[Senate Report 112-12]
[From the U.S. Government Printing Office]

                                                        Calendar No. 25
112th Congress                                                   Report
 1st Session                                                     112-12




                 April 4, 2011.--Ordered to be printed


   Mrs. Feinstein, from the Committee on Intelligence, submitted the 

                              R E P O R T

                             together with


                         [To accompany S. 719]

    The Select Committee on Intelligence, having considered an 
original bill (S. 719) to authorize appropriations for fiscal 
year 2011 for intelligence and intelligence-related activities 
of the United States Government, the Community Management 
Account, and the Central Intelligence Agency Retirement and 
Disability System, and for other purposes, reports favorably 
thereon and recommends that the bill do pass.

                Classified Annex to the Committee Report

    The classified nature of United States intelligence 
activities precludes disclosure by the Committee of details of 
its budgetary recommendations. The Committee has prepared a 
classified annex to this report that contains a classified 
Schedule of Authorizations. The Schedule of Authorizations is 
incorporated by reference in the Act and has the legal status 
of public law. The classified annex is made available to the 
Committees of Appropriations of the Senate and the House of 
Representatives and to the President. It is also available for 
review by any Member of the Senate subject to the provisions of 
Senate Resolution 400 of the 94th Congress (1976).

              Section-by-Section Analysis and Explanation

    The following is a section-by-section analysis and 
explanation of the Intelligence Authorization Act for Fiscal 
Year 2011 that is being reported by the Committee.

              Title I--Budget and Personnel Authorizations

Section 101. Authorization of appropriations

    Section 101 lists the United States Government departments, 
agencies, and other elements for which the Act authorizes 
appropriations for intelligence and intelligence-related 
activities for fiscal year 2011.

Section 102. Classified schedule of authorizations

    Section 102 provides that the details of the amounts 
authorized to be appropriated for intelligence and 
intelligence-related activities and the applicable personnel 
levels (expressed as full-time equivalent positions) for fiscal 
year 2011 are contained in the classified Schedule of 
Authorizations and that the classified Schedule of 
Authorizations shall be made available to the Committees on 
Appropriations of the Senate and House of Representatives and 
to the President.

Section 103. Intelligence Community Management Account

    Section 103 authorizes appropriations for the Intelligence 
Community Management Account (ICMA) of the DNI and sets the 
authorized full-time equivalent personnel levels for the 
elements within the ICMA for fiscal year 2011.
    Subsection (a) authorizes appropriations of $649,732,000 
for fiscal year 2011 for the activities of the ICMA. Subsection 
(b) authorizes 648 full-time equivalent personnel for elements 
within the ICMA for fiscal year 2011 and provides that such 
personnel may be permanent employees of the Office of the 
Director of National Intelligence (ODNI) or detailed from other 
elements of the United States Government.
    Subsection (c) authorizes additional appropriations and 
full-time equivalent personnel for the classified Community 
Management Account as specified in the classified Schedule of 
Authorizations and permits the funding for advanced research 
and development to remain available through September 30, 2012.

 Title II--Central Intelligence Agency Retirement and Disability System

Section 201. Authorization of appropriations

    Section 201 authorizes appropriations in the amount of 
$292,000,000 for fiscal year 2011 for the Central Intelligence 
Agency (CIA) Retirement and Disability Fund.

           Title III--General Intelligence Community Matters

Section 301. Restriction on conduct of intelligence activities

    Section 301 provides that the authorization of 
appropriations by the Act shall not be deemed to constitute 
authority for the conduct of any intelligence activity that is 
not otherwise authorized by the Constitution or laws of the 
United States.

Section 302. Increase in employee compensation and benefits authorized 
        by law

    Section 302 provides that funds authorized to be 
appropriated by this Act for salary, pay, retirement, and other 
benefits for federal employees may be increased by such 
additional or supplemental amounts as may be necessary for 
increases in compensation or benefits authorized by law.

Section 303. Non-reimbursable detail of other personnel

    Section 303 makes a correction to Section 113A of the 
National Security Act of 1947 (50 U.S.C. 404h-1), which was 
amended by Section 302 of the Intelligence Authorization Act 
for Fiscal Year 2010 (Pub. L. No. 111-259, October 7, 2010). As 
enacted, this section limited to two years the length of time 
that United States Government personnel may be detailed to the 
staff of an element of the Intelligence Community funded 
through the National Intelligence Program from another element 
of the Intelligence Community or from another element of the 
United States Government on a reimbursable basis or a non-
reimbursable basis. It was intended to extend the period of 
time an employee could be detailed on a non-reimbursable detail 
from one year to two years. The provision was not intended to 
limit the time period for reimbursable details, which had not 
been previously time-limited. Section 303 restates Section 113A 
of the National Security Act without the limitation on 
reimbursable details and clarifies that the section does not 
limit any other source of authority for reimbursable or non-
reimbursable details.

  Title IV--Matters Relating to Elements of the Intelligence Community


Section 401. Schedule and requirements for the National 
        Counterintelligence Strategy

    Section 401 amends Section 904(d)(2) of the 
Counterintelligence Enhancement Act of 2002 (50 U.S.C. 
402c(d)(2)) to require that the National Counterintelligence 
Strategy be revised or updated at least every three years and 
that it align with the strategy and policies of the Director of 
National Intelligence.
    The Committee does not consider the current requirement to 
produce this multi-year strategy on an annual basis to be an 
efficient or effective use of limited resources. Section 401 
will enable, whenever possible, the Strategy to be produced in 
tandem with strategic planning documents such as the National 
Intelligence Strategy.

Section 402. Insider Threat Detection Program

    Section 402 requires the Director of National Intelligence, 
not later than October 1, 2012, to establish an initial 
operating capability for an effective automated insider threat 
detection program for the information resources in each element 
of the Intelligence Community in order to detect unauthorized 
access to, or use or transmission of, classified information. 
Section 402 requires that the program be at full operating 
capability by October 1, 2013.
    Not later than December 1, 2011, the Director of National 
Intelligence shall submit to the congressional intelligence 
committees a report on the resources required to implement the 
program and any other issues the Director considers appropriate 
to include in the report.

Section 403. Unauthorized disclosure of classified information

    The Committee has had long-standing concerns about 
unauthorized disclosures of classified information. A 
particular source of frustration has been that leakers are 
rarely seen to suffer consequences for leaking classified 
information. In order to better supplement criminal prosecution 
remedies for unlawful disclosures, the Committee has urged the 
Executive Branch to make fuller use of administrative 
sanctions. Up to now, those sanctions have consisted of 
security clearance revocation, suspension, or termination as a 
means of deterring and punishing leakers. Unfortunately, these 
sanctions are not generally available for use against a key 
source of leaks, former Intelligence Community employees.
    The purpose of Section 403 is to provide an additional 
administrative option for the Intelligence Community to deter 
leakers who violate the prepublication review requirements of 
their non-disclosure agreements. This option may require 
individuals to surrender their current and future federal 
government pension benefits if they knowingly violate the 
prepublication review requirements in their non-disclosure 
agreements in a manner that discloses classified information to 
an unauthorized person or entity.
    Section 403 authorizes the DNI to publish regulations, in 
coordination with the head of each element of the Intelligence 
Community, that require each Intelligence Community employee to 
sign a written non-disclosure agreement and set forth the 
administrative procedures applicable when an employee violates 
his non-disclosure agreement. The provision is designed to be 
flexible and allow the DNI and agency heads to tailor 
regulations and procedures that will work best for their 
respective agencies, while providing due process for an 
employee who has violated the terms of the non-disclosure 
agreement. In order to ensure that the Government's procedures 
governing classified information are administered in an 
integrated manner, regulations published under Section 403 
shall be consistent with any procedures established by 
Executive order or regulation under section 801of the National 
Security Act.
    Under this provision, non-disclosure agreements will: (1) 
prohibit an employee from disclosing classified information 
without authorization; (2) require the employee to comply with 
all prepublication review requirements; (3) specify appropriate 
disciplinary action, including the surrender of any current or 
future federal government pension plan, to be taken against the 
employee if the DNI or the head of the employee's element of 
the Intelligence Community determines that the employee 
knowingly violated the prepublication review requirements 
contained in the non-disclosure agreement in a manner that 
disclosed classified information to an unauthorized person or 
entity; and (4) describe procedures for making and reviewing 
disciplinary determinations in a manner consistent with the due 
process and appeal rights otherwise available to an employee 
who is subject to the same or similar disciplinary action under 
existing law. These non-disclosure agreement requirements are 
consistent with and do not supersede, conflict with, or 
otherwise alter Intelligence Community employee obligations, 
rights, or liabilities established by federal law, statute, or 
regulation. In particular, the Committee notes that this 
provision has no impact on any laws relating to whistleblowers. 
Unauthorized disclosure of classified information to the media 
or the public is not permissible under any existing 
whistleblower protection laws, and would therefore not be 
covered under this provision.
    Section 403 provides a mechanism for the Director of 
National Intelligence to enforce the contractual obligations 
contained in a nondisclosure agreement with respect to 
prepublication review requirements, for both current and future 
Intelligence Community employees. Such agreement may be 
enforced either during or subsequent to employment. The use of 
the term ``surrender'' is crucial to this contractual concept. 
Section 403 is not intended to give the DNI the authority to 
revoke or take pension benefits on his own and without 
reference to the agreement between the employee and the 
Intelligence Community element. Rather, each individual 
employee may now be held to the promise to surrender current 
and future federal government pension benefits if it is 
determined, in accordance with the applicable administrative 
procedures required by subsection (a), that the individual 
knowingly violated the prepublication review requirements in a 
manner that disclosed classified information to an unauthorized 
person or entity. It is important to note that there is no 
requirement that the disclosure of classified information also 
be done knowingly. The Committee believes that imposing such a 
requirement would allow those who purposely bypass the 
prepublication review procedures to claim that they did not 
reasonably know that their published information was 
classified--a fact about which they would have been informed 
had they complied with their prepublication requirements in the 
first place.
    For the purposes of Section 403, the term ``federal 
government pension plan'' does not include any Social Security 
benefits, Thrift Savings Plan benefits or contributions, or any 
contribution by a person to a federal government pension plan, 
in their fair market value. These limitations ensure that the 
only part of the individual's pension that is subject to 
surrender under the authorities of this provision is that 
portion funded by U.S. taxpayers.

                       SUBTITLE B--OTHER ELEMENTS

Section 411. Defense Intelligence Agency counterintelligence and 

    Section 411 amends Section 105 of the National Security Act 
of 1947, on the responsibilities of Intelligence Community 
elements in the Department of Defense, to make clear that the 
responsibilities of the DIA include counterintelligence as well 
as human intelligence activities. This confirms the existing 
responsibilities of the agency.
    Section 411 also provides authority for the Director of the 
DIA to account for expenditures for human intelligence and 
counterintelligence activities of a confidential, 
extraordinary, or emergency nature, in a manner similar to that 
available to the CIA, which does not reveal sensitive 
information. Section 411 limits this authority to no more than 
five percent of the amounts available to the DIA Director for 
human intelligence and counterintelligence activities unless 
the Director notifies the congressional intelligence committees 
thirty days in advance of the intent to exceed this limit. In 
addition, the Director must report annually to the 
congressional intelligence committees on the use of this 
expenditure authority. It is the intention of the Committee 
that the DIA Director shall carefully monitor the use of this 
authority to ensure that the flexibility it permits is used 
only in furtherance of the counterintelligence and human 
intelligence responsibilities of the DIA.
    A similar provision, without the five percent limitation, 
was included in S. 1494, the Intelligence Authorization Act for 
Fiscal Year 2010, reported by the Committee on July 22, 2009. 
S. 1494 passed the Senate by unanimous consent on September 16, 

Section 412. Accounts and transfer authority for appropriations and 
        other amounts for the intelligence elements of the Department 
        of Defense

    Section 412 authorizes the Secretary of Defense to transfer 
defense appropriations into an account or accounts established 
by the Secretary of the Treasury for receipt of such funds. 
These accounts may receive transfers and reimbursement from 
transactions between the defense intelligence elements and 
other entities, and the Director of National Intelligence may 
also transfer funds into these accounts. Appropriations 
transferred pursuant to this section shall remain available for 
the same time period, and for the same purposes, as the 
appropriations from which transferred. This should improve 
auditing of defense intelligence appropriations.

Section 413. Confirmation of appointment of the Director of the 
        National Security Agency

    Section 413 amends the National Security Agency Act of 1959 
to provide that the Director of the National Security Agency 
(NSA) shall be appointed by the President by and with the 
advice and consent of the Senate. Under present law and 
practice, the President appoints the Director of the NSA. The 
appointment has been indirectly subject to confirmation through 
Senate confirmation of the military officers who have been 
promoted into the position. Section 413 will make explicit that 
the filling of this key position in the Intelligence Community 
should be subject to confirmation.
    The Committee has had a long-standing interest in ensuring 
Senate confirmation of the heads of the NSA, the National 
Reconnaissance Office, and the National Geospatial-Intelligence 
Agency. The Committee moves forward on the requirement for 
Senate confirmation of the Director of NSA in this Act in light 
of NSA's critical role in the national intelligence mission, 
particularly with respect to activities which may raise privacy 
    Through advice and consent, the Senate can enable the 
Congress to fulfill more completely its responsibility for 
providing oversight to the intelligence activities of the 
United States Government and ensure the responsibilities and 
foreign intelligence activities of the NSA receive appropriate 
    The requirement for confirmation of the Director of NSA 
will not increase the number of Senate-confirmed officials. The 
Director of the NSA is now also the Commander of the U.S. Cyber 
Command and therefore subject to confirmation. Accordingly, 
Section 413 does not alter the role of the Committee on Armed 
Services in reviewing and approving the promotion or assignment 
of military officers. Through a sequential referral the Armed 
Services and Intelligence Committees will assure that all 
aspects of the appointment, both with respect to the Cyber 
Command and intelligence collection, will be considered.
    Section 413(c) makes clear that the requirement for Senate 
confirmation applies prospectively. Therefore, the Director of 
the NSA on the date of enactment will not be affected by this 
section, which will apply initially to the appointment and 
confirmation of his successor.

                            Committee Action

Vote to report the committee bill

    On March 15, 2011, a quorum for reporting being present, 
the Committee voted to report the bill, by a vote of 12 ayes 
and 3 noes. The votes in person or by proxy were as follows: 
Chairman Feinstein--aye; Senator Rockefeller--aye; Senator 
Wyden--no; Senator Mikulski--aye; Senator Nelson--aye; Senator 
Conrad--no; Senator Udall--no; Senator Warner--aye; Vice 
Chairman Chambliss--aye; Senator Snowe--aye; Senator Burr--aye; 
Senator Risch--aye; Senator Coats--aye; Senator Blunt--aye; 
Senator Rubio--aye.
    On March 18, 2011, acting on the basis of discussion during 
the mark-up, Chairman Feinstein and Vice Chairman Chambliss 
sent a letter to the Director of National Intelligence to 
request his views on Section 403 of the bill. The Committee has 
not received a formal response to that letter as of the filing 
of this report.

                       Compliance With Rule XLIV

    Rule XLIV of the Standing Rules of the Senate requires 
publication of a list of any ``congressionally directed 
spending item, limited tax benefit, and limited tariff 
benefit'' that is included in the bill or the committee report 
accompanying the bill. Consistent with the determination of the 
Committee not to create any congressionally directed spending 
items or earmarks, none have been included in the bill, the 
report to accompany it, or the classified schedule of 
authorizations. The bill, report, and classified schedule also 
contain no limited tax benefits or limited tariff benefits.

                           Estimate of Costs

    Pursuant to section 11 of rule XXVI of the Standing Rules 
of the Senate, the Committee transmitted this bill to the 
Congressional Budget Office (CBO) on March 15, 2011, and 
requested it to conduct an estimate of the costs incurred in 
carrying out its provisions. On March 31, 2011, the CBO 
provided a cost estimate on the unclassified portions of the 
bill (posted on its website at
doc12123/Senate%20Intelligence.doc.pdf) and concluded that, 
while the bill contains direct spending that makes the pay-as-
you-go procedures applicable, the effects of that spending 
would not be significant. The CBO also noted that the bill 
contains no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act and would impose no 
costs on state, local, or tribal governments.

                    Evaluation of Regulatory Impact

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee finds that no 
substantial regulatory impact will be incurred by implementing 
the provisions of this legislation.

                        Changes in Existing Laws

    In the opinion of the Committee, it is necessary to 
dispense with the requirements of paragraph 12 of rule XXVI of 
the Standing Rules of the Senate in order to expedite the 
business of the Senate.


    As a new member of the Senate Select Committee on 
Intelligence I am proud to represent thousands of current and 
former members of the intelligence agencies who live, work, or 
retire in Virginia. Because they are not able to discuss their 
very important work with friends and even family members, I 
will be a strong advocate for them in Congress.
    I am also committed to providing robust oversight of the 
United States Intelligence Community, which is charged with 
gathering, analyzing, and acting upon intelligence that keeps 
our nation safe. There is perhaps no more important function of 
the U.S. government than providing policymakers with unbiased 
facts and assessments that guide their decisions in matters of 
war and peace.
    The fact that this important mission must be done in secret 
makes it all the more important that the people of the United 
States have the confidence that it is being carried out--
always--in keeping with this nation's laws, and in line with 
the principles and expectations of Americans. Passing an annual 
authorization bill that informs the intelligence agencies how 
they may spend appropriated funds is an important way for the 
Senate Intelligence Committee to play a key role in this 
necessary oversight. I am honored to have been named to this 
position of responsibility.

                                                    Mark R. Warner.


    This intelligence authorization bill is the product of 
substantial labor by both Chairman Feinstein and Vice Chairman 
Chambliss, as well as their respective staff, and I commend 
them both for their efforts and for the bipartisan manner in 
which they have worked to put it together. It has now been 
almost seven years since an intelligence authorization bill was 
signed into law during the fiscal year it was intended to 
cover, and although the 2011 fiscal year is now approximately 
halfway over, Congress still has an opportunity to provide 
useful guidance and direction regarding intelligence spending 
for this fiscal year.
    This bill also contains several worthwhile legislative 
provisions, including one that would make the Director of the 
National Security Agency a Senate-confirmed position. I support 
much of what these provisions are intended to achieve, but I 
have very significant concerns about one provision in this 
bill, and that is why I voted against it.
    Section 403 of this bill would authorize the Director of 
National Intelligence (DNI) to establish an administrative 
process under which the DNI and the heads of the various 
intelligence agencies would have the authority to take away the 
pension benefits of an intelligence agency employee (or a 
former employee) if they ``determine'' that the employee has 
knowingly violated his or her nondisclosure agreement and 
disclosed classified information.
    I share my colleagues' frustration regarding unauthorized 
disclosures, or ``leaks,'' of classified information. Leaks are 
a problem that has plagued intelligence agencies throughout 
modern history--they can undermine intelligence operations, 
jeopardize intelligence sources and methods, and have a 
terrible impact on the lives of covert agents who are publicly 
exposed. Every member of Congress, myself included, wants to 
find new ways to identify and appropriately punish individuals 
who illegally disclose classified information. I personally 
spent four years working on legislation to increase the 
criminal penalty for people who are convicted of deliberately 
exposing covert agents. And I am proud to say that with help 
from a number of my Republican and Democratic colleagues, this 
legislation was finally signed into law last year.
    I agree that increasing penalties for particular offenses 
can sometimes have a deterrent effect on those who might 
otherwise be tempted to leak, so I support the creation of new 
consequences for individuals who have been convicted of 
illegally divulging classified information. But when it comes 
to leakers, the biggest challenge is not determining how to 
punish them as much as it is identifying who they are.
    Given these challenges, my concern is that giving 
intelligence agency heads the authority to take away the 
pensions of individuals who haven't been formally convicted of 
any wrongdoing could pose serious problems for the due process 
rights of intelligence professionals, and particularly the 
rights of whistleblowers who report waste, fraud and abuse to 
Congress or Inspectors General.
    Section 403--as approved by the Select Committee on 
Intelligence--gives the intelligence agency heads the power to 
take pension benefits away from any employee that an agency 
head ``determines'' has knowingly violated their nondisclosure 
agreement. But as I noted in the committee markup of this bill, 
neither the DNI nor any of the intelligence agency heads have 
asked Congress for this authority. Moreover, as of this writing 
none of the intelligence agencies have officially told Congress 
how they would interpret this language.
    It is entirely unclear to me which standard agency heads 
would use to ``determine'' that a particular employee was 
guilty of disclosing information. It seems clear that section 
403 gives agency heads the power to make this determination 
themselves, without going to a court of law, but the language 
of the provision provides virtually no guidance about what 
standard should be used, or even whether this standard could 
vary from one agency to the next. No agency heads have yet told 
Congress what standard they believe they would be inclined or 
required to use. This means that if an agency head 
``determines'' that a particular individual is responsible for 
a particular anonymous publication, he or she could conceivably 
take action to revoke that individual's pension benefits even 
if the agency does not have enough proof to convict the 
employee in court.
    Section 403 states that agency heads must act ``in a manner 
consistent with the due process and appeal rights otherwise 
available to an individual who is subject to the same or 
similar disciplinary action under other law.'' But federal 
agencies do not normally take away the pension benefits of 
former employees unless they are convicted of a crime or begin 
openly working for a foreign government. I do not believe that 
this ``otherwise available'' language is intended to require 
the government to get a criminal conviction; beyond that I am 
not at all sure what impact this language is supposed to have 
and I am not sure that the various intelligence agency heads 
will know what it means either. This only increases my concern 
that this provision could be used to undermine or violate the 
due process rights of intelligence agency employees, with a 
corresponding impact on their family members and dependents.
    I am also especially troubled that section 403 is silent 
regarding disclosures to Congress and Inspectors General. 
Everyone hopes that intelligence agency managers and 
supervisors will act honorably and protect whistleblowers who 
come forward and go through proper channels to report waste, 
fraud and abuse in national security agencies, but this is 
unfortunately not always the reality. There are existing laws 
in place that are intended to protect whistleblowers who 
provide information to Congress and Inspectors General--and I 
believe that these laws should be strengthened--but section 403 
does not specify whether it would supersede these existing 
statutes or not. I know that none of my colleagues would 
deliberately do anything to undermine protections for 
legitimate whistleblowers, but I think it was a mistake for the 
Intelligence Committee to report this bill without hearing the 
intelligence agencies' views on whether or not they believe 
that section 403 would impact existing whistleblower 
    It is unfortunately entirely plausible to me that a given 
intelligence agency could conclude that a written submission to 
the congressional intelligence committees or an agency 
Inspector General is an ``unauthorized publication,'' and that 
the whistleblower who submitted it is thereby subject to 
punishment under section 403, especially since there is no 
explicit language in the bill that contradicts this conclusion. 
Withholding pension benefits from a legitimate whistleblower 
would be highly inappropriate, but overzealous and even 
unscrupulous individuals have served in senior government 
positions in the past, and will undoubtedly do so again in the 
future. This is why it is essential to have strong protections 
for whistleblowers enshrined in law, and this is particularly 
true for intelligence whistleblowers, since, given the covert 
nature of intelligence operations and activities, there are 
limited opportunities for public oversight. But reporting fraud 
and abuse by one's own colleagues takes courage, and no 
whistleblowers will come forward if they do not believe that 
they will be protected from retaliation.
    Finally, I am somewhat perplexed by the fact that section 
403 creates a special avenue of punishment that only applies to 
accused leakers who have worked directly for an intelligence 
agency at some point in their careers. There are literally 
thousands of employees at the Departments of Defense, State and 
Justice, as well as the White House, who have access to 
sensitive information. Some of the most serious leaks of the 
past few decades have undoubtedly been made by individuals 
working for these organizations. I do not see an obvious 
justification for singling out intelligence community 
employees, particularly in the absence of evidence that these 
employees are responsible for a disproportionate number of 
leaks. And I am concerned that it will be harder to attract 
qualified individuals to work for intelligence agencies if 
Congress creates the perception that intelligence officers have 
fewer due process rights than other government employees.
    Withholding pension benefits from individuals who are 
convicted of disclosing classified information will often be an 
appropriate punishment. This punishment is already established 
in existing laws, and I would be inclined to support efforts to 
clarify or strengthen these laws. But I am not inclined to give 
agency heads broad authority to take away the pensions of 
individuals who have not been convicted of wrongdoing, 
particularly when the agency heads themselves have not even 
told Congress how they would interpret and implement this 
authority. This is why I voted against this authorization bill. 
I look forward to working with my colleagues to amend this bill 
on the Senate floor and I do not intend to support it unless 
significant reforms are made. All of my colleagues and I agree 
that illegal leaks are a serious problem, but this does not 
mean that anything at all that is done in the name of stopping 
leaks is necessarily wise policy.
                                                         Ron Wyden.