinized by 
many, including, in most cases, more than one congressional 
committee, as well as the media and various other entities 
which are interested in the activities of that federal agency. 
However, when it comes to the CIA, there is, by design, little 
that is available for public view. We as members of this 
Committee are entrusted with overseeing this crucial government 
agency, which is at the front lines of our nation's war on 
global terrorism, and like the Committee the Inspector General 
is charged with assuring that the CIA's employees are 
performing to the highest standards.
    As a statutory Inspector General, the CIA Inspector General 
has the added responsibility of reporting to the Congress any 
and all problems discovered within the agency. To fulfill this 
Committee's oversight responsibility, we must rely on the 
wisdom, the integrity, the diligence and the independence of 
the person who holds the job of CIA Inspector General. Mr. 
Helgerson, I look forward to hearing from you and how you would 
meet these expectations should you be confirmed.
    By way of introduction, I will tell the audience that Mr. 
Helgerson has a long and diverse career within the intelligence 
community. A native of South Dakota, he holds a bachelor's 
degree from St. Olaf College in Minnesota and a master's and 
Ph.D. from Duke University, where I understand he met his wife, 
    He began his career as a CIA analyst. He has at varying 
points headed units responsible for coverage of Russia, Europe, 
Africa and Latin America. His senior management positions 
include Deputy Director for Intelligence at the CIA, Deputy 
Inspector General of the CIA and Deputy Director of the 
National Imagery and Mapping Agency. In August of 2001, he was 
appointed Chairman of the National Intelligence Council. Mr. 
Helgerson has received a number of awards and commendations, 
including the CIA's Distinguished Intelligence Medal and NIMA's 
Distinguished Civilian Service Award.
    I would now like to call on my friend and colleague, Vice 
Chairman Senator Shelby for his opening remarks and then we 
look forward to hearing from Mr. Helgerson.
    Vice Chairman Shelby. Thank you, Mr. Chairman.
    Mr. Helgerson, congratulations on your nomination and I 
want to thank you for your willingness to appear before the 
Committee today. I know from our discussion yesterday that 
you're aware of the importance of the position for which you've 
been nominated. The CIA Inspector General is a Presidentially-
appointed, Senate-confirmed position, a very important job. The 
IG serves at the will of the President, giving him a measure of 
independence from the Director of Central Intelligence, as it 
should be.
    The CIA Inspector General supervises approximately 160 
staff positions and has broad duties and responsibilities. The 
office independently conducts the inspections, investigations 
and audits of the CIA's programs and operations to ensure that 
they're conducted in accordance with applicable laws and 
    It is the Inspector General's duty to keep the DCI, the 
Director of Central Intelligence, and the intelligence 
committees informed of any violations of law or deficiencies in 
the CIA programs and to monitor the implementation of 
corrective actions. The CIA Inspector General is obligated to 
report to the oversight committees if he's unableto resolve any 
differences with the Director affecting the execution of his duties on 
any audits or investigations focused on the Director or acting 
Director, or if he's unable to obtain significant documentary 
information in the course of an investigation.
    Mr. Helgerson, I believe you have the qualifications 
necessary to fulfill these duties. Your background at the CIA, 
the National Imagery and Mapping Agency and the National 
Intelligence Council, gives you a broad perspective on the 
issues which are encountered by the intelligence community. 
This experience will serve you well.
    In your statement, you described your approach to 
investigating wrongdoings. You asserted, and I'll quote: 
``Initiative, integrity and independence should be the 
cornerstones of any investigation.'' I could not agree more. I 
would especially emphasize independence. In the closed society 
of the intelligence community and of the CIA, in particular, 
one must, while having an insider's knowledge of the agency as 
you do, investigate wrongdoings with professional detachment 
and independence. After you're confirmed, I believe you will 
exhibit such independence during your tenure.
    Again, thank you for being here today and I look forward to 
your testimony and also to support your nomination. Thank you, 
Mr. Chairman.
    Chairman Graham. Good. Thank you, Senator.
    Mr. Helgerson.


    Mr. Helgerson. Thank you, Mr. Chairman, and thank you, 
Senator Shelby. Mr. Chairman, do you wish to swear me in, or 
shall I just begin?
    Chairman Graham. We have such overwhelming confidence in 
your integrity that that will not be necessary.
    Mr. Helgerson. Well, Mr. Chairman, I appreciate that and I 
appreciate the opportunity to make an introductory statement. I 
am honored, as you would know, to have been nominated by the 
President for the position of Inspector General of the Central 
Intelligence Agency. I've looked forward to this exchange with 
the Committee for some time, and I will be happy to answer any 
questions you may have about my experience, qualifications and 
    Should I be confirmed for this position, as you have 
mentioned, I will be the third statutory Inspector General at 
CIA. I have known well the two previous incumbents, Fred Hitz 
and Britt Snider, and have learned a great deal from them 
personally and from their fine example in the performance of 
their duties. As you are aware, I served from 1998 to 2000 as 
Britt's deputy, working with him to build on the foundation 
that Fred had laid as we strengthened still further the 
capabilities of the office.
    Looking back on my time as Deputy IG, I'm proud of the 
progress we made in several specific areas. We brought the 
office up to its full personnel strength, including hiring a 
number of new auditors from outside the agency who had first-
class information technology and systems auditing skills. We 
launched a program of field station audits, implemented a 
proactive fraud detection effort, expanded staff training, 
established a formal work plan and undertook a number of joint 
inspections with other IGs, some at congressional request.
    And finally, we crafted and secured DCI approval of an 
agency regulation that for the first time comprehensively 
spelled out for all employees the authorities and 
responsibilities of the statutory IG. During this period, as 
the Committee is aware, the office also accomplished a large 
body of substantive work in the form of audits, investigations 
and inspections. As Deputy IG, I reviewed and approved most of 
those. In the case of one key investigation that we conducted, 
I personally led the team that carried out the investigation 
and drafted the report. This was the investigation into the 
bombing in May 1999 of the Chinese embassy in Belgrade. The 
report on the bombing, I believe, provides the Committee a 
concrete and revealing look at the approach I bring to 
investigating wrongdoing--initiative, integrity and 
independence. The results of this investigation were made 
available promptly to the DCI, the President and to the 
Congress. The findings led to important follow-up actions 
within CIA, in the agency's interaction with the U.S. military 
and in U.S. diplomatic efforts.
    I look forward also, if you would like, to discussing with 
the Committee my experience in the field of foreign 
intelligence that's not directly related to the office of the 
Inspector General. Currently, I am serving in an intelligence 
community post as Chairman of the National Intelligence 
Council. As you have mentioned, I've also held senior positions 
as Deputy Director of the National Imagery and Mapping Agency 
and as Deputy Director for Intelligence at CIA. My experience 
in different agencies, both in Washington and overseas, has 
given me broad exposure to the range of programs that the IG 
audits, investigates and inspects.
    Now, a number of the positions that I've held have honed 
the skills and perspectives required to do the work of the 
statutory IG. In my service as CIA's Director of Congressional 
Affairs, it gave me the high awareness of the agency's 
reporting requirements to the Congress. My many years as an 
analyst and supervisor of analysts imbued in me the absolute 
need to make analytic judgments with integrity, to call them 
like we see them. During my tenure at NIMA, I worked to 
strengthen the IG function there. That assignment afforded me 
also the opportunity of learning how the IGs of the defense 
intelligence agencies function autonomously and yet under the 
larger DOD IG umbrella. Finally, Mr. Chairman, my joint service 
with Britt Snider provided me with valuable on-the-job 
    I am familiar with this Committee's views about the 
importance of having a statutory IG at CIA and your very high 
expectations about the experience, integrity and independence 
of the individual who holds that position. I am aware, in 
particular, of the IG's reporting responsibilities to the 
Director of Central Intelligence and to the Congress. Let me 
assure you, Mr. Chairman, that I am fully committed to meeting 
the letter and the spirit of these responsibilities in 
theunambiguous way that they are now embodied in the CIA statute.
    I thank you for your attention. I look forward to your 
questions and, if confirmed, to working with you in the future 
as Inspector General.
    Chairman Graham. Thank you very much, Mr. Helgerson. I 
would like to ask a few questions, and then I'm certain that 
Senator Shelby will also have some inquiries.
    One of the recurring questions for someone who has spent a 
substantial amount of your adult life within the intelligence 
community and now are taking another post which requires you to 
do evaluation of that same community is the issue of 
independence. Can you bring the perspective of objectivity 
along with the depth of your personal experience within the 
community? Could you comment as to how you think you will be 
able to do that and maybe use your previous position as deputy 
Inspector General as illustrative of some of those challenges 
of both knowledge of, but also distance from the intelligence 
community to maintain objectivity?
    Mr. Helgerson. I'd be happy to Mr. Chairman. In fact, as 
you mentioned, I have had unusual, wonderful opportunities to 
hold posts in a number of agencies and directorates of CIA, and 
so on, and this breadth of experience I think does give me a 
valuable perspective. But another way of looking at it is this 
is a career spent wholly within the U.S. intelligence 
community. I would like to say that my experience as deputy 
Inspector General was the single thing that prepared me best to 
do this job, including with the independence and the vigor that 
you and Senator Shelby seek and that I do as well, and that job 
was very important, and I'll come back to it.
    But, frankly, the single most important thing by far was 
the training and experience I had as an analyst and a 
supervisor of analysts. We take great pride in drumming into 
ourselves from the moment we begin that career the integrity of 
the analytic work we do, the need to dig to get the facts and 
to accept nothing at face value, and to offer independent 
conclusions. If anything, frankly, in the analytic cadre, the 
problem is not that we bend with the winds, but the analysts 
instinctively want to poke the policymaker in the eye to prove 
that they know better than they do. So we value independence, 
independent thinking very highly, and I think that background 
more than anything gives me the instinct to do this job.
    But referring specifically to the deputy IG job, it did, of 
course, bring home to me in real terms what's involved with 
audits, investigations, inspections, and, as I've suggested to 
the Committee, I think the opportunity that arose when I was 
given the job of inspecting or investigating how did the U.S. 
government happen to bomb the Chinese embassy in Belgrade is 
kind of a useful case study. When that incident occurred, the 
Director of Central Intelligence and the Inspector General said 
we want somebody to oversee this investigation who knows how 
it's all supposed to work and yet has the courage to lay it all 
on the table as to what actually happened.
    This Committee, HPSCI and others, saw the results of that 
work. It did have a very substantial impact, and I don't think 
you could find anyone inside or outside the intelligence 
community who said anything other than the unvarnished truth 
was laid out there with very significant accountability 
consequences. So I have learned from being an analyst. I've 
learned from our recent experience in the IG business, and I 
think the two combine very well.
    Mr. Chairman, if I may, it's probably unnecessary, but let 
me say that I am, of course, aware of the strengths provided to 
the statutory Inspector General in the statutes, and we may 
want to come back to that. But if there was ever any doubt 
about the ability of the Inspector General to be independent 
and vigorous, those doubts were removed with the tools that 
Congress provided in the statutory IG Act.
    Chairman Graham. There is a special relationship within 
that Act that you just referred to between the Inspector 
General and the oversight committees of Congress. The statute, 
for instance, specifically requires that the DCI forward to the 
oversight committees semi-annual reports to the Inspector 
General. The Inspector General is required to summarize his 
activities and identify to the Committee any significant 
problems that he or she has uncovered. Could you describe for 
us what you will define as being a significant problem that 
warrants being summarized and then specifically referred to the 
oversight committees of Congress?
    Mr. Helgerson. Mr. Chairman, I can commit that I will 
continue the practice that Fred Hitz and Britt Snider used, and 
that was to err in the side of including it all. If there's any 
problem with our semi-annual reports, frankly, it is that they 
include too much rather than too little. We list there every 
investigation, inspection and audit undertaken, and the ones 
that are of any real importance we provide additional material. 
Staff of the Committee have not been shy about questioning us 
if they want additional material. So you are aware literally of 
everything we do, significant or otherwise.
    I might say parenthetically I am aware also, of course, of 
the provision of law that says that if the Inspector General 
shall happen upon particularly serious or flagrant problems 
that we need to inform the DCI immediately and he the Congress 
within seven days. There one does run into more definitional 
problems about what's particularly significant or flagrant, 
but, as a routine matter, you know everything we do.
    Chairman Graham. Senator Shelby.
    Vice Chairman Shelby. Thank you, Mr. Chairman.
    Mr. Helgerson, last year Britt Snider, the outgoing CIA 
Inspector General that we've been talking about, described the 
CIA's financial and management situation as being very poor. 
According to him, it was, and I'll quote his words, ``often 
impossible to know where money is and how it is actually being 
spent.'' He went on to say that ``the CIA could not produce 
uniform and reliable financial data and that they had a 
personnel evaluation process that defies any effort to weed out 
poor performers.'' Furthermore, and I'm quoting the Inspector 
General, Britt Snider, ``There was too little concern about the 
quality of goods and services which the agency was purchasing 
with taxpayer money.''
    In his farewell statement, Mr. Snyder asked a number of 
fundamental questions about the CIA's ability to plan for the 
future and concluded, and I'll quote again. ``Frankly,'' he 
said, ``based upon my timehere''--and that was a long time--``I 
don't think the existing corporate structure provides an adequate 
mechanism for addressing them.'' All in all, he described the CIA as 
lacking, quote again, ``effective, top down corporate management.''
    That assessment was made a little over a year ago, January, 
2001. Since then, the CIA has lacked both a confirmed Inspector 
General and a permanent deputy Inspector General. This year, 
the Agency is about to receive a huge new infusion of funds to 
help fight the war on terrorism, which we all support. Do you 
think the problems that your predecessor, Mr. Snider, as an 
Inspector General identified at the CIA remain problems today, 
or do you know at this point?
    Mr. Helgerson. Well, Senator Shelby, you've asked a number 
of questions in one, but let me pick off pieces of it. I am 
familiar with Britt Snyder's statement that he prepared when he 
left the job of Inspector General----
    Vice Chairman Shelby. Absolutely.
    Mr. Helgerson. Certain pieces of it I think he's absolutely 
right, and they are important. Should I be confirmed and take 
up the job as Inspector General, for example, one thing I 
intend to concentrate on is the CIA procurement acquisition 
process for information technology and information systems. 
This is an area that frankly in any government agency is ripe 
for waste, fraud and abuse. That's how IGs originally started 
their work.
    Vice Chairman Shelby. Absolutely.
    Mr. Helgerson. A lot of money is spent in the acquisition, 
in the operation and the use, or misuse, or security purposes, 
and so on. So a big challenge I know in the office of the 
Inspector General when I was there was hiring, training, 
retaining auditors and investigators who really understood the 
information technology business. I intend to make this one of a 
couple priority areas to ensure that we have the capability and 
the audit and investigations staff to do that.
    A second kind of generic capability that I intend to 
emphasize refers to another part of your question. That is, I 
am mindful that CIA has received and will be receiving 
significant additional funds for the programs you mentioned. A 
great deal of these monies are spent with overseas operations. 
Mr. Snider and I put in place a field audit capability that I 
intend to strengthen still further, because in the IG business, 
frankly, one wants to follow the money. Now, I apologize these 
are such cryptic answers, but let me leap to the most general 
question, and that refers to the kind of overall organization, 
because Mr. Snider was referring not only to the CIA, frankly, 
but to the intelligence community.
    Vice Chairman Shelby. Absolutely.
    Mr. Helgerson. I won't venture an opinion here about what 
ought to be the scope of the DCI authorities. You and the DCI 
and the President will have opinions on that. But as regards 
the IG business, let me take the occasion to say if you were to 
ask me should there be a community-wide IG to help deal with 
these larger problems you've pointed to, my firm answer would 
be if we reach the day when the DCI's responsibilities and 
authorities are expanded significantly in some of the ways 
we're talking about, then it might be appropriate to expand the 
authorities of the Inspector General to match those of the DCI.
    I think if we expanded the authorities of a community IG 
without having expanded authorities on behalf of the Director, 
we'd get the cart before the horse and you'd find a weakened IG 
who couldn't follow up in the way he must, including with our 
semi-annual reports. So I've just touched on a couple parts of 
your question. They're important ones. We can come back to them 
if you like.
    Vice Chairman Shelby. Let me go back to this part of it, 
and I'll quote Mr. Snider again. He says, ``Frankly''--and this 
about the CIA he's referring to. ``Frankly, based upon my time 
here as the CIA's Inspector General, I don't think the existing 
corporate structure provides an adequate mechanism for 
addressing them.'' All in all, he described the CIA as lacking, 
quote, ``effective top down corporate management.'' Are you in 
a position to comment on that yet or do you want to do this 
after you get into your job as Inspector General?
    Mr. Helgerson. Well, prudence would suggest I comment at a 
later stage but that doesn't keep me from having an opinion 
even now, and that is to point out that a number of others, 
including the DCI, have recognized that at least some of what 
Mr. Snider pointed to is the case and the wholly new system 
that is----
    Vice Chairman Shelby. But you're not saying what Mr. 
Schneider said is incorrect?
    Mr. Helgerson. Not at all.
    Vice Chairman Shelby. Okay.
    Mr. Helgerson. I'm saying that parts of it he has a real 
good point, particularly in compensation and personnel 
management, and the new system that you and staff have heard is 
being prepared will address some of those issues. Another 
multi-year program that the IG oversees to help the agency get 
in a position to prepare truly auditable financial statements 
is important in addressing another part of this. We have a 
chief information officer, a chief financial officer, both 
created relatively recently, particularly on the financial 
side. It's a multi-year process to get the auditable financial 
statements but we're making real headway in that progress.
    My challenge, and I'll try and be brief here, should I 
become IG, the challenge there is to hold the Agency's feet to 
the fire, moving toward the auditable financial statements 
without getting ourselves in an Enron/Andersen-like situation. 
That is, in our observations twice a year as to what's wrong 
and what ought to be done to get it fixed, we inevitably 
continue then to work with the affected relevant components to 
see that the follow up is done. I want to be sure that we stick 
with the auditing and the what ought to be done and the 
monitoring the follow up and don't, out of goodwill or 
foolishness, get caught up in the actual implementation and 
    The Enron/Andersen example is something that all IGs and 
perspective IGs have taken seriously. The Comptroller General 
has issued updated guidance to the IG community on how to keep 
yourself out of that problem and I intend to be sure that the 
IG group at CIA have read that report carefully.
    Vice Chairman Shelby. And also to keep other people out of 
the problems.
    Mr. Helgerson. Exactly.
    Vice Chairman Shelby. Thank you, Mr. Chairman.
    Chairman Graham. Thank you, Senator.
    Senator Rockefeller.
    Senator Rockefeller. Thank you, Mr. Chairman.
    I'm sort of a little bit going to go with the same line of 
questions but in a slightly different way because I think 
Senator Shelby was trying to nail something really important 
here. The need for collaboration and cooperation has obviously 
got to grow and you just can't go back to the days of the 
U.S.S. Liberty and Pueblo, right? I mean, people have got to be 
able to talk to each other and there's got to be cooperation in 
the intelligence community.
    Now, more and more programs are going to cut across 
different intelligence agencies in different places and 
oversight will continue to increase. It will need to, hopefully 
constructively and usefully. There are a variety of ways to 
achieve this goal.
    One, the Inspector General at the various intelligence 
agencies could conduct more joint audits and investigations. 
Two, the Congress could create an intelligence community 
Inspector General to handle cross-cutting programs, which is 
the way the Defense Department operates. Or, three, the CIA 
Inspector General, as part of the DCI's staff, could take the 
lead in conducting or coordinating reviews of joint programs.
    I'd like to get your thoughts on each of these, part of 
which will be repetitious but I think it's very important, and 
would the establishment, in your judgment, of an intelligence 
community Inspector General improve the DCI's ability to manage 
the community? I've questioned him on this. I'm not talking 
Scowcroft recommendations. That hasn't come out and this isn't 
about that; this is about commonsense reaction. If you were 
able to do that would that improve his ability to work the 
community and hold the community responsible or would it just 
create chaos? And I have a follow up question.
    Mr. Helgerson. I understand, Senator Rockefeller, thank 
    Let me repeat myself a little bit in saying that I think IG 
oversight of everybody by somebody is appropriate. I have 
worried in the past a little bit about whether the intelligence 
Community Management Staff was exempt from any IG oversight. I 
know our office of Inspector General traditionally has wondered 
whether they are within our purview. It's probably a healthy 
thing that they think decidedly they are. They think not that 
they're exempt from oversight but they have double oversight 
because the DOD IG looks at them and we look at them. And the 
trick of course is whether we look at them together in a 
coordinated way that covers all the bases, keeps things from 
falling through the cracks.
    Let me double back just a minute. That was just an example. 
My fundamental point is for an IG to be effective they have to 
have the backing of the executive who runs whatever the 
institution is. So, again, I think it very important that one 
have a strong, independent IG whose turf corresponds to that of 
the Director. If the Director's turf is expanded with real 
authorities, then so should an IG, whether it's CIA or 
    But let me take just a minute to say in the meantime we 
have a system that probably is better than most people realize 
in the IG forum of which you're doubtless aware. Some four or 
five years ago, that group was reconstituted, and while I don't 
want to exaggerate its effectiveness for those who may be not 
in the middle of this, it's a group made up of the inspectors 
general of a dozen agencies who have national security 
responsibilities. All of the IGs go to the President's Council 
on Integrity and Efficiency which covers the whole of 
government, but a number have said to me, frankly, the IG forum 
in the intelligence community is more useful in dealing with 
the issues that really pertain to us.
    Now, interestingly, in terms of formal audits and 
investigations and inspections, that group has undertaken only 
a few and they're a little dated now, but when I was deputy IG 
we had just finished the work on NRO's financial management, 
we'd done work on foreign intelligence relationships, because 
all agencies had sharing relationships with other services. We 
had done a multi-agency look at export control capabilities 
because we were all involved in it in one way or another.
    But what we've found is that certain other projects, like 
the one we did on POW MIAs at the request of Senator Smith that 
came through then-Chairman Shelby as I recall, we found there 
wasn't much use for the Departments of Transportation or Energy 
or whatever. It was a smaller subset. In any case, what I'm 
saying here is that there have not been a great many large-
scale formal efforts, and my feeling is that where they are 
truly appropriate one should do them but it isn't easy with 12 
cooks in the broth or however many, so you don't want to force 
things into the community approach unless they really belong 
there. What does belong there and what goes on more 
continuously is a system where that forum meets every quarter, 
chaired alternately by the IGs of Department of Defense and of 
the CIA, and it has very active working groups which, for 
example, meet to discuss information assurance issues of the 
kind I was mentioning earlier. Or now they're working on the 
issue of are we sharing information on terrorism optimally.
    Each year they have an auditors conference. Two or three 
hundred community auditors get together. So this is the kind of 
thing, year in and year out, that some of it sounds kind of 
pedestrian but it is useful in the absence of a larger 
community IG of the kind you're referring to which, at some 
point down the road, might be appropriate, but I personally 
right now think would be premature.
    Senator Rockefeller. Okay. Mr. Chairman, can I just follow 
up very briefly but intelligently. [Laughter.]
    Chairman Graham. You'll be judged on that.
    Senator Rockefeller. I'll be judged on that. I may never be 
able to ask another question again.
    You've said two things and you strike me as having been 
very,very careful in the way you answered that question, but I 
think that there was a feeling coming out of you when you used the 
words ``down the line could make sense.'' Two factors: one is we're 
dealing with the way the world used to be and the way the world now is. 
So to say that something is working much better than people ordinarily 
think it is, is not necessarily a very impressive statement to me 
unless it meets the requirements of what's going to be needed in the 
world that we're going to be facing--and that the IG or the IGs will be 
    Second, you said at one point that, as I said, people don't 
realize how well these IGs getting together I guess on a 
quarterly basis actually works, and then you came back and said 
in the latter part of your statement in fact that sort of--I 
forget how you phrased it but you didn't put in a very good 
light. You can't have it both ways. And if something is a good 
idea down the road but is premature, that means that it's a 
good idea which somebody doesn't want to come out for because 
it's not of the moment, so to speak.
    And then I look at Secretary Rumsfeld and what he's done 
and he had all these people who evidently didn't want to 
fight--and I don't know this but this has been reported--really 
didn't want to fight wars the way they're going to have to be 
fought, and he said to hell with that, we're going to get young 
people here who know how to take on what has to be done, and 
I'm going to do it. And he did it, and I assume there's a whole 
lot of grumbling and I don't think he cares and the country is 
better served.
    So I'm not even going to make you answer that, but I want 
to put in your mind that I thought that you were being a little 
careful there and I suspect I think I know where you want this 
to come out in the end. And I think I may agree with you. But 
if you simply say that the IG's territory ends at the end of 
the box where his turf expands to and can go no further, then 
quarterly meetings of IGs may be better than people think. I 
just wonder whether it's good enough.
    Mr. Helgerson. Senator Rockefeller, you've kindly offered 
to make this a rhetorical question, but let me nevertheless, if 
I may, make a couple of points. One of them is, I don't mean to 
be too careful here at all. My decided view is that yes, an 
assertive, capable IG is terribly important but I do believe it 
needs to correspond again to the scope of the authorities of 
the director, if it is to work. So my personal position is 
right now, the CIA IG authorities ought to match those of the 
DCI. If the DCI's authorities expand, then my personal opinion 
is some IG ought to have authorities matching his.
    On the other side of this though, let me say I wanted to 
give you as precise an understanding as I could of the 
usefulness of this quarterly IG forum. I don't mean to 
overstate it. If your question were to go a little further and 
say what do I think could be usefully done to make the 
collective intelligence community of IGs more effective, I 
believe without a doubt the answer is to continue what the 
Committee has already done in recent years, which is to give 
added staff and resources to the autonomous IGs of the other 
intelligence agencies.
    I have recently come off a couple of years as deputy 
director of NIMA. While there I oversaw the expansion of that 
IG operation from eight to 24 people and we tripled the budget 
and we tried to bring in people who had meaningful 
investigative audit capability, particularly on information 
systems and information assurance, these kind of issues we've 
been talking about. I think there's dramatic payoff to that. I 
thank the Committee for myself and on behalf of NIMA. It's made 
all the difference in the world.
    So the point is, I don't mean to shade any of this and I'd 
be happy on another occasion to offer still more concrete ideas 
of what we can do to strengthen the IG business across the 
community. I do, however, as you correctly understood, have 
some cautionary views about the conditions under which we ought 
to go the community IG route.
    Senator Rockefeller. Thank you, sir and thank you, Mr. 
Chairman, for your hearty indulgence.
    Chairman Graham. Thank you, Senator. Senator Shelby has a 
pressing next appointment so I'm going to defer to the Vice 
    Vice Chairman Shelby. Thank you, Mr. Chairman. Mr. 
Helgerson, one of the duties of the Office of Inspector General 
is to report violations of the law, right?
    Mr. Helgerson. Right.
    Vice Chairman Shelby. I am sure we'd all agree that where 
an obligation set forth in a statute is accompanied by a 
penalty for non-compliance, a violation of this provision would 
merit an IG report. Do you want me to say that again?
    Mr. Helgerson. Yes, the latter part. It would probably be 
safe if you did, yes.
    Vice Chairman Shelby. Well, let me just say I hope you 
would agree that where an obligation is set forth in statute 
and it's accompanied by a penalty for noncompliance, and a 
violation of this provision would merit an IG report.
    Mr. Helgerson. In general, yes, of course.
    Vice Chairman Shelby. The Congress sometimes writes laws to 
require things without providing a penalty for noncompliance. 
In your view, would the violation of such a provision be a 
violation that an Inspector General would have to report? In 
other words, if it was a violation of a statute.
    Mr. Helgerson. I understand. If I may?
    Vice Chairman Shelby. Yes, go ahead.
    Mr. Helgerson. It is a complicated question, not in the 
spirit, which is that everybody ought to obey the law and the 
IG ought to see that they do.
    Vice Chairman Shelby. Absolutely.
    Mr. Helgerson. The implications though, are a little more 
complicated because normally criminal law, for example, is the 
violation of those statutes to which a jail term might be 
    Vice Chairman Shelby. Or a fine.
    Mr. Helgerson. Or a fine. The statutes that govern what the 
IG does say that we shall report crimes to the Attorney General 
and we do it through our Director normally, but pursuant to 
guidance that theAttorney General has issued. As a practical 
matter, there is a threshold that involves violation of the law, civil 
or criminal, and in both cases there are fairly substantial numbers of 
violations that, after looking at the Attorney General guidelines, we 
do not in fact formally report to the Attorney General.
    We consult with the Eastern District of Virginia or with 
the Department of Justice, or in some cases we're authorized--I 
say we, but the CIA's IG--not to consult with anybody if they 
don't reach a certain threshold. Even though it's a violation 
of law, the understanding is that they would not be reported 
formally and that administrative action would be taken within 
the Agency to deal with whatever----
    Vice Chairman Shelby. It's based on the Department of 
Justice recommendations too?
    Mr. Helgerson. Yes, it is. Yes.
    Vice Chairman Shelby. Okay. Congress has provided in 
statute, as you well know, that the Assistant DCI for 
collection and the Assistant DCI for analysis and production, 
shall be positions subject to nomination and to Senate 
confirmation. You're familiar with that?
    Mr. Helgerson. I am familiar.
    Vice Chairman Shelby. These positions continue to be filled 
by nonconfirmed appointed officials, despite the law that says 
they shall be positions subject to nomination by the President 
and Senate confirmation. Would you consider that a violation of 
the law that an Inspector General would have to report? Or do 
we already know that?
    Mr. Helgerson. Well, Senator----
    Vice Chairman Shelby. You see where we are coming from?
    Mr. Helgerson. I certainly do. And as you usually do, 
you've anticipated the answer with that last remark. If I may 
put this in a few words, the role of the IG normally, 
classically, is not to serve as prosecutor, judge or jury.
    Vice Chairman Shelby. We know that.
    Mr. Helgerson. Our job is to assemble the facts, as you 
know. We have here an ironic situation where I approach this 
and think to myself, my job is to, on any given issue, find the 
facts and report them where appropriate to the DCI, to the 
intelligence committees, and, where appropriate, to the 
Department of Justice and in principle, even the White House, 
because I work for the President.
    Vice Chairman Shelby. That's right.
    Mr. Helgerson. Now here you've raised a subject--again, 
here's the irony--where the DCI, the Congress, the Department 
of Justice and the White House all know the facts to the point 
where they wish they didn't know the facts. I mean, for four or 
five years we've been going around this track.
    Vice Chairman Shelby. Absolutely.
    Mr. Helgerson. Now my own view is that I would approach 
this if Inspector General, with an eye to protecting the 
integrity, the power, the credibility of the Office of the 
Inspector General. And frankly, just as the federal courts or 
state courts are reluctant to venture into political sands 
between the other two branches of government, frankly I see 
this, in very large part--despite the legal issue you rightly 
point to--in very large part a political issue and I can't help 
thinking, what could the IG really contribute to this and I am 
frankly having no fear of the DCI but I'm a little reluctant to 
get myself crosswise with the White House and with the Congress 
and so on, when I have little to add.
    The other angle to this, from a kind of technical point of 
view and this is not meant to excuse anybody, is that what the 
law really provides is that the President shall appoint, for 
Senate deliberation. I worry that, if I did get into this as 
Inspector General, what my attorneys would tell me is that the 
writ of the OIG at CIA does not extend to the President's 
appointment powers. And I would not really want to get in a 
situation where I had to sign a report that looked like I was 
excusing a situation that we all know, frankly, could have been 
handled better, probably from all sides.
    Now on the political side of this, while I'm not in the 
middle of it, I am aware that the DCI and the Deputy DCI, 
because there is a vacancy in one of those jobs, will be, I 
believe, again talking with the Committee about their 
obligations and next steps. The supreme irony in all this is 
that the Committee wanted these positions created. They have 
been filled by people--Charles Allen and John Gannon, who have 
done a whale of a job over a few years. But this does not 
leave--this leaves unaddressed this question that you raised. 
It's an important one. I have to tell you in all honesty I 
don't know what the Office of Inspector General can bring to it 
in the way of resolving it, but you can be sure that we 
understand the issue.
    Vice Chairman Shelby. Thank you, Mr. Helgerson. You've had 
a lot of experience in the intelligence community. Are there 
any particular areas of inefficiency at the CIA, that you would 
seek to improve, or is this premature at this point? Do you 
want to get into the job more?
    Mr. Helgerson. Well, a considered answer would demand some 
time in the job. But I mentioned in response to an earlier 
question, that the general IS/IT area is one that I know I need 
to work on and the heightened operational funding is clearly an 
area where we'll have to follow up. But I don't know of 
particular areas of problem now, other than those general areas 
that are challenging. Would be in any department of government, 
particularly the IS/IT.
    Vice Chairman Shelby. Chairman, thank you for your 
    Chairman Graham. Thank you very much, Senator. I just have 
one area of further questioning and then I'll call on Senator 
    Approximately a year ago we heard a report from one of the 
national accounting firms relative to the state of the 
financial records of the CIA. The basic position was that they 
were not auditable, subject to audit, because they did not 
reach the threshold which an auditor could then proceed to 
review and then give an opinion as to the status of the 
records. Subsequent to that time I have met with the head of 
the General Accounting Office, who has indicated that the 
situation at the CIA was not unique to the CIA and that he 
considers this to be a serious matter, thatthere needs to be a 
commitment to move towards having financial records that are subject to 
generally-acceptable governmental accounting procedures and analysis.
    What role do you see the Inspector General's Office playing 
in facilitating the movement of the CIA towards generally 
acceptable accounting standard financial records?
    Mr. Helgerson. Mr. Chairman, this is an important area and 
I am familiar with it because the multiyear effort to which I 
earlier referred, was begun at the time when Britt Snider and I 
were both in the IG. We have a substantial crew of very capable 
auditors, CPAs, certified fraud examiners and others in the IG 
operation. They were working with the Office of Finance and its 
successors on the CIA management side to help them get to a 
stage where CIA's books did have an auditable financial 
    Now let me underscore the point you made. CIA is not alone 
in this. I think all our agencies were in this boat and it did 
not mean in fact that we did not have financial controls in 
place. Auditable financial statements is a term of art in the 
auditing profession and I risk getting beyond my level of 
competence here, but the reason we didn't have auditable 
financial statements in CIA and the other agencies was in large 
part that we had never aspired to have. The Government 
Accounting Office, the Congress and others had not required it 
of us, and it seemed for many years inappropriate or 
unnecessary. In recent years, however, including with 
congressional direction, there is a resolve and I think in the 
report language, even a command that we shall, over the next 
two or three years, get to that stage.
    So the Office of Inspector General, with its expertise, 
already has--and nothing to do with me; I've been away a couple 
of years--been working with the chief financial officer and her 
staff to bring this about. But it requires the training of 
their staff. It requires an expertise and a rebuilding of the 
systems in a way that, if done sensibly, perhaps regrettably, 
does take still, as I understand it, another two or three 
years. But we do--I believe you've put in the law that we shall 
do it, each year do an audit of the progress that has been made 
in this direction. I shall see that that continues.
    Chairman Graham. Thank you. Senator Rockefeller.
    Senator Rockefeller. Just a quickie, or two quickies. The 
National Security Act 1947 explicitly says that the DCI, in his 
role as head of the Central Intelligence Agency, can provide 
services that are ``of common concern to the elements of the 
intelligence community.'' And, one, I'm interested in how you 
interpret that.
    Secondly, do you think that this gives the DCI the 
authority to use the CIA Inspector General to conduct 
community-wide investigations? And thirdly, if this were the 
case, could this be a useful way to proceed? But let's start 
with what is in the '47 Act.
    Mr. Helgerson. Senator Rockefeller, I should say I don't 
have an informed view of the true legal aspects of the 
authorities provided by that Act. Obviously, I'd be happy to 
look into this. But I----
    Senator Rockefeller. It's pretty clear.
    Mr. Helgerson [continuing]. Could nevertheless answer the 
question, which is that Act does give the DCI considerable 
authorities and we have already, in the past, used those 
authorities to do Inspector General audits, one agency of 
another, in specific cases, including the one I referred to a 
moment ago where two or three agencies looked over the NRO's 
books. And we've done other such things including under the 
provisions for peer review and so on in the IG community.
    I think that if we wanted to do it--that is the Congress, 
the DCI, Office of Inspector General--considerably more could 
be done in furtherance of the kind of thing you're getting at.
    My concern with this--a little different angle to this--is 
I believe the most powerful thing that came out of the 
statutory IG at CIA--terribly important to us--is that we have 
a system whereby, semi-annually, we report on what our findings 
were, what our recommendations were, progress made to date by 
management in addressing those--and we have an executive 
director and a DCI to back us up. So again I sound like a 
broken record, but the forthright answer is that we can, 
without a doubt, pursuant to the authorities you mention, do 
considerably more in the IG side if it's decided we should, in 
looking into cross-boundary issues.
    My concern, as a long-time manager and a kind of realist in 
this business, is that I want to be sure in the interests of 
good government that there is some clout behind those findings, 
so that on a semi-annual basis, a year and a half down the 
road, I or whoever it is as Inspector General, can go to the 
other party which in this case might be in another agency, and 
say have you done what those recommendations laid out you 
should do and know that behind me stands somebody.
    I don't want to sound at all closed-minded about this. 
There's a lot we can do. I'm just saying that it's not as--the 
real payoff is in getting people to do what the IG and/or 
others believe they should. If we build in somehow the follow 
up, then I think you've got a very good idea and we're right 
there with you.
    Senator Rockefeller. Thank you, sir.
    And my second question is very short but not easy. I always 
ask when a Cabinet Secretary is up for confirmation, if your 
budget comes up blatantly short as per your value system with 
respect to your responsibilities, will you take the President 
on face to face? Will you go do face time with the President, 
argue your case directly, or will you cave in to OMB, as so 
often happens?
    My question to you is just a little bit different. If there 
was an investigation that was requested by this Committee or 
which was in your judgment clearly needed, and the DCI did not 
want that to happen, you would have to exercise judgment. Would 
you be willing to contemplate carrying on with it, in spite of 
the DCI's objection?
    Mr. Helgerson. Unfortunately, this takes reference to two 
provisions of law. The statute that set up the statutory IG at 
the CIA anticipated that there would be differences between an 
IG and the DCI. And one provision of the Act provides that if 
there are differences between the two concerning the IG's 
exercise of his authorities and responsibilities that cannot be 
resolved, then these differences shall be reported immediately 
to the intelligence committees.
    A different section of the same Act, says specifically--the 
first one pertained to anything the IG might be doing. The 
other provision of law says, that if the IG--or put it this 
way, it says the DCI can, on national security grounds, direct 
that the IG not initiate, carry out or publish, whatever the 
word was, an inspection, audit or investigation. In that case, 
the DCI must report to the Congress within seven days that he 
has done this and why he has done it and the IG can append his 
thoughts as well.
    Now, if you want to take the really unlikely scenario, if 
an IG said--so to answer your question, lest you think I've 
forgotten it, if the Director said you may not do this report 
for national security reasons, I would say, yes, sir I will 
desist, but you and I have got to report this to the oversight 
committee. In an extraordinarily unlikely scenario that a DCI 
said, no, I'm not going to report it, then I of course, would 
report it myself under the other provision that said we'd found 
an issue we can't resolve.
    So the DCI--important to know in principle--does have the 
authority, under certain conditions, to order a stand down. As 
a practical matter though, for the record, and the Committee 
should know, that I know very well--Britt Snider and Fred Hitz 
and we in the IG community of course, talk about this--while 
this is a terribly important provision of law, as a practical 
matter these two provisions have never been triggered in the 12 
years we've had a statutory IG at the CIA.
    I hope they are not triggered but these are among the 
provisions that give the statutory IG the strength that he or 
she has to do the job. It means a lot to me to have that in the 
back pocket even though I have no expectation that I'd use it, 
just as it has not been used through ten years and five DCIs 
and two IGs. But it's a key issue.
    Senator Rockefeller. Thank you, sir. Thank you, Mr. 
    Chairman Graham. Mr. Helgerson, thank you very much for 
your presence. We appreciate you being accompanied by family 
and friends and your very informative responses to our 
questions. We will take this matter under advisement and I hope 
soon, be in a position to have a vote to recommend your 
confirmation to our colleagues in the Senate.
    Mr. Helgerson. Mr. Chairman, Senator Rockefeller, thank you 
very much. I appreciate the opportunity.
    Chairman Graham. Thank you very much and thank you for your 
past service and what I'm certain will be distinguished future 
    Mr. Helgerson. Thank you, sir.
    Chairman Graham. Thank you. This concludes the open 
hearing. We will reconvene in five minutes in SH-219 for the 
second part of our hearing this afternoon. Thank you.
    [Whereupon, at 3:33 p.m., the hearing was adjourned.]


                              ----------                              -

                        THURSDAY, APRIL 25, 2002

                                       U.S. Senate,
                          Select Committee on Intelligence,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 3:45 p.m., in 
room S-216, The Capitol, the Honorable Bob Graham (chairman of 
the Committee) presiding.
    Committee Members Present: Senators Graham, Rockefeller, 
Feinstein, Wyden, Bayh, Mikulski, Shelby, Kyl, Inhofe, Roberts, 
    Committee Staff Members Present: Vicki Divoll, General 
Counsel; Kathleen McGhee, Chief Clerk; Paula DeSutter, Melvin 
Dubee, Bob Filippone, Chris Ford, Jim Hensler, Matt Pollard, 
Michal Schafer, Linda Taylor, and Jim Wolfe.
    Chairman Graham. I call the meeting to order.
    The Committee will now consider the nomination of John L. 
Helgerson for the position of Inspector General of the Central 
Intelligence Agency. Pursuant to Rule 5 of the Committee rules, 
I move that the Committee vote to report favorably to the 
Senate the President's nomination of Mr. John Helgerson to be 
CIA Inspector General.
    Is there a second?
    Senator Inhofe. Second.
    Chairman Graham. The Clerk will call the roll.
    Mrs. McGhee. Mr. Levin?
    [No response.]
    Mrs. McGhee. Mr. Rockefeller?
    Senator Rockefeller. Aye.
    Mrs. McGhee. Mrs. Feinstein?
    Senator Feinstein. Aye.
    Mrs. McGhee. Mr. Wyden?
    Senator Wyden. Aye.
    Mrs. McGhee. Mr. Durbin?
    Chairman Graham. Aye by proxy.
    Mrs. McGhee. Mr. Bayh?
    Senator Bayh. Aye.
    Mrs. McGhee. Mr. Edwards?
    Chairman Graham. Aye by proxy.
    Mrs. McGhee. Ms. Mikulski?
    Senator Mikulski. Aye.
    Mrs. McGhee. Mr. Kyl?
    Senator Kyl. Aye.
    Mrs. McGhee. Mr. Inhofe?
    Senator Inhofe. Aye.
    Mrs. McGhee. Mr. Hatch?
    Senator Kyl. I have his proxy. I presume it's an aye.
    Mrs. McGhee. Mr. Roberts?
    Senator Roberts. Aye.
    Mrs. McGhee. Mr. DeWine?
    Senator Kyl. I have his proxy, presumably an aye.
    Mrs. McGhee. Mr. Thompson?
    Senator Thompson. Aye.
    Mrs. McGhee. Mr. Lugar?
    Senator Kyl. I have his proxy, presumably an aye.
    Mrs. McGhee. Mr. Shelby?
    Vice Chairman Shelby. Aye.
    Mrs. McGhee. Mr. Graham?
    Chairman Graham. Aye.
    Mrs. McGhee. Sixteen ayes.
    Chairman Graham. Thank you all.
    [Whereupon, at 3.47 p.m., the Committee adjourned.]