ESTABLISHMENT OF OFFICES OF INSPECTOR GENERAL.

SEC. 102. ESTABLISHMENT OF OFFICES OF INSPECTOR GENERAL. (a) Purpose.— Section 2(1) of the Inspector General Act of 1978 (Public Law 95–452; 5 U.S.C. App. 3) 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) Technical Amendment.— The last clause of section 2 is amended by striking out “thereby” and inserting in lieu thereof “there”. (c) Addition of Departments of Energy, Health and Human Services, Justice and Treasury, Federal Emergency Management Agency, Nuclear Regulatory Commission, Office of Personnel Management, and Railroad Retirement Board to List of Covered Establishments.— Section 11 of such Act is amended by striking out paragraphs (1) and (2) and inserting in lieu thereof the following: “(1) the term ‘head of the establishment’ means the Secretary of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Housing and Urban Development, the Interior, Labor, State, Transportation, or the Treasury; the Attorney General; the Administrator of the Agency for International Development, Environmental Protection, General Services, National Aeronautics and Space, Small Business, or Veterans’ Affairs; the Director of the Federal Emergency Management Agency, the Office of Personnel Management or the United States Information Agency; the Chairman of the Nuclear Regulatory Commission or the Railroad Retirement Board; as the case may be; “(2) the term ‘establishment’ means the Department of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Housing and Urban Development, the interior, Justice, Labor, State, Transportation, or the Treasury; the Agency for International Development, the Environmental Protection Agency, the Federal Emergency Management 102 STAT. 2516Agency, the General Services Administration, the National Aeronautics and Space Administration, the Nuclear Regulatory Commission, the Office of Personnel Management, the Railroad Retirement Board, the Small Business Administration, the United States Information Agency, or the Veterans’ Administration; as the case may be;”. (d) Transfers of Existing Audit and Investigation Units.— Section 9(a)(1) of such Act is amended— (1) by striking out subparagraph (I), relating to the Community Services Administration; (2) by redesignating subparagraphs (E) and (F) as subparagraphs (G) and (H), respectively; (3) by redesignating subparagraphs (G) and (H) as subparagraphs (J) and (K), respectively; (4) by redesignating subparagraph (J) as subparagraph (M); (5) by redesignating subparagraphs (K) and (L) as subparagraphs (O) and (P), respectively; (6) by redesignating subparagraphs (M) and (N) as subparagraphs (T) and (U), respectively; (7) 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 and Human Services, the Office of Inspector General (as established by title II of Public Law 94–505);”; (8) by inserting after subparagraph (H) (as redesignated by paragraph (2) of this subsection) the following new subparagraph: “(I) of the Department of Justice, the offices of that Department referred to as (i) the ‘Audit Staff, Justice Management Division’, (ii) the ‘Policy and Procedures Branch, Office of the Comptroller, Immigration and Naturalization Service’, the ‘Office of Professional Responsibility, Immigration and Naturalization Service’, and the ‘Office of Program Inspections, Immigration and naturalization Service’, (iii) the ‘Office of Internal Inspection, United States Marshals Service’, (iv) the ‘Financial Audit Section, Office of Financial Management, Bureau of Prisons’ and the ‘Office of Inspections, Bureau of Prisons’, and (v) from the Drug Enforcement Administration, that portion of the ‘Office of Inspections’ which is engaged in internal audit activities, and that portion of the ‘Office of Planning and Evaluation’ which is engaged in program review activities;”; (9) by inserting after subparagraph (K) (as redesignated by paragraph (3) of this subsection) the following new subparagraph: “(L) of the Department of the Treasury, the office of that department referred to as the ‘Office of Inspector General’, and, notwithstanding any other provision of law, that portion of each of the offices of that department referred to as the ‘Office of Internal Affairs, Bureau of Alcohol, Tobacco, and Firearms’, the ‘Office of Internal Affairs, United States Customs Service’, and the ‘Office of Inspections, United 102 STAT. 2517States Secret Service’ which is engaged in internal audit activities;”; (10) by inserting after subparagraph (M) (as redesignated by paragraph (4) of this subsection) the following new subparagraph: “(N) of the Federal Emergency Management Agency, the office of that agency referred to as the ‘Office of Inspector General’;”; and (11) by inserting after subparagraph (P) (as redesignated by paragraph (5) of this subsection) the following new subparagraphs: “(Q) of the Nuclear Regulatory Commission, the office of that commission referred to as the ‘Office of Inspector and Auditor’; “(R) of the Office of Personnel Management, the offices of that agency referred to as the ‘Office of Inspector General’, the ‘Insurance Audits Division, Retirement and Insurance Group’, and the ‘Analysis and Evaluation Division, Administration Group’; “(S) of the Railroad Retirement Board, the Office of Inspector General (as established by section 23 of the Rail-road Retirement Act of 1974);”. (e) Technical and Conforming Amendments.— (1) (A) Section 208 of the Department of Energy Organization Act is repealed. (B) The table of contents in the first section of such Act is amended by striking out the item relating to section 208. (2) Title II of Public Law 94–505 is repealed. (3) Section 23 of the Railroad Retirement Act of 1974 is repealed. (4) 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 Services, or the Railroad Retirement Board, shall continue to serve in such position until such individual dies, resigns, or is removed from office in accordance with section 3(b) of the Inspector General Act of 1978. (f) Special Provisions With Respect to the Inspectors General of the Nuclear Regulatory Commission, the Department of the Treasury, and the Department of Justice.— The Inspector General Act of 1978 is amended by inserting after section 8A the following new sections: “special provisions concerning the nuclear regulatory commission “Sec. 8B. (a) The Chairman of the Commission may delegate the authority specified in the second sentence of section 3(a) to another member of the Nuclear Regulatory Commission, but shall not delegate such authority to any other officer or employee of the Commission. “(b) Notwithstanding sections 6(a) (7) and (8), the Inspector General of the Nuclear Regulatory Commission is authorized to select, appoint, and employ such officers and employees as may be necessary for carrying out the functions, powers and duties of the Office of Inspector General and to obtain the temporary or intermittent services of experts or consultants or an organization thereof, subject 102 STAT. 2518to the applicable laws and regulations that govern such selections, appointments and employment, and the obtaining of such services, within the Nuclear Regulatory Commission. “special provisions concerning the department of the treasury “Sec. 8C. (a) (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 the Treasury with respect to audits or investigations, or the issuance of subpenas, which require access to sensitive information concerning— “(A) ongoing criminal investigations or proceedings; “(B) undercover operations; “(C) the identity of confidential sources, including protected witnesses; “(D) deliberations and decisions on policy matters, including documented information used 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; or “(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 protection by section 3056 of title 18, United States Code, section 202 of title 3, United States Code, or any provision of the Presidential Protection Assistance Act of 1976 (18 U.S.C. 3056 note; Public Law 94–524). “(2) With respect to the information described under paragraph (1), the Secretary of the Treasury may prohibit the Inspector General from 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 subpena, if the Secretary determines that such prohibition is necessary to prevent the disclosure of any information described under paragraph (1) or to prevent significant impairment to the national interests of the United States. “(3) If the Secretary of the Treasury exercises any power under paragraph (1) or (2), the Secretary of the Treasury shall notify the Inspector General in writing stating the reasons for such exercise. Within 30 days after receipt of any such notice, the Inspector General shall transmit a copy of such notice to the Committees on Governmental Affairs and Finance of the Senate and the Committees on Government Operations and Ways and Means of the House of Representatives, and to other appropriate committees or subcommittees of the Congress. “(b) In carrying out the duties and responsibilities specified in this Act, the Inspector General of the Department of the Treasury shall have oversight responsibility for the 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, and the internal audits and internal investigations performed by the Office of Assistant Commissioner (Inspection) of the Internal Revenue Service. The head of each such office shall promptly report to the Inspector General the significant activities being carried out by such office. 102 STAT. 2519 “(c) Notwithstanding subsection (b), the Inspector General may initiate, conduct and supervise such audits and investigations in the Department of the Treasury (including the bureaus and services referred to in subsection (b)) as the Inspector General considers appropriate. “(d) If the Inspector General initiates an audit or investigation under subsection (c) concerning a bureau or service referred to in subsection (b), the Inspector General may provide the head of the office of such bureau or service referred to in subsection (b) with written notice that the Inspector General has initiated such an audit or investigation. If the Inspector General issues a notice under the preceding sentence, no other audit or investigation shall be initiated into the matter under audit or investigation by the Inspector General and any other audit or investigation of such matter shall cease. “(e) (1) The Inspector General shall have access to returns and return information, as defined in section 6103(b) of the Internal Revenue Code of 1986, only in accordance with the provisions of section 6103 of such Code and this Act. “(2) Access by the Inspector General to returns and return information under section 6103(h)(1) of such Code shall be subject to the following additional requirements: “(A) In order to maintain internal controls over access to returns and return information, the Inspector General, or in the absence of the Inspector General, the Acting Inspector General, the Deputy Inspector General, the Assistant Inspector General for Audits, or the Assistant Inspector General for Investigations, shall provide to the Assistant Commissioner (Inspection) of the Internal Revenue Service written notice of the Inspector General’s intent to access returns and return information. If the Inspector General determines that the Inspection Service of the Internal Revenue Service should not be made aware of a notice of access to returns and return information, such notice shall be provided to the Senior Deputy Commissioner of Internal Revenue. “(B) Such notice shall clearly indicate the specific returns or return information being accessed, contain a certification by the Inspector General, or in the absence of the Inspector General, the Acting Inspector General, the Deputy Inspector General, the Assistant Inspector General for Audits, or the Assistant Inspector General for Investigations, that the returns or return information being accessed are needed for a purpose described under section 6103(h)(1) of the Internal Revenue Code of 1986, and identify those employees of the Office of Inspector General of the Department of the Treasury who may receive such returns or return information. “(C) The Internal Revenue Service shall maintain the same system of standardized records or accountings of all requests from the Inspector General for inspection or disclosure of returns and return information (including the reasons for and dates of such requests), and of returns and return information inspected or disclosed pursuant to such requests, as described under section 6103(p)(3)(A) of the Internal Revenue Code of 1986. Such system of standardized records or accountings shall also be available for examination in the same manner as provided under section 6103(p)(3) of the Internal Revenue Code of 1986. 102 STAT. 2520 “(D) The Inspector General shall be subject to the same safeguards and conditions for receiving returns and return information as are described under section 6103(p)(4) of the Internal Revenue Code of 1986. “(f) An audit or investigation conducted by the Inspector General shall not affect a final decision of the Secretary of the Treasury or his delegate under section 6406 of the Internal Revenue Code of 1986. “(g) Notwithstanding section 4(d), in matters involving chapter 75 of the Internal Revenue Code of 1986, the Inspector General shall report expeditiously to the Attorney General only offenses under section 7214 of such Code, unless the Inspector General obtains the consent of the Commissioner of Internal Revenue to exercise additional reporting authority with respect to such chapter. “(h) Any report required to be transmitted by the Secretary of the Treasury to the appropriate committees or subcommittees of the Congress under section 5(d) shall also be transmitted, within the seven-day period specified under such section, to the Committees on Governmental Affairs and Finance of the Senate and the Committees on Government Operations and Ways and Means of the House of Representatives. “special provisions concerning the department of justice “Sec. 8D. (a) (1) Notwithstanding the last two sentences of section 3(a), the Inspector General shall be under the authority, direction, and control of the Attorney General with respect to audits or investigations, or the issuance of subpenas, which require access to sensitive information concerning— “(A) ongoing civil or criminal investigations or proceedings; “(B) undercover operations; “(C) the identity of confidential sources, including protected witnesses; “(D) intelligence or counterintelligence matters; or “(E) other matters the disclosure of which would constitute a serious threat to national security. “(2) With respect to the information described under paragraph (1), the Attorney General may prohibit the Inspector General from 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 subpena, if the Attorney General determines that such prohibition is necessary to prevent the disclosure of any information described under paragraph (1) or to prevent the significant impairment to the national interests of the United States. “(3) If the Attorney General exercises any power under paragraph (1) or (2), the Attorney General shall notify the Inspector General in writing stating the reasons for such exercise. Within 30 days after receipt of any such notice, the Inspector General shall transmit a copy of such notice to the Committees on Governmental Affairs and Judiciary of the Senate and the Committees on Government Operations and Judiciary of the House of Representatives, and to other appropriate committees or subcommittees of the Congress. “(b) In carrying out the duties and responsibilities specified in this Act, the Inspector General of the Department of Justice— 102 STAT. 2521 “(1) may initiate, conduct and supervise such audits and investigations in the Department of Justice as the Inspector General considers appropriate; “(2) shall give particular regard to the activities of the Counsel, Office of Professional Responsibility of the Department and the audit, internal investigative, and inspection units outside the Office of Inspector General with a view toward avoiding duplication and insuring effective coordination and cooperation; and “(3) shall refer to the Counsel, Office of Professional Responsibility of the Department for investigation, information or allegations relating to the conduct of an officer or employee of the Department of Justice employed in an attorney, criminal investigative, or law enforcement position that is or may be a violation of law, regulation, or order of the Department or any other applicable standard of conduct, except that no such referral shall be made if the officer or employee is employed in the Office of Professional Responsibility of the Department. “(c) Any report required to be transmitted by the Attorney General to the appropriate committees or subcommittees of the Congress under section 5(d) shall also be transmitted, within the seven-day period specified under such section, to the Committees on the Judiciary and Governmental Affairs of the Senate and the Committees on the Judiciary and Government Operations of the House of Representatives.”. (g) Disclosure of Tax Returns and Return Information.— Section 5(e)(3) of the Inspector General Act of 1978 is amended by striking out “Nothing” in the first sentence and inserting in lieu thereof “Except to the extent and in the manner provided under section 6103(f) of the Internal Revenue Code of 1986, nothing”. (h) Transfer of 20 Investigation Positions Within the Department of Justice.— No later than 90 days after the date of appointment of the Inspector General of the Department of Justice, the Inspector General shall designate 20 full-time investigation positions which the Attorney General may transfer from the Office of Inspector General of the Department of Justice to the Office of Professional Responsibility of the Department of Justice for the performance of functions described under section 8D(b)(3) of the Inspector General Act of 1978. Any personnel who are transferred pursuant to this subsection, and who, at the time of being so transferred, are protected from reduction in classification or compensation under section 9(c) of such Act, shall continue to be so protected for 1 year after the date of transfer pursuant to this subsection.