BACKGROUND ON MILITARY-ECONOMIC ADVISORY PANEL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80M00165A001000270006-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 11
• Document Creation Date: December 15, 2016
• Document Release Date: January 16, 2004
• Sequence Number: 6
• Publication Date: April 13, 1977
• Content Type: MEMO

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13 April 1977
MEMORANDUM
SUBJECT: Background on Military-Economic Advisory Panel
1. Origin and purpose: Established in mid-1972 to gain
outside appraisal of CIA costing efforts. The panel then aimed
to advise the DCI on:
-- Evaluation of data
-- Evaluation of the methodology
-- Its critique of the finished studies
2. DCI Schlesinger in 1973 directed the panel to report to
the DDI. By 1976, the panel suggested improvements in formulation
of the intelligence questions, in the research tasks and methods,
and in the scope for disseminating CIA findings so as to face up
to what they perceived as serious differences of opinion facing the
US policy makers.
3.. The panel advised in April 1976 that they should be directed
again to report to the DCI. A new charter was circulated and ap-
proved by Mr. Bush.
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WASHINGTON, D. C. 20505
16 APR 1976
The Honorable Robert Ellsworth
The Deputy Secretary of Defense
Washington, D. C. 20301
Thank you for your letter of 31-March on the
Military-Economic Advisory Panel (MEAD). I agree
that the MEAP should now report to the Director of
Central Intelligence. These changes will not dis-
rupt the close relationship the working level ana-
lysts now enjoy with the Panel members. We will-be
pleased to have Professor Laffer and Major Badgett
join the NEAP and I am writing to both formally
asking them to participate.
On 9.April, I met with the Chairman of the
Panel who has agreed to carry on as Chairman. He
and some of the other members asked that their
association with the Panel not be made a matter of
public record. Their concern is that public--annaunce---
ment could prevent them from traveling to the USSR or
could interfere with their fruitful contacts with -
Soviet economic officials.
I also agree with the thrust of your recommended
formulation of the MEAP charter which emphasizes the
areas that deserve renewed attention. The enclosed
statement I believe reflects your views. It is clear
that the problem of military-economic analysis is
extremely complex and simply has not had enough re-
sources devoted to it over the years to do all the
things that should be done. With this in mind, we are
developing plans for augmenting the analytic resources
of the Central Intelligence Agency. I know that you
already have considered ways that the Department of
Defense can contribute to an increased effort.
Sincerely,
Ls/_ -eQr~lqw-h
George Bush
Enclosure:
Statement
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Director of Central Intelligence
Military-Economic Advisory Panel
Charter
The Director of Central Intelligence has
established the Military-Economic Advisory Panel
(MEAP) to examine the US Intelligence Community's
military-economic analysis of Communist countries.
The MEAP will continue and extend the work of the
panel created by the Deputy Director for Intelli-
gence in 1.972. To accomplish its work, the MEAD'
will be given access to the full range of informa-
tion and methodologies in use and will have full
access to all intelligence community resources
involved in this work.
The Panel will meet twice a year, or more fre-
quently when current developments make it necessary.
It will prepare a written. report for the Director
of Central Intelligence at least annually.
The MEAP will give special attention to the
following areas:
--Thoroughly review and critique the data,
concepts, and methodologies used in the
estimates as well as the appropriateness,
form, and scope of reporting the research
findings.
--Examine alternatives and recommend actions
which will improve the existing military
economic analyses, including recommenda-
tions for new research areas to enhance
the existing burden and comparative sizing
analyses.
--Review alternative estimative methodologies
which could provide limits or benchmarks
with which existing burden and comparative
sizing could be compared, and recommend the
most promising alternatives for further
study.
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THE DEPUTY SECRETARY. OF DEFENSE
MAR 3 1 1976
Honorable George Bush
Director, Central Intelligence
CIA Headquarters
Washington, DC 20505
Dear George:
This letter is to follow up our recent conversations on the intelligence
community's efforts in military-economic analysis during which you
decided to continue the operation of the existing Military-Economic
Advisory Panel (NEAP) while incorporating some ideas for improvement.
With regard to those ideas I have the following recommendations.
At present the NEAP focuses principally upon evaluating and recommending
improvements to the existing CIA methodologies and reports in the com-
parative military-economic areas concerning the U.S. and Soviet Union.
These are important responsibilities, and I believe _they.should remain
prominent NEAP activities to be pursued with even more vigor than in the
past. However, I believe the NEAP should also be charged with the
broader responsibility to investigate and recommend alternative method-
ologies, especially those suitable for bounding the results of the
principal existing CIA analyses. In addition the HEAP should be charged
to suggest areas where additional profitable research could be undertaken
and estimates derived which would enhance our understanding of the size
and burden of Soviet defense efforts.
In part because of. these broader responsibilities, I also recommend that
the NEAP be elevated to report directly to the DCI rather than to the
DDI as is now the case. It would be important, however, to ensure that
the NEAP continue or increase its close contacts with the working level
people within the CIA, and that it continue to receive from the CIA
timely and complete access to the information necessary for appraising
the Agency analyses..
As you suggested I have given some thought to people who might be added
to the HEAP and recommend that the following two people be appointed as
additional HEAP members:
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Professor Arthur Laffer of Chicago; and Major Lee Badgett, recently
selected as Permanent Professor and Head of Department at the USAF
Academy.
Attached are some paragraphs which reflect more formally my views as to
how a revised MEAP charter might look.
I hope these recommendations are helpful to you.
Sincerely,
Attachment
a/s
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RECOMMENDED REVISIONS TO THE
MEAP CHARTER
The Military-Economic Advisory Panel (MEAP) is directed to report to
the Director of Central Intelligence upon the full range of issues
concerning military-economic analyses carried on by the U.S. Intelligence
Community. This responsibility is to include:
-- Thorough review and critique of the-intelligence and
conceptual bases, the methodologies, and the form, scope
and dissemination of the reports, related to military-
economic issues.
-- Recommendation to the DCI of actions which will improve
existing Intelligence Community military-economic analyses,
to include recommendations for new or additional research and'
estimations to enhance current burden and comparative sizing
analyses.
-- Investigation and evaluation of alternative estimation
methodologies which could provide bounds to, or checks upon
the uncertainty of, existing burden and comparative sizing
estimates, and the recommendation of the most promising
alternatives to the DCI.
In carrying out these responsibilities the MEAP wall maintain close
contact with the concerned working-level analysts, and will be provided
by the concerned organizations with the full range of information and
briefings relevant to military-economic analysis.
The MEAP will meet twice yearly, or more frequently if appropriate, and
will submit to the DCI an annual report appraising the major Intelligence
Community analyses in the military-economic area, and making such
recommendations as the MEAP thinks appropriate.
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8 April 1976
Responsibilities of the
Military-Economic Advisory Panel
This memorandum summarize the responsibilities
of the Military-Economic Advisry Panel (MEAP) since
its formation in 1972. It provides background material
for use in reviewing the proposed charter for the MEAP
drafted in response to recommendations by Deputy
Secretary of Defense Ellsworth.
DDI Proposal on Functions of MEAP (May 1972)
The DDI proposal stated that the mission of the
.MEAP was to help insure that intelligence on Soviet
defense spending provided to the US decision maker
was of the highest quality. To accomplish -this, the
proposal charged the Panel to:
1. Become familiar with the data and methods
in use.
2. Advise the DCI in the following three areas:
--Evaluation of the data,
--Evaluation of the methodologies,
--Critique of finished studies to assure that
they:
a) Address the right questions,
b) Utilize appropriate cost concepts,
c) Adequately measure level, and changes
in levels, of weapons development, pro-
curement, and deployment as well as
the operating activities of the forces.
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3. Act as a continuing body.to advise and provide
review through regular meetings with CIA. In
performing this function, to receive briefings
by other agencies in the Intelligence Community.
Subsequent to the formation of the MEAP, Dr.
Schlesinger became DCI and directed the Panel to report
to the DDI.
MEAP Second Report (January 1976)
In its second report the Panel indicated that it
considered its main purpose to be to advise the DDI on
the present adequacy, validity, and usefulness of CIA's
military economic analysis and on possible ways to im-
prove it. The Panel saw serious differences of opinion
facing US policy makers in evaluating the available
evidence. The Panel sought to provide advice on minimiz-
ing the uncertainty and inconsistency in the evidence and
on marshalling the evidence persuasively in forms direct-
ly applicable to decision making.
The Panel suggested improvements in:
--The formulation of intelligence questions,
--Research tasks to undertake,
--Research methods to employ,
--Ways to organize the research effort,
--The form and scope for disseminating research
findings.
DoD's Recommended Revision to the MEAP Charter (March 1976)
In a recent letter to the DCI, Deputy Secretary
Ellsworth recommended a charter for the MEAP. A
summary of the recommendations, together with a
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statement of the present status (in parenthesis),
follows:
The MEAP should be directed to report to the DCI
on the full range of military-economic analyses carried
on by the Intelligence Community. This is to include:
--Review and critique of the bases, methodologies,
and the form,. scope, and dissemination of reports.
(Already being done).
--Recommendations for improvements in analyses, to
include recommendations of new or additional.
research to enhance burden and comparative sizing
analyses. (Not explicit earlier but being pursued).
--Investigations and'evaluations of alternative
methodologies which could provide bounds to,
or. check upon, the uncertainty of existing
estimates and recommendations to the.DCI of
the most promising. (Not explicit earlier
and not receiving much attention by the Panel).
The NEAP in carrying out these duties will maintain
close contact at the working level and be provided with.
the full range of information relevant.to this analysis.
The MEAD will meet two or more times a year and sub
mit an annual report appraising Community analyses and
making appropriate recommendations.
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 Revised 29 Sept 1975
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Dr. Herbert S. Levine, Chairman
University of Pennsylvania
Dr. Levine is Professor of Economics with the
University of Pennsylvania. He has been a leading
expert in the field of Soviet economics for over
20 years.
Major Badgett is a member of the Economic faculty
at the Air Force Academy. He holds a PhD degree in
economics and has worked closely with OSR on military-
economics for the past few years as military assistant
Lt. Col. Lee D. Badgett, USAF
USAF Academy
to Dr. Andrew .Marshall_,_ OSD/NA.
STAT
STAT
STAT
-specialist in Soviet- national income. _
`RAND::. Corporation ..., . He is:: -recognized. as a leading .
Dr..:_ Beck er. i.s.:with. the -Economic-Department. a'
Kenneth W. `Dam
University of Chicago
Director (for national security and international
Dr. Dam is with the Law School at the University
of Chicago. From 1971 to 1973 he served as Assistant
affairs), Office of Management and Budget.
Dr. Holland Hunter
Haverford College
Dr. Hunter is Chairman of the Economic Deaprtment
at Haverford College. He has been a specialist in the
Soviet economy for over 25 years and is a recognized
expert in the field.
retired from the Agency in 1974. The
last position he held was Deputy Director of Strategic
Research, aloe to the Panel stems from
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his experience in military and military-economic
analysis, his familiarity with the community, and
his knowledge of the consumers of the intelligence-
product.
Dr. K. Wayne Smith
Dart Industries
Dr. Smith is a Vice President of Dart Industries,
Inc. His past experience in the Department of Defense
and the NSC Staff enables him to.provide input to the
Panel on consumer needs in the field. of estimates
on Soviet military-economic programs.
Dr. Stanley I. Weiss
Lockheed Missile & Space Company, Inc.
Dr. Weiss is Vice President and Assistant?GEnera
-.technical products-for DoD, NASA, and aerospace
meat and engineering, including space programs and
Division' at Lockheed. He is responsible for develop-.-
Manager, Engineering and Development, Space Systems
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