BRIEFING BOOK FOR THE DDCI

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89G01321R001002650001-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 210
• Document Creation Date: December 23, 2016
• Document Release Date: August 1, 2012
• Sequence Number: 1
• Publication Date: March 1, 1988
• Content Type: MISC

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BRIEFING, BOOK
FOR THE DIRECTOR OF CENTRAL INTELLIGENCE APPEARANCE
BEFORE THE SELECT COMMITTEE ON INTELLIGENCE
UNITED STATES SENATE
1 MARCH 1988
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Attached is the chart you requested
from Bill Donnelly that provides information
on the present duty strength of the IG
and the planned size, as well as the
statistics on inspections, investigations
and audits carried out in 1987.
88
STAT
Date
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94TH CONGRESS
24 Reagan
SENATE
REPORT
-No. 944755
BOOK I
FINAL REPORT
OF THE
SELECT COMMITTEE
TO STUDY GOVERNMENTAL OPERATIONS
WITH RESPECT TO
INTELLIGENCE ACTIVITIES
UNITED STATES SENATE
TOGETHER WITH
ADDITIONAL, SUPPLEMENTAL, AND SEPARATE
VIEWS
APRIL 26 (legislative day, APRIL 14)4976
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2
ent suspicion it might be desirable
Lin a list of allegations and the re-
gations for periodic inspection by
9 appropriate congressional corn-
airing of grievances through the
irector of Personnel and finally to
Agency through the Inspector
is direct the Inspector General to
ich have not received satisfactory
,annels and empower him to accept
n certain circumstances this griev-
detection of illegal or improper
rst be sought in the chain of com-
e Inspector General is available
zo through normal channels with-
rare exceptional circumstances." 96
tg of grievances should be main-
the "authority to counter the pos-
oyee." 97 The mechanism might be
of the importance of having a
ees should be aware that they can
oversight committees.
ition, allegations, or complaints of vio-
of Justice immediately, without a pro-
le Inspector General. This might, how-
nfounded complaints being referred to
, Deputy Director for Operations wrote
iduals who are quick to allege maiscon-
heir superiors or peers. The question as
'stance can best be initially determined
ferral to another body will result in
.rtain cases broaden the security dam-
ollow-up on real charges when enough
tiated." (Nelson letter, 1/13/76, p. 1.)
e to Chief, Review Staff, 3/17/76, p. 2.
telligence has recommended that the
?dures be publicized, and the Inspector
ation to get involved prematurely in
? Agency itself, as contrasted to a com-
tallenging the Inspector General, since
f the Agency. Thus, the Inspector Gen-
?en the Agency and the employee. This
k-ho brought such cases to the Inspector
external administrative appeal avail-
the Office of Inspector General." (Law-
303
C. INTERNAL AND EXTERNAL REVIEW OF THE OFFICE OF THE! INSPECTOR
GENERAL
The Inspector General reports to the Director of the Central In-
telligence Agency, and the Director has the primary responsibility for
evaluating this office. The Office has not, however, been regularly or
formally reviewed. Some mechanism for internal inspection of the
Office of the Inspector General should be devised.
The Inspector General was aware of questionable activities' some of
which continued for many years with the approval of the Agency's
top management. This underscores the importance of outside reviews
of the Agency. To be effective, the reviewing bodies must have access
to the Inspector General's work.
A number of individuals familiar with the work of the Office of the
Inspector General have argued against the Inspector General's having
a direct reporting. responsibility outside of the CIA. Lawrence Hous-
ton noted that if the Inspector General reported directly to anyone
other than the Director, two crucial elements would be lost: "first
the absolute candor that should exist in his relations with the Director
and second the ability to protect the integrity of his files and the con-
fidentiality of his findings and recommendations." 99 The Committee
has also been told that "any arrangement which would separate the
Inspector General from his present relationship to Agency manage-
ment would tend to result in a lack of candor and a resistance to reveal-
ing sensitive details in investigations and this would inevitably result
in diluting the authority and effectiveness of the Inspector General.1??
A start in outside reporting has been made. Under Executive Order
11905 the Inspector General must report to the Intelligence Oversight
Board any activities that raise questions of legality or propriety.101
But Executive Branch oversight of the CIA or the CIA's Inspector
General is not sufficient. The Inspector General should be available
to the appropriate congressional oversight committees.102 And some
form of reporting on the work of the Office of the Inspector General
should be made, with appropriate safeguards, to the appropriate
congressional committees.
The present Inspector General believes that:
[t]he I.G. could and perhaps should provide our oversight
committees with the following: (1) a summary of our find-
ings on each component survey, one which would reveal prob-
"Houston letter, 1/76, p. 1.
' Comments on the Office of the Inspector General, 1/25/76, pp. 2-3. However,
Scott Breckinridge wrote that "If so directed by the DCI, elements being in-
spected will continue to be as forthcoming as in the past. There is no reason to
expect that this will not be the case." (Breckinridge letter, 1/12/76, p. 5.) Mr.
Breckinridge noted, however, that if reports were to be made available to outside
bodies, less detail might be provided "in support of conclusions and recommen-
dations."
101 Ibid. Prior to the issuance of the Executive Order, CIA regulations, amended
to conform to the recommendations of the Rockefeller Commission, required
reports to be sent to the NSC and PFIAB.
" Letter from John McCone to the Senate Select Committee, 1/30/76, p. 2.
Former DCI McCone wrote that the IG should not report to anyone outside the
Agency such as the PFIAB, the NSC or congressional oversight committees. The
IG, should be however, "available to all of these groups." (Ibid., p. 2.)
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lems and recommended solutions but not give operational
details; (2) a semi-annual summary of all other cases, em-
phasizing trends, general problems etc., but not giving names
of individuals or sensitive details which might identify
individmals.103
Such reports, coupled with access, where necessary, to the results
of particular inspections or reviews by the Inspector General, would
greatly aid congressional oversight of the CIA.1?4 Congressional
evaluation of the work of the Office of the Inspector General might be
facilitated by requiring the Inspector General to provide the over-
sight committee with a plan of action setting out "priority surveys to
be done and why, the schedule to be followed, the dates reports would
be completed, [and] the actions taken on reports (or the non-actions)
and why." 1?5
A second means for Congress to oversee the work of the Inspector
General would be to make the Inspector General subject to presidential
nomination and senatorial confirmation. Pregiaential
1103veverminighttinadevertentlyigivap?sitliflTaw
paitialtadziratiop_swhIchawoutardlifigive=ics-t-s ofieth-ev.
01E7
" Chamberlain letter, 1/13/76, p. 4. In order to reinforce the chain of command
such reporting could be done via DOT's reports to the oversight committees.
" One former Inspector argued against congressional access without the DCI's
concurrence as leading to "congressional involvement in Agency minutiae," the
erosion of security, and the reduction of the candor of Agency employees vis a
vis the TO. (Heimann letter, 1/18/76, p. 2.) Another former Inspector wrote that
If all IG's reports were to be sent to Congress they would "become less candid
and more conservative." (Lawrence letter, 2/18/76, p. 5.) Another former In-
spector suggested that "an active and strong congressional oversight committee
would be my first choice" as an "outside authority" which would correct problems
that the IG discovers. (Holmes letter, 1/19/76, p. 6.)
' Holmes letter, 1/19/76, p. 12. The submission of such a plan would allow the
IG to be evaluated on the basis of his own plan, which would be approved by
the IG and the committees. The committee "would be assured that the IG was
planning to do what the committee expected them to do." Ibid.
The IG is required, under Executive Order 11905 to report to the Intelligence
Oversight Board the "practices and procedures" formulated to discover ques-
tionable activities by the CIA.
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INDEX
DCI APPEARANCE BEFORE SENATE INTELLIGENCE COMMITTEE
ON LEGISLATION TO ESTABLISH A .CIA STATUTORY INSPECTOR GENERAL
A. Background on the Hearing
B. Opening Statement
C. Questions and Answers
D. S. 1818, Section Four
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26 February 1988
NOTE FOR: The Director
FROM: John Helgerson
SUBJECT: I March Senate Intelligence Committee Hearing
on Statutory IG
Attached is your briefing book along with a separate set of
background materials in preparation for your I March appearance at
an open Senate Intelligence Committee hearing on Senator Specter's
bill to establish a statutory Inspector General at CIA.
Based on recent discussions with Committee staff, it appears
that other than bearing from you on measures you have taken to
strengthen the Office of Inspector General, there are two major
areas of Committee interest: 1) the degree to which you are
willing to share with the oversight committees information on IG
inspections and investigations; and 2) the extent to which the IG
will be "independent" of influence from the DCI and the rest of
the Agency. Our proposed opening statement concentrates on
summarizing the changes you have made in the office and listing
the specific problems you have with the Specter bill. We have
prepared questions and answers dealing with the issues of
committee access to IG information and IG "independence."
The Committee staff fully expects that some members will ask
questions related to CISPES. However, Specter's staff has
indicated that Specter, at least, will confine his questions in
this regard to two areas: 1) how the FBI Inspection Division is
organized and operates; and 2) the role of the Inspection Division
in the entire CISPES investigation, has put together STAT
pertinent materials for you on this subject which can be found at
Tab J of the background notebook. He will also separately provide
you with proposed questions and answers.
Also scheduled to testify on I March are the Inspectors
General of the State and Defense Departments (both of whom were
established by statute), and the Comptroller General. We
understand that none of them plans to take any position on whether
there should be a statutory IG at CIA. Instead, the State and
Defense Department IGs will discuss their organization and
mandate, and the Comptroller General will offer his assessment
of the effectiveness of statutory. IGs that exist at other Federal
agencies.
STAT
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DAVID L BOREN. OKLAHOMA. CHAIRMAN
rt. ncfll Y-1:1P
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SAM NUNN. GEORGIA, ORRIN HATCH. UTAH
ERNEST F. HOLLINGS. SOUTH CAROLINA FRANK WITKOWSKI. ALASKA
BILL BRADLEY. NEW JERSEY ARLEN SPECTER, PENNSYLVANIA
ALAN CRANVON. CALIFORNIA CHIC HECHT. NEVADA
DENNIS 111CuNCINI. ARIZONA JOHN WARNER. VIRGINIA
HOWARD M METZENBAUM. OHIO
ROBERT C. BYRD. WEST VIRGINIA. EX OFFICIO
ROBERT DOLE, KANSAS. EX OFFICIO
EVEN E. HOLMES. STAFF DIRECTOR/GENERAL COUNSEL
JAMES H. DYKSTRA. MINORITY STAFF DIRECTOR
KATHLEEN P. McGHEE. CHIEF CLERK
United e%tates Senate
SELECT COMMITTEE ON INTELLIGENCE
WASHINGTON, DC 20610-6476
?
February 10, 1988
The Honorable William H. Webster
Director of Central Intelligence
Central Intelligence Agency
Washington, 11.(%, 20505
Dear Judge Webster:
On Tuesday, March 1, 1988, the Senate Select Committee
on Intelligence will conduct an open hearing commencing at
2:00 p.m. in Dirksen 562 in consideration of S.1818, the
National Security Reform Act of 1987, an omnibus bill
concerning inspections and sanctions for intelligence
activities.
Since you have expressed a particular interest in the
statutory Inspector General section of the bill and have
requested the opportunity to advise the Committee of the IG
reforms you have instituted at the Central Intelligence
Agency, we request that you appear as a witness.
We anticipate that testimony by other witnesses will
conclude by 3:00 p.m. at which time we would look forward
to your remarks.
Si J rely,
47,44,2.
David L. Boren
Chairman
.4610A
7Wi)lliam S.
-Vice Chairman
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STATEMENT OF THE
DIRECTOR OF CENTRAL INTELLIGENCE
BEFORE THE SELECT COMMITTEE ON INTELLIGENCE
UNITED STATES SENATE
1 MARCH 1988
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MR. CHAIRMAN AND MEMBERS OF THE SELECT COMMITTEE ON
INTELLIGENCE, I AM PLEASED TO BE HERE TODAY TO DISCUSS MY VIEWS
ON SECTION FOUR OF S. 1818, THE NATIONAL SECURITY REFORM ACT OF
1987, WHICH PERTAINS TO THE ESTABLISHMENT OF A STATUTORY
INSPECTOR GENERAL AT THE CENTRAL INTELLIGENCE AGENCY.
THE PURPOSE OF THE PROPOSAL, AS I UNDERSTAND IT, IS TO
STRENGTHEN THE INDEPENDENCE AND OBJECTIVITY OF THE INSPECTOR
GENERAL. As SENATOR SPECTER DESCRIBED IT, IT IS "TO HELP
ASSURE LAWFUL INTERNAL COMPLIANCE ON MATTERS WHICH DO NOT COME
WITHIN THE PURVIEW OF CONGRESSIONAL OVERSIGHT." IT WOULD ADD
THE CIA TO THE LIST OF FEDERAL AGENCIES WHICH CURRENTLY HAVE
STATUTORY INSPECTORS GENERAL.
BEFORE I PROVIDE YOU WITH MY THOUGHTS ON SENATOR SPECTER'S
MEASURE, I WOULD FIRST LIKE TO EXPLAIN BRIEFLY WHAT THE CIA
INSPECTOR GENERAL CURRENTLY DOES AND HOW THE OFFICE OF
INSPECTOR GENERAL IS NOW ORGANIZED.
THE CIA ALREADY HAS AN INSPECTOR GENERAL WHO IS A SENIOR
OFFICER REPORTING DIRECTLY TO THE DCI AND DDCI AND WHO IS
SUBORDINATE ONLY TO THE DCI AND DDCI. IN THE CONDUCT OF HIS
DUTIES, THE INSPECTOR GENERAL HAS UNLIMITED AND AUTOMATIC
ACCESS TO ALL AGENCY RECORDS.
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THE INSPECTOR GENERAL CURRENTLY DIRECTS AND COORDINATES THE
ACTIVITIES OF THREE GROUPS: THE INIIOR_LAFF, THE
INVESTIGATION STAFF AND THE AUDIT STAFF. THESE THREE GROUPS
CONDUCT SPECIAL INVESTIGATIONS WHEN NEEDED, ROUTINE INSPECTIONS
AND AUDITS. ALL ELEMENTS OF THE AGENCY, BOTH AT HEADQUARTERS
AND IN THE FIELD, ARE SUBJECT TO EXAMINATION. ONLY THE DCI HAS
THE AUTHORITY TO EXEMPT A COMPONENT OR PROGRAM FROM AN
INSPECTION OR AN AUDIT. To THE BEST OF MY KNOWLEDGE, NO DCI
HAS EVER EXERCISED THIS POWER.
BEFORE I EXPLAIN THE WORKINGS OF THE THREE GROUPS UNDER THE
DIRECTION OF THE INSPECTOR GENERAL, LET ME EMPHASIZE THAT, IN
ADDITION TO HIS NORMAL INSPECTION, INVESTIGATION AND AUDIT
ACTIVITIES, THE INSPECTOR GENERAL NOW HAS MUCH BROADER POLICY
AND MANAGEMENT FUNCTIONS WITHIN CIA. As PART OF THE NEW
RESPONSIBILITIES I HAVE ASSIGNED TO THAT OFFICE, HE WILL BE
DIRECTLY INVOLVED IN IMPROVING OVERALL AGENCY MANAGEMENT,
ENSURING ACCOUNTABILITY AND DISCIPLINE, AND ENCOURAGING THE
RAISING OF STANDARDS AND QUALITY. OF PERFORMANCE THROUGHOUT THE
AGENCY.
2
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I SEE THE OFFICE OF INSPECTOR GENERAL AS PERFORMING ANOTHER
NEW AND PERHAPS EVEN MORE CRITICAL INSTITUTIONAL ROLE, AND THAT
IS DEVELOPING OUR TOP MANAGERS AND LEADERS OF TOMORROW.
HENCEFORTH AN ASSIGNMENT TO THE OFFICE OF INSPECTOR GENERAL
\ WILL BE A NECESSARY AND MEANINGFUL COMPONENT IN THE CAREER
' DEVELOPMENT OF OUR BRIGHTEST AND MOST PROMISING OFFICERS, I AM
\PERSONALLY COMMITTED TO THE GOAL OF IDENTIFYING AND BRINGING
OUR BEST PEOPLE TO THE OFFICE, AND I AM PLEASED TO SAY THAT WE
ARE ALREADY WELL ON THE WAY TOWARDS FULFILLING THAT GOAL.
THE INSPECTION STAFF, THE FIRST OF THE THREE GROUPS UNDER
THE SUPERVISION OF THE INSPECTOR GENERAL, CONDUCTS PERIODIC
INSPECTIONS OF ALL AGENCY COMPONENTS TO ENSURE COMPLIANCE WITH
LAWS AND REGULATIONS. IT ALSO ADDRESSES PROBLEMS BROUGHT TO
ITS ATTENTION AND EVALUATES MANAGEMENT EFFECTIVENESS. IN
COMPLIANCE WITH EXECUTIVE ORDERS 12333 AND 12334, THE INSPECTOR
GENERAL AND, FOR THAT MATTER, THE GENERAL COUNSEL WILL REPORT,
TO THE EXTENT PERMITTED BY LAW, TO THE PRESIDENT'S INTELLIGENCE
OVERSIGHT BOARD ANY INTELLIGENCE ACTIVITIES WHICH HE HAS REASON
TO BELIEVE MAY BE UNLAWFUL OR CONTRARY TO EXECUTIVE ORDER OR
PRESIDENTIAL DIRECTIVE. LIKEWISE, THE INTELLIGENCE OVERSIGHT
ACT, ? 501 OF THE NATIONAL SECURITY ACT OF 1947, REQUIRES THE
AGENCY TO REPORT TO THE INTELLIGENCE COMMITTEES ANY ILLEGAL
INTELLIGENCE ACTIVITY, ALONG WITH ANY CORRECTIVE MEASURES TAKEN
OR PLANNED TO BE TAKEN.
3
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THE I,t112.1.Elig.li_5.IAEZ, THE SECOND OF THE THREE GROUPS,
HANDLES COMPLAINTS ABOUT EMPLOYEE CONDUCT AND REPORTS OF
POSSIBLE VIOLATIONS OF LAW, REGULATIONS OR PROCEDURES, AND ALSO
INVESTIGATES EMPLOYEE GRIEVANCES AND DISCRIMINATION
COMPLAINTS. IN THE PAST FOUR YEARS, THIS STAFF HAS HANDLED AN
AVERAGE OF TWO DOZEN INVESTIGATIONS THAT HAVE CULMINATED IN
FORMAL REPORTS, AND AN ADDITIONAL 75 INFORMAL INQUIRIES AND
GRIEVANCE REFERRALS OR CONSULTATIONS PER YEAR THAT DO NOT
RESULT IN FORMAL REPORTS.
THE AUDIT STAFF PERFORMS INDEPENDENT AUDITS OF ALL MATTERS
RELATED TO THE RECEIPT, DISBURSEMENT AND APPLICATION OF FUNDS
AND ASSETS AVAILABLE TO THE AGENCY IN ACCORDANCE WITH AUDIT
STANDARDS WHICH THE COMPTROLLER GENERAL HAS ESTABLISHED. THE
CHIEF OF THE AUDIT STAFF REPORTS THE AUDITORS' OBSERVATIONS AND
RECOMMENDATIONS TO THE DEPUTY DIRECTOR OF THE OFFICE CONCERNED
AND TO OTHER OFFICIALS AS APPROPRIATE. THE DEPUTY DIRECTOR
MUST REPLY TO AUDIT RECOMMENDATIONS WITHIN 60 DAYS. IF
RECOMMENDATIONS CANNOT BE RESOLVED SATISFACTORILY AT OPERATING
LEVELS, THEY MAY BE REFERRED TO ME THROUGH THE INSPECTOR
GENERAL FOR RESOLUTION.
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As I SAID EARLIER, THERE ARE NO LIMITATIONS ON THE SCOPE OF
AUDITS AND INVESTIGATIONS, THE INVESTIGATORS, INSPECTORS AND
AUDITORS HAVE COMPLETE ACCESS TO ANY INFORMATION WITHIN CIA AND
THE DCI's STAFF ELEMENTS, BOTH AT HEADQUARTERS AND IN THE
FIELD. AUDITORS, INVESTIGATORS AND INSPECTORS, AS WELL AS
THEIR SUPERVISORS, ARE GRANTED SPECIAL CLEARANCES WHEN NEEDED
TO REVIEW EXTREMELY SENSITIVE COMPARTMENTED ACTIVITIES.
DESPITE THE MANY STRENGTHS OF THE INVESTIGATION PROCESS, I
DISCOVERED THAT SOME AREAS OF THE OFFICE OF INSPECTOR GENERAL
NEEDED TO BE IMPROVED IN THE WAKE OF THE IRAN-CONTRA AFFAIR.
As YOU KNOW, I BROUGHT IN A SPECIAL COUNSEL, RUSSELL BRUEMMER,
TO REVIEW THE AGENCY'S PERFORMANCE IN THE AFFAIR, IN HIS
REPORT, MR. BRUEMMER, WHO NOW SERVES AS THE CIA's GENERAL
COUNSEL, PINPOINTED THE FOLLOWING PROBLEMS IN THE OFFICE OF
INSPECTOR GENERAL:
-- THE NUMBER OF INVESTIGATORS ASSIGNED TO THE
INVESTIGATION STAFF WERE NOT ENOUGH TO DEAL WITH THE
DEMANDS OF A MAJOR INVESTIGATION;
-- THE INVESTIGATORS DO NOT RECEIVE FORMALIZED TRAINING IN
INVESTIGATIVE TECHNIQUES WHEN THEY ROTATE INTO THIS
ASSIGNMENT; AND
5
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CI
-- THE INVESTIGATORS DO NOT RECORD THEIR RECOLLECTIONS AS
VERBATIM TRANSCRIPTS, SIGNED STATEMENTS OR FORMAL MEMORANDA
FOR THE RECORD.
THE REPORT OF THE IRAN-CONTRA COMMITTEES HAD EARLIER REFLECTED
THESE CONCERNS MORE GENERALLY BY STATING THAT THE OFFICE LACKED
THE MANPOWER, RESOURCES AND TENACITY TO UNCOVER KEY FACTS
LEARNED IN OTHER INVESTIGATIONS OF THAT MATTER.
AT THE SAME TIME, IT IS IMPORTANT TO KEEP IN MIND THAT THE
SPECIAL COUNSEL NOTED IMPORTANT STRENGTHS WITHIN THAT OFFICE.
FOR INSTANCE, HE DETERMINED, IN SPITE OF THE PROBLEMS I JUST
DESCRIBED, THAT THE INSPECTOR GENERAL'S STAFF PERFORMED WELL IN
DETERMINING THE AGENCY'S ROLE IN THE IRAN ARMS SALES. IN A
MATTER OF SIX WEEKS AFTER THE ATTORNEY GENERAL'S ANNOUNCEMENT
OF THE SALES, THE INVESTIGATION TEAM PRODUCED A 40-PAGE REPORT
ON THE AGENCY'S ROLE AND A 35-PAGE CHRONOLOGY THAT HAVE BEEN
PROVEN TO BE ESSENTIALLY ACCURATE AFTER MANY MORE MONTHS OF
ADDITIONAL TESTIMONY.
6
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NONETHELESS, IN LIGHT OF THE APPARENT SHORTCOMINGS OF THE
OFFICE OF INSPECTOR GENERAL IDENTIFIED BY THE IRAN-CONTRA
COMMITTEES AND MY SPECIAL COUNSEL, I CONVENED. A STEERING GROUP
LAST NOVEMBER COMPOSED OF SENIOR AGENCY MANAGERS TO RECOMMEND
SPECIFIC WAYS IN WHICH THE OFFICE COULD BE IMPROVED. ITS
FINDINGS MIRRORED TO A LARGE DEGREE THOSE OF THE IRAN-CONTRA
COMMITTEES AND THE SPECIAL COUNSEL 1 THAT IS, THAT THE OFFICE'S
MANPOWER AND THE QUALIFICATIONS OF ITS PERSONNEL SHOULD BE
STRENGTHENED AND ITS INVESTIGATIVE STAFF MORE RIGOROUSLY
TRAINED TO ENABLE IT TO IDENTIFY AREAS OF POTENTIAL IMPROPRIETY
OR VIOLATIONS OF STATUTES AND REGULATIONS BETTER AND TO
IDENTIFY CLEARLY AND DEAL PROPERLY WITH ACTUAL VIOLATIONS OF
LAW.
THE STEERING GROUP ALSO DETERMINED THAT THERE WAS ROOM FOR
IMPROVEMENT IN THE ROLE OF THE INSPECTOR GENERAL HIMSELF;
SPECIFICALLY, THAT THE AUTHORITY, STATUS AND IMAGE OF THE
POSITION SHOULD BE ENLARGED. PERHAPS MORE IMPORTANT, THE
INSPECTOR GENERAL'S RELATIONSHIP WITH ME SHOULD BE ENHANCED.
I HAVE ALREADY IMPLEMENTED MEASURES THAT I BELIEVE WILL GO
A LONG WAY TOWARD ALLEVIATING THE PROBLEMS I HAVE NOTED. SO
FAR I HAVE:
7
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-- TAKEN STEPS TO ENSURE THAT THE INSPECTOR GENERAL IS
RECOGNIZED AS BEING EQUIVALENT IN RANK AND POSITION TO A
DEPUTY DIRECTOR, SUBORDINATE ONLY TO ME AND THE DDCI, AND P--)
HAVE ENSURED THAT BOTH HIS INSPECTION AND INVESTIGATION
REPORTS ARE SENT DIRECTLY TO ME AND TO THE DDCI;
-- TAKEN STEPS TO INCREASE THE STAFF OF THE OFFICE;
-- EXPANDED THE INSPECTOR GENERAL'S ROLE TO INCLUDE
BECOMING DIRECTLY INVOLVED IN IMPROVING OVERALL AGENCY
MANAGEMENT, ENSURING ACCOUNTABILITY AND DISCIPLINE AND
ENCOURAGING THE RAISING OF STANDARDS AND QUALITY OF
PERFORMANCE WITHIN THE AGENCY, IN ADDITION TO CONDUCTING
HIS NORMAL INVESTIGATION, INSPECTION ?AND AUDIT ACTIVITIES;
AND
-- APPOINTED WILLIAM DONNELLY TO HEAD THIS ENHANCED OFFICE
OF INSPECTOR GENERAL, MR. DONNELLY IS A WIDELY-RESPECTED
AGENCY OFFICER WHO, IN 33 YEARS WITH THE AGENCY, HAS
COMPILED AN EXTENSIVE OPERATIONAL, MANAGEMENT AND
ADMINISTRATIVE BACKGROUND THAT GIVES HIM A UNIQUE PERSONAL
INSIGHT INTO A WIDE RANGE OF AGENCY ACTIVITIES.
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UNDER MY TENURE THE PROCESS OF DEFINING THE DUTIES AND
RESPONSIBILITIES OF THE INSPECTOR GENERAL WILL BE A CONTINUING
AND EVOLUTIONARY PROCESS. SOME OTHER STEPS CURRENTLY UNDER
DEVELOPMENT, BUT NOT YET FULLY STAFFED, INCLUDE:
-- STRENGTHENING AGENCY REGULATIONS PERTAINING TO THE
INSPECTOR GENERAL'S RESPONSIBILITIES;
-- REORGANIZING THE OFFICE TO INCLUDE THE EXPANSION OF THE
INVESTIGATION STAFF;
-- DEVELOPING TRAINING AND INVESTIGATIVE PROCEDURES; AND
-- IDENTIFYING THOSE ACTIVITIES WHICH THE INSPECTOR GENERAL
NEEDS TO REVIEW FROM TIME TO TIME.
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I AM CONCERNED THAT ENACTMENT OF A STATUTORY INSPECTOR
GENERAL WILL ACTUALLY PROVE TO BE COUNTERPRODUCTIVE TO AN
EFFECTIVE INSPECTION AND INVESTIGATION PROCESS AT THE CIA.
FIRST, THE USE OF THE SUBPOENA POWER COULD BE COUNTERPRODUCTIVE
TO OBTAINING ALL THE FACTS. ADMINISTRATIVE ACTIONS ARE NOT
CRIMINAL PROCEEDINGS. VOLUNTARY COOPERATION IS ESSENTIAL IN
LEARNING THE FACTS AS SOON AS POSSIBLE AND IMPLEMENTING ANY
NECESSARY CORRECTIVE ACTIONS AS SMOOTHLY AS POSSIBLE. EVIDENCE
(THAT IS COMPELLED El SUBPOENIA...; UNLIKE INFORMATION VOLUNTARILY
PROVIDED OUR INVESTIGATORS, HAS THE POTENTIAL TO JEOPARDIZE
SUBSEQUENT CRIMINAL ACTIONS IF THE LATTER BECOME NECESSARY.
BEST, INJECTING THE SUBPOENA POWER INTO THE INVESTIGATION
PROCESS WILL MERELY SERVE TO COMPLICATE IT.
I SHOULD ALSO NOTE THAT HISTORICALLY, THE FACT THAT THE
AGENCY HAS HAD NO SUBPOENA POWER IS NO ACCIDENT. As A RESULT
OF A CAREFULLY CONSIDERED DECISION OF THE CONGRESS IN 1947, THE
AGENCY WAS SPECIFICALLY NOT VESTED WITH ANY SUBPOENA OR LAW
ENFORCEMENT POWERS. IT WAS CONCLUDED THEN, AND I RESPECTFULLY
SUBMIT THAT IT IS TRUE NOW, THAT THE CIA SHOULD NOT HAVE ANY
LAW ENFORCEMENT POWERS OR FUNCTIONS APART FROM THOSE OF OUR
SECURITY PROTECTIVE OFFICERS WHO GUARD AGENCY FACILITIES.
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SECOND, THE SUBPOENA POWER IN MANY CASES COULD NOT
REASONABLY BE USED IN THE CIRCUMSTANCES IN WHICH THE AGENCY
OPERATES. REALISTICALLY, THE AGENCY CANNOT GO INTO COURT --
RISKING DISCLOSURE OF SOURCES AND METHODS -- TO SEEK A COURT
ORDER TO HAVE A CONTRACTOR WITH WHICH IT HAS A COVERT
RELATIONSHIP TURN OVER DOCUMENTS. CURRENTLY THE DEPARTMENT OF
JUSTICE AND THE FBI SEEK SUBPOENAS ON THE AGENCY'S BEHALF.
THIS SYSTEM WORKS WELL. WE HAVE FOUND, HOWEVER, THAT THERE IS
MORE THAN SUFFICIENT LEVERAGE IN THE CONTRACTUAL RELATIONSHIP
ITSELF. THE BOTTOM LINE IS THAT AGENCY INVESTIGATIONS ARE NOT
ENCUMBERED BY THE LACK OF SUBPOENA POWER.
THIRD, THE PROPOSED LEGISLATION WOULD RAISE SOME AMBIGUITY
ABOUT THE STATUTORY AUTHORITY OF THE DCI TO PROTECT
INTELLIGENCE SOURCES AND METHODS AND THE AUTHORITY OF THE
INSPECTOR GENERAL TO MAKE INDEPENDENT DECISIONS TO RELEASE SUCH
INFORMATION. BECAUSE THE STATUTORY IG WOULD HAVE A SIGNIFICANT
AMOUNT OF INDEPENDENCE FROM THE DCI, OUR INTELLIGENCE SOURCES
AND FOREIGN LIAISON SERVICES MAY BE RELUCTANT TO PART WITH
INFORMATION THAT WILL BE AVAILABLE TO AN OFFICE "INDEPENDENT
OF" THE DCI. THEY ARE LIKELY TO BELIEVE, RIGHTLY OR WRONGLY,
THAT THE AGENCY WILL NOT BE ABLE TO PROTECT THEIR INFORMATION.
WE HAVE A SPECIAL CONCERN THAT OUR FOREIGN INTELLIGENCE SOURCES
MAY FEEL THAT THE AGENCY WILL NOT BE ABLE TO PROTECT THEIR
IDENTITIES AND THAT THE PERSONAL RISK IS TOO GREAT TO COOPERATE
WITH THE AGENCY.
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FOURTH, I WOULD SUBMIT THAT IT IS SIMPLY UNREALISTIC TO
EXPECT THAT ESTABLISHING A STATUTORY INSPECTOR GENERAL WILL BY
ITSELF RESOLVE ANY PERCEIVED FLAWS AND DEFICIENCIES IN THAT
OFFICE, IN THIS REGARD, IT IS NOTEWORTHY THAT IN 1976 THE
CHURCH COMMITTEE CONCLUDED THAT THE AGENCY NEEDED TO CONTINUE
TO EXPAND AND STRENGTHEN ITS INSPECTOR GENERAL STAFF, BUT IT
ALSO POINTEDLY REFRAINED FROM RECOMMENDING THAT THE INSPECTOR
GENERAL BE ESTABLISHED BY STATUTE. THE CHURCH COMMITTEE
RECOGNIZED, AND I BELIEVE IT REMAINS TRUE TODAY, THAT THE BEST
WAY TO IMPROVE THE PERFORMANCE OF THE OFFICE OF INSPECTOR
GENERAL IS TO GET HIGHLY QUALIFIED AND TRAINED PEOPLE TO SERVE
IN THE OFFICE AND TO MAKE IT CLEAR TO ALL EMPLOYEES THAT THEY
ARE EXPECTED TO COOPERATE FULLY WITH THE INSPECTOR GENERAL OR
RISK SEVERE CONSEQUENCES. I AM CONVINCED THAT WE ARE NOW ON
THE RIGHT TRACK IN THESE AREAS.
FINALLY, APART FROM SENATOR SPECTER'S PROPOSED LEGISLATION,
I NOTE THAT THIS COMMITTEE HAS NOW FORMED ITS OWN AUDIT GROUP.
THE AGENCY IS OF COURSE FULLY SUPPORTIVE OF THIS EFFORT AND IS
COOPERATING WITH THE COMMITTEE'S AUDITORS.
12
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THE CHANGES IN THE DUTIES AND PERCEPTIONS OF THE AGENCY'S
INSPECTOR GENERAL AND HIS STAFF THAT I HAVE DESCRIBED ARE
SIGNIFICANT ONES. WE ARE WELL DOWN THE ROAD TOWARD BUILDING AN
EFFECTIVE MEANS OF ENSURING COMPLIANCE WITH LAWS, REGULATIONS,
EXECUTIVE ORDERS AND PRESIDENTIAL DIRECTIVES. I ASK THAT WE BE
GIVEN THE OPPORTUNITY TO DEMONSTRATE THE EFFECTIVENESS OF THESE
CHANGES, RATHER THAN BE FORCED TO LIVE WITH A SYSTEM THAT FAILS
TO ACCOMMODATE THE AGENCY'S UNIQUE CONCERNS. FOR CIA, THIS IS
THE BETTER COURSE TO TAKE. I AM CONVINCED THAT NEITHER I, NOR
THE CONGRESS, WILL BE DISAPPOINTED.
THIS CONCLUDES MY STATEMENT. I AM PREPARED TO ANSWER ANY
QUESTIONS YOU MAY HAVE.
13
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,
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STAT
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100TH CONGRESS
1ST SESSION
S. 1818
II
To make requirements for the preparation, and transmittal to the Congress, of
Presidential findings for certain intelligence operations; to provide mandatory
penalties for deceiving Congress; and to establish an independent inspector
general for the Central Intelligence Agency.
IN THE SENATE OF THE UNITED STATES
OCTOBER 27 (legislative day, OCTOBER 16), 1987
Mr. SPECTER introduced the following bill; which was read twice and referred to
the Select Committee on Intelligence
A BILL
20 SEC. 4. INSPECTOR GENERAL FOR THE CENTRAL INTELLI-
21 GENCE AGENCY.
22 (a)(1) PURPOSE; ESTABLISHMENT.?In order to create
23 an independent, objective and congressionally accountable
24 unit to conduct and supervise investigations and audits relat-
25 ing to programs and operations of the Central Intelligence
S 181818
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5
1 Agency, there is hereby established in the Central Intelli-
2 gence Agency or Office of Inspector General.
3 (2) APPOINTMENT AND REMOVAL?There shall be at
4 the head of the Office an Inspector General who shall be
5 appointed by the President, by and with the advice and con-
6 sent of the Senate. The inspector general shall report to and
7 be under the general supervision of the Director of Central
8 Intelligence or the officer next below in rank but not. an-
9 other officer of the Central Intelligence Agency.
10 (3) The Director may prohibit. the inspector general
11 from initiating, carrying out, or completing any audit or in-
12 vestigation, or from issuing any subpoena, only concerning
13 ongoing operations, and only if he determines that such pro-
14 hibition is necessary to protect vital national security inter-
15 ests of the United States.
16 (4) If the Director exercises any power under subsection
17 (a)(3) of this section, he shall submit a classified statement of
18 the reasons for the exercise of the power within seven days to
19 the Select Committee on Intelligence, of the Senate and Per-
20 manent Select Committee on Intelligence of the House of
21 Representatives.
22 (5) The inspector general may be removed from office
23 only by the President. The President shall immediately corn-
24 municate in writing to both Houses of Congress the.reasons
25 for any such removal. .
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6
1 (6) DUTIES AND POWERS.?It shall be the duty and
2 responsibility of the inspector general appointed under this
3 Act-
4 (A) to provide policy direction for and to conduct,
5 supervise, and coordinate investigations and audits re-
6 lating to the programs and operations of the Central
7 Intelligence Agency to assure they are conducted effi-
8 ciently and in accordance with applicable law and
9 regulations;
10 (B) to keep the Director and the Congress fully
11 and currently informed, by means of reports required
?
12 by subsection (8) and otherwise; -C'Oncerning violations
13 of laws and regulatiorfraud/and other serious prob-
-- 14 lems, abuses, and deficiencies and to report the
15 progress made in implementing corrective action.
16 (7) The inspector general shall have the power to issue
17 subpoenas to carry out his work.
18 (8) REPORTS.?The inspector general shall not later
19 than April 30 and October 30 of each year, prepare a classi-
20 fled semiannual report summarizing the activities of the
21 Office during the immediately preceding six-month periods
22 ending March 31 and September 30.
23 (9) Classified semiannual reports of the inspectOr
24 general shall be furnished to the Director not later than April
25 30 and October 30 of each year and shall be transmitted by
S IRIS IS
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7
1 him to the Select Committee on Intelligence of the Senate
2 and the Permanent Select Committee on Intelligence of the
3 House of Representatives within thirty days after receipt, to-
4 gether with any comments he deems appropriate. -2
5 (10) The inspector general shall report immediately, se----
/ 6 rious problems, violations of law or regulations or serious de-
7 ficiencies relating to the administration of programs and oper-
8 ations of the Agency. The Director shall transmit any such
9 report to the Select Committee on Intelligence of the Senate
10 and the Permanent Select Committee on Intelligence of the
11 House of Representatives within seven calendar days, to-
12 gether with any comments he deems appropriate.
S ISISIS-
0
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CIA-RDP89G01321R001002650001-8 'HE DIRECTOR
STAT
29 February 1988
Judge,
Re: FBI-Related Q's and A's for SSCI
Hearing on Statutory IG
Attached are questions and answers
relating to CISPES and the FBI Inspection
process that and I prepared forsTAT
your use in tomorrow's hearing. They are
not included in your briefing book.
STAT
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Question: Could you please review for this Committee how
the Inspection Division at the FBI works?
Answer: The Inspection Division is composed of three
_
offices: the Office of Professional Responsibility, the Office
of Inspections, and the Office of Program Evaluations and
Audits.
The primary functions of the Office of Professional
Responsibility (OPR) are to supervise and/or investigate all
allegations of criminality and serious misconduct on the part
of FBI employees, and monitor disciplinary action taken
concerning all employees of the FBI. In addition, OPR
maintains close liaison with OPR in the Department of Justice
and coordinates FBI submissions to the Intelligence Oversight
Board at the White House. During Fiscal Year 1986, OPR
coordinated and/or personally investigated 438 separate
inquiries of FBI employees.
The Office of Inspections is responsible for conducting
in-depth examinations of the FBI's investigative and
administrative operations to determine whether: (1) there is
compliance with applicable laws, regulations, and policies; (2)
resources are managed and used in an effective, efficient, and
economical manner; and (3) desired results and objectives are
1
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being achieved. These examinations are conducted for all FBI
field offices, legal attaches and Headquarters divisions
approximately once every two years. The work product of the
Office of Inspections provides valuable input for management's
short-range planning and decision making, and serves as a
useful tool in the evaluation of FBI managers. During Fiscal
Year 1986, the Office of Inspections conducted 40 inspections
and issued 1,830 instructions or recommendations, of which
1,282 related to effectiveness or efficiency of operations.
Further, the Office of Inspections undertook examination of 24
Equal Employment Opportunity complaints and conducted 10
administrative inquiries.
The Office of Program Evaluations and Audits is comprised
of a Program Evaluations Unit and an Audit Unit. The Program
Evaluations Unit conducts periodic evaluations of FBI
investigative programs and administrative activities as well as
studies and policy analyses. The purpose of these functions is
to determine whether existing policies, procedures, and
operations meet present and anticipated requirements. In
addition, FBI operations are reviewed for economy, efficiency
and effectiveness. During Fiscal Year 1986, 3 evaluations of
FBI programs and 11 studies were initiated and 4 evaluations
and 6 studies were completed and reported. These evaluations
and studies resulted in numerous recommendations for improving
2
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operational and management effectiveness. All FBI major
programs are scheduled for evaluations on a five-year cycle.
The Audit Unit is responsible for financial and Electronic
Data Processing audits within the FBI and has the
responsibility for liaison with the General Accounting Office,
Department of Justice and other government auditors. During
Fiscal Year 1986, the Audit Unit conducted financial and
compliance audits at 35 field offices and nine audits of FBI
Headquarters funds. Also, two Electronic Data Processing
audits were completed and additional EDP reviews were
accomplished. During Fiscal Year 1986, the Audit Unit assisted
the General Accounting Office and the Department of Justice in
conducting 32 reviews/studies of FBI operations. The
assistance rendered to the General Accounting Office and the
Department of Justice ranged from the coordination of the
participation in interviews of FBI management officials to
extensive compilations of data at FBI Headquarters and in
various field offices.
3
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Question: Does the FBI's Inspection Division report to the
Intelligence Oversight Board (I0B) the results of its inquiries
into FBI foreign intelligence or foreign counterintelligence
activities that may be illegal or improper?
Answer: Yes. In conjunction with the FBI's Legal Counsel
Division, the Inspection Division reports all such illegal or
improper activities to the President's Intelligence Oversight
Board pursuant to Executive Order 12334. All such activities
are reported either immediately or in quarterly reports
submitted to the I0B.
4
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Question: How much independence does the FBI Inspection
Division's Office of Professional Responsibility have to
conduct investigations into misconduct and wrongdoing?
Answer: The Inspection Division at the FBI has broad
authority to investigate allegations of misconduct, and it
investigates such allegations regardless of their source or
subject. An integral part of its activities is overseen by the
Counsel on Professional Responsibility at the Department of
Justice. By Department of Justice regulation, the Counsel on
Professional Responsibility "receives and reviews any
information or allegation concerning conduct by an FBI employee
that may be a violation of law, regulations, or orders, or of
applicable standards of conduct, or may constitute
mismanagement, gross waste of funds, abuse of authority, or of
substantial and specific danger to public health or safety."
Pursuant to this regulation, the Inspection Division is in
daily contact with the Counsel on Professional Responsibility.
It reports immediately all allegations of consequence. All
improper or illegal activities are reported to the Counsel on a
monthly basis. Additionally, the Inspection Division prepares
an annual report to the Counsel summarizing all cases handled
by it throughout the course of the proceeding year.
5
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The FBI's Inspection Division reports directly to the
Director of the FBI. Although the Inspection Division informs
the FBI Director of the investigations it is conducting, it
need not do so if it believes that such an action would'
jeopardize its investigation in any way. In fact, the
Inspection Division's authority to investigate allegations of
misconduct include any allegations leveled against the Director
of the FBI. Like all matters involving criminality or
misconduct, such a matter would be reported to the Counsel on
Professional Responsibility at the Department of Justice. The
Counsel retains the option of having his office handle any
investigation if he believes it necessary.
6
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Question: You have said before that the Inspection
Division was your right arm at the Bureau. Why didn't it
surface any of the problems we are seeing with the CISPES
investigation now?
Answer: The Inspection Division process at the FBI is
designed to uncover violations of law, regulations, guidelines
and inadequate management-supervision. If problems in any of
those areas occurred, they should have been picked up in the
normal inspection process.
The Inspection Division currently is conducting an
investigation into the Bureau's handling of the CISPES
investigation, but I am not privy to the information that it
has developed thus far. It is my understanding that this
Committee will be fully briefed upon the completion of that
investigation.
7
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?
Question: A few cables from FBI field offices to FBI
Headquarters ask for guidance regarding the proper scope of
information they could collect during the CISPES
investigation. Shouldn't the FBI's inspection process have
picked up this confusion among some of the field offices and
rectified the situation?
Answer: Under current procedures, the Bureau's Inspection
Division inspects every field office approximately once every
two years. During the course of that inspection, it reviews
all active and pending investigative files. This review
ordinarily would surface any communications to Headquarters
that indicate a confusion or disagreement with Headquarters
guidance. If Headquarters had failed to respond to these
queries, the Inspection Division should have brought this to
Headquarters' attention and asked that appropriate guidance be
provided.
8
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Question: Once the decision was made in March 1983 to
conduct a full investigation of CISPES, at what point were you
informed and briefed?
Answer: A preliminary review of FBI files by the Bureau
indicates that I saw six informative notes from the Criminal
Investigative Division during the course of the CISPES
investigation. Each of these notes advised me only of public
demonstrations involving the CISPES organization. I was often
advised of demonstrations involving public safety issues such
as actual or potential violence. None of these notes
summarized the CISPES investigation.
I appeared before the Subcommittee on Program and Budget
Authorization of the HPSCI in executive session on May 1, 1985
and provided testimony on the CISPES investigation.
[Note for the DCI: Buck Revell was asked by Senator Specter at
the SSCI hearing on February 23, 1988 whether you were involved
in the CISPES investigation in any way. Our notes of his
response indicate that he answered:
He was aware of several cables sent to him for
informational purposes. He was aware of cables going
to other agencies about demonstrations conducted by
CISPES. These cables, however, did not summarize the
investigation. They related only to public safety
issues rather than to the investigation. Judge Webster
did not authorize the investigation or any activities
conducted pursuant to the investigation. That was done
at the supervisory level. If the investigation had
involved any special techniques, he would have been the
one to authorize those techniques. But those
techniques were never used.]
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Question: What did the FBI Inspection Division do to
investigate the allegations by Frank Varelli that the FBI
conducted break-ins and included prominent Americans such as
Rep. Pat Schroeder in a "terrorist photograph album?"
Answer: The following is a summary of the FBI Office of
Professional Responsibility inquiry concerning allegations made
by Frank Varelli.
FBI OPR initiated an inquiry on February 13, 1987 in
response to news media accounts of allegations made by Frank
Varelli that FBI agents committed illegal acts in connection
with a 1981-1985 FBI investigation of CISPES. Varelli is a
former operational asset of the Dallas Division of the FBI
whose allegations in 1984 against former FBI SA Daniel J.
Flanagan resulted in Flanagan's resignation from the FBI.
Those allegations were that SA Flanagan withheld asset payments
from him and provided Varelli with classified FBI documents.
After Flanagan's resignation, Varelli filed a civil suit
against Flanagan and several current FBI employees in an effort
to recover the money he claimed he was owed by the FBI.
Varelli made statements to the national news media alleging
that FBI agents committed illegal acts in connection with the
CISPES investigation. Among these allegations were charges
10
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that two FBI agents broke into a CISPES office and removed
CISPES documents, and that Varelli prepared a Terrorist file on
Ambassador Robert White and made dossiers on Reagan
administration opponents at FBI direction.
FBI OPR's inquiry has been completed and no information was
developed corroborating Varelli's allegations concerning
criminal acts on the part of current FBI employees. Varelli
has refused to be interviewed by the FBI. The results of the
OPR FBI investigation are currently being reviewed by the FBI's
Administrative Services Division to determine whether any
discipline is warranted. On August 6, 1987, FBI
representatives provided an oral briefing to Congressman Don
Edwards and others concerning the results of the OPR inquiry.
11
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BACKGROUND-, READING
FOR THE DIRECTOR OF CENTRAL INTELLIGENCE APPEARANCE
BEFORE THE SELECT COMMITTEE ON INTELLIGENCE
UNITED STATES SENATE
I MARCH 1988
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INDEX
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BACKGROUND READING
Th
A. Introductory Statement on S. 1818 by Sen. Specter
B. Relevant Legislation
1. Existing Inspector General Law
2. Proposed Amendment (S. 908) and Legislative History
C. Studies/Observations of Office of Inspector General
1. Iran-Contra Committees Report (excerpt)
2. Steering Group Report and Forwarding Letter to SSCI
3. Special Counsel Report (excerpt)
4. 1976 Church Committee Report (excerpt)
D. Changes Underway in Office of Inspector General
1. Memorandum from DCI to Executive Director
2. Announcement of New Inspector General
3. Letter to Members of SSCI
4. Memorandum from Deputy Inspector General to DCI
E. Previous Testimony Before the SSCI on Oversight Legislation (excerpt)
F. Existing Agency Regulation on Office of Inspector General
(promulgated in 1983)
G. Letters with Sen. Glenn re: Structure of Office of Inspector General
H. Information on Audit by GAO
1. Proposed Glenn Bill (S. 1458) and Legislative History
ILLEGIB
3. History of GAO Audit of CIA
I. Establishment of Statutory IG within the FBI
1. Proposed Bill (S. 2076)
2. Introductory Remarks by Sen. Specter
J. C.I.S.P.E.S. Materials
1. FBI "white Paper" and Sessions Press Statement
2. Summary of 2/23 SSCI Hearing and Revell Opening Statement
3. CISPES Summaries and Cables Sent to WHW
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a.a...f.ratazacaaaa.naketa. ? az:.ia ea a 1. vcrover it, i387
it.JAWNJ
(BY Mr. SPECTER.:
cS. 1618. A bill to make requirements
for thepreparation, and transmittal to
the Congress. of Presidential findings
for certain intelligence operations; to
.provide mandatory penalties for de-
ceiving Congress: and to establish an
' Independent Inspector General for
the CIA: to the Select Committee on
Intelligence.
riATIORAL BECCRITT REPORM ACT
Mr. SPECTER. Mr. President, hear-
ings before the Senate Intelligence
Committee and joint hearings before
the Select Senate and House Commit-
tees on the Iran/Contra matter have
demonstrated the need for significant
action in order to establish the appro-
priate role for congressional oversight
pursuant to the checks and balances
contemplated by the U.S. Constitu-
tion. Notwithstanding any action
hich may be taken by the President
by way of Executive order on this
issue, legislative change is necessary to
impose statutory requirements govern-
ing this or future administrations
a here any such Executive orders
might be countermanded.
This bill has four goals:
First, to encourage timely consulta-
tion with key Members of Congress to
obtain the benefit of their insights to
avoid future blunders like the transac-
tion with Iran on arms for hostages:
Second, to provide for effective con-
gressional oversight by specific statu-
tory requirements establishing precise
time limits for notice where the Presi-
dent decides not to consult in advance:
Third, to establish mandatory penal-
ties where executive branch officials
make false statements to congressional
committees: and
Fourth, to add an Inspector General
for the Central Intelligence Agency to
help assure lawful internal compliance
on matters which do not come within
the purview of congressional over-
sight.
SECTION 2
Notwithstanding the obvious failure
of the executive branch to provide req-
uisite information to Congress under
the provisions of existing statutes,
some have argued that there was com-
pliance because of the vagaries of cur-
rent law. In order to prevent a repeti-
tion of such conduct, the National Se-
curity Act of 1947 (50 U.S.C. 413) and
section 662 of the Foreign Assistance
Act of 1961 (22 U.S.C. 2422), known as
the Hughes-Ryan amendment, are
made more specific by this bill. Exist-
ing law prohibits the expenditure of
funds by the Central Intelligence
Agency for covert activities "unless
and until the President finds that
each such operation is important to
the national security of the United
States." Efforts have been made to
justify the CIA's action in the Iran/
Contra matter by contentions that an
oral finding was sufficient and that a
later written finding could retroactive-
ly justify earlier covert action.
This bill unequivocally requires that
the finding be in writing and that the
President shall give notice and a copy
of any finding to the House and
Senate Intelligence Committees con-
temporaneoUsly with the finding. but
In no event later than 24 hours after it
Is made. A limited exception is provid-
ed for an oral finding in situations
where the President deems that imme-
diate action by the United States is re-
quired to deal with the emergency sit-
uation affecting vital national inter-
ests and time does not permit the
preparation of a written finding. In
that event, the finding must be imme-
diately reduced to writing after the
action is orally approved, with the
written finding to be completed no
later than 24 hours after the making
of the oral finding.
Where an oral finding is used, there
is the additional requirement that the
written finding shall include a state-
ment of the reasons of the President
for having first proceeded with an oral
finding. This bill further provides that
a finding shall be effective only with
respect to operations beginning after
the finding was made by the President
in order to preclude any contention
that the finding may retroactively
cover prior CIA operations.
These statutory requirements leave
no room for doubt that no coven
action may be undertaken without
complying with the requirements of a
written finding and the requisite
notice, by any personnel of the execu-
tive branch or anyone acting on its
behalf including foreign governments
or any individual. This specific provi-
sion would preclude any future argu-
ment that the delivery of arms to Iran
was legally justified, after the fact, by
a retroactive finding or that other en-
tities or actors were not bound by the
same limitations affecting the CIA.
This bill further removes any possi-
ble ambiguity in section 501(b) of the
President's obligation to notify the
House and Senate Intelligence Com-
mittees of covert action. Section 501(b)
now provides:
(b) The President shall fully inform the
intelligence committees in a timely fashion
of intelligence operations in foreign coun-
tries, other than activities intended solely
for obtaining necessary intelligence, for
which prior notice was not given under sub-
section (a) and shall provide a statement of
the reasons for not giving prior notice.
The phrase "for which prior notice
was not given under subsection (a)"
carries the direct implication that the
House and Senate Intelligence Com-
mittees should have been "fully and
currently informed" of covert activi-
ties which are covered by section
501(b). It is obvious that the President
did not comply with section 501(b) to
inform the Intelligence Committees in
a "timely fashion" where some 14
months elapsed from the time of the
first covert action on the Iranian arms
sales to the time that information
reached the Intelligence Committees.
Yet, some have contended that the ex-
igencies of the situation excused the
President from giving earlier notice so
that requirements of a "timely fash-
ion" were observed.
This bill removes any room for such
future arguments by requiring the
President to give notice to the Intelli-
gence Committees contemporaneously
with any written or oral finding. In
order to remove any conceivable arnbi-
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October 27, 1987 CONGRESSIONAL RECORD ?SENATE S15191
gutty as to the meaning of "contempo-
raneously,- a time certain is added re-
quiring the !Information to be trans-
mitted no later than 24 hours after
Cthe making of ark oral or written find-
ing. Absent the experience of the
Iran/Contra matter, it would seem un-
necessary to put a 24-hour limitation
after the requirement of "contempora-
neously." but the recent experience
that a time certain be affixed so that
no one can later claim that ?4contem-
poraneously" means days, weeks,
? months, or even years later.
The requirement that the President
shall contemporaneously Inform the
Intelligence Committees is intended to
provide a procedure where the Intelli-
gence Committees might be consulted
In advance so that the President would
have the benefit of their thinking If
he so chose. The language of section
501(0(1) to keep the Intelligence
Committees -fully and currently in-
formed of all intelligence activities"
suggests a design for congressional
input. Even with such oontemporane-
ous information and the possibility of
congressional input, it would remain
within the President's power to pro-
ceed or not as he chooses.
There is much to recommend the
availability of the institutional experi-
ence of the Senate and House Intelli-
gence Committees. Had there been a
review by the Intelligence Committees
of the sale of arms to Iran, It is likely
that the policy would never have been
0 implemented. Had members of the
Senate and House Intelligence Com-
mittees Joined the Secretary of State
and the Secretary of Defense and
others in discouraging Presidential
action in selling arms to Iran, the
President might well have ceased and
desisted on his own. Had the President
declined to terminate that disastrous
policy, then the Congress might have
utilized its power to terminate funding
through its appropriations powers,
thereby ending the sale of arms to
Iran.
The President's obligations on con-
gressional oversight are further limit-
ed by excluding notice to the Intelli-
gence Committees where the Presi-
dent determines that it is essential to
limit such disclosure to meet extraor-
dinary circumstances affecting the
vital interests of the United States. In
that event, such notice is to be given
only to the chairman and ranking mi-
nority members of the Intelligence
Committees, the Speaker and minority
leader of the House of Representatives
and the majority and minority leaders
of the Senate. That more limited dis-
closure gives sufficient assurances of
preservation of secrecy. A valid argu-
ment could be made that notice should
go only to the leadership of both
CHouses in the interests of secrecy, but
the greater familiarity of the chair-
man and vice-chairman of the Intelli-
gence Committees warrants their
being included.
4111:CT1013 3
This bill farther ptervides for a man-
datory sentence of Imprisonment for
any officer or employee of the United
States who provides false Information
to any committee or subcommittee of
the Senate or House of Representa-
tives. No :natter how rigorous or ex-
acting statutory requirements may be,
the oversight function of Congress
cannot be accomplished if executive
branch officials present false or mis-
leading testimony to the Congress.
This is especially problemsome
where witnesses appear before the In-
telligence Committees in a secret ses-
sion. Where evidence is provided in a
public session, there is an opportunity
for others to learn of the false infor-
mation and to come forward with the
truth so that the oongressional over-
sight committees can perform their
functions. That is not possible where
key executive officials appear in secret
and provide false information to the
Oversight Committees. Under those
circumstances, the committees realisti-
cally have little or no opportunity to
determine the truth.
While false official statements to
such congressional committees are
covered by section 1001 of the Crimi-
nal Code. (18 U.S.C. 1001), this kind of
misconduct, either in secret or public
session, is so serious that it warrants a
mandatory jail sentence.
While there has been experience
with witnesses who return to the com-
mittee to apologize for prior testimo-
ny, such apologies fall far short of cor-
recting the enormous damage which
has been done. Obviously, there is no
way to know how much false, decep-
tive, or misleading evidence has been
presented in secret where the truthful
Information has never come to the at-
tention of the committees. This man-
datory jail sentence is intended to put
members of the executive branch on
notice that the matter is extremely se-
rious as reflected by the heavy penal-
ty.
It is obviously well within the ambit
for any witness who appears before a
'congressional committee to decline to
answer any question until that witness
has had an opportunity to reflect on
the question or to consult with his or
her superior. Simply stated, it is un-
derstandable if a witness declines to
answer or asks for a delay, but it is in-
tolerable for false or deceptive answers
to be made. The committee would
doubtless oonsider not insisting on an
answer where some reason was ad-
vanced for nondisclosure. Where any
witness chooses to decline to answer a
question, there is always an opportuni-
ty for farther consideration by both
the witness and the committee.
In any event, an enforceable legal
obligation to answer does not arise as
a practical matter until citation for
contempt of Congress is obtained and
the court orders an answer. It is only
at this point that a witness is subject
to a sanction for contempt for failing
to answer.
This bill further provides that
anyone who gives such false or decep-
tive information may recant and avoid
possible criminal liability by correcting
the record within 5 days. This 5-day
period should be ample time for re-
thinking the issue and time to make
the appropriate correction.
sscnork 4
The Inspector General Act of 1978,
Public Law 95-452. established inde-
pendent Presidentially-appointed and
Senate confirmed IG's in 19 Federal
departments and agencies. The ore-
atiois of these statutory IG's has im-
proved the effectiveness of the Feder-
al -Government. The act also ensures
that both the Congress and agency
heads are receiving independent as-
sessments of programs and operations
for which they are accountable or
have oversight responsibility. Howev-
er. the CIA was not included.
Currently. the Inspector General for
CIA is usually appointed internally.
That process is not conductive to ob-
jectivity.
A prime example was the CIA's
mining of the harbors of Nicaragua.
The CIA official with operational re-
sponsibility for that action was next
appointed to the position of Inspector
General. While he disqualified himself
from the ensuring IG investigation of
that activity. it is difficult to calculate
the objectivity of that investigation by
virtue of his presence.
The Intelligence Committee has had
access to some IG reports in past
years, but for the most part., it has not
exercised oversight over the intelli-
gence community's IG's. That has
been a responsibility of the Intelli-
gence Oversight Board. The Iran-
Contra investigations have raised seri-
ous questions about the effectiveness
of that body. The Tower Commission
found that (III-22): "Lieutenant Colo-
nel North and Vice Admiral Poin-
dexter received legal advice from the
President's Intelligence Oversight
Board that the restriction on lethal as-
sistance to the Contras did not cover
the NSC staff.- In addition, review of
Executive Order 12334, which estab-
lishes the Intelligence Oversight
Board, and the operations of the
Board itself reveal that the Board is
not adequately staffed, that the qual-
ity of its legal counsel has been dem-
onstrated to be less than thorough
and experienced, and, finally, that its
effectiveness is not held in high regard
by the Intelligence Committees.
This bill would greatly increase the
independence and credibility of the
CIA's Inspector General by making
the 10 a permanent, statutory official
subject to appointment by the Presi-
dent and confirmation by the Senate
with limitations on grounds for dismis-
sal. To increase accountability to Con-
gress, semiannual and special reports
by the Inspector General must be
promptly submitted to the Intelli-
gence Committees, as well as to the
Director of the CIA.
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? .
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Secrecy is provided for, as is subpoe-
na power. While the Director may halt
an audit or investigation, he may do so
only if:
First, it concerns an ongoing oper-
ation:
Second, he finds it vital to national
security: and
Third, he reports to the Intelligence
Committees within 7 days on the rea-
sons.
The combined effect of an independ-
ent IG. mandatory penalties for de-
ceiving Congress, and statutory re-
quirements on notice to Congress on
covert action along with written find-
ings are therapeutic steps which
should be taken in light of our experi-
ence from the Iran/Contra matter.
After the problems were publicly dis-
closed on the failure of the executive
branch to notify the Intelligence Com-
mittees on the sale of arms to Iran,
there was an exchange of correspond-
ence between the President and the ;
Senate Intelligence Committee. The
President wrote to Chairman BOREN
by letter dated August 7, 1987, ex-
pressing his support for certain key ?
concepts recommended by the Senate
Intelligence Committee. Paragraph 6
of the President's letter stated:
In all but the most exceptional circum-
stances. timely notification to Congress
under Section 501(b) of the National Ser...uri-
ty Act of 1947. as amended, will not be de-
layed beyond two working days of the initi-
ation of a special activity.
In my judgment, where notice may
not be given even in "the most excep-
tional circumstances" the fundamen-
tal requirement of notice is defeated
because it remains with the purview of
the President to determine what con-
stitutes the "exceptional circum-
stances." Precise requirements are nec-
essary as set forth in this proposed
legislation.
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.;
APPENDIX 3
INSPECTOR GENERAL ACT OF 1978
Pub.I.. 95-452, Oct. 12, 1976, 92 Stat. 1101, SI amended Pub.L. 96-86, Title V,
I 508(n), Oct 17, 1979, 93 Stat. 694: Pub.L 97-113, Title VII, ? 705, Dec. 29.
1981, 95 Stat. 1544: Pub.L. 97-252, Title XI, 1117(a)-(c), Sept. 8. 1982, oc Stat.
75-752: Pub.L. 99-93, Title I, { 150(a). Aug. 16, 1965. 99 Stat 427; Pub.L
99-899, 'Mlle IV, I 412(a), Aug. 21, 1966, 100 Suit 867.
Sec
Sec
I.
Short title.
6.
Authority of Inspectors General. in-
2.
Purpose and establishment of Offices
of Inspector General, departments
and agencies involved
formation and assistance from Fed-
eral agencies, unreasonable refusal,
office apia,x and equipment
3.
Appointment of Inspectors General;
supervision, removal. political ac-
7.
Complaints by employees, disclosure
of identity. reprisals
tivities, appointment of Assistant
? Inspector General for Auditing and
Assistant Inspector General. for In-
S.
Additional provisions with respect rc
the Inspector General of the De-
partment of Defense.
vestigations
BA Special provisions relating to the
4.
Duties and responsibilities; report of
criminal violations to Attorney Gen-
Agency for International Develop-
ment.
eral.
9.
Transfer of functions.
5.
Semiannual reports; transmittal to
Congress: availability to public; im-
10
Conforming and technical amend-
ments
mediate report on serious or fla-
11
Definitions
grant problems
12
Effective date
1. Short title
That this Act be cited as the "Inspector General Act of 197E-.
Legialativi Histors. For legislative history and
purpose of Publ. 9S-452. see 19M U.S Code
Cone and Adm Neva, p 266.
I 2. Purpose and t-tablishment of Offices of Insy-ctor General; departments
and agencies involved
in order to create independent and objective units?
(I) to conduct and supervise audits and investigations relating to programs
and operations of the Department of Agriculture. the Department of Commerce,
the Department of Defense, the Department of Education, the Department of
!lousing and Urban Development, the Department of the Interior, the Depart-
ment of Labor, t.h: Depar- tinent of Transportatiin, the Agency for International
Development. the Community Services Admini-u-ation. the Environmental Pm-
tection Agency. the General ServiceE Administratior.. the National Aeronautics-
and Space Administration. the Sins]) Business Administration. the United States
Information Agency, the Veterans' Administration. and the Department of
State: ?
(2) to provide leadership and coordination and recommend policies for activi-
ties designed (A) to promote economy, efficiency, and effectiveness in the
administration of, and (B) to prevent and detect fraud and abuse in, such
programs and operations: and
(3; to provide a means for keeping the head of the establishment and the
Congress fully and currently informed about problems and deficiencies relatin,ti
. to the administration of such programs and operations and the necessity for and
progress of corrective action:
1S9
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?
?2
TITLE 5-APPENDIX 3 190
thereby 3 is hereby established in each of such establishments an
General.
(At amended Pub.L Title V. { EIDEitnY1). Oct V. Irk.. 93 Stet 694
V11. 70541(1). Dec 29. 191zi. 95 Suit 1544. Pub.L P-22. Title Xl. ?
96 Stat 750, Put.L 99-93, nth, 1.1 150(a1(1). Aur 16, 19E4. 99 Stat 477
IV. # 412isX11. Aur. 77, 1986, 100 Stat 867.)
1So in onrmal Probabl) should be 'there-.
1984 Arieodenest. Par (I) Publ.. 95-399
lessened -the United State Information Asene).-
before the Veterans Administration-.
1985 Amendment_ Pat. (1) Pub.L 95-93
added reference to the Department of State
1982 Amendment. Par (1). Pub.L 97-252.
# 11170)01. inserted -the Deparunent of De-
fense.- folk:muss ''Commerce.-.
1981 Ameedinest. Par. (1) Pub.L 97-113
inserted -the Agency for International Develop-
ment.- &het *Transportatior,.-.
1979 Amendment. Par. (I) Pub.L 96-44 in-
serted the Department of Education.- follow -ins
"r-orrunerce.-.
Effective Date ref 1979 Amendment. Amend.
rnent Pub.L. 96-8E. effective Ma % 4. 1911:). with
specified exceptions. sec seam 601 of Publ..
96-8E. se out a, an Efftive Date Dote under
section 3401 of Title 20, Eclumtion
Communit) Services Administration. The
Communit) Service Administration. which Iva,
office of Inspector
Pub.L 97-113. Title
17(001. Sept 6. 1982.
. Pubi 99-899. Title
esuiblished b) section 601 of the Economic Op.
portunit) Act of 1964. as amended (42 L'.5 C.A
I 2941). arm terminated a-hen the Economic Op-
portunit) Am of 1964. Publ. 114-452. Aus 20.
1964. -73 Star 50E. at amended. way repealed.
wimp: for Titles VIII and X. effective Oct I.
19E1. la) section 6E3(a) of Pub I. 97-35. Title VI,
Au s 13. 1911.95 Stat 519. which a classified to
42 U.S C.A I 9912(a) An Office of Communit)
Serviats. beaded bt a Direciot. was establtshed ic
the Department of Health and Human Services b)
section 676 of Pub.L 97-35. Which a classified to
42 U.S C.A. I 9905
Leadalative Higtor). Poi ksislatiee histor) and
purrese of Pub.L 95-452. set 1973 U.S Code
Cons and Aden News. p. 267e See. also. Pub.L
96-8E. 1979 U.S Code Cons and Aden News. p
1514. Pub.L 97-113. 1931 U.S Code Cons and
Adm News. p 246M. Pub.L 99-93, 19E5 US
Code Cons and Adm. News. p 329. Pub.L
95-399. 1936 U.S.Code Cons and AdmNews. p ?
1565.
? 3. Appointment of Inspector General supervision: removal: political attivi-
ties: appointment of Assistant Inspector General for Auditing and Assist-
ant Inspector General for Investigations
(a) There shall be at the head of each Office an Inspector General who shall be
appointed by the President, by and with the advice and consent of the Senate,
without regard to political affiliation and solely on the bass of integrity and
demonstrated ability in accounting. auditing, financial analysis law, management
analysis. public administration, or investigations. Each Inspictor General shall
report to and be under the general supervision of the head of the establishment
involved or, to the extent such authority is delegated, the officer next in rank below
such head, but shall not report to, or be subject to supervision by, any other officer
of such establishment. Neither the head of the establishment nor the officer next in
rank below such head shall prevent or prohibit the Inspector General from initiating.
carrying out, or completing any audit or investigation, or from issuing any subpena
during the course of any audit or investigation.
(1)1 An Inspector General may be removed from office by the President. The
President shall communicate the reasons for any such removal to both Houses of
Congress.
(C) For the, purposes of section 7324 of Title 5, United States Code. no Inspector
General shall be considered to be an employee who determines policies to be pursued
by the United States in the nationwide administration of Federal laws.
(di Each Inspector Genera) shall, in accordance with applicable laws and regula-
tions governing the civil service-
(1) appoint an Assistant Inspector General for Auditing who shall have the
responsibility for supervising the performance of auditing activitres relating to
programs and operations of the establishment and
(2 appoint an Assistant Inspector General for Investivationi- who chaP have.
the responsitiilir.,- for supervising the performance of ir,vestiratve
relating to such programs and operations.
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191 INSPECTOR GENERAL ACT ? 4
Note 1
Legislative History. For lerslative history. and
purpose of Pub.L. 95-452. set 1978 U.S. Code
Cons and Adm. News. p. 2676.
? 4. Duties and responsibilities; report of criminal violations to Attorney Gen-
eral
(a) It shall be the duty and responsibility of each Inspector General, with respect
to the establishment within which his Office is established?
(1) to provide policy direction for and to conduct, supervise, and coordinate
audits and investigations relating to the programs and .operations of such
establishment.
(2) to review existing and proposed legislation and regulations relating to
programs and operations of such establishment and to make recommendations in
the semiannual reports required by section 5(a) concerning the impart of such
legislation or regulations on the economy and efficiency in the administration of
programs and operations administered or financed by such establishment or the
prevention and detection of fraud and abuse in such programs and operations;
(3) to recommend policies for, and to conduct, supervise, or coordinate other
activities carried out or financed by such establishment for the purpose of
promoting economy and efficiency in the administration of, or preventing and
detecting fraud and abuse in, its programs and operations;
(4) to recommend policies for, and to conduct, supervise, or coordinate rela-
tionships between such establishment and other Federal agencies. State and
local governmental agencies, and non-governmental entities with respect to (A)
all matters relating to the promotion of economy and efficiency in the adminis-
tration of, or the prevention and detection of fraud and abuse in, programs and
operations administered or financed by such establishment, or (B) the identifica-
tion and prosecution of participants in such fraud or abuse; and
(5) to keep the head of such establishment and .the Congress fully and
currently informed, by means of the reports required by section 5 and otherwise,
concerning fraud and other serious problems, abuses, and deficiencies relating
to the administration of programs and operations administered or financed by
Such establishment, to recommend corrective action concerning such problems,
abuses, and deficiencies, and to report on the progress made in implementing
such corrective action.
(b) In carrying out the responsibilities specified in subsection (OW, each Inspector
General shall?
(1) comply with standards established by the Comptroller General of the
United States for audits of Federal establishments, organizations, programs,
activities, and functions; .
(2) establish guidelines for determining when it shall be appropriate to use
non-Federal auditors; and .
(3) take appropriate steps to assure that any work performed by non-Federal
auditors complies with the standards established by the Comptroller General as
described in paragraph (I).
(c) In carrying out the duties and responsibilities established under this Act, each
Inspector General shall give particular regard to the activities of the Comptroller
General of the United States with a view toward avoiding duplication and insuring
effective coordination and cooperation.
(d) In carrying out the duties and responsibilities established under this Act, each
Inspector General shall report expeditiously to the Attorney General whenever the
Inspector General has reasonable grounds to believe there has been a violation of
Federal criminal law.
Legislative History. For legislative history and
purpose of Pub.L. 95-452, see 1978 U.S. Code
Cong and Adm. News, p. 2676.
Not of Decisioos
1. General Services Admiaistratioa programs
The Inspector Genera ha: the responsibility
and the power to conduct supervise and coor-
dinate audits and invesrigations relating to pro-
grams of the General Services Administration ir,
order to promote efTictenc) and, to prevent fraud
and abuse., but unlike the Internal Revenue Ser.
a
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?4
Not? I
wict whir), seetine, 7122 of 7:1k 2t Imes et: Insperior General an' trio+ la, banned U.S v. An
power to continue twili:. once the 110410 Depan? Metal U.S.A.. Inc.. D.C.NJ./9K. 4.4 F.Supo
anent begins to move criminal. the powers of the $114
? 5. Semiannual reports: tranamittal to Congrressi arailability to public;
diate report on serious or flagrant problems
(a) Each Inspector General shall, not later than April 80 and October 8l of each
year, prepare semiannual report: summarizing the activities of the Office during the
immediately preceding siii-month periods ending March 81 and September 80. Such
report: shall include, but need not be limited to?
(]) 2 description of significant problems. abuses, and deficiencies relating to
the administration of programs and operations of such establishment disclosed
by such activities during the reporting period.
(2) a description of the recommendations for corrective action made by the
Office during the reporting period with respect to significant problems. abuses,
or deficiencies identified pursuant to paragraph (1);
(3) an identification of each significant recommendation described in previous
semiannual report: on which corrective action has not been completed:
(4) a summary of matters referred to prosecutive authorities and the prosecu-
tions and convictions which have resulted,
(5) a summary of each report made to the head of the establishment under
section 6(1:1)(24 during the reporting period; and
(6) a listing of each audit report completed by the Office during the reporting
period.
(b) Semiannual report: of each Inspector General shall be furnished to the head of
the establishment involved not later than April 30 and October 31 of each year and
shall be transmitted by such head to the appropriate committees or subcommittees of
the Congress within thirty days after receipt of the report. together with a report by
the head of the establishment containing any comments such head deems appropri-
ate
(c) Within sixty days of the transmission of the semiannual report: of each
Inspector General to the Congress, the head of each establishment shall make copies
of such report available to the public upon request and at a reasonable cost
(d) Each Inspector General shall report immediately to the head of the establish-
ment involved whenever thi Inspector General becomes aware of particularly
serious or flagrant problems, abuses, or deficiencies relating to the administration of
programs and operations of such establishment The head of the establishment shall
transmit any such report u, the appropriate committees or subcommittees of Con-
gress within seven calendar days, together with a report by the head of the
establishment containing any comments such head deems appropriate.
(e)(1) Nothing in this section shall be construed to authorize the public disclosure
of information which is?
(A) specifically prohibitA from disclosure by any other provision of law;
(B) specifically required by Executive order to be protected from disclosure in
the interest of national defense of national security or in the conduct of foreign
affairs: or
(C) a part of an ongoing criminal investigation.
(2) Notwithstanding paragraph (IXC), any report under this section may be
disclosed to the public in a form which includes information with respect to a part of
an ongoing criminal investigation if such information has been included in a public
record.
(3) Nothing in this section or in any other provision of this Act shall be construed
to authorize or permit the withholding of information from the Congress., or from
any committee or subcommittee thereof.
(As amende6 Pu),.L. 97-252. TiLIE Xl. ? 1117tel: Sept E. 19E2. 9f, Sta*-
19E2 Amendment. Subsez (el Put.'" 9".:?--252 Legislative Hirtor). F07 kriSlinve hts1C.ry
sddrif sutc.sec. (el purposx of Pu.L95-4f.:. sec Ii U.S
0074 ane? Ad'. a? 20e.
TITLE 5?APPENDIX 3 192
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193 INSPECTOR GENERAL ACT ? 6
Note 1
?
S. Authority of inspector General: information and assistance from Federal
agencies: unreasonable refusal; office space and equipment
(a) In addition to the authority otherwise provided by this Act, each Inspector
General, in carrying out the provisions of this Act, is authorized?
(1) to have access to all records, reports. audits, reviews, documents, papers,
recommendations, or other material available to the applicable establishment
which relate to programs and operations with respect to which that Inspector
General has responsibilities under this Act;
(2) to make such investigations and reports relating to the administration of
the programs and operations of the applicable establishment as are, in the
judgment of the Inspector General, necessary or desirable:
(3) to request such information or assistance as may be necessary for
carrying out the duties and responsibilities provided by this Act from any
Federal. State, or local governmental agency or unit thereof;
14) to require by subpena the production of all information, documents,
reports, answers, records, accounts, papers, and other data and documentary
evidence necessary in the performance of the functions assigned by this Act,
which subpena. in the case of contumacy or refusal to obey, shall be enforceable
by order of any appropriate United States district court Provided, That
procedures other than subpenas shall be used by the Inspector General to obtain
documents and information from Federal agencies;
(5) to have direct and prompt access to the head of the establishment involved
when necessary for any purpose pertaining to the performance of functions and
responsibilities under this Act;
(6) to select, appoint, and employ such officers and employees as may be
necessary for carrying out the functions, powers, and duties of the Office
subject to the provisions of Title 5, United States Code, governing appointments
in the competitive service, and the provisions of chapter 51 and subchapter III of
chapter 53 of such title relating to classification and General Schedule pay rates;
(7) to obtain services as authorized by section 3109 of Title 5, United States
Code, at daily rates not to exceed the equivalent rate prescribed for grade GS-18
of the General Schedule by section 5332 of Title 5, United States Code; and
(8) to the extent and in such amounts as may be provided in advance by
appropriations .Acts, to enter into contracts and other arrangements for audits,
studies, analyses, and other services with public agencies and with private
persons, and to make such payments. as may be necessary to carry out the
provisions of th:s Act.
(b)(I)-Upon request of an Inspector General for information or assistance under
subsection (a)(3), the head of any Federal agency involved shall, insofar as is
practicable and not in contravention of any existing statutory restriction or regula-
tion of the Federal agency from which the information is requested, furnish to such
Inspector General, or to an authorized designee. such information or assistance.
(2) Whenever information or assistance requested under subsection (aX1) or (a)(3)
in the judgment of an Inspector General, unreasonably refused or not provided,
the Inspector General shall report the circumstances to the head of the establish-
ment involved without delay.
(.c) Each head of an establishment shall provide. the Office within such establish-
ment with appropriate and adequate office space at central and field office locations
of such establishment. together with such equipment, office supplies, and communi-
catkins facilities and services as may be necessary for the operation of such offices,
and shall provide necessary maintenance services for such offices and the equipment
and facilities located therein.
'Legislative History. For legislative htstor) and sought evidence penaining to defense ntractor's
purpose of Pub.L 95-452. see 1975 U.S Code audits, at reques; of Defense Contract Audit
Cong and Adm. News. p. 2676. . Agency so long as he did so in furtherance of
purpose within his statutory authority arid exer-
cised independent judgment in d=itiing to issue
Notes of Decisions subpoena U.S v Westinghouse Dec. Corp.,
C.A.3 (Pt) 1985.785 F.2d 164. .
1. Subpoena powers
inspector General of Department of Defense Inspector Genera.: could inspect government
had statutory authority to Issue subpoena_ which contractor's business records the: had been sul.-
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0
Note I
poenaed for grand gut" investigation. notwith-
standing that be had recommended that
tion. where Inspector General had subpoenaed
those recordi prior to referring matter to Justice
Department. cnminal investigation had been corn.
pined and prosecution had been declined_ and
insrection war cntieal to Inspector General's Sr,
%mitigation Ir. re Grand Jur) Matter. L.D.Pa
119kt. 640 F.Supt. 63
Likelihood or imminence of criminal proceed-
ings did no render enforcement of a related ad-
ministrative subpoena impermissible and did not.
therefore. preclude enforcement of a subpoena
itlu= secuer sought b) the Inspector General of
the General Services Admmtsiration for certain
tai and related business records of taxpayers in
connection sith an investigation of payoff' and
TITLE 5?APPENDIX 3 194
other fraudulent practices a-here the agency in
etuestion had riot itself made a formal recoMmen.
dation to the hastier Department Sc' prosecute.
and the summons or subpoena had a civil purpose
US 1. An Metal-LLS A.. Inc DC.tili.1960.4S4
F.Supe554
Acquisition of the Las teturrir and related dot..
urnents of 6 gosemrrent oontractor pursuant to an
investigation of fraud e within the scope of the
subpoena powers of the Inspector General Id
Its and related business records of taxpayers
were not beyond the scope of the subpoena power
of the Inspector Genera! of the General Services
Administration whet be sought to ducover,same
in connection aidt an investigation of payoffs and
other fraudulent practices Id
7. Complaints by employ-ea; disclosure of identity; reprisals
(a) The Inspector General may receive and investigate complaints or information
from an employee of the establishment concerning the possible existence of an
activity constituting a violation of law, rules. or reg-ulation.s, or mismanagement,
gross waste of funds, abuse of authority or a substantial and specific danger to the
public health and safety.
(b) The Inspector General shall not, after receipt of a complaint or information
from an employee, disclose the identity of the employee without the consent of the
employee. unless the Inspector General determines such disclosure is unavoidable
during the course of the investigation. ?
(c) Any employee who has authority to take. direct others to take, recommend, or
approve any personnel action. shall not, with respect to such authority, take or
threaten to take any action against any employee as a reprisal for making a
complaint or disclosing information to an Inspector General. unless the complaint.
was made or the information disclosed with the knowledge that it was false or with
willful disregard for its truth or falsity.
Legislative Hision. For kyislative lustors and
purpose of Pub.L 95-452, sex 197F U.S Code
Cong and Adm. News. p. 267E.
E. Additional provisions with respect to the Inspector General of the Depart-
ment of Defense
(a) No member of the Armed Forces, active or reserve, shall be appointed
Inspe -.tor General of the Department of Defense.
(b)(1) Notwithstanding the last two sentences of section 3(a). the Inspector
General shall be under the authority, direction, and control of the Secretary of
Defense with respect to audits or investigation's, or the issuance of subpoenas, which
require access to information concerning?
(A) sensitive operational plans;
(13 intelligence matters:
(C) counterintelligence matters:
iD) ongoing criminal investigations by other administrative units of the
D:-partrnent of Defense related to national security: OT
(E) other matters the disclosure of which would constitute a serious threat to
national security.
(21 With respect to the information described in paragraph (1) the Secretary of
Defense may prohibit the Inspector General from initiating. carrying out or complet-
ing any audit or investigation or from issuing any subpoena. after the Inspector
General has decided to initiate, carry out or complete such audit or investigation or
to issue such subpoena. if the Secretary determines that such prohibition is neces-
sary to preserve the national security interests of the 'United States -
(31 If the Secretary of Defense exercises any power under paragraph 01 or (2!.
the Inspector General shall submit a statement concernini.- such exercise withn.
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195 INSPECTOR GENERAL ACT
?8
thirty days to the Committees on Armed Services and Governmental Affairs of the
Senate and the Committees on Armed Services and Government Operations of the
House of Representatives and to other appropriate committees or subcommittees of
the Congress.
(4) The Secretary shall, within thirty days after submission of a statement under
paragraph (3), transmit a statement of the reasons for the exercise of power under
paragraph (1) or (2) to the Committees on Armed Services and Governmental Affairs
of the Senate and the Committees on Armed Services and Government Operations of
the House of Representatives and to other appropriate committees or subcommit-
tees.
(c) In addition to the other duties and responsibilities specified in this Act, the
Inspector General of the Department of Defense shall?
(1) be the principal adviser to the Secretary of Defense for matters relating to
the prevention and detection of fraud, waste. and abuse in the programs and
operations of the Department:
(2) initiate, conduct, and supervise such aud.ts and investigations in the
Department of Defense (including the military departments) as the Inspector
General considers appropriate;
(3) provide policy direction for audits and investigations relating to fraud,
waste, and abuse and program effectiveness:
(4) investigate fraud, waste, and abuse uncovered as a result of other
contract and internal audits, as the Inspector General considers appropriate;
(5) develop policy, monitor and evaluate program performance, and provide
guidance with respect to all Department activities relating to criminal investiga-
tion programs;
(6) monitor and evaluate the adherence of Department auditors to internal
audit, contract audit, and internal review principles, policies, and procedures:
(7) develop policy, evaluate program performance. and monitor actions taken
by all components of the Department in response to contract audits, internal
audits, internal review reports, and audits conducted by the Comptroller General
of the United States;
(B) request assistance as needed from other audit, inspection, and investiga-
tive units of the Department of Defense (including military departments); and
(9) give particular regard to the activities of the internal audit, inspection, and
investigative units of the military departments with a view toward avoiding
duplication and insuring effective coordination and cooperation.
(d) Notwithstanding section 4(d), the Inspector General of the DepLrtment of
Defense shall expeditiously report suspected or alleged violations of chapter 47 of
title 10, United States Code (Uniform Code of Military Justice), to the Secretary of
the military department concerned or the Secretary of Defense.
(e) For the purposes of section 7. a member of the Armed Forces shall be deemed
to be an employee of the Department of Defense.
(f)(11) Each semiannual report prepared by the Inspector General of the Depart-
ment of Defense under section &al shall include information concerning 01( numbers
and types of contract audits conducted by the Department during the reporting
period. Each such report shall be transmitted by the Secretary of Defe:,se to the
Committees on Armed Services and Governmental Affairs of the Senate and the
Committees or, Armed Services and Government Operations of the House of Repre-
sentatives and to other appropriate committees or subcommittees of the Congress.
. (2) Any report required to be transmitted by the Secretary of Defense to the
appropriate committees or subcommittees of the Congress under section 5(d) shall
also be transmitted, within the seven-day period specified in such section, to the
Committees on Armed Services and Governmental Affairs of the Senate and the
Committees on Armed Services and Government Operations of the House of Repre-
sentatives.
(g) The provisions of section 1385 of title 18. United States Code. shall not apply
to audits and investigations conducted by. under the direction of, or at the request of
the Inspector General of the Department of Defense to carry out the purposes of
this Act.
(A.. amended Pub.L 97-252. Titie Xi.? 1117(b). Sept_ E. 192. Stat. 751.)
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1911 Amendment. PubL amended
sectsori penerall). substitutin; additional prosi.
aeon, relatint it the Inspector Genera of the
Drpartmeni of Defense for prormion, relatins to
semiannual reports of Secretor) of Defense on
oudit. investipative. and mapertior. unit, of Ge?
tense Deronmeni .sai)shaii of stir). reports to
the public. excluaion of national tocunt)mieersi
delepation of the Secretar)'a duties. submittal of
proposed Septslation. the establishmenr of a Iasi
force to stud) opreatior, of such:. inveatiptive and
inspection uvula. enemberahrr in the task force_
and the submission of, comprehenatve report tt.
the task force to the Secretor) of Defense and
Director' of Office e Manatemeni and Sudper.
who were to submit a final noon to Conpreas no
lain l thar. April 1. 1963
Lesnalatise Husior). For kits-lame history and
purpose of Pub.l. 95-452. see 1971 U.S Code
Cons and Adrr, Nests, p 267e
TITLE 5?APPENDIX 3 196
%toes of Decitions
1. Subpoenas
Inspector General of the Department Of De.
tenae loos entitled to enforcement of aur odenima.
trative subpoena seelinf evadence pertoininE to a
defense contractor's internal audits dame de-
fense contractor-a contention, tho' sub-Tornio so,
improper') issued or. behalf of the Defense Con-
tract Audi Apenc) IC. COeftt settlement of a
related administrative dispute. Our scope and tuts
*et of subpoena were tot brood and tha'. compl,-
once would be undul) burdensome US s Wesr-
inphouse Elec Corp.. DC Pt. 191f. 615 F.Supr.
116,:r
I SA. Special provisions relating to the Agenej for International Development
(a) In addition to the other duties and responsibilities specified in this Act, the
Inspector General of the Agency for International Development?
(fl shall supervise. direct, and control all security activities relating to the
programs and operations of that Agency. subject to the supervision of the
Administrator of that Agency; and
(2) to the extent requested by the Director of the United States International
Development Cooperation Agency (after consultation with the Administrator of
the Agency for International Development), shall supervise, direct, and control
all audit, investigative, and security activities relating to programs and opera-
tions within the United States International Development Cooperation Agency.
fbl In addition to the Assistant Inspector Generals provided for in section Std i of
this Act, the Inspector General of the Agency for International Development shall, in
accordance with applicable laws and regulations governing the civil service, appoint
an Assistant Inspector General for Security who shall have the responsibility for
supervising the performance- of security activities relating to programs and opera-
tions. of the Agency for International Development.
(c) The semiannual reports required to be submitted to the Administrator of the
Agency for International Development pursuant to section 5(b) of this Act shall also
be submitted to the Directo- of the United States International Development
Cooperation Agency.
(dl In addition to the officer:, and employees provided for in section 6(a)(C; of this
Act. members of the Foreign Service may. at the request of the Inspector General of
the Agency for International Development, be. assigned as employees of the Inspec-
tor General. Members of the Foreign Service so assigned shall be responsible solely
to the Inspector General. and the Inspector General (or his or her designee) shall
prepare the performance evaluation reports for such members.
(e) In establishing and staffi-,g field offices pursuant to. section 6(cl of this Act,
the Administrator of the Agency for International Development shah) not be bound
by overseas personnel ceilings established under the Monitoring Overseas Direct
Employment
The reference in section 'hat of this Act to an employee of the establishment
shall. with respect to the Inspector General of the Agency for International Develop-
Mem. be construed to include an employee of or under the United States InterLation- ?
al Development Cooperation Agency. ?
(r1 The Inspector General of the Agency for Ir..terriationa.; Developmen1 shz7*:-Ihe mc.
addition to the officers provided for in section ?24.a cd the Foreigr. Assistance Ac:
of 19f:.: 122 1:.S.C.A. ?
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197 INSPECTOR GENERAL ACT ? 9
(hi As used in this Act, the term *.'Agency for International Development"
includes any successor agency primarily responsible for administering part I of the
Foreign Assistance Act of 1961 [22 U.S.C.A. I 2151 et seq.).
(Added Pub.L 97-113. Title VII, 7054ax3), Dec. 29, 19E1, 95 Stat 15441
References in Text. The Foreign Assimance
Act of 19bi. referred to an subset.. (111. is Pub L.
87-195. Sept. 4. 1%), 75 Stat. 424. as amended
Part I of the Foreign Assistance Act of 1%1 is
classified general)) to subchapter I (? 2151 et
sec) of chapter 32 of Title 22. Foreign ReLations
and Intercourse. For complete classification of
this Act to the Code. see Short Ink note sr out
under section 2151 of Title 2: and Tabin volume
Legislative History. For legislative htstor) and
purpose of Pub L. 97-113. see 1981 U.S Code
Cons a- el Adm. News, p 2404
9. Transfer of functions
(a) There shall be transferred?
(1) to the Office of Inspector General?
(A) of the Department of Agriculture, the offices of that department
referred to as the "Office of Investigation" and the "Office of Audit";
(B) of the Department of Commerce. the offices of that department
referred to as the "Office of Audits" and the "Investigations and Inspec-
tions Staff' and that portion of the offi( referred to as the "Office of
Investigations and Security" which has r,sponsibility for investigation of
alleged criminal violations and program abuse:
(C) of the Department of Defense, the offices of that department re-
ferred to as the "Defense Audit Service" and the "Office of Inspector
General. Defense Logistics Agency", and that portion of the office of that
department referred to as the "Defense Investigative Service" which has
responsibility for the investigation of alleged criminal violations:
(DI of the Department of Education, all functions of the Inspector
General of Health, Education, and Welfare or of the Office of Inspector
General of Health, Education, and Welfare relating to functions transferred
by section 301 of the Department of Education Organization Act [20
? 3441);
(E) of the Department of Housing and Urban Development, the office of
that department referred to as the "Office of Inspector General";
(F) of the Department o-' the Interior, the office of that department
referred to as the "Office of Audit and Investigation";
(G) of the Department of labor. the office of that department referred to
as the "Office of Special Investigations";
(11) of the Department of Transportation, the offices of that department
referred to as the "Office of Investigations and Security" and the "Office of
Audit" of the Department. the "Offices of Investigations and Security,
Federal Aviation Administration", and "External Audit Divisions, Federal
Aviation Administration". the "Investigations Division and the External
Audit Division of the Office of Program Review and Investigation, Federal
Ifighv.-ay Administration", an(' the "Office of Program Audits, Urban Mass
Transportation Administratior.";
(I i of the Community Services Administration the offices of that agency
referred to as the "Inspections Division", the "External Audit Division-,
and the "Internal Audit Division'';
(J) of the Environmental Protection Agency, the offices of that agency
referred to as the "Office of Audit" and the "Security and Inspection
Division";
(K) of the General Services Administration, the offices of that agency
referred to as the "Office of Audits" and the "Office of Investigations";
(L) of the National Aeronautics and Space Administration, the offices of
that agency referred to as the "Management Audit Office" and the "Office
of Inspections and Security";
(M) of the Small Business Administration., the office of that agency
referred to as the "Office of Audits and Investigations"; and
(N) of the Veterans' Administration, the offices of that agency referred
to as the "Office of Audits' and the "Office of Investigations"; and
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TITLE &--APPENDIX 3 298
(2) such other offices or agencies, or functions., powers, or duties thereof, as
the head of the establishment involved may determine are properly related to
the functions of the Office and would. if at transferred, further the purposes of
this Act.
except that there shall not be transferred to an Inspector General under paragraph
(2) program operating responsibilities.
(b) The personnel, assets, liabilities. contracts, property. records, and unexpended
balances of appropriations. authorizations, allocations. and other funds employed.
held. used, arising from, available or to be made availabk, of any office or agency
the functions, powers, and duties of which are transferred under subsection (al art
hereby transferred to the applicable Office of Inspector General.
(c) Personnel transferred pursuant to subsection (b) shall be transferred in
accordance with applicable laws and regulations relating to the transfer of functions
except that the classification and compensation of such personnel shall not be
reduced for one-year after such transfer.
(d) In any case where all the functions, powers, and duties of any office or agency
are transferred pursuant to this subsection, such office or agency shall lapse. Any
person who, on the effective date of this Act [Oct. 1, 197i). held a position
compensated in accordance with the General Schedule, and who, without a break in
service. is appointed in an Office of Inspector General to a position having duties
comparable to those performed immediately preceding such appointment shall contin-
ue to be compensated in the new position at not less than the rate- provided for the
previous position, for the duration of service in the new position.
(As. amended Pub.L. 9643E. Title V. f 50Estn)(2i. Oct 37, 1979. 93 Slat 694 Pub.L 97-242. Title
XI, 1117011(2). (3). Sept. E, 19E2. AC Stat.. 750.1
19112 Amendment. Subsec. (a)(1) Pub.L Services beaded by a Director. was established in
97-252 added subpar. (C) Forme: subpar-1. (C1 the Department of Health and Human Sersicm by
to (M) redesignated (D) to (N). respectively . sec-tion 676 of Pub.L 97-35. which. es classified to .
1979 Amendment. Subsec . (a )( I ) Pub.L 42 U.S CA. i 9905
96-8I redesignated subpar!. (Ci to (1.1 as (D) to Transfer of Audit Peraonnel to Inspector Gen?
(M) and added a nee subpar (C) eral. Department of Defense. Section. 1117(e) of
Effective Date of 1979 Amendment. Amend- Publ... 97-252 provided that -In addition to the
merit by Pub.L. 9645. effective May 4. 1920. with positions transferred to the Office of the Inspector
specified exceptions. sec section 601 or Pub.L General of the Department of Defense. pursuant
9643E. set out at IIII Effective Date Dote under to the amendments made by subsection (a) of this
section 3401 of Title 20. Education. section to sections 2(1). 9(a)(1). and 11(1) of this
Community Services Administration. The Act). the Stetary of Defense shall transfer to the
Community Services Athrunistration. which was Office of Inspector General of the Departmen: of
'established by am-tion 601 of the Economic Op- Defense no: less that. one hundred additional
portunity Act of 1964. as amended (42 U.S.C.A audit positions The Inspector General of the
f 2941). was terminated when the Economic Op- Department of Defense shall fill such positions
portunio Act of 1964. Pub.L. 8E-452. Aug 20. with persons trained to perform contract audits"
1964. 7i SW 50E. as amended. was repealed. Legislative His-tory. For legislative history and
except for Titles VIII and X. effective Oct I. purpose of Pub.L. 95-452. sec 1971 U.S Code
1951. In section 6I3lai of Pub.L. 97-35. Title VI. Cori g and Aden Neu-s. p 2676 See. also. Pub.L
Aug 13. 1951. 95 Stat. 519. which is classified to 964E, 1979 U.S Code Cong and Acim News. p.
42 U.S.C.A. f 9912(51. An Office of Community 1514
f 10. Conforming and technical amendments
[Section amended sections 5315 and 5331- of Title 5, Government Organization and
Employees, and section 3522 of Title 42 The Public Health and Welfare, which
amendments have been executed to text.)
Legislative History. For legislative histor) and
purpose of Pub.L 95-452. w 1971 U.S. Code
Gang and Aden News. p 267c
f 11. Definitions
As used in this Act-
(1) the tern, "head of the establishment' means thc. Secretary of Ap-iculture.
Commerce, Defense. Eciucatior? housing and 1:rbart Development. the interior,
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199 INSPECTOR GENERAL ACT ? 12
Labor, State. or Transportation or the Administrator of the Agency for Interna-
tional Development, Community Services, Environmental Protection, General
Services, National Aeronautics and Space, Small Business, or Veterans' Affairs.
or the Director of the United States Information Agency 1 as the case may be;
(2) the term "establishment" means the Department of Agriculture. Com-
merce. Defense. Education. Housing and Urban Development. the Interior,
Labor, State. or Transportation or the Agency for International Development.
the Community Services Administration, the Environmental Protection Agency,
the General Services Administration, the National Aeronautics and Space Ad-
ministration. the Small Business Administration, the United States Information
Agency or the Ve:erans' Administration, as the case may be;
(3) the term "I7.spector General" means the Inspector General of an establish-
ment;
(4) the term "Office" means the Office of Inspector General of an establish-
ment and
? (5) the term "Federal agency" means an agency as defined in section 552(e)
of Title 5 (including an establishment as defined in paragraph (2)1, United States
Code, but shall not be construed to include the General Accounting Office.
(As amended Pub.L 96-84. Title V. ? 5090831. (4), Oct. 17, 1979. 93 Stat. 695; Pub.L 97-113.
Title VII, ? 705(21(2). Dec. 1981.95 Stat. 1544: Pub.L. 97-252. Title XI. 4 1117(1124). (5). Sept.
8. 1982. 96 Stat. 750; Pu .L 99-93, Title I. I 150131(21. Aug. 16, 1985. 99 Stat 427; Pub.L
99-399, Title IV. ? 412(a1(..!.. Aug. 27, 1986. 100 Stat. 867.)
1So in onginal. Probably should be followed by a comma.
1986 Amendment Par. (1). Pub.L. 99-399.
412(aX2XA). inserted "or the Director of the
United States Information Agency" before "as the
case may be".
Par. (2). Pub.L. 99-399, ? 412(aX2XB). insert-
ed "the United States Information Agency" before
"or the Veterans' Administration"..
1985 Amendment. Pars. (I). (2). Pub.L.
99-,93 inserted "State." after "Labor.".
1982 MeteDelfD4OL Par. (1). Pub.L. 97-252.
5 1317(0)4). inserted "Defense." following
"Commerce,".
Par. (2). Pub.L. 97-252. 5 1117(aX5), inserted
"Defense." following "Commerce_".
1911 .Ameodmest Par. (I). Pub.L. 97-113.
? 705(aX21(A). inserted "the Agency for Interna-
tional Deve)opment," after "Administrator of-.
Par (2). Pub.L. 97-113.5 705(aX2)(B). insert-
ed "the Agency for International Development...-
after "Transportation or".
1979 Amendment Par (1) ? Pub.L. 96-88.
? 508(n X3), inserted "Education." following
"Commerce".
Par. (2). Pub.L. 9648. ? sosiason. inserted
"Education." following "Commerce-.
Effective Date of 1979 Amendment Amend-
ment by Pub.L. 96-88. effective May 4, 1980, with
specified exceptions. see section 601 of Pub.L.
96-88. set out as an Effective Date note under
section 3401 of Title 20. Education.
Community Streit.** Administration. The
Community Services Administration, which was
established by? section WI of the Economic Op-
portunity Act of 1964. as amended (42 LLS.C.A.
2941). was terminated when the Economic Op-
-portunity Act or 1964. Publ.. 88-452. Aug ?O.
1964. 71 Stat as amended. was repealed.
except for Title* VIII and X. effective Oct. I,
1911. by section 65341 of Pub.L. 97-35. Title VI.
Aug. 13. 1981. 95 Stat. 519. which is classified to
42 U.S.C.A. ? 9912(a). An Office of Community.
-Services, headed by a Director, was established in
the Department of Health and Human SerYices by
section 676 of Pub.L. 97-35, which is classified to
42 U.S.C.A. ? 9905.
Legislative History-. For legislative history arid
purpose of Pub.L 95-452. see 1978 U.S. Code
Cong and Adm. News_ p. 2676 See. also. Pub.L.
96-86. 1979 U.S. Code Cong and Adm. News_ p.
1514. Pub.L. 97-113, 1911 U.S. Code Cong. and
Adrn News p 2404. Pub.L. 99-92. 1915 U.S.
Code Cons and Adm. News p. 329. Pub.L.
99-399. 1986 U.S Code Cons and Adm.News. p.
1865.
? 12. Effective date
The provisions of this Act and the amendments made by this Act [see section 1(1 of
this Act) shall take effect October 1, 1975.
Legislative History. For legislative history and
purpose of Pub.L-91,45. sec I'M U.S. -Code
Cong and Adm. News. p. 2676
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reoniary Z, 155 WNUKt1J1NAL Kr.t.Aircu ? SENA-IL S 425
tRolleall Vote No. 15 Leg.)
YEAS-85
Garn
Glenn
Graham
Gramm
Grassley
Harkin
Hatch
Hatfield
Hecht
Hein?
if eiTT-,
Hollings
Humphrey
Inouye
Kassebaum
Hasten
Kennedy
Kerry
Lau ten berg
Leahy
Levin
Lugar
McCain
McClure
McConnell
Metzenbaum
Mikulsk:
Mitchell
Moynihan
Adams
Armstrong
Baucus
Bentsen
Bingaman
Bond
Boren
Boschwitz
Bradley
Breaux
Bumpers
Burdick
Byrd
Chat '
Chiles
Cothran
Cohen
Conrad
Cranston
Danforth
DeConcini
Dixon
Dodd
Dorn en i ci
Durenberger
Evans.
Lyon
Ford
Fowler
Biden
D'Arnat o
Daschle
Doh.
Gore
Murkowski
Nickles
Nunn
Packwood
Pell
Pressler
Proxmire
Pryor
Quayle
Riegle
Rockefeller
Roth
Sanford
Sarbanes
Sasser
Shelby
Simpson
Specter
Staf lord
Stennis
Symms
Treble
Wallop
Warner
Weicker
Wilson
Wirth
NOT VOTING-15
Heflin
Johnston
Karnes
Matsunaga
Melcher
Reid
Rudman
Simon
Stevens
Thurmond
Se the bill (S. 908) was passed, as fel-
lows:
Be it enacted by the Senate and House of
Representatives of the United States of
America in Congress assembled,
That this Act may be cited as the "Inspec-
tor General Act Amendments of 1988".
CONFORMATION OF AUTHORITIES OF EXISTING
OFFICES OF INSPECTORS GENERAL
SEC. 2. (a) Section 2(1) of the Inspector
General Act of 1978 is amended to read as
follows:
"(1) to conduct and supervise audits and
Investigations relating to the programs and
operations of the establishments listed in
section 11(2);".
(b) Section 9(a)(1) of such Act is amend-
ed?
(1) by striking out subparagraph (I);
(2) by redesignating subparagraphs (M)
and (N) as subparagraphs (0) and (P), re-
spectively;
(3) by redesignating subparagraphs (J)
through (L) as subparagraphs (K) through
(M), respectively:
(4) by redesignating subparagraphs (E)
through (H) as subparagraphs (G) through
(.1). respectively;
(5) by inserting after subparagraph (D)
the following new subparagraphs:
"(E) of the Department of Energy. the
Office of Inspector General (as established
by section 208 of the Department of Energy
Organization Act):
"(F) of the Department of Health arid
Human Services. the Office of Inspector
General (as established by title II of Public
Law 94-505):"; and
161 by inserting after subparagraph (M)
(as redesignated by paragraph (3) of this
subsection) the following new subpara-
graph:
"(N) of the Railroad Retirement Board.
the Office of Inspector General (as estab-
lished by section 23 of the Railroad Retire-
ment Act of 1974):".
(c) Section 11 of such Act is amended?
(1) by inserting "Energy, Health and
Human Services," after "Education," each
place It appears in paragraphs (1) and (2);
(2) by striking out "Community Services,"
in paragraph (1);
(3) by striking out -the Community Serv-
ices Administration." in paragraph (21:
(4) by inserting "or the Chairman of the
Railroad Retirement Board." before "as the
case may be" in paragraph (1); and
(5) by inserting "the Railroad Retirement
Board,?' after "National Aeronautics and
Space Administration," in paragraph (2).
(d)(1)(A) Section 208 of the Department
of Energy Organization Act is repealed.
(13) The table of contents in the first sec-
tion of such Act is amended by striking out
the item relating to section 208.
121 Title II of Public Law 94-505 is re?
pealed.
(3; Section 23 of the Railroad Retirement
Act of 1974 is repealed.
(e) The transfer of functions under the
amendments made by subsection (b) shall
riot affect any individual, who on the date
of enactment of this Act, is serving as the
Inspector General of the Department of
Energy. the Department of Health and
Human Sen-ices. or the Railroad Retire-
ment Board. Any such individual shall con-
tinue to serve in such position until such in-
dividual dies, resigns, or is removed from
office in accordance with the Inspector
General Act of 1978.
UNIFORM SALARIES FOR INSPECTORS GENERAL
SEC. 3. (a) Section 5315 of title 5, United
States Code, is amended by adding at the
end thereof the following new paragraphs:
"Inspector General, Department of Com-
merce.
"Inspector General.
Interior.
"Inspector General.
tional Development.
"Inspector General,
tection Agency.
"Inspector General.
ministration.
"Inspector General,
and Space Administrat
"Inspector General,
Board.
"Inspector General,
ministration.".
(b) Section 5316 of such title is amended
by striking out the paragraphs relating to?
(1) the Inspector General of the Depart-
ment of Commerce;
(2) the Inspector General of the Depart-
ment of the Interior;
(3) the Inspector General of the Agency
for International Development:
(4) the Inspector General of the Commu-
nity Services Administration;
(5) the Inspector General of the Em-iron-
mental Protection Agency;
(6) the Inspector General of the General
Services Administration;
(7) the Inspector General of the National
Aeronautics and Space Administration: and
(8) the Inspector General of the Small
Business Administration.
ESTABLISHING AN OFFICE OF INSPECTOR GENER-
AL IN THE DEPARTMENT OF THE TREASURY,
THE INTERNAL REVENUE SERVICE, THE FEDER-
AL EMERGENCY MANAGEMENT AGENCY, THE NU-
CLEAR REGULATORY COMMISSION, AND THE
OFFICE OF PERSONNEL MANAGEMENT
SEC. 4. (a) Section 9(a)(1) of the Inspector
Genera) Act of 1978 (as amended by section
2(b) of this Act) is further amended?
(1) by redesignating subparagraphs (0)
and (P) (as redesignated by paragraph (2) of
section 2(b) of this Act) as subparagraphs
(T) and (U), respectively:
(2) by redesignating subparagraph (N) (as
added by paragraph (6) of section 2(h) of
this Act) as subparagraph (S);
(3) by redesignating subparagraphs (K),
(L), and (M) (as redesignated by paragraph
Department of the
Agency for Interna-
Environmental Pro-
General Services Ad-
National Aeronautics
ion.
Railroad Retirement
Small Business Ad-
(3) of section 2(b) of this Act) as subpara-
graphs (M), (0). and (P), respectively:
(4) by inserting after subparagraph (J) (as
redesignated by paragraph (4) of section
2(b) of this Act) the following new subpara-
graphs:
"(K) of the Department of the Treasury,
the office of that department referred to as
the 'Office of Inspector General', and, not-
withstanding any other provision of law,
that portion of each of the offices of that
department referred to as the 'Office of In-
ternal Affairs. Bureau of Alcohol. Tobacco.
and Firearms', the 'Office of Internal Af-
fairs, United States Customs Sen-ice", and
the 'Office of Inspections. United States
Secret Sen-ice' which is engaged in internal
audit activities;
"(L) of the Department of the TreasurN
in the Internal Revenue Sen-ice of SIWil de-
partment, the office of that service referred
to as the 'Office of Assistant Commissioner
(Inspection). Internal Revenue Service';-;
(5) by inserting after subparagraph (M
(as redesignated by paragraph (3) of thil
subsection) the following neu subpara-
graph:
"(N) of the Federal Emergency Manage-
ment Agency, the office of that agency re-
ferred to as the 'Office of Inspector Gener-
al';"; and
(6) by inserting after subparagraph (Pi (as
redesignated by paragraph (3) of this sub-
section) the following new subparagraphs:
"(Q) of the Nuclear Regulatory Commis-
sion, the offices of that commission referred
to as the 'Office of Inspector and Auditor':
"(RI of the Office of Personnel Manage-
ment, the offices of that agency referred to
as the 'Office of Inspector General'. the 'In-
surance Audits Division. Retirement and In-
surance Group', and the 'Analysis and Eval-
uation Division. Administration Group';".
(b)(1) Section 11(1) of such Act (as amend-
ed by section 2(c) of this Act) is further
amended?
(A) by striking out "or Transportation or"
and inserting in lieu thereof "Transporta-
tion, or the Treasury:"
(B) by striking out ". or the Director of
the United States Information Agency" and
inserting in lieu thereof a semicolon and
"the Director of the Federal Emergency
Management Agency, the Office of Person-
nel Management, or the United States In-
formation Agency:";
(C) by inserting "the Nuclear Regulatory
Commission or" before "the Railroad Re-
tirement Board" (as added by section 2(c)(4)
of this Act); and
(D) by inserting "or the Commissioner of
Internal Revenue" before "as the case may
be".
(2) Section 11(2) of such Act (as amended
by section 2(c) of this Act) is further amend-
ed?
(A) by striking out "or Transportation"
and inserting in lieu thereof "Transporta-
tion, or the Treasury:";
(B) by inserting "the Federal Emergency
Management Agency." after "the Environ-
mental Protection Agency,";
(C) by inserting "the Nuclear Regulatory
Commission, the Office of Personnel Man-
agement." after "the National Aeronautics
and Space Administration,", and
(D) by inserting "Internal Revenue Serv-
ice" before "as the case may be".
(c) The Inspector General Act of 1978 is
amended by inserting after section 8A the
following new sections:
"SPECIFIC PROVISION CONCERNING THE
NUCLEAR REGULATORY COMMISSION
"Sac. 8B. The Chairman of the Commis-
sion may delegate the authority specified in
the second sentence of section 3(a) to an-
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.r..
8 426 CONGRESSIONAL RECORD ?SENATE February 2, 1988
Other member of the Nuclear Regulatory
Commission. and shall not deiegate such au-
thority to an other officer or employee of
the Commission.
..SPECIAl. PROVISIONS REGARDING THE
DEPARTMENT OP THE TREASURY
-Sr.c. 8C. (a) In carryLne Out the duties
and responsibilities specified in this Act. the
Inspector General of the Department of the
Treasury shall have oversight responsibility
for tin internal investigations performed by
the Office of Internal Affairs of the Bureau
of Alcohol. Tobacco and Firearms, the
Office of Internal Affairs of the United
States Customs Service. and the Office of
Inspections of the United States Secret
Service. The head of each such office shall
report to the Inspector General the signifi-
cant investigative activities being carried
out by such office.
"ate Notaithstanding subsection (a). the
Inspector General of the Department of the
Treasury may conduct an investigation of
an officer or employee of such Department
(other than the Internal Revenue Service)
"(1) the Secretary of the Treasury or the
Deputy Secretary of the Treasury requests
the Ir.spector General to conduct an investi-
gation:
"(2) the investigation concerns senior offi-
cers or employees of the Department of the
Treasury. including officers appointed by
the Pi taidont. members of the Senior Exec-
utive Service, and individuals ih Positions
classified at grade GS-I5 of the General
Schedult or abote Cr classified at a grade
equivalent to suet-, grade or above such
equivalent grade or
"(3) the investigation involves alleged no-
torious conduct or ana- other matter which,
in the opinion of the Inspector General, is
especially sensitive or of departmental sig-
nificance.
"(Cl If the Inspector General of the De-
partment of the Treasury initiates an inves-
tigation under subsection (b). and the offi-
cer or employee of the Department of the
Treasury subject to investigation is em-
ployed by or attached to a bureau or service
referred to in subsection (a). the Inspector
General may provide the head of the office
of such bureau or service referred to in sub-
section (a) with written notice that the In-
spector General has initiated such an inves-
tigation. If the Inspector General issues a
notice under the preceding sentence, no
other investigation shall be initiated into
the matter under investigation by the In-
specter General and any other investigation
of such matter shall cease.
?ad)(1) Notwithstanding the last two sen-
tences of section 3(a), the Inspector General
of the Department of the Treasury and the
Inspector General of the Internal Revenue
Service shall be under the authority, direc-
tion. and control of the Secretary of the
Treasury and the Commissioner of Internal
Revenue, respectively with respect to audits
or investigations, or the issuance of subpe-
nas, which require access to information
concerning_
"(A) ongoing criminal investigations or
proceedings:
"(8) sensitive undercover operations:
"(C) the identity of confidential sources,
including protected witnesses;
"(D) deliberations and decisions on policy
matters, including documented information
uaeri as a basis for making policy decisions,
the disclosure of which could reasonably be
expected to have a significant influence on
the economy or market behavior; ?
-(E) intelligence or counterintelligence
matters;
-(F) other matters the disclosure of which
would constitute a serious threat to national
security or to the protection of any person
or property authorized protectiori by section
3056 al title 18, United States Code. section
202 of title 3, United States Code, or any
provision of the Presidential Protection As
sistance Act of 1976 (18 tJ.SC. 3056 note
Public Law 94-524).
"(2) With respect to the Information de-
scribed In paragraph ()). the Secretary of
the Treasury or the Commissioner of Inter,
nal Revenue may prohibit the Inspector
General of the Department of the Treasury
or the Inspector General of the Internal
Revenue Service, respectively. from initiat-
ing, carrying out, or completing any audit or
Investigation, or from issuing any subpena.
after such Inspector General has decided to
initiate, carry out, or complete such audit or
investigation or to issue such subrenta if the
Secretary or the Commissioner determines
that such prohibition is neeessary- to pre-
serve the confidentiality of or prevent the
disclosure of arty information described in
paragraph (Il,
'(3)A)If the Secretary of the Treasury
exercises any power under paragraph (I) or
(2). tht Secretary of the Treasury shall
notify the Inspector General of the Depart-
ment of the Treasury in writing of such ex-
ercise. Within 30 days after receipt of any
such notice. the Inspector General of the
Department of the Treasury shall transmit
a copy of such notice to the Committee on
Government-EC Affairs of the Senate and the
Committee on Government Operations of
the House of Representatives, and to other
appropriate committees or subcommittees
of Congress.
(e) In addition to the standards prescribed
by the first sentence of section 3,a). the In-
spector General of the Internal Revenue
Service shall at the time of appointment be
in a career reserved position in the Senior
Executive Service in the Internal Revenue
Service as defined under section 3132(a)(8)
of title 5. United States Code, with demon-
strated ability in investigative techniques Or
internal audit functions with respect to the
programs and operations of the Internal
Revenue Service.
(f )(1) In addition to the duties and respon-
sibilities specified in this Act. the Inspector
General of the Internal Revenue Service
shall perform such duties and exercise such
powers as may be prescribed by the Com-
missioner of Internal Revenue, to the
extent such duties and powers are not in-
consistent with the purposes of this Act.
(2) No audit or investigation conducted by
the Inspector General of. the Department of
the Treasury or the Inspector General of
the Internal Revenue Service shall affect a
final decision of the Secretary of the Treas-
ury or his designee described in section 6406
of the Internal Revenue Code of 19E6,
"(B) If the Commissioner of Internal Rev-
enue exercises any power under paragraph
(I) or (2), the Commissioner shall notify the
Inspector Genera) of the Internal Revenue
Service in vt-riting of such exercise. Within
30 days after receipt of such notice, the In-
spector General shall transmit a copy of
such notice to the Committee on Govern-
mental Affairs and the Committee on Fi-
nance of the Senate and to the Committee
on Government Operations and the Com-
mittee on Ways and Means of the House of
Representatives.".
-(d) Section 5315 of title 5. United States
Code (as amended by section 3(a) of this
Act) is further amended by adding at the
end thereof the following new Items-
"Inspector General, Department of the
Treasurv.
"Inspector General. Internal Revenue
Service.
-Inspector General, Federal Emergency
Management Agency.
"Inspector General. Nuclear Regulatory
Commission.
"Inspector General. Office of Personnel
Management.",
REQUIREMENTS AND PROTECTIONS FOR AUDIT
AND INVESTIGATION UNITS
Snc. 5. (a) The Inspector General Act of
18.78 (as amended by section 4(c) of this Act)
is further amended by inserting after sec-
tion 8C the following new section.
''SPECIFIC REQI'IREMENTS POE FEDERAL
ENT/TIES
-Sea. 8D. (al As used in this section?
"(I) the term 'Federal entity' means any
Government corporation (within the mean-
ing of section Mel) of title 5. United States
Code). any Government controlled corpora-
tion (within the meaning of section 103(2)
of such tit ie). or any other entity in the Ex-
ecutive branch of the Government. or any
Independent regulatory agency, but does
not include?
"(A) an establishment (as defined in sec-
tion 11(2i of this Act) or part of an estab-
lishment:
-(B) the Executive Office of the Presi-
dent:
"(C) the Central Intelligence Agency:
'(D) the General Accounting Office:
"(E) the Department of Justice: or
'iF) any entity in the judicial or legisla-
tive branches of the Government, including
the Administrative Office of the United
States Courts and the Architect of the Cap-
itol arid any activities under the- direction of
the- Architect of the Capito):
"(2) the term *designated Federal entity'
means ACTION. .Aintrak.. the Appalachian
Regional Commission, the Board of Gover-
nors of the Federal Reserve System. the
Board for International Broadcasting. the
Commodity Futures Trading Commission,
the Consumer Product Safety Commission,
the Corporation for Public Broadcasting.
the Equal Employment Opportunity Com-
mission, the Farm Credit Administration,
the Federal Communications Commission,
the Federal Deposit Insurance Corporation,
the Federal Election Commission, the Fed-
eral Home Loan Bank Board. the Federal
Labor Relations Authority, the Federal
Maritime Commission, the Federal Trade
Commission. the Interstate Commerce Com-
mission. the Legal Services Corporation, the
National Archives and Records Administra-
tion. the National Credit Union Administra-
tion, the National Endowment for the Arts,
the National Endowment for the Human-
ities. the National Labor Relations Board,
the National Science Foundation, the
Panama Canal Commission the Peace
Corps, the Pension Benefit Guaranty Cor-
poration. the Securities and Exchange Com-
mission. the Smithsonian Institution, the
Tennessee Valley Authority, the United
States International Trade Commission, and
the United States Postal Service: -
"(3) the term 'head of the Federal entity'
means the director, administrator, presi-
dent, chairman or chief executive officer of
a Federal entity, or any other body desig-
nated by statute as the head of a Federal
entity:
"(4) the term 'head of the designated Fed-
eral entity' means the director, administra-
tor, president, chairman, or chief eXecutive
officer of a designated Federal entity, or
any other body designated by statute as the
head of a designated Federal entity;
"(5) the term 'internal audit unit' means a
component of a Federal entity which carries
out audits or investigations, or both, of the
programs and operations of such entity, but
does not include a component that carries
out audits or investigations as an integral
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reur-uury Z, ',VOSS LONUKESSIONAL RECORD ? SENATE S 427
part of the conduct of the programs arid op- and to obtain the temporary or intermittent "(C) where applicable the amounts f ?n
erations of such entity: and services of experts or consultants or an or- eligible costs. ineligible ' l
?
costa that were disi
"(6) the term 'internal audit unit director' ganization thereof, subject to the applicable allowed, unsupported costs, and unsupport-
means the head of an internal audit unit. laws and regulations that govern such selec- ed costs tha . were disallowed- and
"(b) After the date which is 180 days after Lions, appointments, and employment. and "(D) where applicable. the of die?
the date of enactment of this section, there the obtaining of such services. within the allowed costs returned to. or offset by, the
shall be established in each designated Fed- designated Federal entity. Government;
era) entity an internal audit unit. The head "(3) The provisions of subsection (d) of8
( ) a summary of each significant audit
of the designated Federal entity shalt trans-
section 8C (other than the provisions of sub report to the internal audit unit established in report completed before the commencement
paragraphs (A), (B's (C). and 1E) of subsec-
such entity the offices. units, or other corn- of the reporting period and identified under
tion (dal)) shall apply to the internal au paragraph (7)(13). together with an explana-
ponents. and the functions, powers, or audit
unit director of the Board of Governors of
duties thereof, that such head determines the Federal Reserve System and the Chair- tion of the reason the audit determination
are properly related to the functions of the man of the Board of Governors of the Fed- was not made during the period described in
Internal audit unit and would. if so trans- eral Reserve System in the same manner as sueh paragraph:
ferred, further the purposes of this section. such provisions apply to the inspector Gen- ' (9) a description of. and an explanation
of the reasons for. any significant ret-iced
There shall not be transferred to an in eral of the Department of the Treasury and
nal audit unit any program operating re-
sponsibilities. the Secretary of the Treasury, respectively- audit determinations made during the re-
"(h) Within one year after the date of en- porting period: and
"(c) The internal audit unit director shall -(10) information concerning any signifi-
actment of this. section. and on October 31
be appointed by the head of the designated cant audit determination with which the In-
of each calendar year thereafter. the head
Federal entity in accordance with the aPPli- spector General is in disagreement.s,
d
of each Federal entity which is not a desig-
cable laws and regulations governing ap- (b) Section 5(13) of such Act is amended by
pointmen nated Federal entity shall prepare and
ts within the designated Federal inserting "(I)" after "containing" and by in-
entity, transmit to the Director of the Office of serting before the period a comma and '?121
-(d) Each internal audit unit director Management and Budget a report which?
a list of each audit report made by the es-
-(1) states whether there has been estab-
shall report to and be under the general su- tablishment's Office of Inspector General
pervision of the head of the designated Fed- lished in the Federal entity an internal which was not resolved within one year
eral entity, but shall not report to, or be audit unit that meets the requirements of
after the date on which an audit determina-
subject to supervision by. any other officer this section:
tion was made on such report. (3) an expla-
or employee of such designated Federal "(2) specifies the actions taken by the
entity. The head of the designated Federal Federal entity to ensure that audits are con-
nation of the reason such audit was not re-
solved. and (4) for each such audit report,
entity shall not prevent or prohibit the in- ducted of its programs and operations in ac-
the amount of disallowed costs that are
ternal audit unit director from initiating. cordance with the standard.s for audit of
under administrative or judicia.) appeal and
carrying out, or completing any audit or in- governmental organizations, programs, ac-
vestigation, or from issuing any subpena tivities, and functions issued by the Comp-
the amount of any disallowed costs returned
during the course of any audit or investiga- troller Genera) of the United States, includ-
to. or offset by. the Government".
tion.(c) Section Ste) of such Act is amended
ing a list of each audit report completed by
"(e) If an internal audit unit director is re- a Federal or non-Federal auditor during the adding at the end thereof the following net;
moved from office or is transferred to an- reporting period: and sentence: "The head of each establishment
other position or location within a designat- "(3) summarizes any matters relating to shall also make copies of the report of such
ed Federal entity, the head of the designat- the personnel, programs, and operations of head required under subsection (b) available
ed Federal entity shall promptly cornmuni- the Federal entity referred to prosecutive to the public upon request and at a reasons-
cat?e the reasons for any such removal or authorities, including a summary descrip- ble cost.".
transfer to both Houses of Congress. Lion of any preliminary investigation con- (di Section 5 of such Act is further
"(f)(1) The Chief Postal Inspector of the ducted by or at the request of the Federal amended by adding at the end thereof the
United States Postal Service shall be the in- entity concerning these matters, and the following new subsection:
ternal audit unit director of the United prosecutions and convictions which have re- "(1) As used in this section?
States Postal Service, and for purposes of suited.". "(1) the term 'ineligible cost' means an in-
this section shall report to, and be under (b) Section 410(b) of title 39, United curred cost that is questioned by the Office ?
the general supervision of. the Postmaster States Code, is amended? of Inspector General because of an alleged
General. The Chief Postal Inspector may be (1) by striking out "and" at the end of violation of a provision of a law, regulation,
removed from office or transferred to an- paragraph (6): contract, grant, cooperative agreement, or
Other position or location within the United (2) by striking out the period at the end of other agreement or document governing the
States Postal Service if the Postmaster Gen- paragraph (7) and inserting in lieu thereof a expenditure of funds:
eral issues a written order stating the semicolon; "(2) the term 'unsupported cost means an
reason for such action and two-thirds of the (3) by striking out "The" in paragraph (8) incurred cost that is questioned by the
Governors of the United States Postal Sen:- and inserting in lieu thereof "the": Office of Inspector General because the
ice vote to ratify such order. If the Chief (4) by striking out the period at the end of Office found that, at the time of the audit,
Postal Inspector is removed or transferred paragraph (8) and inserting in lieu thereof a such cost was not supported by adequate
in accordance with this subsection, the Post- semicolon and "and"; and documentation;
master General shall promptly notify both (5) by adding at the end thereof the fol- "(3) the term 'disallowed cost' means an
Houses of Congress of the reasons for such lowing new paragraph: ineligible cost or unsupported cost that the
removal or transfer. "(9) the provisions of section 8D of the In- management of an establishment has con
"(2) For purposes of paragraph (1), the spector General Act of 1978.". eluded, in an audit determination, should
term 'Governors' has the same meaning as
In section 102(3) of title 39, United States PROVISIONS TO ENSURE UN/FOR/517Y AND not be charged to the Federal Government:
Code. RELIABILITY OF /NSFECTOR GV,../.RAL REPORTS "(4) the term 'audit determination' means
"(g)(1) Sections 4, 5, 6, and 7 of this Act Sec. 6. (a) Section 5(a) of the Inspector the evaluation by the management of an es-
(other than sections 6(a)(7) and 6(a)(8)) General Act of 1978 is amended? tablishment of the findings and recomrnen-
shall be applied to each internal audit unit, (1) by striking out "and" at the end of dations included in an audit report and the
internal audit unit director, designated Fed- paragraph (5); and issuance of a written final decision by man-
eral entity, and head of the designated Fed- (2) by striking out paragraph (6) and in- agement concerning its response, including
era) entity (as such terms are defined in serting in lieu thereof the following: corrective actions concluded to be necessary,
subsection (a)) by substituting? "(6) a list, subdivided according to subject to such findings and recommendations:
"(A) 'internal audit unit director' for 'In- matter, of each audit report completed by -(5) the term 'audit resolution' means the
spector General': the Office during the reporting period, to- completion of all corrective actions that the
"(B) 'designated Federal entity' for 'estab- gether with a summary of the significant re- management of an establishment has con-
lishmentS ports; eluded, in an audit determination, are neces-
"(C) 'internal audit unit' for 'Office': and "(7) a detailed statistical analysis of audit sary with respect to the findings and recom-
'(D) 'head of the designated Federal reports, depicting in tables arranged by mendations included in an audit report; and,
entity' for 'head of the establishment', audit status information concerning? in the event that the management of an es-
"(2) In addition to the other authorities "(A) the number of audit reports in each tablishment concludes no corrective action
specified in this Act, an internal audit unit audit status; is necessary. 'audit resolution* occurs when
O director is authorized to select, appoint, and
employ such officers and employees as may an audit determination was not made within and
be necessary for carrying out the functions, 6 e "(B) the number of such reports for which an audit determination has been reached;
Powers. and duties of the internal audit unit rmpoortsntlis ; of the date of completion of such "(6) the term 'audit status' includes the
following six categories:
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wi4t3iit...131t/INIAL RECORD ? SENATE
"(A) audits for which the audit report was
completed before the commencement of the
reporting period and for which?
"(I) the audit determination was not made
by the end of such period:
"(ii) the audit determination was made
during such period and for Which audit reso-
lution has not oecurred: and
"(iii) the audit determination Was made
during such period and for which audit reso-
tution has occurred: and
-(B) audits for which the audit report was
completed during the reporting period and
for which?
"(i) the audit determination was not made
by the end of such period:
"(ii) the audit determination was made
during such period and for which audi: reso-
lution has not occurred: and
"(in) the audit deterrninat?ion was made
during such period and for which audit reso-
lution has occurred.",
(e) Section 3512(b)(2) of title 31. United
States Code, is amended by adding at the
end thereof the following: "Such standards
shall include (A) a definition of audit resolu-
tion consistent with section 5(1)(5) of the In-
spector General Act of 1978. and (B) a
standard to ensure that an audit determine- .
tion will be made an each audit report
within 6 months after the completion of
such report, in the case of an audit per-
formed by a Federal auditor, and within 6
months after receipt by the executive
agency responsible for the program con-
cerned. in the case of each audit performed
by a non-Federal auditor. No order, circular,
or directive prescribed by the Director of
the Office of Management and Budget shall
include an inconsistent definition or stand-
ard with respect to audit resolution.".
OATH ADMINISTRATION AL'7110RITY
SEC. 7. Section 6(a) of the Inspector Gen-
eral Act of 1978 is amended? -
(1) by redesignating paragraphs (5)
through (8) as paragraphs (6) through (9),
respectively, and
(2) by inserting after paragraph (0 the
following new paragraph:
"(5) to administer to or take from any
person an oath, affirmation, or affidavit,
whenever necessary in the Performance of
the functions assigned by this Act, which
oath, affirmation, or affidavit when admin-
istered or taken by or before an investigator
or such other employee of an Office of In-
spector General designated by the Inspector
General shall have the same force and
effect as if administered or taken by or
before an officer hating a seal:".
APPROPRIATION ACCOUNTS
Sec. 8. Section 1105(5)(25) of title 31,
United States Code, is amended to read as
follows: ?
"(25) a separate appropriation account for
appropriations for each Office of Inspector
General established by the Inspector Gener-
al Act of 1978.".
DISCLOSURE OF TAR RETURNS AND RETURN
INFORMATION
SEC. 9. Section fieeX3) of the Inspector
General Act of 1978 is amended by striking
out "Nothing" in the first sentence and in-
serting in lieu thereof "Except to the extent
provided in section 6103(f) of the Internal
Revenue Code of 1986. nothing".
Mr. GLENN, Mr. President. I move
to reconsider the vote by which the
bill a-as passed.
Mr. BYRD, Mr. President, I move to
lay that motion on the table.
The motion to lay on the table was
agreed to.
The PRESIDING OFFICER. The
majority leader.
Mr. BYRD. Mr. President, I don-
gratulate Mr. Otrign and Mr. Ram for
their management of this measure. I
also want to thank and compliment
the staffs on the inspector general bill.
S. 908. It will improve the Govern-
ment's ability to fight waste, fraud,
and mismanagemen.t, and it will assist
Congress in its oversight duties. Their
_efforts in working out the last few ,
I problems enabled the Senate to corn-
\plete the bill with but one rolleall vote
on passage.
Mr. President.. there will be no more
?-ollcall rotes today.
February Z
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LEGISLATIVE HISTORY OF S. 908,
Inspector General Act Amendments of 1987
--Introduced on April 3, 1987 by Senator Glenn
--Public hearings held by Senate Comittee on Governmental Affairs
April 9, 1987 and May 12, 1987
--Report filed by Senate Committee on Governmental Affairs August 7, 1987
--Passed by the Senate on February 2, 1988 by a vote of 85-0
0
0
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Union Calendar No. 277
ORept. No. 100-433
100th Congress, 1st Session
S. Rept. No. 100-216
Report of the Congressional Committees Investigating the
Iran-Contra Affair
With
Supplemental, Minority, and Additional Views