DRAFT REPORT TO THE PRESIDENT ON ORGANIZATION AND MANAGEMENT OF THE FOREIGN INTELLIGENCE COMMUNITY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01495R000800050005-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 64
• Document Creation Date: December 12, 2016
• Document Release Date: November 21, 2001
• Sequence Number: 5
• Publication Date: December 16, 1975
• Content Type: REPORT

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DRAFT REPORT TO THE PRESIDENT ON
ORGANIZATION AND MANAGEMENT OF THE
FOREIGN INTELLIGENCE COMMUNITY
-Opeow,~
NSC Declassification/Release Instructions on File
December 16, 1975
I/R-75/S-665
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16 December 1975
MEMORANDUM FOR: Secretary of State
Secretary of Treasury
Secretary of Defense
Attorney General
Director, Central Intelligence
Chairman, Joint Chiefs of Staff
FROM: James T. Lynn
SUBJECT: Options Paper for the President on
Organization and Management of the
Foreign Intelligence Community
Transmitted herewith is the latest draft of the options and
recommendations paper for the President concerning the organization
and management of the foreign intelligence community. I understand
that the text of the options paper has been reviewed by your working
group representative.
The deadline for your comments and recommendations to the
President with respect to the various policy options is Noon, Thurs-
day, December 18. I appreciate the shortness of this deadline, but
it is necessary in order to ensure that the President has the benefit
of your views.
Attachment
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TABLE OF CONTENTS
EXECUTIVE SUMMARY
I. Introduction
II. Current and Future Trends
Future Trends
III. Problems in Intelligence
Page
A. Proper Safeguards Against Future Abuses 10
B. Quality Intelligence on a Timely Basis 12
C. Well-directed Intelligence Activities 17
D. A Need for Change? 22
IV. Actions to Prevent Abuses 24
A. Guidelines for Propriety and 24
Restrictions
B. Oversight 24
C. Intelligence Policy Coordination 27
D. The 40 Committee 29
V. Intelligence Community Organization Options 30
Option #1 Centralized National Intelligence 32
Program
Option #2 Centralized Resource Control 36
Option #2A 40
Option #3 Departmental Emphasis 41
Option #3A 45
Option #4 Modified Current Arrangements 46
Covert Action Location so
VI. Management Improvements 53
A. Budgetary and Financial Controls
B. Compartmentation
C. Consumer Interaction with the
Intelligence Community
D. Performance Evaluation System
E. Cover and Clandestine Collection
53
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ORGANIZATION AND MANAGEMENT OF THE
FOREIGN INTELLIGENCE COMMUNITY
EXECUTIVE SUMMARY
The primary objective of the foreign intelligence community is to
provide quality intelligence on a timely basis to both policy-makers and
operational officials. Any organization and management of the Commun-
ity -- its collectors, processors, and producers -- must be shaped to
accomplish this objective. To assure public confidence and support,
organization and management must be structured to prevent potential
abuses and to make maximum use of limited resources.
Demands from Congress for information on intelligence operations
and substantive intelligence will force the Intelligence Community to operate
in a more public arena. Diffusion of political and economic power, pro-
liferation of nuclear and sophisticated conventional weapons, and growth
in terrorism are creating broader demands for timely integrated analysis.
Ever-increasing demands for high quality intelligence assessments, especially
in crisis situations, will require increased use of advanced technological
systems as well as the more traditional human intelligence sources. Any
restructuring of the organization and management of the Community must
respond to these challenges.
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Executive Branch safeguards are necessary to prevent potential
abuses. Options include: (1) guidelines defining the scope- of permissible
intelligence activity and (2) mechanisms to improve Executive Branch
oversight.
To improve quality and direction in the Intelligence Community,
four major structural options -- three requiring legislative action -- are
examined:
#1: Creation of a new expanded intelligence agency, headed by
a Director of Intelligence, with resource and line control over
the national programs -- the CIA Program (CLAP), Consolidated
Cryptologic Program (CCP), and the National Reconnaissance
Program (NRP). This option is based on the premise that
national programs are best managed if centrally funded and
controlled, and that gains from centralization outweigh disad-
vantages resulting from separation of collectors from their
primary consumers.
#2: Creation of a Director-General for Intelligence (DGI) with
resource control over the CLAP, CCP and NRP, but line control only
over his immediate staff. This option is based on the premise
that a central leader with resource control and without a vested
interest in any one element of the Community is needed. Option #2A
differs from Option #2 by giving the DCI line control over
present CIA production, elements.
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#3: Creation of a Director of Foreign Intelligence (DFI) with
broad coordination powers but neither resource nor line
control over any part of the Intelligence Community. This
option is based on the premise that an intelligence leader,
independent of any organization within the Community, would
be best able to coordinate its activities, and that the Defense
Department requires a major voice in resource and line
control of intelligence assets. Option #3A differs from Option #3
by decentralizing intelligence production responsibilities through
transfer of present CIA production elements to the relevant
departments.
#4: Retention of current Community relationships with the addition
of a second full Deputy to the DCI with management responsibility
for the CIA and perhaps with expanded or restructured Executive
Committees and production responsibilities. This option is based
on the premise that major organizational changes may be
undesirable, and that improved Community leadership structures
are possible through administrative action.
The study also discusses moving the covert action capability out of
CIA and placing it in a new, separate agency.
Finally the study also discusses certain possible management
improvements.
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ORGANIZATION AND MANAGEMENT OF THE
FOREIGN INTELLIGENCE COMMUNITY
I. INTRODUCTION
On November 14, 1975, the President initiated a study of the
organization and management of the foreign intelligence community,
including an examination of:
the basic structure of the Community,
key problems of organization and management,
definition of requirements,
systems design and selection,
resource allocation,
guidance mechanisms,
consumer-producer relationships, and
relevant recommendations of the Rockefeller and
Murphy Commissions.
Based upon the results of these reviews, the study was directed to:
evaluate the need for changes in the current organization
of the foreign intelligence community,
present options for a possible reorganization of the foreign
intelligence community, and
submit the recommendations of each addressee [the Secretaries
of State, Treasury, and Defense, Attorney General, Directors
of OMB and CIA, and Chairman of the Joint Chiefs of Staff] on
the options presented.
The study group determined that its charge did not include counter-
intelligence or assistance to law enforcement agencies, because these
areas include components outside the foreign intelligence community,
primarily the FBI.
Classlftod by Donald G. Ogilvie
Exempt from general
declassification schedule of E.O. 11652
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II. CURRENT AND FUTURE TRENDS
The foreign intelligence community serves a wide variety of consumers,
not only at the national level but also in the field. These include the members
of the NSC -- the President, Vice President, and Secretaries of State and
Defense -- the Secretary of Treasury, and, to a lesser extent, the Secretaries
of Commerce and Agriculture and the other members of the .economic policy
community. Also included are Ambassadors, trade negotiators, and military
command authorities -- all stationed outside of Washington. These consumers
use intelligence to guide policy decisions in the military, diplomatic, political,
and economic areas.
Analysts and producers of intelligence include parts of the CIA, the
Defense Intelligence Agency (DIA), the State Department's Bureau of Intelli-
gence and Research (INR), Treasury and elements in the armed services.
Collectors of intelligence include the CIA, the National Security Agency (NSA)
and military Service Cryptologic Agencies, the National Reconnaissance
Office (NRO), members of the Foreign Service Officer corps, Treasury,
Agriculture, Commerce and Defense attaches, and elements of the armed
services intelligence staffs. The chart on the facing page displays relation-
ships in the foreign intelligence community.
The Director of Central Intelligence (DCI) is currently charged by the
President with leadership of the Intelligence Community. His four major
responsibilities are:
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S Y~ f n 0 0} O_
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-- Planning and reviewing all intelligence activities
and the allocation of all intelligence resources.
-- Producing national intelligence required by the President
and other national consumers.
-- Chairing and staffing all Intelligence Community advisory
boards or committees.
Reconciling intelligence requirements and priorities
within budgetary constraints.
The DCI exercises both resource and line control over the CIA.
The Defense Department exercises resource and line control over the
Consolidated Cryptologic Program (CCP), the National Reconnaissance
Program (NRP), and the General Defense Intelligence Program (GDIP).
The DCI exercises the responsibilities outlined above through his line
control over CIA production and collection components, through chairman-
ship of Community advisory committees on requirements, resources,
and production, and through his authority to establish collection requirements
and priorities. He is also chairman of an Executive Committee (ExCom)
which sets budgetary and operating policy for the NRP. Finally, the DCI
annually presents his recommendations on the total. Intelligence Community
program to the President.
Resources and personnel available to the Intelligence Community
reached a peak during the Vietnam War and have declined in real terms
since. An agency and functional picture of the 1976 intelligence budget
request is shown on the facing page. CIA has abou f the total
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national intelligence resources with the bulk of its efforts concentrated
in human intelligence collection, production, and various support functions.
Almost all other intelligence resources are carried in the Defense budget,
with signals intelligence, photo intelligence, and intelligence-related
resources dominating the picture.
National intelligence resources can be described in three different
? By function, about 85 per cent are dedicated to collection
and processing, about 10 per cent to analysis and production
of intelligence and the balance to support.
? By target area, over 75 per cent of foreign intelligence assets
are directed at the communist world, primarily the USSR;
? By output category, about 85 per -cent relate to the size
and status of foreign military forces (including scientific and
technical information), and the remaining 15 per cent cover
political and economic subjects.
Future Trends
The USSR and Communist China will remain our major intelligence
targets. There are, however, developing international trends and issues
which will pose new challenges to the Intelligence Community over the
coming years:
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? Largely because of the spread of new technology and the
growth of global interdependence, more nations will acquire
some measure of leverage in world affairs.
? The proliferation of nuclear and sophisticated conventional
weapons, the organization of cartels such as OPEC,.and the
growing demand for raw materials will make coercive power
increasingly available to foreign governments and non-govern-
mental groups, including terrorist organizations.
The gap between the have and have not nations will continue
to widen.. Issues such as mass starvation and overpopulation
will grow in importance. The conflict between economic
realities and social welfare aspirations will continue to create
fertile fields for communist subversion, political turbulence,
and growth of terrorist threats (perhaps involving nuclear weapons).
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In the coming years, additional challenges to the Intelligence Community
will be posed by the acceleration of international events requiring the capa-
bility to assess and respond on a near real-time basis. New collection and
data systems will produce large amounts of information requiring a need for
improved communications between agencies, better management and informa-
tion handling capabilities, more advanced analytical methodoligies, and new
types of product presentation.
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A great variety of demands, issues and opportunities face the
Community's leadership:
? Notwithstanding the increased sophistication of collection
systems, there is a rising demand, particularly in crisis
situations, not only for the kind of intelligence available
from technical sensors, but also for intelligence which can
normally be acquired only from human sources.
The need for confident monitoring of Soviet compliance with
SALT and other agreements and support of MBFR negotia-
tions will require more detailed intelligence on Soviet and
Eastern European military targets.
? Collection systems must be able to survive and be useable
in wartime to satisfy combat needs.
? Congress will demand more substantive intelligence. Policies
will have to be developed to determine what intelligence should
be provided, how sensitive information is to be protected from
public disclosure, and how to avoid inhibitions on the analytic
independence of the Community.
Changes in the world at large, and in the means of perceiving and
assessing their significance, have complicated the tasks and challenged
the resourcefulness of the Community. These challenges do not argue
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for any particular organization of the Community; they illustrate the
diversity and scope of the demands upon the Community and suggest
the potential significance of the way in which the Community is structured.
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III. PROBLEMS IN INTELLIGENCE
The Intelligence Community has made many vital- contributions to
the national security of the United States. Throughout its history efforts
have been made to improve Community performance. Inevitably, in any
study of this type, the focus must be on problems, rather than achieve-
ments, in intelligence. Problems in intelligence can be viewed in the
context of three major objectives for management and organization of the
Intelligence Community:
? Create proper safeguards against future abuses;
? Provide customers with quality intelligence on a timely basis; and
? Ensure that intelligence activities are well-directed.
A. Proper Safeguards Against Future Abuses
The current public focus on the Intelligence Community evolved
from a concern over alleged abuses: surveillance of Americans, domestic
electronic intercepts, mail openings, and assassination plots. The Com-
mission on CIA Activities within the United States (the Rockefeller Com-
mission), the Murphy Commission and recent Congressional investigations
all concluded that existing safeguards against abuses, including guidelines,
have been inadequate. The Commissions made a number of recommendations
aimed at (1) ensuring that top policy-makers were aware of possibly
questionable activities, and (2) promoting deliberative consideration o
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Inadequate safeguards were found within the Intelligence Community,
the Executive Office of the President, and Congress. Although many
Community-wide directives have existed for assignment of responsibilities
and other management purposes, directives on proper conduct have been
rare. The DCI, the leader of the Community, has no clear authority to
inspect activities except within the CIA. Particular problems within the
CIA. identified by the Rockefeller Commission include the limited role of
the Inspector General and General Counsel, absence of written regulations
on this subject, and over -compartmentation of some activities. Within
the Executive Office, inadequate mechanisms exist to review the legality
and propriety of intelligence activities. Responsibilities for propriety rest
primarily with the head of each operating component. Within the Congress,
oversight of the CIA and other components of the Intelligence Community
was conducted until quite recently by a senior group of Senators and Con-
gressmen. This small group of Congressmen reviewed Community activities
and approved intelligence budgets.
The recurring theme in oversight and safeguards against potential
abuse at all three levels is the inadequacy of review mechanisms and
insufficiency of attention to propriety. Because attention was not focused
on this responsibility, certain activities were conducted without the top
level attention they merited.
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B. Quality Intelligence on a Timely Basis
Production of quality intelligence on a timely basis extends
deeply:into the management of the whole intelligence effort. It includes
the process by which resources are allocated to collectors, processors
and producers; the quality and organizational placement of collection and
production functions; the nature of the research and development efforts;
and even the development of programs which provide necessary support
for intelligence activities. While the leadership will continue to be
challenged by the need to provide efficient management of Community
resources, major attention must be devoted to intelligence production.
The Intelligence Community has been criticized for failing to predict
major events and crisis situations such as the 1973 Middle East War.
Over the years, however, the Community has dealt successfully with many
different crises such as the 1967 Middle East War. Success or failure
in forecasting events rests on the perceptiveness of the estimative judg-
ments of the Community as well as the sufficiency of timely, relevant
and accurate intelligence from which judgments of intent could be derived.
The Community's performance with respect to longer term estimates
has also been mixed. The production of such estimates is complicated by
(a) the paucity of hard evidence and (b) the fact that judgmental accuracy
hinges on future decisions or actions of foreign governments, or on U. S.
decisions or actions to which the estimators are not privy. Accuracy
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apart, the utility of estimates is also complicated by problems of dialogue
and feedback between intelligence consumers and intelligence producers.
While senior policy officers have often felt that intelligence assessments
are not sharply focused on their real needs and concerns, these policy
officials often do not clearly articulate their needs. The estimates produc-
tion process, however, does compel an orderly review of all new intelli-
gence and analysis and forces old assumptions to be retested and discarded
or revalidated.
Estimates of concrete, factual subjects -- e. g. , military capabilities
are generally well regarded and thought to be useful. In those addressing
political and economic subjects, the judgment quotient is much higher.
They elicit a more mixed reception and represent areas in which State and
Treasury rely heavily on their own analytical resources.
A number of problem areas in provision of quality intelligence have
been identified:
Consumer relations with the Intelligence Community, While intelli-
gence produced for policy-makers in recent years has improved in quality
and timeliness, certain problem areas remain that impact adversely on the
intelligence product and on the efficiency of the intelligence process. There
is inadequate guidance and feedback from senior policy officials, com-
pounded by a traditional reluctance to make certain sensitive policy or
operational information available to intelligence officials. When intelligence
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personnel are in close contact with policy and operational activities, their
appreciation of the priority issues is vastly improved.
The NSC Intelligence Committee (NSCIC) has been criticized for not
performing the product review and consumer guidance functions for which
it was organized. However, the NSCIC working group now meets regularly,
has provided some guidance on requirements, and has initiated a consumer
survey.
Consumers are often inadequately informed as to the resource impli-
cations of their requirements. Although they need not be intimately involved
or knowledgeable concerning the details of the intelligence resource alloca-
tion process, they should be informed when the cost of their intelligence
requirements has significant cost or trade-off implications.
Crisis management. The consumer relationship becomes especially
crucial during crises. It is essential that intelligence analysis in critical
circumstances proceed from an understanding of operational policy decisions
so that the likely reactions of the other side can be assessed. The White
House, State, Defense and the DCI all have major roles to play in improving
procedures to develop better intraagency, interagency and White House ties.
In times of crisis, each Agency organizes itself to maximize support
for its chief who participates in crisis management decision-rnalring through
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the NSC's Washington Special Action Group or less formal arrangements.
These generally work well; but, there is little overall coordination of,
agency activities. They often result in a large volume of unevaluated infor-
mation at the top. Timeliness of intelligence reporting has taken prece-
dence over careful analysis and interagency coordination. The future
challenge is to ensure adequate analysis and timely reporting and to provide
for more interagency dialogue.
National intelligence support to field commanders. National collection
systems can provide information to military commanders at the level of
detail needed for planning and conducting military operations, but their
utility as wartime assets remains to be tested. Military intelligence is an
essential element of the combat commander's force. National collection
assets offer promise of contributing significantly to the commander's intelli-
gence needs. If the national assets cannot meet requirements for timeliness,
accuracy, availability, dependability and survivability in a combat environ-
ment, however, combat commanders will remain understandably reluctant
to become overly dependent on national collection systems. An effort is
currently under way to provide processed information directly to military
commanders at the theater level and below.
Secrecy and compartmentation. Access to some intelligence informa-
tionat both the policy and operational levels requires special clearances,
which are considered necessary to protect sources and methods of
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intelligence and other sensitive information from unauthorized disclosure.
A classification system established by an Executive Order, reinforced
by unusual employment termination authorities over employees of CIA and
NSA, and a series of less than airtight criminal statutes are used with
varying degrees of effectiveness to protect intelligence. For many years,
it has been recognized that these procedures and sanctions are inadequate
to accomplish their task and to allow the DCI to fulfill his statutory respon-
sibility to protect sources and methods.
In part because of the inadequacy of classification and statutory
sanctions, a number of special control systems for particular types of
intelligence information have been developed. Compartmentation, properly
applied, permits a broader dissemination of less sensitive material while
protecting the most sensitive. However, procedures to remove classified
information from control systems are usually elaborate and time consuming.
A continuing problem is the difficulty of ensuring that consumers have
access to the kinds of intelligence products they require. Separate control
systems also inhibit useful intelligence analysis and production. Compart-
mentation procedures in some organizations artificially divide the
intelligence data base and make it difficult -- in some cases impossible
to store and integrate information collected at great costs. Much has been
done to sanitize and decontrol intelligence to make it more widely available.
More remains to be done. In undertaking such changes, sensitive material
must be protected.
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C. Well-Directed Intelligence Activities
Consideration of the third objective -- ensuring well-directed
intelligence activities -- starts with the National Security Act of 1947 which
gave CIA the responsibility to advise and make recommendations to the NSC
and to correlate and evaluate intelligence relating to the national security.
Existing Presidential directives state that the DCI "shall assume leadership
of the Community in planning, reviewing, coordinating, and evaluating all
intelligence programs and activities, and in the production of national intelli-
gence. " Today, the DCI has resource and line control authority over only
one part of the Intelligence Community -- the CIA. His Community respon-
sibility to set requirements and priorities for collection is established
in NSC directives and is exercised through a variety of committees and
ad hoc arrangements. The DCI must coordinate all national intelligence
resources to assure that military, economic and political concerns receive
appropriate emphasis. The Secretary of Defense must ensure that his
military intelligence organization, as an integral part of the national
intelligence community, provides information to all echelons of command.
The increasing capability of national collection assets to provide intelli-
gence to field activities calls for closer interagency cooperation in a
number of areas:
Peacetime /wartime transition. In peacetime, centrally -managed
technical collection systems such as the National Reconnaissance Program
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and the Consolidated Cryptologic Program are controlled by a variety
of mechanisms in which the DCI's influence varies. In wartime, Defense
'...:eZ N 0,.MnA., p 4w 'rLw
concluded formal understandings governing military/CIA command relation-
ships at the theater level in war and contingency situations. There is,
however, no peace/war transition agreement at the national level. Closely
related is the question of whether existing arrangements provide for an
effective transition to crisis and hot war conditions. Formal agreements
concerning DCI and CIA support to Defense in time of war could enhance
collaboration between the two organizations in time of peace.
Control over Community resources. The DCI has direct resource
control over the CIA, less direct control but substantial influence over the
National: Reconnaissance Program, and influence through the requirements
process and the recommended program budget over the General Defense
Intelligence Program and Consolidated Cryptologic Program.
Budget development and execution occurs primarily within the depart-
ments. However, the National Reconnaissance Program budget developed
by an Executive Committee (ExCom) made up of the DCI and the Assistant
Secretary of Defense for Intelligence.
Although the budget is handled primarily within the departments, the
DCI submits each year a set of program recommendations to the President
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for his consideration in preparing next year's budget. In this document the,
DCI discusses important aspects of the U. S. Foreign Intelligence Program,
presents his position on budget issues, and displays a recommended level
of Community resources for the coming year. Because it is superimposed
on the normal budgetary process, there have been problems of timing asso-
ciated with this submission. It must be formulated after the preliminary
budgets are formed and the issues defined and debated, but before the
President's budget is assembled.
The DCI also uses two interagency advisory review mechanisms:
? The United States Intelligence Board (USIB). The USIB was
established to advise the DCI and identify information needs
and requirements. When the information requirements can
be readily translated into resource requirements, they influ-
ence resource levels.
? Intelligence Resources Advisory Committee (IRAC). The IRAC
was established to advise the DCI on the preparation of the
intelligence budget and the allocation of resouces among programs.
It has as members the DCI and senior representatives from State,
Defense, the CIA and OMB.
There is no single central controller of intelligence resources.
Trade-offs among collection, processing and production functions seldom
are made, in part because of the diverse budget review process,. It is
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difficult to relate resource inputs to product outputs. While there is a
tie between processed intelligence input and finished analytical output,
the relationship of product to processing and collection activities except
in isolated circumstances is difficult to quantify. Further, decisions
tend to be made in terms of particular sensor collection capabilities to
the exclusion of consideration on an across-the-board basis among avail-
able.resource options.
Clandestine collection and covert actions. CIA, and to a limited
extent the military services, conduct clandestine collection abroad.
The importance of such collection remains high in learning about the secret
activities, plans and intentions of foreign states.
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Public Law 93-495 expresses Congress' view that coordination is essential.
While a limited amount of Washington-level coordination takes place at
working levels between State and CIA, mutually acceptable procedures have
not been achieved.
Covert actions, including political and psychological projects and
paramilitary warfare, have been carried out by the CIA almost since its
inception. Proposals for moving covert action out of the CIA have been
made many times but have always been rejected.
Review, coordination, and approval of covert operations is the respon-
sibility of an NSC subgroup, the 40 Committee. The Murphy Commission
and congressional observers have criticized this committee for inadequate
deliberation and staff support and for failure to represent a broad enough
diversity of policy-makers.' At times in the past, 40 Committee meetings
have not been held; decisions were made by telephone or written correspond-
ence. Inadequate time for staff consideration has been a criticism both
within the government and outside. Although the 40 Committee charter
calls for annual reviews of ongoing programs, this direction has not always
been followed. The Attorney General has served on the 40 Committee in
the past, but served more as a trusted Presidential aide than as the
government's chief legal adviser.
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D.. A Need for Change?
Since 1947, major changes have occurred in the size and scope of
the responsibilities and activities of the Intelligence Community. Over this
period the DCI's Community leadership has remained basically constant;
however, the intelligence leadership structure within Defense has become
increasingly centralized. A wide assortment of committee arrangements
has been developed to advise the DCI, who has coordinating authority, and
managers within the Community, who have resource and line authority.
In the oversight area, new arrangements seem required. Although
the publicity of the last year was probably the most effective safeguard
possible against potential impropriety, the preferred prescription for the.
future is not continued exposure, but rather sound oversight within the
Community, at the Executive Office level and in Congress.
With respect to the management and control of Intelligence Community
resources, the 1971 Presidential Directive gave the DCI a resource review
responsibility for the entire Intelligence Community but no statutory or fiscal
authority to enforce such a responsibility. Arguments for centralization
based upon the growing resource management task stress the DCI's lack
of real authority and the Intelligence Community's increasing reliance on
expensive collection systems which require central management to serve
the full range of potential consumers. Counter-arguments stressing the
need for greater, or at least unimpaired, departmental authority point to
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the substantial influence that the DCI has exercised under present
directives and arrangements. They also contend that major technological
collection programs, such as the National Reconnaissance Program and
Consolidated Cryptologic Program have worked well, are responsive to
national requirements, and represent a form of Community management
that while decentralized makes effective use of scarce resources and expertise.
Proponents of major organizational change believe that new institu-
tional arrangements at the top of the Community are necessary for effective
consideration and solution of many complex problems. Opponents, on the
other hand, believe major organizational change is not required and would
be disruptive, reduce morale and actually decrease efficiency, at least
in the short run.
As a final point, it is generally agreed that the House and Senate Select
Committees will make proposals for reorganization and that the President
would be well advised to set forth his own proposals which could be useful
as guides for Congress in its deliberations. On the other hand, while such
proposals will be advanced, there is no certainty that Congress will act.
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IV. ACTIONS TO PREVENT ABUSES
Recent events have demonstrated the need for improvement in existing
control procedures over the Intelligence Community within the Executive
Branch and in Congress. Changes in both organization and procedures to
provide additional control are examined below.
A. Guidelines for Propriety and Restrictions -
A code of standards for the conduct of intelligence activities
is needed. A draft Executive Order has been prepared for intelligence
agencies (excluding the FBI) which sets restrictive guidelines for domestic
activities (e.g., mail opening, infiltration of dissident groups, illegal
electronic surveillance, inspection of tax returns, collection of information
on U. S. citizens and drug testing) and which limits activities which can be
taken to protect intelligence sources and methods. Approval and dissemina-
tion of an Executive Order is a necessary first step toward providing the
guidelines within which the Intelligence Community must operate.
B. Oversight
A.number of legislative proposals have already been introduced
to enhance the congressional oversight role. Two distinct possibilities are
emerging:
? Establishment of a joint oversight committee with responsibility
to review all intelligence activities; and
? Establishment of a wider General Accounting Office role in
review of intelligence. h
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Against this backdrop, three tiers of potential options exist within the
Executive Branch:
1. Executive Branch oversight -- within the Intelligence Community.
The DCI currently utilizes an Inspector General (IG) to review only CIA
activities. Each agency is responsible for carrying out an inspection
function of its own activities. Special clearances and sensitive aspects of
intelligence functions have inhibited deep scrutiny in the past. Two options
can be considered:
? Strengthen the inspection function in each agency;
Establish a Community IG under the DCI.
Establishment of a Community IG should reflect the planned future role
of the DCI. Conflicts may arise between a Community IG and the intelligence
agencies regarding access and degree of authority. Also relevant is the
decision on the need for a Counsel to the President, as addressed in the
following section. The arguments for either a Community IG or oversight
at the Presidential level are fairly clear, but the functions of the two would
overlap. Some would question the need for both.
2. Executive Branch oversight -- outside the Intelligence Community.
A decision in this area should address the following:
? Usefulness to the President of an independent oversight official;
? Ability of this official to gather useful information; and
? Public perception of the change -- substantive or cosmetic.
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Three options have been identified:
? The Attorney General, who would advise the President through
use of a staff established within Justice to monitor intelligence
activities; or
? A Special Counsel to the President, together with an appropriate
staff, who would be responsible for advising the President on the"
legality and propriety of intelligence activities; or
? A government-wide Inspector General, who would also respond
for the President to improprieties in Federal activities beyond
the Intelligence Community. His appointment would demonstrate
a willingness to address other Executive Branch improprieties.
3. Executive Branch oversight -- by outside Government personnel.
Another approach to oversight involves the use of a non-government group
to advise the President. Two options are identified:
? Adding an oversight responsibility to the President's Foreign
Intelligence Advisory Board (PFIAB); or
? Establishing a new oversight group.
The Rockefeller and Murphy Commissions both strongly endorsed the concept
of expanding the PFIAB charter. The key question to be resolved here is the
extent to which an advisory group (even with a permanent and expanded staff),
meeting on an occasional basis, could effectively oversee ongoing intelligence
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operations. Expansion of the PFIAB charter should probably be coupled
with appointment of a more diversified membership. Determination of
whether to use the PFIAB or to establish a new group depends heavily on
consideration of the extent to which the PFIAB's primary role in the past --
encouragement of the Intelligence Community to do the best job possible --
would be diluted by, and perhaps even conflict with, this new responsibility.
C. Intelligence Policy Coordination
A number of intelligence activities impact on policies -- domestic,
diplomatic and military -- outside the Community. The NSC has the statutory
duty of integrating domestic, foreign and military policies. This duty is
currently carried out through NSC directives and NSC committees. Coor-
dination of intelligence activities, in large part due to their highly sensitive X1 C
nature, remains a difficult problem.
The organizational focus within the Executive Office should address:
s The ability to coordinate the efforts of foreign intelligence,
counterintelligence, and domestic intelligence on specific
projects; and
w The public and Congressional perception of Executive Office
control over intelligence activities.
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Three options have been identified:
? Expanded Use of the I4SC Structure. The NSC structure could be
better used to integrate policies involving domestic and foreign
intelligence. NSC Committees could be augmented to include
Justice and Treasury. Other departments could be brought in as
the subject demands. Either a new committee could be established,
or the functions assigned to the NSC Intelligence Committee could
be expanded.
? Intelligence Adviser to the President. One person located in the
Executive Office could be assigned responsibility for integrating
those interagency policies affecting foreign and domestic intelli-
gence activities. A special adviser would have some authority
and high public visibility. Ad hoc committees could work with the
intelligence adviser and his staff on designated problems; over-
sight responsibility could also be assumed. Conflicts with the
NSC could occur, however, because the special adviser's
responsibilities would overlap those of the NSC.
? Improved DCI/Agency Coordination. Foreign and domestic policy
considerations involving foreign intelligence efforts could be
handled through existing informal mechanisms directly between
the DCI and involved agency heads without White House participation.
This would require re-examination of the current role of the DCI.
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D. The 40 Committee
The NSC's 40 Committee provides policy approval for covert
actions. The group is chaired by the Assistant to the President for National
Security Affairs and includes the DCI, State, Defense and the Joint Chiefs
of Staff. The Attorney General is formally a member but has not been an
active participant in recent years.
While formal review procedures have been established, there is a
general perception by Congress and independent commissions that there has
been an inadequate substantive review of proposed actions. Improved review
might be achieved by:
? Reinstituting formal committee meetings on all significant.
covert and sensitive requests;
? Redesignating the Attorney General as a committee member
with additional representation from other departments as the
subject demands (with attention paid to possible conflict of
roles for the Attorney General if he is designated as the
President's intelligence inspector); and
? Adding staff to provide non-departmental substantive analytic
input on the need, risk and potential benefits of each operation.
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V. INTELLIGENCE COMMUNITY ORGANIZATION OPTIONS
In the context of addressing the problems discussed in Section III,
the study group examined a wide variety of Community leadership alterna-
tives, ranging from total centralization of all intelligence resources and
programs to elimination of any central intelligence coordinator. Four
organizational options were analyzed in depth. These options are intended
to present a range of choices and need not be adopted in their entirety.
Key elements of these options are:
? Identification of the overall leader of the Intelligence Com-
munity and definition of his place within the hierarchy of the
Executive Branch and the Intelligence Community;
? Specification of operational responsibilities;
? Specification of analytic and production responsibilities;
? Specification of resource responsibilities; and
? Definition of the jurisdictions and organizational inter-relationships
of the major components of the Intelligence Community.
All options would accommodate an intelligence leader who could either
continue in his traditional role as adviser to the NSC or himself become a
member of the NSC. Full NSC membership, by increasing the intelligence
leader's stature, would strengthen his role within the Community. Conferral
of Cabinet rank or statutory direct access to the President could serve the
same purpose. Retention of the adviser role has the advantage of keeping
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intelligence separated from policy and precludes over-identification of
the Government's chief intelligence officer with specific policy choices.
Of the four options considered, legislation would be required to im-
plement the first three. The fourth could be accomplished through admin-
istrative action.
Certain elements are common to all options. First, all options would
accommodate an Inspector General under the direction of the Community
leader to ensure legality and propriety in the conduct of intelligence activities.
The more control the leader of the Community had, the more authority and
access his Inspector General would have.
Second, all options envisage the head of the Intelligence Community
as Community spokesman in relations'with Congress including the presenta-
tion of an overall intelligence budget and provision of substantive intelligence.
The extent to which the DCI would speak for the Community is greater under
options envisaging increased centralization than in those stressing depart-
mental roles.
Third, all options envisage continuance of departmental intelligence
production to support departmental missions and to contribute to national
intelligence production.
Finally, all options would relieve the DCI of responsibility for day-to-
day management of CIA and for reviewing tactical intelligence resources.
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SUMMARY OF
INTELLIGENCE COMMUNITY LEADERSHIP OPTIONS
Leadership of
Community
Operational
Responsibilities
Resouroe
Responsibilities
Collection
Responsibilities
Production
Responsibilities
Committee
Structure
Legislation
Required
OPTION #1
CENTRALIZED NATIONAL
INTELLIGENCE PROGRAM
Director of
Intelligence (DI)
DI line authority over
CLAP, CCP, NRP
DI controls CCP, NRP,
CLAP resources
DI controls all-CIAP,
CCP, NRP elements
DI produces all
national intelligence
Most existing
committees can be
eliminated
DEPARTMENTAL
EMPHASIS
Director, Foreign
Intelligence (DFI)
DFI review only;
Chairman, NRP ExCom
DFI establishes
requirements &
priorities
DFI produces national
estimates; tasks other
production elements
MODIFIED CURRENT
ARRANGEMENTS
Director, Central
Intelligence (DCI)
DCI delegates CIA line
authority to a 2nd Deputy
DCI controls CLAP;
Chairman NRP & SIGINT
Excoms;
Reviews other resources
DCI establishes
requirements &
priorities
DCI produces national
estimates; controls
CIA production
OPTION #3A:
Transfers CIA
production components
to departments
Retain existing or
similar committees
Retain existing
committees;
Add SIGINT ExCom
CENTRALIZED
RESOURCE CONTROL
Director General for
Intelligence (DGI)
DGI controls CCP,
NRP, CLAP resources
DGI establishes
requirements &
priorities
DGI produces national
estimates; tasks other
production elements
OPTION #2A: Provides
DGI line control over
present CIA
production
Retain existing or
similar committees;
Eliminate IRAC
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OPTION #I
CENTRALIZED NATIONAL INTELLIGENCE PROGRAM
RATIONALE
This option is based on the premise that the present intelligence
system suffers from a division of responsibility and control of resources
and operations, and that the best approach to the problem is to centralize
every element that reasonably can be centralized -- the CIA Program (CLAP),
the Consolidated Cryptologic Program (CCP), and the National Reconnais-
sance Program (NRP). This option assumes that the gains in centralizing
intelligence resources outweigh any disadvantages resulting from transferring
some collection agencies from their primary customers. This new agency
would serve the Government's intelligence needs much as the Justice Depart-
ment serves its legal needs.
SUMMARY DESCRIPTION
The major and most costly national intelligence activities, CLAP,
NRP and CCP, would be combined into a single agency, headed by a Director
of Intelligence. Departmental analysis and production centers would be
retained, permitting the presentation of contrasting points of view in national
intelligence production.
While this option creates the maximum centralization of intelligence
of all the options presented, it does not encompass all intelligence. Thus,
departmental intelligence components would remain basically unchanged.
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PRIMARY CHANGES AND EFFECTS
Leadership of Community
The Director o4ntellig nce would have line authority over national
foreign intelligence activities, including the CCP, NRP and CLAP. This
provides the maximum leadership authority of all the options.
Operational Responsibilities
The Director of Intelligence would be fully responsible for operational
and other aspects of national intelligence, including the CLAP, the CCP and
the NRP.
Resource Responsibilities
The new agency would include the budgets of the_C-CP, NRP and CLAP,
which the Director of Intelligence would review and approve. The Director
of Intelligence would develop and submit the overall intelligence budget to
the President and Congress.
Collection Responsibilities
All collection elements included within the CLAP, the CCP and the
NRP would be contained in the new agency. Their organization would be
1G 14 YV 41aV iJ ii V%.YVa Vi aas.. VJ.a.&5 VaaV V. K - I@
Production Responsibilities
Qka
Production of national intelligence (national current intelligence produc-
tion, national estimates, maintenance of national intelligence data, and
specialized intelligence research) would be centralized in the new agency,
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but other departments would continue to produce departmental intelligence.
The nucleus for the production component would be centralized in the new
agency but other departments would continue to produce departmental
intelligence. The nucleus for the production component would be the
production elements of what is now the CIA, possibly with augmentation
from analytical elements of other departments.
The Director of4Intelligence would have authority to settle disputes
without recourse to the pre sent, committee structure; however, some form
of committee structure would be required for interaction with other
departments.
Effect on Intelligence Product
Centralization of control over national programs under the authority
of one individual could result in improvements in overall product quality as
collection, processing, and production resources are focused on highest
priority problems. However, diversity and competition of views will be
submerged to the extent that production is centralized at the expense of the
departments.
Effect on Intelligence Management
Combining resource and management control in one agency could
result in the most effective and efficient intelligence management system
of all options by eliminating conflicts between responsibility and control.
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A short-coming is the possibility of decreased responsiveness to the
requirements of Defense which currently generates the preponderance
of intelligence requirements. At the outset, realignment and reorgani-
zation would be unsettling and would adversely affect efficiency.
The proposal to establish a new intelligence agency would encounter
congressional and departmental opposition.
Finally, establishment of such an agency would focus attention on the
intelligence budget and might increase demands for more open consideration
of it.
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OPTION #2
CENTRALIZED RESOURCE CONTROL
RATIONALE
This option is based on the premise that there is a need for a stronger
Community leader, but that Defense, with its military requirements, must
retain a strong voice in the management of certain intelligence assets now
under its direct control. This option strengthens the leader by giving him
resource control over the national intelligence programs -- the CIAP, NRP
and CCP -- while leaving Defense's operational control over the NRP and CCP
intact. The leader is separated by statute from the CIA, reducing the conflict
between his present roles as head of the Intelligence Community and head
of the CIA. These changes are intended to strengthen the leader of the
Community and relieve him of vested interest in any one segment of the
Community.
SUMMARY DESCRIPTION
The DCI would be separated from CIA and renamed the Director General
for Intelligence (DGI). He would have no operational responsibilities but
would continue to be the President's chief intelligence adviser. He would have
control over the national intelligence budget which includes the CLAP, CCP
and NRP. Defense would continue to manage the NRP and CCP; and a newly
created Director of CIA would manage the CIAP. The Director of CIA would
report to the NSC through the DGI. The Director of CIA would be responsible
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for day-to-day management of CIA and for management of national
intelligence production, drawing on other agencies, as now.
A variant of this option discussed as Option #2A below would give
the DGI direct management responsibility for intelligence analysis and
production.
PRIMARY CHANGES AND EFFECTS
Leadership of Community
The DGI would be charged with overall policy direction for the
Intelligence Community, without direct line management over any of its
operational elements. His leadership authority would rely on resource
control and independence from agency ties.
Operational Responsibilities
The DGI would have a staff similar to the present DCI Staff, i. e. ,
the National Intelligence Officers (NIO's) and the Intelligence Community
Staff (IC Staff), but no operational responsibilities. Operational control
of the NRP, CCP and GDIP would be retained in Defense. Operational
control of the CLAP would be -vested in a Director of CIA.
Resource Responsibilities
The DGI would control budgets for the three major national intelligence
programs. Funds for these programs would be appropriated to the DGI for
reallocation to program managers. The DGI would develop and submit the
overall intelligence budget to the President and Congress.
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Collection Responsibilities
The DGI would provide guidance concerning information requirements,
review the adequacy of collection requirements developed by the Community,
and make recommendations for necessary improvements. He would use his
control over the budgetary process to insure adherence to his policy guidance.
Production Responsibilities
The DGI would be directly responsible through his NIO Staff for the
production of national intelligence estimates. He would be responsible for
providing guidance to the Intelligence Community on needs and priorities
and for arranging for the provision of intelligence support to the President,
the NSC'and Congress.
Committee Structure
The DGI would require USIB, IRAC, ExComs or similar bodies to
insure effective coordination and integration of resource and operational
matters. This option presents an opportunity to streamline the committee
structure.
Effect on Intelligence Product
By giving the DGI basic authority over the resource allocation process,
he should be able to focus collection systems on high priority production
requirements and to evaluate the performance of both collectors and producers
in meeting consumer needs. DGI control over resource decisions concerning
the CCP and NRP might provide insufficient assurance of adequate resources
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to meet the needs of military customers. Defense operational control over
the CCP and NRP would be an offsetting factor.
Over the longer term, development of a resource review process in
which fundamental trade-offs can be considered, and costs and benefits
can be evaluated, could have a positive effect upon overall product quality.
Effect on Intelligence Management
. The changes proposed would give one individual, the DGI, effective
authority to establish a comprehensive and integrated resource review process
for the three major national intelligence programs. This arrangement allows
the DGI to establish priorities and effect trade-offs in developing an optimal
intelligence program. By leaving operational control over the CCP in Defense,
and by maintaining existing NRP arrangements, Defense would continue to
exercise significant control over these programs in order to satisfy essential
military requirements.
A potential problem with such an arrangement, most particularly in
the case of the CCP, is whether a program manager could efficiently carry
out his responsibilities while reporting to Defense on operational matters
and to the DGI on resource matters. This could also create problems in
ensuring that Defense planning was adequately related to resource decisions
made by an independent DGI. However, analogous procedures, including
the NRP ExCom, exist elsewhere in government.
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OPTION #2A
This option is identical in all respects to Option #2 except that,
under this variant, in order to concentrate his efforts on improving the
national intelligence product, the DGI would retain full responsibility
for line management of present CIA production components.
The principal advantage of this variant is that it would give the DGI
line control over production resources to carry out the substantive respon-
sibilities given to him under the option. Also, it would disassociate
present CIA production elements from operational components of CIA.
25X1A The principal disadvantage of this variant is that it gives the DGI line
NSC25X(1)
management responsibility for a sizeable
production program,
thereby reducing his ability to carry out an impartial resource manage-
ment role as established under the basic option.
25X1A
NSC25X(1)
25X1A
NSC25X(1)
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OPTION #3
DEPARTMENTAL EMPHASIS
RATIONALE
This option is based on the concept that the necessary independence
of the DCI within the Intelligence Community is compromised by his ties to
the CIA, and that the responsibilities of the Department of Defense require
a major voice for the Secretary of Defense in the development and manage-
ment of intelligence assets. This option attempts to increase the DCI's
stature as an independent leader of the Community by divesting him of his
management responsibilities over the CIA, while retaining his role in major
resource decisions. Resource control would reside in the departments and
agencies.
SUMMARY DESCRIPTION
Under this option, the present DCI would be renamed the Director,
Foreign Intelligence (DFI); and the DFI would be organizationally separated
from the CIA. The DFI would take the NIO structure and IC Staff from the
DCI organization. The CIA would be rechartered under a Director of CIA
reporting to the NSC through the DFI.
The DFI would have the
primary responsibility of providing substantive intelligence support to the
President and the NSC. The DFI would have a role in Community resource
decisions concerning major national intelligence systems through his
25X1 C
25X1 C
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authority to establish requirements and priorities and through his
chairmanship of the IRAC and.the NRP. The DFI would provide inde-
pendent assessments regarding national intelligence on both substantive
and resource matters, and he would task elements of the Community
to aid him.
Under a variant, Option #3A discussed below, CIA production
elements would be transferred to other departments; and the DFI would
be cast in the role of "coordinator" of departmental intelligence.
PRIMARY CHANGES AND EFFECTS
Leadership of Community
The DFI would be charged with overall policy direction for the
Intelligence Community, without direct line management or resource
control over any of its operational elements. His authority would be
vested in him through appointment by the President as an independent
leader.
Operational Responsibilities
The DFI would have a staff similar to the present DCI Staff, i. e.,
NIO's and the IC Staff, but no operational responsibilities. Control of the
NRP, CCP and General Defense Intelligence Programs would be continued
under the Secretary of Defense. ExCom arrangements for the NRP would
remain essentially unchanged. NSA would remain under Defense (the 25X1 C
Secretary of Defense is the Government's executive agent for SIGINT)
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Operational control of the CLAP
would be vested in a Director of CIA.
Resource Responsibilities
Development of program budgets would remain as a departmental or
agency responsibility. The DFI, in an advisory role,_ would provide the
President with an independent review of the entire intelligence budget as at
present. Funds for the CIAP, CCP and NRP would be appropriated to operating
departments and agencies for reallocation to program managers.
Collection Responsibilities
The DFI would establish requirements and priorities and provide
recommendations regarding the national intelligence program, but would
lack resource control. The Director of CIA would supervise all clandestine
HUMINT collection activities, except those organic to combat units or in
direct support of military activities. Defense would control all SIGINT
collection activities
Production Responsibilities
The DFI would have no production organization, but would be responsible
for providing guidance to the Intelligence Community on intelligence needs
and priorities, arranging for intelligence support to the President, the NSC
and Congress, and for reviewing and evaluating the resulting national
intelligence products. The DFI, through his NIO's, would coordinate and
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arrange with departmental elements, for the production of National
Intelligence Estimates. The DFI would coordinate the integration of
the intelligence production activities.
Committee Structure
The present committee structure, or some similar structure, with
the DFI chairing appropriate committees, would be needed.
Effects on Intelligence Product
Emphasizing departmental responsibility for production could lead to
improved responsiveness to departmental heads. An inherent danger could
be the dimunition of an independent capability to produce and critique intelli-
gence assessments.
Effect on Intelligence Management
This approach effectively removes the present conflicts between the
DCI's, roles as Community leader and as head of CIA, but it leaves him with
neither budget nor operational authority to shape the programs of the
Intelligence Community. However, through presentation of annual budget
recommendations to the President and his chairmanship of USIB, the IRAC
and ExCom or similar committees, the DFI would still have a role in
Community resource decisions concerning major national intelligence
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OPTION #3A
This option is identical in all respects to Option ##3 except that, under
this variant, present CIA production responsibilities and resources for
intelligence analysis would be transferred to the relevant departments. The
underlying assumption is that policy-makers would be better served by de-
partmental producers than by a central agency.
The principal advantage of this option is that it would place primary
stress on the value of strong participation in the production process by the
relevant departments, thereby better linking producers and consumers of
intelligence. The principal disadvantage is that it would eliminate an.inde-
pendent analytical entity separate from policy-makers and thus independent
of their operational or policy biases. There is also a question as to whether
a DFI with only production coordination responsibilities could usefully serve
as the senior intelligence adviser. This coordinator role was contemplated
for the DCI with passage of the 1947 Act, but early Agency experience
strongly suggests that the coordinator can only function effectively if he
has direct access to a production capability which gives him an independent
basis for judgment.
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OPTION #4
MODIFIED CURRENT ARRANGEMENTS
RATIONALE
Each of the three prior options would require basic changes in the
National Security Act of 1947. It is uncertain that such changes can be
accomplished without a major controversy within the Executive Branch
and without major legislative changes. A series of proposals which can
largely be accomplished within existing legislation, or with only minor
changes in existing statutes, may have appeal. The three options discussed
above, and the variants to them, all solve certain perceived problems but
may create others. Finally, it can be argued that Congressional legisla-
tive proposals are most likely to'focus on the question of control of past
abuses and only secondarily on major, largely unrelated, management
and organizational changes. Much of what may be needed to reduce the
potential for future abuses can be accomplished without considering major
organizational change.
SUMMARY DESCRIPTION
Changes addressed in this option involve the establishment of a second
full Deputy for the DCI. This would allow the use of one Deputy for line
management of the CIA and a second Deputy to carry out the present Intelli-
gence Community responsibilities assigned under the President's Novem-
ber 1971 letter. Changes could also be made to the existing committee
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structures regarding resources and to delegations of responsibility for
production without changing the basic organization of the Community.
PRIMARY CHANGES AND EFFECTS
Leadership of the Community
Present arrangements for policy direction of the NRP, including the
Executive Committee (ExCom) chaired by the DCI with Defense participation,
have. helped assure that these programs meet the needs of all major producers.
The CCP and the CIA collection program, however, serve national as well
as departmental interests. With increased dependence on technical collection,
a similar ExCom arrangement could be established for the CCP to ensure
that views of other producers are taken fully into account in tasking and pro-
cessing. Consideration could also be given to an ExCom review of CIA
collection programs. Since principals will remain essentially the same for
consideration of NRP and CCP matter, consideration might also be given
to consolidating the two review functions within one ExCom, perhaps with
an expanded membership to reflect consumer, as well as producer interests.
Operational Responsibilities .
The DCI would continue to be legally responsible for the operation
of CIA. However, a second Deputy with responsibility for CIA management
would absorb substantial responsibilities in this area.
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Resource Responsibilities
No basic change from present practice would occur, except that
establishment of an ExCom chaired by the DCI and charged with the respon-
sibility of policy overview and resource review of the CCP
could enhance the DCI's ability to influence the overall direction
of these major programs. 25X1 C
Collection Responsibilities
No change would occur.
Production Responsibilities
No change would occur.
Committee Structure
Adjustments in the responsibilities of committees might be necessary
in recognition of an enlarged ExCom.
Effect on Intelligence Product
This option would largely continue present arrangements. The DCI would
retain unimpaired his Community-wide responsibility for production of national
estimates, current intelligence, and crisis warning, and for evaluating the
Community's performance. Existing independent and competing production
capabilities in Defense, CIA, State and Treasury could be retained or aug-
mented. Structural changes at the leadership level in CIA should free the
DCI to devote more of his attention to production issues.
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Effect on Intelligence Management
As discussed under the summary description above, this option would
clarify management arrangements within CIA and moderately enhance the
DCI's ability to carry out his Community management:-and resource review
responsibilities. This option would not, however, give the DCI new basic
authority to deal with these responsibilities.
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Covert Action Location
One last organizational issue cuts across all four options: the
placement of a covert action capability. Covert action was originally
placed within the CIA to accompany its clandestine collection capabilities.
Transfer to the State Department would endanger the primary activities
of this overt service and be contrary to international diplomatic practices.
Transfer to the Defense Department would raise public apprehension over
accountability given the size and scope of the Department's activities. A
number of observers have, however, strongly promoted placing the covert
action capability in an entirely separate agency directly under the control
of the NSC. They have argued:
? If the covert action capability were isolated in a small agency,
oversight would be easier; fewer resources and personnel would
need to be kept under close supervision.
! The independent analytic capabilities of the CIA are biased because
covert actions make it an operational agency. Covert actions
create a departmental interest in the CIA which is contrary to its
basic national functions.
? The CIA might be better able to attract analysts and scientists
if it shed its "dirty-tricks" image which is closely connected to
its covert action capability.
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On the other hand; a number of strong arguments exist for retaining
the covert action capability in the CIA:
? Separation, rather than improving possibilities for effective
oversight, would create greater oversight. problems by isolating
this activity from conflicting agency demands and from agency
supervision.
? During the brief period in the early 1950's when clandestine
collection and covert actions were in separate offices, the two
offices were in conflict for resources and attention, inevitable
redundancy existed, and units worked at cross-purposes. That
experience demonstrated the close connection in terms of
contacts, methods, goals and support that is desirable between
the two activities. For example, the covert action agent is
often also an intelligence source, and clandestine tradecraft
required to run a covert action agent is essentially the same
as that for an intelligence agent.
? The need for cover, already a difficult problem, would be
further aggravated by the requirement to increase the number
of officials requiring cover status.
? Merely shifting around within the Government of the covert
action capability will neither assuage public fears nor reduce
attacks on the CIA. Outsiders will never believe that "dirty tricks"
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have been taken out of the CIA, and indeed, their perceptions
may be somewhat accurate as the new organization would
inevitably have to work closely with CIA clandestine activities.
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VI. MANAGEMENT IMPROVEMENTS
Although organizational reforms can help solve many of the identified
problems of the Intelligence Community, sustained management attention will
also be required to resolve these problems. The study group identified some
possibilities for management improvements in areas of particular significance
which should contribute both to a prevention of abuses and to a better intelli-
gence product.
A. Budgetary and Financial Controls
Financial and budgetary procedures provide an effective discipline
in government operations for the President, the Congress and the agencies.
The lack of public perception of the budget and financial controls over intelli-
gence activities contributes to public and Congressional opinion that no
system of checks and balances exists on the intelligence agencies within the
Executive Branch or, for that matter, within the Congress.
In the present situation, while fiscal information on the intelligence
agencies is contained in the President's budget, it is not openly identified.
Centralized control over the financial execution of intelligence budgets is not
exercised. Two options by which the budget process could be strengthened are:
. Provision by the President to Congress of a separate classified
budget appendix that contained information similar to that provided
for all other government activities; it would be prepared at the
appropriate security level and would require special handling
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within the Congress. This option has the advantage of a
formal Executive Branch initiative (within acceptable security
bounds) to the Congressional request for more information.
The primary arguments against this proposal involve the
precedent setting nature of a formal budget submission for
intelligence and the inevitable' congressional demand for more
detailed information.
? Implementation of controls by OMB on the, apportionment,
reprogramming, transfer and outlay of intelligence funds, similar
to those for other agencies.
Initiation of these controls would
increase OMB's involvement in the execution phase of the
intelligence budget which is currently limited to the CIA reserves.
Congressional reports have already identified the need for imposi-
tion of reprogramming controls on intelligence programs.
Arguing against this proposal is the appropriateness of relying
on budget control for effective direction of an organization
rather than establishing objectives and evaluating achievements
against them. Also, imposition of reprogramming controls could
adversely limit the flexibility to respond to crisis situations.
These proposals for providing budgetary information to the Congress
and enhancing the visibility of Presidential budgetary control may not be
particularly effective in identifying abuses, but they would enhance public
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and congressional confidence that the Intelligence Community is subject
to the same set of checks and balances as all other agencies.
B. Compartmentation
Present arrangements for compartmenting sensitive information
have impeded the. flow of information to consumers. The NSC should assure
itself that current Community studies of decompartmentation be intensified
with .an eye to improving consumer access to the intelligence product.
C. Consumer Interaction with the Intelligence Community
A number of improvements are required in the interactions of policy
officials with the Intelligence Community:
? The NSC should undertake a more active program to improve
consumer interactions with the Intelligence Community. Surveys
should be, undertaken to identify the strengths and deficiencies that
consumers find in intelligence support (from the NIE's, for
example) and to determine what actions the policy consumers
and intelligence producers should take to ensure more useful
intelligence contributions to the decision-makers.
? The NSC should specifically address problems identified in this
report including the need for: guidance and feedback from decision-
makers to the Intelligence Community; a better intelligence
appreciation of those policy and negotiating issues which might
benefit from intelligence inputs; and arrangements within
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the economic policy-making organizations required to promote
a more effective interchange with the Intelligence Community.
The NSC Intelligence Committee should also address the
special problem of the need for better dissemination of sensitive
memoranda, reports and telegraphic traffic to officials with a
need to know.
D. Performance Evaluation System
Measures are needed, particularly in certain high cost areas,
which will permit a comparison of the value of certain intelligence contribu-
tions with their anticipated cost. The purpose of such measures is to ensure
that intelligence collection and production are focused in a way which will
achieve more effective expenditures in terms of consumer needs. These
measures would be an important criterion in evaluating intelligence performance.
The DCI should intensify efforts, including consultations with consumers,
to strengthen arrangements for evaluating Community performance.
E. Cover and Clandestine Collection
The NSC could be tasked to conduct an interagency study addressing
both the effectiveness of present cover arrangements and the adequacy of
coordination of clandestine collection.
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