In March 1971 the White House Office of Management and Budget (OMB) finalized a report that would have a lasting effect on the Intelligence Community (IC). Known now by the name of its principal author—James Schlesinger—the report was the first to examine the impact that "technical collection" systems were having on the IC. The Schlesinger Report had an immediate organizational impact, to be sure, but it also caused a sea-change in thinking about ways to manage intelligence.
- James Schlesinger
Technological Innovation in the 1960s
The 1960s saw rapid technological innovation and rising intelligence costs. The use of satellites and computers for intelligence work brought new capabilities and drove organizational changes. By 1969, the incoming Nixon Administration, glimpsing new challenges and opportunities for America in both fields, wondered why the IC seemed so slow to take advantage of these developments.
The Administration authorized a survey of the IC in late 1970, giving the job to James Schlesinger, assistant director of OMB, who worked with Henry Kissinger's National Security Council staff on the project. Their March 1971 report described a Community adapting haphazardly to change.
The Schlesinger Report
As might be expected with a budget official in charge of the survey, the resulting report took a hard look at resources. The Schlesinger Report noted two "disturbing phenomena":
- the cost of intelligence had exploded over the last decade with "spectacular increases in collection activities," but
- the IC had failed to achieve "a commensurate improvement in the scope and overall quantity of intelligence products."
Improved collection technologies—satellite photography, telemetry, and electronic intelligence—had cast doubt on the once-clear lines between "national" and "tactical" intelligence. Uncertain of their missions, the intelligence agencies and armed services had expanded into costly and duplicative ventures while clinging to obsolescent collection systems.
In addition, the vast new quantities of data had outstripped the IC’s ability to analyze them. Analysts were not exploiting the "richness" of the new data. They had shown little initiative in offering explanations for foreign actions, and had demonstrated a "propensity to overlook...unpleasant possibilities."
The expense and impetus of technological developments worsened this problem, making the collectors more influential in their agencies than the analysts, so that collection guided production instead of vice versa. Consumers also tended to treat intelligence as "a free good, so that demand exceeds supply, priorities are not established, the system becomes overloaded, and the quality of the output suffers." The Community's inertia could not be remedied without "a fundamental reform of [its] decision making bodies and procedures."
Report Offers Solutions
The Schlesinger Report presented a range of options, from mild to radical degrees of centralization. The National Security Act of 1947 had granted the Director of Central Intelligence (DCI) authorities to remedy the "defects in central processing, production, and dissemination" that had hampered the government before Pearl Harbor. The Act had not, however, anticipated the need to "plan and rationalize" the collection of intelligence or to evaluate the quality of its product. Someone had to manage all of these fields, both within the Defense Department and across the IC.
The report noted that the required Intelligence Community leader could be anything from a new coordinator in the White House to a full-fledged "Director of National Intelligence" controlling the budgets and personnel of the IC. The report offered a similar range of possibilities for a manager of Defense intelligence functions, declaring, "changes within the Department of Defense alone could improve the allocation and management of resources and reduce the overall size of the intelligence budget."
The Schlesinger Report's more radical options would have required new legislation and were controversial even within the Nixon Administration, but some of its milder remedies were implemented. These resulted in the appointment of a deputy to the DCI for Community Affairs and of an Assistant Secretary of Defense for Intelligence, the merger of the service cryptologic organizations in a Central Security Service under the National Security Agency, and the creation of the Defense Mapping Agency and an Intelligence Community Staff to support the DCI.
James Schlesinger himself became the ninth Director of Central Intelligence in early 1973 and came to the job with a mandate to make these reforms work. Although he served as DCI only a few months before President Nixon nominated him to be Secretary of Defense, the impact of his report lived on. Indeed, every subsequent DCI was expected to oversee the preparation of the IC’s budgets, to establish intelligence requirements and priorities, and to ensure the quality of its products.