Conferees Want Hard Look at Contractors

By Walter Pincus
Monday, December 17, 2007

The 104-page House-Senate conference report on the fiscal 2008 intelligence authorization bill is heavily focused on the use of private contractors by intelligence agencies.

Director of National Intelligence Mike McConnell was directed to produce a comprehensive report by the end of March describing the "activities performed by contractors" in all 16 intelligence agencies and how they are overseen. McConnell also was given the unusual authority to convert positions currently occupied by contractors into full-time positions by allowing him to increase personnel levels, by no more than 10 percent in any agency.

The Office of the Director of National Intelligence, which oversees the intelligence community with a staff of more than 1,000 employees, is an exception: Criticized on Capitol Hill for being too large, it can grow by only 5 percent if contractor positions are turned into full-time government jobs.

Underlying the congressional concern, the conferees' report said that "the intelligence community lacks a clear definition of the functions that may be appropriately performed by contractors and, as a result, whether contractors are performing functions that should be performed by government employees."

Another concern of the conferees is the estimate that an average civilian government employee costs the government $126,500 annually in salary and benefits, while "a core contractor [is] estimated to cost an average of $250,000 annually." One reason for the gap is that the cost of the contract employee includes administrative overhead and profit for the contracting company.

After the attacks of Sept. 11, 2001, the growth in the number of contractors was justified because the government needed to rapidly increase its intelligence functions. Now the conferees believe the time has come for McConnell's office to determine "the appropriate balance of contractors and permanent employees."

After the recent release of a National Intelligence Estimate that concluded that Iran had halted its nuclear weapons program in 2003, the conferees said they want such assessments on Iranian and North Korean intentions and capabilities done and submitted to the House and Senate intelligence committees in the next two years. The request is that one assessment be done in 2008 and that both be completed during fiscal 2009. McConnell has sought to reduce the number of reports required by lawmakers, but the conferees argue this requirement guarantees that the intelligence community place "a high priority" on reporting to Congress on the two countries' nuclear programs.

The conferees also added a requirement that the CIA inspector general conduct an audit every three years of each covert action underway and submit it to the congressional oversight committees. That practice already occurs, but the committees want to be assured it will continue. There is a provision that can limit disclosure to the panels "to protect vital national security interests," but in those cases the CIA director must inform the committees of those reasons.

Recognizing the multibillion-dollar budgets of the National Security Agency, which monitors and analyzes electronic communications, and the National Reconnaissance Office, which builds and manages intelligence satellites, the conferees want the heads of those agencies to be presidential nominees who require Senate confirmation. The White House has voiced opposition to this provision, but the conferees argue that the spending of the two agencies "comprises a substantial portion of the national intelligence program" and that the NSA's wiretapping deals with issues involving civil liberties of U.S. citizens.

On another note, the conferees have given the directors of all the intelligence agencies authority, now limited to the director of national intelligence and CIA director, to limit reporting of foreign gifts or decorations received by their personnel or even spouses or children. Under law, all such gifts or awards are supposed to be reported to the secretary of state, who is required to publish the information in the Federal Register. It was recognized that such a public listing could disclose the identities of covert officers.

Dropped from the legislation was language that required the director of national intelligence to produce a National Intelligence Estimate on climate change. The highly publicized object of Republican scorn, the conference dropped the request because such a full-scale assessment was already underway.

National security and intelligence reporter Walter Pincus pores over the speeches, reports, transcripts and other documents that flood Washington and every week uncovers the fine print that rarely makes headlines -- but should. If you have any items that fit the bill, please send them

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