ORGANIZING FOR NATIONAL SECURITY THE PRIVATE CITIZEN AND THE NATIONAL SERVICE STUDY SUBMITTED TO THE COMMITTEE ON GOVERNMENT OPERATIONS UNITED STATES SENATE ON THE SUBCOMMITEE ON NATIONAL POLICY MACHINERY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP65B00383R000200050016-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 14
• Document Creation Date: December 15, 2016
• Document Release Date: October 14, 2003
• Sequence Number: 16
• Publication Date: March 13, 1961
• Content Type: STUDY

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87th Congress t
1st Session f
MON MAR 13 1961 IAM
ORGANIZING FOR NATIONAL SECURITY
THE PRIVATE CITIZEN AND THE
NATIONAL SERVICE
STUDY
SUBMITTED TO THE
COMMITTEE ON GOVERNMENT OPERATIONS
UNITED STATES SENATE
BY ITS
SUBCOMMITTEE ON NATIONAL POLICY MACHINERY
(PURSUANT TO S. RES. 20, 87TH CONGRESS)
U.S. GOVERNMENT PRINTING OFFICE
66571 WASHINGTON : 1961
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COMMITTEE ON GOVERNMENT OPERATIONS
JOI1N L. McCLELLAN, Arkansas, Chairman
HENRY M. JACKSON, Washington KARL E. MUNDT, South Dakota
SAM J. ERVIN, JR., North Carolina CARL T. CURTIS, Nebraska
IIUBERT If. IHUMPHREY, Minnesota JACOB K. JAVITS, New York
ERNEST GRUENING, Alaska
EDMUND S. MUSKIE, Mains
WALTER L. REYNOLDS, Chief Clerk and Staff Director
SUBCOMMITTEE ON NATIONAL POLICY MACHINERY
HENRY M. JACKSON, Washington, Chairman
IIUBERT H. IIUMPHREY, Minnesota KARL E. MUNDT, South Dakota
EDMUND S. MUSKIE, Maine JACOB K. JAVITS, New York
J. K. MANSFIELD, Staff Director
ROBERT W. TUFTS, -Chief Consultant
BAYLESS MANNIND, Special Consultant
RICHARD E. NEZISTADT, Special Consultant
DOROTHY FooDlcl, Professional Staff Member
BREWSTER C. DENNY, Professional Staff Member
HOWARD E. UAIMERUD, Professional Staff Member
RODERICK P. KREGER, Minority Counsel
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Throughout our history we have been well served by distinguished
private citizens who have answered the call to national duty.
Elihu Root, Henry Stimson, and James Forrestal served on active
duty in peace and war. The contributions of the Lovetts, the
Achesons, and the McCloys have been no less great.
Today's inheritors of this great tradition of public service bear
solemn responsibilities. So much depends on so few. Theirs is the
main burden of leadership in providing for the common defense and
advancing the cause of individual liberty. They must spark and bestir
the Nation to do its best.
From the outset of its nonpartisan inquiry into the effectiveness of
our governmental processes for developing and executing foreign and
defense policy, the Subcommittee on National Policy Machinery has
given close attention to the problems faced by private citizens called
upon to undertake tours of duty in key national security posts. It
has taken extensive public testimony on this matter.
In time of hot war, we sweep aside impediments to national service.
We are now in a cold war whose outcome will be as final for the Nation
as a shooting war. This struggle makes our Government's require-
ments for executive talent virtually open ended. We need excellence
wherever it can be found, whether inside the Government or outside
the Government.
Yet, today, we often make it unnecessarily hard for private citizens
to undertake Government assignments.
This, the fourth in a series of staff reports being issued by the
subcommittee, suggests ways and means of reducing barriers which
stand in the way of private citizens called to national duty.
HENRY M. JACKSON,
Chairman, Subcommittee on National Policy Machinery.
FEBRUARY 28, 1961.
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CONTENTS
Pace
Foreword---------------------------------------------------------
The problem------------------------------------------------------
2
The conflict-of-interest laws----------------------------------------
The problem of stock divestment------------------------------------
5
The dual compensation statutes-------------------------------------
5
The official in midcareer--------------------------------------------
6
The machinery of recruitment---------------------------------------
7
Turnover---------------------------------------------------------
8
The public vocation------------------------------------------------
8
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ORGANIZING FOR NATIONAL SECURITY
THE PRIVATE CITIZEN AND THE NATIONAL SERVICE
A government's ultimate resource is the people who work for. it.
The excellence of our foreign and defense policies depends upon the
excellence of the millions of people serving our Government in the
area of national security.
Those manning the posts of national security leadership bear the
heaviest responsibility for the safety of our Nation and the future of
freedom. The officials concerned are those in the top positions of
the Departments of State and Defense and in key national security
jobs in other agencies and offices.
Many of these posts are occupied by officials drawn from the'
career services. A larger number, however, are filled by citizens
temporarily in Government service, who come from and return to
private life---the business world, labor organizations, the professions,
and university and research centers.
A President, in making these key appointments, should of course
avail himself of the immense reservoir of skills found inside the
Government. People of great ability will not be attracted to per-
manent Government careers if they are barred from posts of high
responsibility.'
Yet the private citizen in the national service will always play a
critical role in our American system.
He is personally chosen by the President himself or his Cabinet
chiefs. He is a trusted lieutenant in making the Presidential will
effective through the vast and sprawling reaches of the executive
branch.
He may bring to his job some special combination of skill and
experience. He may have unique abilities in space science, atomic
energy, economic policy, or the like.
He has fresh and different perspectives, and the ability to ask
"Why?" He is not beholden to formulas of the past.
He can build public confidence in an administration's policies.
Appointments made with due regard to various regions and groups
symbolize the fact that the President speaks and acts for all the
people. A President seeking broad-based support for his foreign
and defense policies can strengthen his hand if he invites members of
the opposition party to join his administration.
The problem is this: How to make the quality of appointments of
private citizens to national service keep pace with, the spiraling
complexity and difficulty of foreign policy and defense problems.
I Much should be done to make the career services a bettor source of candidates for top appointive posts
in the national security area. See an earlier subcommittee staff report: "The Secretary of State and the
National Security Policy Process" (January 1061).
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Administrations of both parties have encountered formidable
difficulties in persuading outstanding citizens to come to Washington?
and in keeping them there. Both the turndown and turnover rates
have been unsatisfactorily high.
The causes of the problem are many. Some are deeply rooted
in the traditions of our society. Others include the adverse and
unintended side effects of laws and rules aimed at desirable objectives.
One such example is the body of conflict of interest restraints, objectives.
to protect the Government against the use of public office for private
gain.
THE CONFLICT-OF-INTEREST LAWS
The conflict-of-interest laws, as now written, place needless obstacles
in the path of citizens asked to accept Government posts.
Persons of outstanding ability, because of these laws, have found
itnecessary to turn down Government jobs. A much larger number
ha vt discouraged employment overtures from the Government because
of fears of conflict-of-interest problems.
Probity cannot be legislated. Yet effective laws and regulations
will always be needed to keep officials from placing themselves in
compromising positions, and to deter, and if necessary penalize, the
rare person who may be tempted to use his official power for private
advantage.
The conflict-of-interest laws are intended to serve this purpose.
Enacted over the course of a century, seven such statutes are now
on the books. One prohibits a Federal officer fiolu acting for the
Government in business transactions in which lie has a personal
economic interest. Five prohibit Government employees from work-
ing for outsiders in their relations with the Government; of these, two
apply after employees leave the Government. The last of the statutes
bars private compensation for Government work.
These laws are disjointed, overlapping, ambiguous, and improperly
focused. They are anachronistic--addressed in many respects more
to the problems of the 1860's than the 1960's.
Literal compliance with the statutes would in some cases lead to
absurdities, so they are often tacitly ignored or else circumvented
through casuistry.
To criticize the present laws is not to minimize the problem with
which they deal. It is real and serious. The conduct of Government
officials must meet the test of unimpeachable integrity.
But the existing statutes sorely need amendment, consolidation,
updating, and strengthening. Patchwork is not enough; the job
should be tackled as a whole.
Both the Congress and the bar have sponsored searchin studies
of this matter. More recently the administration appointed a com-
mission to make recommendations to the President on the problem
of ethics in government, with particular reference to conflict of
interest questions.
The administration should promptly submit to the Congress a
comprehensive legislative program for modernizing this body of law.
The task merits doing during this session of the Congress.
The part-time consultant
The past generation has witnessed a radical increase in the Govern-
ment's use of part-time consultants in the area of national security
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ORGANIZING FOR NATIONAL SE VI
and other fields. Any overhaul of the conflict-of-interest statutes
should give close attention to the intermittent employee.
Consultants often work for the Government only a day or two a
month.. Yet as members of top advisory groups, trouble shooters on
spot assignments, and experts with unique skills and experience, they
lire very important in shaping our foreign and defense policies.
Existing statutes now in force make it extremely difficult for the
Government to secure the services of certain types of consultants. If
these laws were strictly construed, and if more persons were aware of
them, their deterrent effect would be greater still.
The heart of the difficulty lies in the failure of present-day law to
recognize the special problems of the occasional consultant.
Take, for example, the statutes prohibiting outside compensation
of Government employees. A consultant working for the Government
a week 'or two a year can scarcely sever his economic ties with his
regular business or profession. This being so, the legal restrictions
against outside compensation are either ignored in practice or else
bypassed through erratic and improvised exemptions.
Or take the statutes barring certain activities of Federal employees
after they have left the Government. When does the postemployment
period begin for a standby consultant who may advise the Govern-
ment four or five times a year? More important, why should he
accept a consultancy if he thereby runs the risk of disruptions in his
regular business?
To be sure, consultancies can in certain conditions be abused by
those who would pursue private gain or seek to exert covert and
wrongful influence on Government policies. The law and adminis-
trative regulations should effectively guard against such abuses.
Indeed, we-require more precise and sophisticated safeguards than
exist presently.
But the statutes should be refined to deal with the real. danger.
The intermittent consultant should not be arbitrarily and indis-
criminately swept under a network of outdated general restraints
serving only to deny the Government the expert assistance it needs in
modern conditions.
The trials of the lawyer
An updating of the conflict-of-interest statutes should also take
account of the special problem of the Government in persuading
lawyers to accept Government posts.
The law has been an unusually rich source of top-level national
security officials. Yet today's outmoded statutes make it peculiarly
4lifficult to recruit members of the bar.
Five of the general conflict-of-interest statutes aim at preventing
Government employees from acting on behalf of other persons in their
business relations with the Government. Since it is largely the legal
profession that acts in this representative capacity, the impact of these
laws falls mainly on lawyers.
The lawyer's problem is compounded by the fact that a law firm
must practice in the form of a partnership. A lawyer remaining in a
partnership after accepting a Government post is subject to the con-
flict-of-interest laws both because of what he may do and also what his
partners may do. Thus the partners cannot engage in activities
denied the lawyer without subjecting him, and possibly even the
partnership as a whole, to the consequences of unlawful behavior.
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A lawyer accepting a full-time Government job can meet this
'
problem by resigning from his firm, and in virtually all cases, this is
what he should do.
In addition to this disruption in his profession, the lawyer, and his
future partners as well are faced with sweeping statutory disquali-
fications for 2 years following his tour of duty and return to private
practice. Restraints are needed to keep the lawyer from switching
sides on matters on which he worked while in Government service.
Yet existing restraints, while not going far enough in some cases, go
too far in others. The present-day statutes badly need reworking,
primarily to lend specificity and clarity to the scope of the lawyers'
postemployment disqualifications. As the laws now stand, they limit
the Government's range of selection in recruiting lawyers for full-time
positions.
The deterrent effect of the statutes, however, is far greater in the
case of lawyers asked to serve the Government on a. part-time basis.
here the conflict-of-interest statutes have often proved an absolute
bar.
The law}per-adviser perhaps works for the Government no more
than a week or two a year, and lie obviously cannot be expected to
resign from his private practice. But the conflict of interest conse-
quences for him, and for his partners also, are now the same as if he
worked for the, Government full time. Little wonder in these cir-
cumstances that lawyers by the score are forced to decline consult-
ancies.
A recent case illustrates the absurdities that can result: A practicing
lawyer who is also an amateur art authorit - regretfully declined an
appointment as an unpaid adviser to the Federal Commission of Fine
Arts. Acceptance would arguably have required either his resignation
from his law firm or withdrawal of the firm from antitrust cases, tax
problems, and all other legal work involving the Federal Government-
This kind of episode can be serious when it occurs in the area of
national security, as it does many times. Lawyers, particularly those
whose backgrounds include earlier full-time Government experience,
can render signal help as consultants. Yet the conflict statutes in
many cases deny the Government their services.
The urgent need is for clearly defined legislative provisions which
will enable the partners of an intermittent consultant, and the con-
sultant himself, to engage in activities unrelated to his consult.antship
without the danger of running afoul of the conflict statutes.
Retirement plans
Can a private citizen serving a tour of duty in the Governnment
legally continue to participate in retirement and group insurance
plans of his regular employer? The answer is now in doubt. A strict
reading of the conflict-of-interest statutes may invite the conclusion
that continued participation in such plans represents a form of outside
compensation forbidden under the law. If so interpreted, the law
virtually forecloses the possibility of accepting appointment to
Government office, since few can afford to lose their equity in such
programs.
It should be made clear that citizens accepting Government
assignments can continue to participate in the retirement, group
insurance, and similar plans of their former employers.
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ORGANIZING FOR NATIONAL SECURITY 5
In recent years the Senate Armed Services Committee has required
candidates for high Pentagon posts to divest themselves of stocks
whose retention the committee believed to be inconsistent with the
proper discharge of the nominee's official duties. The stocks owned,
for the most part, have been those of defense contractors or companies
working in fields related. to defense.
The committee now has no good. yardsticks for determining what
conditions to impose upon the appointee. The portfolio of each
nominee tends to be considered as an individual case. Appointees,
although they may be forced to sell stock, are permitted to obtain or
acquire other types of securities or real estate holdings.
As a deterrent to Government service, the stock divestment re-
quirements fall heavily upon two groups: Corporate officers with
holdings in their own company, and officials who are owner-managers
of closely held family corporations. To the first group, compulsory
divestment may bring heavy economic loss. To the second, it may
also mean the abandonment of a particular business career, not only
for him but his children.
There are two problems: (1) How to formulate better guidelines
for the executive branch, the Senate, and. nominees in cases involving
potential conflicts of interest, toward the end of predictability and
uniform treatment; and (2) how to handle the divestment problem
without imposing Draconian penalties upon nominees while at the
same time guarding the public against favoritism in official decisions.
The members of the Senate Armed Services Committee are them-
selves deeply concerned with finding better ways of dealing with
stock divestment problems. A special subcommittee is currently
studying the matter.
THE DUAL COMPENSATION STATUTES
The so-called dual compensation statutes offer another illustration
of a body of law adopted for one objective in the past but serving
today to hamper the Government in recruiting top national security
talent.
In broad, the law now says that retired Regular officers can. serve
the Government as full-time civilian officials only in Senate confirma-
tion posts, or if they are retired for physical disability. Further, this
limited group of retired officers who are allowed to accept civilian
jobs must in most instances waive their retirement pay, waive their
civilian pay, or else accept a limitation of $10,000 on their combined
annual income.
These statutes purport to keep a retired officer from drawing two
Government salaries. But actually, the two Government checks
involved are very different. One is a salary check. The other is for
retirement benefits earned over a 20- or 30-year career in the Armed
Forces.
The laws not only discriminate against retired officers; they dis-
criminate between them. They fall far more, heavily upon retired
Regular officers than upon retired Reserve officers.
There are retired Regular military officers, still at the height of their
professional powers and possessing valuable skills, who could make
major contributions in civilian national security posts. But the
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C? ORGANIZING FOR NATIONAL SECURITY
so-called dual compensation laws now deny the Government their
services in most cases, or else permit them to work only under con-
ditions which can be regarded as inequitable and unfair.
Mr. Roger Jones, the former Chairman of the Civil Service Com-
mission, put it this way to the subcommittee:
Why * * * should we deny ourselves of their services and
deny them another career * * * when they still have 20
years of useful life ahead of them? I think it snakes no
sense at all.
Retired Regular officers frequently accept. jobs in private employ-
ment little different from those they might have had in a Govern-
ment civilian post--usually at a greater ultimate cost to the Govern-
ment, for the Government is the customer of the outside employer.
It is sometimes argued that relaxation of the ostrotirentent em-
ployment ban would result in too many officers being appointed to
jobs now held by civilians, particularly in the Department of Defense.
Ways can and should be found to prevent abuses and discrimination
against civilians in job appointments.
An enormous Government investment has been poured into the
training and experience of an outstanding retired military officer.
In the present state of national need, this investment cannot be per-
mitted to be thrown away.
The dual compensation laws should be reviewed and aanended.
One possibility meriting careful study, for example, is that of suspend-
ing retirement payments during periods of civilian service but pro-
viding for later compensatory credits.
The person in midcareer is in many ways the private citizen whose
services the Government needs the most. He may be in his late
thirities or forties. He is at the very height of his vigor and powers.
Ile is bold and innovative.
Yet the midcareer official, so much needed by the Government, is
also generally the hardest to get. The relative sacrifices required of
hits in accepting a Government post may be of a different order of
magnitude from those demanded of a successful executive nearing re-
tirement acre.
He and is family are probably living up to, or beyond, their in-
come. There are mortgages to repay, heavy insurance bills falling
due, and children approaching college age. He is probably only part
way up the promotion ladder in his own profession. Ile may be on
the very threshold of much greater responsibility and income. But
competition for advancement is keen.
Ile may be at the point where he can least afford additional ex-
penses or a reduction of income. He. may also be at the make or
break stage in his profession. The prospect of leaving his regular em-
~tloyer at this juncture, and losing money in the process, is often for
hunt simply out of the question.
Mr. Marion Folsom, of the Eastman Kodak Co., put it this way in
telling the subcommittee why younger business executives are re-
luctant to accept Government assignments:
What I found as the principal reason * * * was the fear
on the part of the younger executive that, regardless of
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ORGANIZING FOR NATIONAL SECURITY
promises by the company, he would find upon his return that
he might have lost an opportunity for advancement. While
I would contend that the executive should benefit from the
experience and thus might be able to advance faster, my argu-
ments were not generally convincing.
Actually, there is considerable evidence that the job a middle-
ranking executive takes when he leaves the Government is often con-
siderably better than the one he had before entering it. The problem
of losing out in his regular employment, however, cannot be lightly
dismissed. Especially in the case of a single proprietorship, a private
professional practice,. or a small company, it is extremely difficult to
argue persuasively for an extended tour of duty in Washington.
Any improvement of this situation depends primarily upon em-
ployers-not the Government. They-whether universities, business
enterprises, labor organizations, or professional firms-must come to
realize that they will periodically be called upon to contribute to the
Nation's security by releasing some of their best personnel for na-
tional service, and welcoming them back. And the case can rest upon
more than patriotism. In many cases, the employer profits from the
new skills and perspectives acquired through Government work.
For the person in midcareer, the problem may be a simple matter
of cash. Relatively small amounts of money may be decisive in re-
solving the issue for or against Government service.
Mr. Roger Jones told the subcommittee that $20 million annually,
prudently applied to adjustments in the top salary grades, would make
it dramatically easier for the Government to enlist the help of private
citizens, and to retain outstanding career officials in its service.
Another practical step, costing extremely little, would be to defray
more of the out-of-pocket expenses normally incurred by those ac-
cepting Government assignments of limited duration. These consist
of moving bills, and the like. Unlike private employers, the Govern-
ment does not pay for legitimate expenses so incurred. It should.
The administrative problem of preventing abuses is certainly not
insuperable.
The recruiting of citizens for top national security posts has nor-
mally proceeded in a way too casual to be satisfactory. Lists of
prospective nominees are often haphazardly compiled; the element of
chance--the accidental phone call, the unexpected encounter-heavily
colors the selection process; agencies engage in competitive bidding for
talent; forward planning is rare.
Some caution is necessary, however, in prescribing remedies. Every
administration ought to follow its own style in seeking key officials.
So, too, recruiting techniques well suited for one agency may not work
in another. A goodly measure of informality and flexibility in finding
candidates for key positions is desirable.
This is why proposals to establish a central White House recruiting
office, together with elaborate registers of available executive and
professional talent, must be viewed with some skepticism.. It is
highly probable that such an office, though it started small, would
grow, and, that procedures for priorities, and clearances adopted in
the name of efficiency would in time become encumbrances.
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8 ORGANIZING FOR NATIONAL SECURITY And how useful, moreover, would such an executive. pool really be?
Few private citizens of top caliber seek temporary Government. ap-
pointments in the abstract: They respond to the concrete challenge
of a specific job. If the right person asks them at the right time to
take the right job, they accept. A clay before, they wound probably
have ignored a form letter asking: "Are you available for Government
service?"
The recruiting process for top national security officials should
never be bureaucratized.
Few businesses could avoid bankruptcy if the turnover rate of their
ranking officers compared with that of the executive branch.
This problem, which has long plagued administrations of both
parties, is of special, concern in the area of national security. Foreign
policy and defense problems are very different from those encountered
in a private business or profession. The technical content of jobs is
often high. An official needs correspondingly long periods of ap-
prenticeship to achieve journeyman status.
Mr. Robert Lovett, told the subcommittee of the problem of the
Department of Defense:
It takes a long time for an able man, without previous
military service of some importance and experience in gov-
crnnient, to catch up with his job in this increasingly complex
Department. At a guess, I would say he could pay good
dividends to the Government. in about 2 years. Mcn.n-
while, of course, he is becoming a more valuable asset each
day. To lose him before, or just as lie becomes productive
is manifestly a serious waste of the effort that went into his
training.
Last year, on the initiative of this subcommittee, the Senate unan-
imously adopted a resolution expressing its concern with the turn-
over problem.'
Nothing can be done to stop an official from resigning if lie so
decides. But it is highly desirable that candidates for national
security posts give advance assurances that, they intend to serve at the
pleasure of the President and their department chiefs.
It is urgent that we remove unnecessary legal and administrative
roadblocks to national service. This study has suggested certain
steps which can be taken toward that end.
Obviously there are other substantial deterrents to the acceptance
of Government posts. The most apparent of these is the dispropor-
tionately low level of Government executive salary scales as compared
with those which can be commanded by able people in private life.
Yet other deterrents lie deeply embedded in the values of our
American society.
Public service is still held in low repute in some quarter3. It is
deemed by some, however wrongly, a haven for the lazy or incom-
2 Bee S. Res. 338, BGtb Cong., 2d sess., and accompanying report entitled "Resolution Expressing Concern
of Senate over Turnover in Administrative and Polleymaking Posts."
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ORGANIZING FOR NATIONAL SECURITY 9
potent, those unwilling or unable to withstand the competitive rigors
of private life.
Many citizens find the prospect of Government service uncongenial
for different reasons. The high public official works under the klieg
lights of the Congress and the press. And the Government's sheer
size, its built-in checks and balances, and the plain complexity of the
problems it faces, guarantees that the frustration quotient of public
service will be inevitably high.
It is quixotic to imagine that the frustrations peculiarly associated
with Government service can ever be eliminated. But they can be
reduced and made more tolerable.
Men rise to challenge, to leadership, and to responsibility. When
great movements are stirring and there are battles to be won, when
there is vigor and a sense of going somewhere at the top, when men are
given a job to do, the authority they need, and are held personally
accountable for results-then Government service becomes a privilege
sought, not a chore avoided.
0
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 CENTRAL INTELLIGENCE AGENCY
OFFICIAL ROUTING SLIP
25X1
PREPARE
RECOMM
RETURN
I showed this to and
he suggested you prepare a. thank you note
for DCI's signature and return it with the
attached today.
60050016-0
FORM Replaces Form 30-4
I AR 55 237 which may be used.
(40)
U. S. GOVERNMENT PRINTING OFFICE: 1955-O -342531