say that each member agrees with the precise wording of each and every proposal. And I think it is our collective judgment that many of them are capable of further substantive improvement.

Senator METZENBAUM. Is that spelled out for us? Is that spelled out in the Panel's report so we know who dissents at what point? Mr. EDGAR. No, I don't think it is, Senator Metzenbaum. Senator METZENBAUM. I think that would be helpful to us. Mr. EDGAR. We can do that.

Senator METZENBAUM. Thank you.

Mr. EDGAR. Third, these proposals by no means exhaust the possibilities for legislative reform. There are other ideas worthy of pursuit. Those that are presented today primarily respond to specific problems raised by executive agencies that have responsibilities in the counterintelligence area. These agencies have told the Panel that such proposals, if enacted, would make a difference in their ability to deter, detect, and prosecute espionage.

Finally, the Panel, as Eli Jacobs has suggested, has sought a balanced approach. We have tried to avoid recommendations that raise serious civil liberties concerns. Some may quarrel with how well we have achieved this objective, but it was our intent so to act. Now, if I may proceed, I will provide a short description of each of the Panel's recommendations.

As you will note, there are 13 proposals in all. We've grouped the recommendations in three categories: The first four proposals are intended to improve the personnel security system; the second five proposals are intended to provide additional penalties for activities related to espionage; last four proposals are intended as enhancements to our counterintelligence investigative capabilities.

The first statutory proposal is to establish by statute uniform minimum requirements for everyone granted a TOP SECRET security clearance. The proposal is applicable to all three branches of Government. There is at present no law on the books which establishes such requirements, and, indeed, the Panel found that these requirements vary from agency to agency.

The Panel thought it was important to deal here with only the highest category of security clearance, and with the people who were, by definition, being placed in a position to cause "exceptionally grave" damage to the national security of the United States. So these recommendations are tied to TOP SECRET information. The Panel's proposal, as the Committee will note, establishes a number of requirements. Among them that persons who receive such a clearance consent to the Government's being able to access certain types of their financial records as well as travel records. Reports of foreign travel would be required of these Government employees, as would reports by them of efforts by foreign nationals to improperly solicit classified information.

The proposal would exempt elected officials and Federal judges from the investigative requirements and would permit the President wide discretion in terms of how the system was implemented. The second statutory proposal would amend the Right to Financial Privacy Act to permit persons with TOP SECRET clearances to provide their consent to the appropriate governmental authorities obtaining access to certain of their financial records. This proposal complements the provision in the first proposal requiring consent

to provide financial records as a condition of access to TOP SECRET information. It is necessary because the Right to Financial Privacy Act as it is written now permits an individual to consent to access to his financial records for a period of only 3 months. The third proposal is intended to strengthen the protection of cryptographic information, which, in plain English, means codes and coding machines. The key element of the proposal is to require that all Government communicators, in whatever agency they may be employed, be subject to the possibility of a limited, counterintelligence-scope polygraph examination during the period of their employment as communicators. Basically, they would be asked simply if they were a spy. The Panel's intent is to reach that population of Government employees who run communications centers processing classified information, those who build coding machines, and those who devise codes. The Panel believes the consequence to the United States of the loss of this kind of information justified this requirement. We further believe that the possibility of periodic polygraph examinations will deter people in this category from contemplating espionage.

The fourth proposed new statute would give the Director of the National Security Agency discretionary authority to provide assistance to employees for up to 5 years after they leave the National Security Agency to help them cope with problems. Experience shows that post-employment problems can jeopardize the classified information to which employees have become privy during the period of their employment. The CIA now exercises this authority under existing law, and it has proven useful on occasion to the CIA. While the authority might well be needed in other agencies which handle sensitive information, the Panel was persuaded that the need was particularly acute in the NSA inasmuch as their employees normally spend their careers in positions of unique sensitivity.

Turning to the second group of recommendations, those bearing on criminal espionage, the fifth statutory proposal would make it a crime to possess espionage devices if the intent to violate the espionage statutes can be shown. This proposal is similar to a statute already in place that criminalizes the possession of electronic surveillance equipment, and it is similar as well as to many State statutes making possession of burglary tools a crime where the intent to use them in a burglary can be established. A law such as this would make it possible to prosecute someone found in the possession of such devices as burst transmitters, sophisticated concealed cameras and such, where the intent to commit espionage can be shown. It permits prosecution without the necessity of proving the passage of classified information, and without proving a conspiracy by showing an agreement with another person. This situation is not a common one, but the proposal occasionally can come into play.

The sixth proposed statute would make it a crime to sell to a person representing a foreign power documents or materials that are marked or otherwise identified as TOP SECRET without the Government having to prove as an element of the offense that the classification marking had been properly applied. The Panel's intent in recommending this is to allow the Government to pros

ecute such conduct without having to reveal the TOP SECRET information in question. The Panel accepts fully the notion that much information is classified that should not be classified. It believes such concern is lessened however insofar as information designated TOP SECRET is involved, and moreover and importantly, that no one can possibly justify selling such materials to known representatives of foreign powers. In these circumstances, we believe the Government should not have to disclose the TOP SECRET information in order to prove its proper classification.

The seventh statutory proposal would add a new provision to that part of the criminal code that deals with the responsibilities of Government employees. It creates a new misdemeanor offense for any Government employee who knowingly removes TOP SECRET documents without authority and retains them at an unauthorized location. The Panel's intent here is to provide the Government with a lesser criminal sanction to deal with Government employees stockpiling highly classified documents with the thought that later they may wish to convert them to personal use. This provision includes both civil and criminal sanctions that might be applied by a court to such cases. The Panel believes the potential seriousness of this kind of behavior, where TOP SECRET information is involved, warrants a special sanction, such as termination of Federal employment. If Government employees must take information which is classified home and keep it for a period of time, they should obtain appropriate authority to do so.

The eighth proposal extends an existing statute which provides for the forfeiture of profits associated with the violation of one of the principle espionage statutes, 18 U.S.C. 794. The proposal would extend that, the so-called "Son of Sam" law to other kinds of espionage convictions.

The ninth proposed statute also amends an existing statute. It would permit the Government to deny retirement pay to United States retirees in the Civil Service Retirement System who are convicted of espionage in foreign courts where the offense concerned United States national defense information. The Attorney General would have to certify that the procedures pursuant to which the conviction had been obtained provided due process rights comparable to those in the United States.

Turning to the last category of recommendations-enhancements of investigative capabilities-our 10th statutory proposal amends or would amend the Fair Credit Reporting Act to permit the FBI to obtain consumer credit reports on persons who are certified by the Director of the FBI as suspected of being agents of foreign powers, as that term has been defined by the Foreign Intelligence Surveillance Act of 1978. Limited identifying information could also be obtained when certified as necessary in other cases. Consumer credit agencies who provide such report would be prohibited from disclosing the request to the consumer involved and this tracks the similar authority the FBI already has with respect to bank records under the Right to Financial Privacy Act of 1979.

The 11th statutory proposal would amend the Electronic Communications Privacy Act of 1986 in order to permit the FBI to obtain subscriber information about persons with unlisted telephone numbers who are called by foreign powers or agents of foreign powers.

Under existing law, the FBI can obtain the toll records of foreign powers and agents of foreign pursuant to a certification process from the Director. These records-in other words, whom the foreign power or agent of foreign power has called-are useless in the instance where the FBI cannot get the names and addresses of the persons whose unlisted telephone numbers were called. Therefore this proposal would authorize the FBI to obtain from the phone company that limited information, namely the information identifying the person whose unlisted telephone number is called by a foreign power or an agent of a foreign power. It does not authorize any other investigative activity on the part of the FBI concerning such a person. Any additional activity would have to be authorized in accordance with other FBI authority.

The 12th statutory proposal would amend the existing statute which provides discretionary authority to the Attorney General to pay rewards for information concerning terrorism, to permit such rewards to be paid for information leading to an arrest or conviction for espionage or for information which had prevented the commission of espionage. The Panel would authorize payments of up to a million dollars for this purpose.

Last but hardly least, the Panel proposes extending the court order procedure now used for electronic surveillances, established by the Foreign Intelligence Surveillance Act, to physical searches done for national security purposes. These are undertaken without a court order under a claim of inherent presidential authority. We think subjecting such searches to a court order process not only would be an important safeguard for the civil liberties of Americans, but would serve also as a protection for the employees of the executive agencies who are asked to engage in such conduct. The Panel believes that the FISA has worked exceedingly well over the last 10 years where electronic surveillances are concerned and we are persuaded that it should be applied to physical searches as well.

Mr. Chairman that concludes my summary of these statutory proposals, and we collectively stand ready to answer your questions.

Chairman BOREN. Thank you very much. Without objection I will enter into our record the text of the Panel's recommendations and any additional comments that members of the Panel might wish to make.

[The document referred to follows:]

THE HONORABLE DAVID L. BOREN,

Chairman.

THE HONORABLE WILLIAM S. COHEN,

Vice Chairman,

Select Committee on Intelligence,

United States Senate,

Washington, DC 20510.

May 23, 1990.

DEAR MR. CHAIRMAN AND VICE CHAIRMAN: As you requested, I am today transmitting on behalf of my colleagues on the Panel thirteen legislative proposals to improve the counterintelligence posture of the United States. These proposals are the product of our review, conducted over the last six months, of the existing statutory framework.

While clearly these proposals can be refined and improved, we believe that the enactment of this or similar legislation would significantly strengthen the ability of the United States to deter, detect, and prosecute persons who turn to espionage. As you will note, the proposals primarily address persons with access to the most sensitive classified information who necessarily possess the capability of doing the greatest harm. We have, on the other hand, attempted to avoid recommendations that would place undue burdens upon the rights and privacy of those who might be affected. The Committee, of course, must decide for itself whether the appropriate balance has been struck.

Our Panel remains ready to assist in any way we can should the Committee decide to pursue these recommendations in the legislative process.

Sincerely,

ELI S. JACOBS.

JACOBS' PANEL-PROPOSED LEGISLATIVE ITEMS

1. AMENDMENT TO THE NATIONAL SECURITY ACT OF 1947 (to provide uniform requirements for persons granted TOP SECRET security clearances)

The National Security Act of 1947 (50 U.S.C. 401 et seq) is amended by inserting at the end thereof the following new title:

“TITLE VIII. UNIFORM REQUIREMENTS FOR ACCESS TO TOP SECRET

INFORMATION

Sec. 801. Minimum Requirements for a TOP SECRET Security Clearance. Except as provided by section 804 of this title and in accordance with the procedures required by section 805, no person shall be given a security clearance after the effective date of this title by any department, agency, or entity of the United States Government, providing such person access to TOP SECRET information owned, originated, or possessed by the United States, unless such person is a citizen of the United States and has, at a minimum:

(1) Been the subject of a completed background investigation by competent investigative authority;

(2) Agreed to provide consent to appropriate investigative authorities permitting such authorities, during the initial background investigation and for such time as the clearance remains in effect, and for five years thereafter access to: (a) financial records concerning the subject pursuant to section 1104 of the Right to Financial Privacy Act of 1978;

(b) consumer reports concerning the subject pursuant to section 1681b of the Consumer Credit Protection Act; and

(c) records maintained by commercial entities within the United States pertaining to any travel by the subject outside the United States.

(3) Agreed for such period as such clearance may be in effect, to report to the department, agency, or entity granting the security clearance any travel to foreign countries which has not been authorized as part of the subject's official duties; and

(4) Agreed to report to the Federal Bureau of Investigation or other appropriate investigative authorities any unauthorized contacts with persons known to be foreign nationals or persons representing, or purporting to represent, foreign nationals, where an effort to acquire classified information is made by the foreign national or persons representing a foreign national, or or where such contacts appear intended for this purpose.

Failure by the subject to comply with any of the requirements of this section shall constitute grounds for denial or termination of a security clearance permitting access to TOP SECRET information.

Sec. 802. Requirements for Additional Investigations. In accordance with the regulations issued pursuant to section 804 of this title, persons who are granted TOP SECRET security clearances shall, at a minimum:

(1) Be subject to additional background investigations by appropriate governmental authorities during the period such clearance is maintained at no less frequent interval than every five years", provided that any failure to satisfy this requirement that is not attributable to the subject of such investigation shall not result in loss or denial of the security clearance concerned; and

(2) Be subject to investigation by appropriate governmental authority at any time to ascertain whether such persons continue to meet the standards for access to TOP SECRET information.