SECURITY REVIEW OF ANNEXES TO MURPHY COMMISSION REPORT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80M01133A001000110002-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 117
• Document Creation Date: December 15, 2016
• Document Release Date: April 22, 2004
• Sequence Number: 2
• Content Type: MF

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MEMORANDUM FOR: AD/DCI/IC
0
110272-75 25X1A
Copy of 3
SUBJECT . Security Review of Annexes to Murphy
Commission Report
1. Per your request, the annexes to the Murphy Commission
Report were reviewed with appropriate authorities for security
including the Chairman, COMIREX, the Executive Secretary,
SIGINT Committee, the Security Advisor to the Director, NRO,
and the Chief, Special Security Unit, DDO/CIA.
2. Based on present policy contained in the November 1973
Presidential decision that "the fact that the United States Government
conducts a photographic satellite reconnaissance program for foreign
intelligence collection be classified SECRET, " it was felt advisable
to technically sanitize the texts of a number of references to
"satellite photography. " In most cases the sanitization consists of
substituting such terms as "reconnaissance photograph, " "overhead"
or "technical" for the term "satellite. " If these substitutions are
acceptable to the Commission, the unclassified texts will be tech-
nically correct from a security classification point of view with
little change in meaning for the average reader.
3. Robert Macy's annex on "Issues on Intelligence Resources
Management" discusses the management arrangements which apply
to the satellite programs. The discussions include descriptions
(without specifics) of the NRP ExCom arrangements and the joint DDO/CIA
program sponsorship and management. While technically unclassified
the discussion is the most extensive and direct that has appeared at the
unclassified level in an official document. I writing as the 25X1A
TALENT Control Officer, CIA, expresses $ie opinion that this issue
presents a more direct security problem and feels it will invite
additional probing and add to the NRO's problems of maintaining
NRO and DOS review(s) completed.
SECRET
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security discipline. The Security Advisor to the Director, NRO,
shares this opinion. He feels that if the "fact of" the reconnaissance
program is SECRET, then discussions of its management authorities
should also be classified SECRET. Further, he mentioned that the
Secretary of Defense in recent discussions with Mr. Thomas Latimer
said that no more material or information about the satellite program
should be released. Accordingly, substitute language or deletions
of this material are proposed.
25X1A
and this is recommended in the report of review. Su stitute language
for his references to satellite photography is also proposed.
5. as the Executive Secretary of the
SIGINT Committee, reviewed Mr. W. J. Barndii' annex titled
"Intelligence and Policymaking in an Institutional Context. " He
recommends two deletions based upon concern with mention of
cryptanalysis and traffic analysis in the text. The proposed deletions
do not significantly detract from the context and may be acceptable
to the Commission.
6. The Chief, Special Security Unit, DDO/CIA, reviewed
T. G. Belcher's annex, "Clandestine Operations." He noted nothing
of security concern in the text.
7. We note that page iii was missing in the summary of
Barnds' study, "Intelligence Functions. "
8. The report of the security review has been prepared for
transmittal as an attachment to a letter from you to Mr. Francis O.
Wilcox who requested the review on 25 March 1975. The letter and
report are attached.
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CLANDESTINE OPERATIONS
by
T. G. Belcher
TABLE OF CONTENTS
J 1C fLa (''
Page
I. Summary
1
II.
The
Image Today
6
a.
Pejorative Comments
7
b.
Pro Covert Action Comments
8
c.
Pro and Con Examples
10
III. A Covert Action Capability or-Not?
11
a. Problems and Dangers
12
b.
Organization of the Clandestine
Services - Definitions, Examples
16
c.
Organization of CIA for Action
Programs - Research and Analysis
19
IV.
Criteria for Action
23
a.
Monitoring Detente and Economic
Interests
23
b.
Third World Interests
24
c.
Narcotics Control - A New Field
24
d.
A Non-Military Capability
25
e.
Follow-up Needs
25
f.
Risks of Exposure
26
g.
Alternative Action
28
h.
When To Use Intelligence
29
V.
The
Question of Adequate Control
30
a.
Better use of Existing Provisions
32
b.
The 40 Committee - Weaknesses
and Suggestions
33
c.
The Need for Secrecy and
Penalties
35
d.
Joint Congressional Committee
Pros and Cons
37
e.
Other Oversight Groups
39
f.
The Need for Vigilance and
Leadership
41
VI. Recommendations for Consideration 44
by the Commissioners
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T. G. Belcher
11/6/74
Third Draft
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TABLE OF CONTENTS
Page
I.
Summary
1
II.
The
Image Today
6
a.
Pejorative Comments
7
b.
Pro Covert Action Comments
8
C.
Pro and Con Examples
10
III. A Covert Action Capability or Not?
11
a. Problems and Dangers
12
b.
Organization of the Clandestine
Services - Definitions, Examples
16
c.
Organization of CIA for Action
Programs - Research and Analysis
19
IV.
Criteria for Action
23
a.
Monitoring Detente and Economic
Interests
23
b.
Third World Interests
24
c.
Narcotics Control - A New Field
24
d.
A Non-Military Capability
25
e.
Follow-up Needs
25
f.
Risks of Exposure
26
g.
Alternative Action
28
h.
When To Use Intelligence
29
V.
The
Question of Adequate Control
30
a.
Better use of Existing Provisions
32
b.
The 40 Committee - ~deaknesses
and Suggestions
33
c.
The Need for Secrecy and
Penalties
35
d.
Joint Congressional Committee
Pros and Cons
37
e.
Other Oversight Groups
39
f.
The Need for Vigilance and
Leadership
41
VI. Recommendations for Consideration 44
by the Commissioners
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SUMMARY
The present image of the CIA and of our covert action
capability and programs is depressingly bad. Pejorative
adjectives abound: omnipresent, powerful, operating under
a debilitating cl6ud of suspicion. The Agency has too many
of the resources and instruments of foreign policy under its
control.
Too much has been written about our "secret" service.
CIA successes have been as heralded as its failures - it is
too widely publicized for a largely clandestine operation.
More recently the flow of critical articles and books has
become a spate.
The case for and against the clandestine services'
collection and operations activities has been eloquently set
forth by DCI Colby, Lord Chalfont, Nicholas Katzenbach,
Marchetti and Marks and last but not least, President Ford.
Despite opinions and positions strongly held, there is no
feasible way to measure past successes and failures and
determine in this fashion whether it makes sense to continue.
Whatever 'the assessments may be, it is obvious that we shall
maintain a service in being and undertake "operations" when
deemed necessary by the highest authorities. This is the
position supported by this paper.
The problem then becomes one of appropriate criteria
for action and sufficient controls both before launching and
during the course of a project as well as ex-post facto
assessments of value gained or lost.
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In any discussion of this problem it is obvious that
there is a confusion in terms. Clandestine collection
activities are not as distinct from covert actions as some
observers apparently think. There are many such operations
which involve us in all the dangers and have many of the
characteristics of covert actions. There are examples of
collection programs which have involved us in very difficult
Decision maki?TATINTL
for major collection activities should, therefore, be at
least as exhaustive as for covert action and responsibility
should lie with the 40 committee.
Collection and action officers should be in the same
service, otherwise too many wires would be crossed. The
problem of "cover" would be even worse if this were not the
case. The CIA presence abroad is already too apparent.
There is a generally expressed belief that covert
operations have been too widely used and that they should
be limited to those which are in the vital national interest
as determined at the very highest level in government.
Furthermore, that the decision to act should include a
recognition of what may be needed to follow up success or,
in case of failure, to minimize the costs of disclosure,
including the effect on contacts, agents, etc. in the host
country.
All overt alternatives must be thoroughly considered
before opting for covert action. The present system gives
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the CIA an'action -potential" which must be more closely con-
trolled. Too often information is developed which cannot
be used for fear of jeopardizing an agent. There id'a
temptation to use such information ourselves in an action
program of our own devising.
The case for and against the physical separation of
DDI and DDO has been presented in numerous commentaries.
The advantages of separation do not appear to me to outweigh
the disadvantages and this paper recommends against separation
of the two functions.
The basic question is one of adequate control over
clandestine operations and covert actions. It has been
alleged that control at present is a fiction. This seems
to overstate the case since it is a failure to use the
control mechanism rather than the lack of one that we note
today. While there are viable possibilities of change in
the system, on balance the best course is to tighten the
existing procedures by widening the "clearance" circle and
broadening the membership of the 40 Committee and its staff.
Some observers would require additional "safeguards",
such as Presidential certification that a given program is
in our vital national interest. A step further, which has
constitutional problems, is the sugge9tion that the 40
Committee include four members of Congress and that the
minutes of meetings be available to be read in executive
session of the various oversight committees.
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Ex 2.:t facto review and control by PFIAB and NSCIC,
(as distinct from initial approval which remains in the
40 Committee) can and should be improved, along with greater
vigilance in the field by Ambassadors and key country team
members. Adequate machinery is in being; we need to re-
vitalize and use it, but effective use depends on Presidential
and Secretary of State leadership as well as continual
vigilance and queries by_the Congress and the media. Secret
Services are as effective or ineffective as the governmental
entities that control them.
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THE IMAGE TODAY
A recent New Yorker cartoon showed two peasants in the
foreground and a new volcano in the distance. One says to
the other: "Pass it on - the CIA did it". Much, much more
has been written or spoken in the same vein.
The image, as Hilsman said in "To Move a Nation" almost
ten years ago, is t" of an omnipresent, pervasive CIA, ubiquitous
active, powerful, a finger in every pie." It has not improved!
Ransom writes that the CIA has become a foreign policy
liability and its status at home remains under a serious and
debilitating cloud of suspicion."
While it is a subject of much current argument whether
or not the CIA is a 'secret service' which merits such com-
ment, there is a general feeling of unease regarding the
power and influence of "The Agency".
Hilsman and others have observed that the "Agency" has
much going for it. It has a fast and secure communications
system of its own; it has more money; more people on station
longer than other agencies; it can dispense more favors and
has more opportunity for "free-wheeling". A cogent case can
be made for the contention that it is too powerful for its
narrow function as set forth in the National Security Act of
19)47. It has too many of the resources and instruments of
foreign policy under its one roof.
The Intelligence Establishment - published 1970
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Pejorative Comments
Very much has been written about the CIA and most of
it has been hyper-critical. It has been suggested that the
Agency itself has publicized its covert political action
successes, perhaps for the purpose of extracting money more
easily from an impressionable congress. The publicity, from
whatever sources, has been damaging and has tended to magnify
the widely publicized failures of the Agency such as the Bay
of Pigs disaster and its activities in Vietnam, Laos and
Cambodia. The present atmosphere is what one could describe
as "negative credibility". Like the peasants mentioned
above, we are prone. to believe most anything, particularly
if it is bad.
However, special circumstances do pertain at this time.
The negative public attitude toward clandestine operations
is extreme at the moment. Things were not so in the 1950s
when there was an easily perceivable threat. In the sixties
the situation changed rapidly as the Communist monolith began
to show cracks. The enemy was not so apparent or so frighten-
ing. Added to this was the debate sparked by our deep and
tragic involvement in Indo China where the secrecy surround-
ing the CIA's actions led to accusations of abuse of
Presidential powers. Add to this the.impact of Watergate
and the apparent injection of the CIA's "dirty tricks"
operatives on the domestic scene and one can readily under-
stand the present negative credibility image.
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The spate of critical statements, articles and books,,
including some much heralded but yet to be published exposes,
has led to serious consideration of the advantages and dis-
advantages of maintaining a covert action capability.
Closely linked to.this is the matter of clandestine opera-
tions which often have some of the characteristics, as well
as the dangers, of covert political action.
Some Comments in Support of Clandestine Operations
Lord Chalfont states in the London Sunday Times of
September 30, 1974, "if the U.S. is disbarred from access to
some of the less attractive instruments of secret diplomacy,
while its enemies, unhampered by the pressures of public
opinion, continue to use them, the power structures of the
world might gradually but irreversibly be changed; and the
change is not likely to be one to delight those who believe
in an open society".
Mr. Colby, the present Director of Central Intelligence,
has commented on Sec. 102 (d) (5) of the National Security
Act ("the CIA shall perform such other functions and duties
related to intelligence affecting the National Security as
the National Security Council may from time to time direct").
Colby said in his November 7, 1973 letter to Chairman Murphy
that world conditions require its (Sec 102) use much less
now, but "this weapon" (clandestine operations and covert
actions) should not be "lightly discarded from our national
arsenal". (It could be maintained that sending the U2 over
the USSR in 1960 might well have been a matter of national
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In his September 13, 1974 presentation to the Fund for
Peace, Director Colby said: "It is advocated by some that
U.S. abandon covert, action. In light of current American
policy, as I have indicated, it would not have a major impact
on our current activities or the current security of the
U.S. However, I can envisage situations in which the U.S.
might well need to conduct covert activity in the face of
some new threat that developed in the world. There have
also been, and are still, certain situations in the world in
which some discreet support can assist America's friends
against her adversaries in their contest for control of a
foreign nation's political direction". My experience as
Ambassador in two "third-world" countries over a period of
ten years convinces me that Mr. Colby is correct in his
views.
President Ford has said publicly that we will not
forego this option. Furthermore, it is significant that the
Senate, on October 2, 1974, voted 68 to 17 not to prohibit
further covert operations. (The so-called Abourezk Amend-
ment). The House, by a similar proposition voted down the
Holtzman Amendment.
Some Comments Against
However, as Laughlin Campbell says, "there is a tenable
position that covert political action is beneath the dignity
of the U.S. and the moral standards of the American tradi-
tion". Indeed, a distinguished American, former Under
SecreAtVgvafF& asg 0 bb /gentvA- .opgoi db13NAOG*Oba'0100OZ-4enback,
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has written: "Our foreign policy must be based on policy
and factual premises which are accepted by the overwhelm-
ing majority of the American people". "As one step toward
reestablishing credibility", he said, "we should abandon
publicly all covert operations designed to influence political
results in foreign countries...We should confine our covert
activities overseas to the gathering of intelligence informa-
tion" .......... *
Some Pro and Con Examples
Of course, there is no way to produce a balance sheet
with a "bottom line" showing definitively a profit or a
loss resulting from our having had a covert action capability.
Any such measurement must of necessity be most subjective
in nature.
The failures have been widely publicized and subjected
to hypercritical study. The successes much less so, even
when known or quantifiable.
Did all this contribute to internal
?
"stability" in this country and hence to easy access to
essential raw materials, an important export market and not
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*Quoted from Anthony Lewis' "Self-Inflicted Wounds", New
York ror RA/e`l~ase'1
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incidentally to the preservation of a liberal regime in
Who can say no? And who can say we could
have done as much without both an action and a collection
capability?
Who can really assess what advantages have accrued
from discreet (and hence unheralded) support of a trade
union or a rising political figure in, an area of great im-
portance to us? Perhaps none as yet, but the future may
bring the "pay off". The influence game is a part of
history and will remain so, and I cannot envisage a time
when our country can afford not to be in a position to act
when acting is considered in our vital national interest.
The crucial question is, therefore, how to determine whether
a situation is of sufficient importance to us to warrant
the risks involved.
A COVERT ACTION CAPABILITY OR i,?OT?
We may use a capability seldom, if ever, but to be
without a capability to even attempt to influence events
through the use of covert contacts with individuals or
institutions would be folly in today's world. Many "opera-
tions" have involved essential financial support of
individuals or organizations already committed to a policy
or a cause with which we are in agreement. Our support is
covert for obvious reasons, but it does not necessarily
involve suborning or "corruption" or the financing of
revolutions or of "traitors".
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Furthermore, just as we have impressive military
forces to use short of our nuclear capability, we need a
political action capability for those purposes not served
by traditional diplomacy or by war. As so many observers
have commented, we must have an action arm short of sending
in the marines.
The question is often asked whether or not our purposes
would not be as well served through some overt, perhaps non-
governmental, channel. I do not believe so. The recipients
of this sort of "aid" could be too easily criticized or even
crucified, their future ruined by the facts becoming public.
Leaky though our system is, it is better than the relatively
easy identification that would go with support by businesses,
foundations or individuals.
Problems and Dangers
One cannot delineate a rigid set of standards which
must be adhered to before engaging in a covert operation.
Each case is in a sense ad hoc with its advantages or dis-
advantages which require expert evaluation. For example,
our best judgment is that third party "x", in a mainly two
party system, would play a vital balancing role in any close
vote issue. Moderate covert support of such a party could
surely be defended, if our judgment was that the party would
vote on the side of moderation which in general would favor
our overall interests. Since such political organizations
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are usually without adequate resources, there is not only
relatively easy access, but also we find leaders of such
groups literally begging for help. The cover and cuut-out
mechanisms in such cases are not difficult to devise.
The same can-apply to individuals with leadership
potential - indeed, they may not even need to know the true
source of their support. Subsidizing a potential leader is
no sure thing; he may change for the worse (from our point
of view) over the years, but if such "gambles" pay off from
time to time, we can be way ahead of the game.
The facilities available to State through the usual
"leader grant" or "important visitor" programs are inadequate
and have no promise of becoming more effective in this sense.
We cannot allow ourselves to be without a capability to
"move" when we think we have identified a target of opportu-
rtty. Furthermore, I see no reason to label all such acts as
immoral or beneath us. We may patronize the arts or support
an individual or an institution in the honest belief that
we are serving ourselves as well as the local commonweal. I
believe this type of covert action can generally be defended,
on the assumption that adequate consideration has been given
through the control mechanisms provided. (This factor - and
the judgment capabilities of the individuals involved - is
crucial and is examined in more detail below.)
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We are on much less defensible. grounds, however, when
we become involved in certain types of clandestine' collection
operations, whether by human or technical means. The former
can be much the riskier of the two types of operations. Is
it really worth the risk involved in "owning" senior civil
servants in key positions in government? Is it worth the
risk to even try to place electronic surveillance devices in
places which may or may not provide intelligence? It has
been said we have a massive capability for determining capa-
bilities, but what we need is a greater ability to assess
intentions. It is doubtful that we can learn enough of inten-
tions by this type of collection operation to balance the
risk of exposure. This type of operation requires the most
thorough check-out of any before final approval.
In all this there is a factor of "fun and games" that
cannot be shrugged off. I know from personal contacts that
there are those in "the trade" who really prefer playing
"dirty tricks" on "the opposition" to the often humdrum and
trying responsibilities of the routines of normal diplomatic
efforts. I have become bemused and even fascinated myself
over a chance event which, if capitalized quickly, using the
covert mechanisms in being, would embarrass or damage our
adversaries. The temptation to play such games may often
be greater than is warranted, given the risks of exposure.
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Assuming that we stay in the business of covert opera-
tions, we must consider the undoubtedly deleterious effects
of exposure on our credibility as a nation basicallT in-
terested in promoting the rule of law internationally. It
is perhaps too easy to shrug off the matter by reference to
past and present practices of all great powers. Somehow
the world accepts and even expects "dirty tricks" and exten-
sive spying from our adversaries, but we must be "Mr. Clean"
in this respect. I do not share the views of those who say
we should set an example for the Soviets (or others) to
follow. We would be giving up a weapon of net advantage
which our friends abroad (and we) may need from time to time.
We would be abdicating the field to those who do not even
suffer from a conscience which drives us to the sort of self-
flagellation of which this paper is one symptom.
Recently much has been written regarding the damage
which knowledge of covert actions does to our overall
credibility, especially in the diplomatic field. I would
say the problem posed in Ambassador Moynihan's now well
known complaint about leaks in Washington and their damaging
effect on his relations with his Chief of State and other
senior Indian government officials is a serious one. But
it would not by any means be solved merely by doing away
with covert operations. The propensity to "leak" is very
great in Washington, and the usual leaks have little or
nothing to do with covert action. This is not to say the
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image of our covert action capabilities does not complicate
both diplomatic relations and the domestic scene. The pro-
pensity to believe the worst, mentioned above, is marlred and
certainly was notable in both of my Ambassadorial posts. How-
ever, I do not think. that my normal diplomatic tasks were
markedly more complicated by this attitude of mind. I do
not of course refer to such situations as today in Cyprus,
where special circumstances pertain and where suspicions of
CIA involvement in the recent coup are endemic.
Definitions and Examples
It is generally accepted that "covert actions" include
(1) political advice and counsel; (2) subsidies to individuals;
(3) financial support and "technical assistance" to political
parties; (4) support of private organizations, including
labor unions, business firms, cooperatives, etc.; (5) covert
propaganda; (6) "private" training of individuals and ex-
change of persons; (7) economic operations; and (8) para-
military (or) political action operations designed to over-
throw or to support a regime. (Bissell quoted by Marchetti
and Marks p. 389).
However, there is a serious danger factor involved in
certain so-called clandestine operations. Gathering intel-
ligence by clandestine or secret means can be a risky and
potentially damaging process. A few examples suffice to
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prove the point: ttie U-2 incident in 1960, the Pueblo
and Liberty actions later, the generally accepted (although
not officially recognized) existence of secret communications
facilities i I anccTATINTL
elsewhere. These, just as many covert operations, have their
political costs and risks.
STATINTL
It has been suggested, for instance, that our perceived
need for our facilities)
I The initial decision to establish these facili-
ties led us to a potentially "hostage" situation that had
not been envisaged at the time the decision was made. The
decision process regarding sensitive collection programs
should, therefore, be at least as exhaustive as that applied
to covert action and should take place at the NSC - LW Committee
level.
A further connection between the two types of operations
is in the personnel involved and their expertise. The link
is in methodology for the "recruiting and handling of
foreign agents". Obviously much the same personnel must
serve two functions, otherwise there would be much confusion,
overlapping of operations and even short circuits. The
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British and U.S. experiments at separation failed. The
World War II German experience was a disaster.
As Laughlin Campbell has observed:
"A single organization can groom and
position abroad a standing force of
trained intelligence officers whose basic
skill is the recruitment and handling of
foreign agents and can send directions
down command channels as to whether agents
are to be used for collection, for action
or for both."
25X1
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19
25X1
Organization of the CIA for Action and Research and Analysis
It has been suggested that one way to improve both
image and functioning is to place CIA's Research and Analysis
(DDI) function in a new institution which might also include
State's Bureau of Intelligence and Research, leaving the
clandestine services (DDO) separate.
The new Research and Analysis Organization, whether
including INR or not, would have a role more closely approach-
ing that of the CIA as envisaged in the National Security
Act of 1947. The proponents of this change say that such
an organization, divorced from "action" operations would
command much greater cooperation from the now alienated
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academic community as well as other "intellectual" circles
whose contributions to our national purposes could.,be
significant.
Furthermore, it is suggested that recruitment possibili-
ties would be enhanced, since the "stigma" of working in an
organization oriented in an important degree to "dirty
tricks" would have been removed. The-image of a true
"Central" Agency for coordination and collation and dissemina-
tion of intelligence collected by all other agencies would
be greatly enhanced. The functions of the Clandestine
Services would be kept apart, either in an organization
directly responsible to the President thru the NSC or, as
some suggest, still thru the DCI, though physically separated
from his other service organizations.
Halperin in his paper, "Implications of Decision
Making for Covert Operations", after endorsing the concept
of a split along the foregoing lines, suggests in addition
that the Research and Analysis or intelligence evaluation
organization have a role in decision making on all covert
operations, including especially an evaluation of the likeli-
hood of success and the cost of failure. It should also
provide an evaluation, ex-post facto, of the value of the
information obtained through clandestine collection activities.
In other words, Halperin believes that the clandestine
services should be evaluated by the Research and Analysis
group, and he recommends they be joined in this responsibility
by policy-level review in State, DOD and the White House.
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(Presumably this latter function could be handled by NSCIC
or PFIAB - See Subsequent and Comments)
There are some cogent arguments in favor of thc`
organizational status quo. DCI Colby has spoken of the
many advantages of "cross fertilization" between analysts
and operators. Physical separation would render this
virtually impossible. Agency representatives insist that
there is a close and valuable association between DDO and
DDI and that the new system of NIO's capitalizes on their
physical proximity as well as the assessment of clandestine
collection efforts made by DDI.
Aside from the tremendous expense of separation other
important factors militate against such action. DDO would
hardly be less in evidence - organizational requirements
would dictate that the administrative set-up, mostly field
and action oriented, plus the communications facilities
would require a larger physical set-up than DDI. To attempt
to keep the Clandestine Service personnel separate from
these facilities would only further accentuate the problem
of division.
Furthermore, the proponents of the status quo claim
that the Academic/intellectual community would hardly be
more receptive to what they would consider a change in the
facade only. In addition it is alleged that, contrary to
the statements of observers such as Halperin, the contacts
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with Academics are effective and mutually appreciated -
and that recruiting from this sector has not been a prob-
lem.
The question of chain of command also poses a problem
in a new Clandestine Services organization. If it is to
be not only physically but organizationally separated from
CIA and the DCI the Director of the new entity would pre-
sumably report directly to and take ordevs.,,o'rom the NSC or
the President. This would give the President an active
arm just one step closer than the present one (Some critics
might say a virtually private one subject to abuse and
very reminiscent of Watergate). Furthermore, much would
depend on the nature of the individual at its head. If on
the other hand, command were still thru the DCI, there
would be little substance and merely much less efficiency
in the change. It is also suggested that Congressional
support of clearly Research and Analysis functions could
suffer since they lack the "sex-appeal" of clandestinity.
In this connection the concept of a Research and Analysis
Organization combining CIA and State's INR has been men-
tioned. The advantages of such a move seem to lie only in
minor budgetary savings. The loss of INR's independent
status as a "check and balance" on CIA's apparatus would
far outweigh any savings.
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On balance then, it is my opinion that the arguments
in favor of a structural status quo deserve the support of
the Commissioners and our efforts to improve the situation
must be concentrated on the application of adequate criteria
for action as well as adequate controls for action decisions
as well as for review of on-going clandestine operations.
CRITERIA FOR ACTION
Given a policy decision to maintain a covert action
capability (which I would support) and given the existence
of a system of intelligence gathering, collation, and
decision-making for action, we come to the question of the
criteria governing the use of the means at our disposal.
Monitoring Detente and our Economic Needs
What are the problems in the present period of detente
which we would consider worth trying to solve using clandes-
tine means? The "monitoring of detente" is one, but this
requires mechanical/technical means more than human. Further-
more, the effort itself could jeopardize the goal of detente.
We need to collect data on, and if possible penetrate,
terrorist groups. This is perhaps a feasible operation.
We are increasingly dependent on strategic raw materials
which are only available abroad in sufficient quantities.
We are becoming more and more vulnera~le economically as we
become dependent on resources controlled by others. Our
need for intelligence in this field and perhaps even to take
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some action to protect-our vital interests will grow and we
cannot afford to be ill-prepared.
Third World Interests
Our economic and political interests in the so-called
"third world" acquire an aspect of greater importance as we
go further into a period of detente. The opportunities and
the need to support individuals or institutions in these
societies emerging from colonialism or from oligarchic rule
may be vital to their future. Discreet support in cases
where it can be shown that such action is of real importance
to us is warranted if subjected to thorough assessment before
approval. However, we must guard against the temptation
to use our extensive action capabilities, now somewhat
diverted from former cold-war targets; dreams of success
may bemuse us. We should take extra care in the approval
and review process in such cases.
New Field -,"Cr Covert Action: Narcotics Control
Another factor of growing importance to us is the control
of narcotics traffic. Our intelligence apparatus can and
must serve us in our attempts to lessen this danger. This
field is one of the least controversial and one which commands
a greater degree of "host country" cooperation than any other.
Experience has shown that our clandestine capabilities (in
the broadest sense of collection and action) are made to
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25
order for this type of operation. Not only is the host
country receptive, but also the quick action quick response
characteristics of the clandestine organization, in
cooperation with local authorities, bear dividends beyond
those accruing from narcotics control.
A Non-Military Action Capability
Many informed observers, such as Ransom (pg. 2 and 3,
op. cit.) have asserted that covert operations should only
be undertaken to prevent a direct threat to our national
security and as an alternative to military action. Mr. Colby
has referred to the need for an action arm with capabilities
short of sending in the marines.
Senator Fulbright has said in support of his contention
that covert action should be used only in emergencies (tO:e must
not Fight Fire .%, th Fire, New York Times 4/23/67) : "[-;e are
compelled, therefore, to lay down a qualified rule, a rule to the
effect that the end almost never justifies the means".
The Need for Follow-uo Action
It has also been observed that covert action can rarely
achieve an important objective alone. It can buy time, fore-
stall a coup, create conditions more conducive to the use of
covert means to achieve an objective. If, for instance, a
coup or other change of government is averted and no additional
step is taken to correct the abuses or the socio-economic
conditions which brought on the unrest in the first place,
then the effort will have been in vain and the risks run even
less Justifla 11t:.
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25X1
Covert actions are therefore to be considered as best
suited for "tactical" situations, where success can bring
quick, short term gains upon which overt, longer term programs
can capitalize.
Risks of Excosure
In a period of detente, the risks inherent in a given covert
action program are much greater than during the cold war era.
Furthermore, given our apparent inability to maintain secrecy,
we must bear in mind the cost of exposure particularly today,
when the media and the Congress are "discussing" the issue,
and a larger number of individuals, formerly in government,
are setting an example of moral crusaders by revealing past
association with clandestine operations.
An individual, a political party, or indeed a govern-
ment could be seriously compromised or damaged by a link to
the CIA. Furthermore, disclosure is costly to the image of
America that we wish to project. We are not only considered
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inept if we are caught but also immoral, even if we succeed.
We prejudice our leadership efforts to promote, on another
plane, a world in which respect for law is paramount. There
is also a factor of alienation of important sectors of our
society from government.
Exposure of a given clandestine operation or covert
action may well result in very strained relations with the
local government which undoubtedly will react to any tampering
with the institutions or individuals of that country. In
addition, our adversaries in the country, both domestic and
foreign representatives, will be quick to try to take
advantage of our action. One must also consider what damage
a "subsidy" may do to the very organization (party, trade
union) or individual we are hoping to help and strengthen.
Too often our help is a crutch which can only be thrown
away with difficulty.
Once having determined that the risks are worth it, we
must apply the same criteria on a continuing basis in order
to insure that the situation still calls for the same sort
of operation and that the costs are still worth the hoped
for results.
These observations lead us to a consideration of the
means whereby we can be sure all such risk factors are included
in the equation. It is obvious that the staffs of those who
sit in final judgment on the 140 Committee must consider a
realistic assessmentof costs and risks and should have a
disaster plan ready in case the operation is "blown".
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Hilsman observes that most covert political action
programs have "such a high potential for political disaster
that every single program, no matter how innocuous it seems,
should be the subject of the fullest coordination and
consideration".
Consideration of Alternatives
There should also be a full consideration of all overt
alternatives - whether the operation is a clandestine
intelligence gathering project or a covert political action
program. A decision to proceed should only be taken when
all overt means have failed or are judged to be impossible
to apply in the circumstances. There is an obvious need for
much greater attention in the executive for review of on-going
projects to determine whether they continue to be worth the
money and the risk. Throughout all the studies of this subject
the question of "control" has been considered basic and in
our case can and must be greatly improved.
Furthermore, despite constant remonstrances to the
contrary, there is no doubt that the "Agency" does propose action
programs and can and does choose the channels to be used in
presenting the proposals for wider executive consideration.
My personal experience and consultations with colleagues
confirms these observations. When Hilsman proposed that
State's Ii1R be the "clearing house" for covert action programs,
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Allen Dulles blocked the idea. Hilsman alleges that CIA has
too much money and too many people and there is a consequent
temptatiyn to think up things to do just to keep busy I
am not so certain that this is still such an issue, in view
of budgetary limitations, but it should be kept in mind.
When to Use Intelligence-and By Whom
An additional factor, which I have observed personally,
is that clandestine operations may uncover information of
great value which can only be used covertly and by us, even though
the "host government" has the interest and capability to use
it - the reason being we judge we must protect our sources
completely. Obviously we must protect our agents, yet this
need must be balanced carefully against the gains from usage.
As Lockhart has noted: "There is no point in producing
intelligence of any sort if it cannot be used. If the
ultimate result of running an agent is to enable some staff
officer to put another pin in a map and nobody takes any
action, that does not do anybody any good --- it must make
some contribution to the national effort." Here again
we need a thorough review to determine usability - and by
whom - by our services or by those of the host country.
The Agency should have to present cogent assignments to the
40 Committee to prevent the use of informath n which the
Ambassador or the Secretary of State believe to be in the
national interest.
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THE OUESTTON OF ADEQUATE CONTROL
Who should consider and decide upon clandestine
operations (both collection and action programs)? The
system in existence looks reasonably good on paper but
close examination reveals certain faults.
Benjamin WW7elles, writing in The Christian Science Monitor
September 12, 1974, observed that "Control over the CIA,
which the Agency touts endlessly in self-justification, is a
fiction". While I believe he overstates the case, since
the control mechanisms, albeit relatively unused, do exist,
Welles shares a generally held belief that the "oversight"
function, that is, control of CIA activities in the field of
clandestine operations leaves much to be desired.
Roger Mlorris shares Welles' preoccupation and recommends
that all covert action programs be certified by the President
as in the vital national interest and be subject to prior
consultation with the Congress. He would bar funding for
"interference" in elections, mercenary military or political
assassination. He also suggests:
1. Secretary of State to have supervisory role over
all foriegn intelligence activities.
2. Prohibition of the use of private institutions
by CIA. ?
3. All Chiefs of Station to have Congressional approval.
4.
The 40 Committee to have a special independent staff
to provide all members with a full review of all
aspects and implications of a given covert action
proposal.
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5. Creation of a fu]ly staffed Congres-
sional Joint Committee or Intelligence
Supervision.
6. The 40 Committee include two members from
each house and that minutes be read in
executive session.
I believe Morris goes too far in several of his
suggestions. Presidential certification and prior consulta-
tion with Congress is too much to ask. Prohibition in the use
of funds for specific purposes other than mercenary military
operations would seem to tie the executive hand too tightly
(the suggestion that funds are available for political
assassination seems to me a gratuitous and mischievous
comment) the idea that chiefs of station should have
Congressional approval is hardly feasible if only for
security and over reasons. The suggestion that the 140
Committee include Congressional Members raises constitutional
problems.
Observations by critics such as Morris and comments in
Congress and the press minimize the effort and maximize the
problem. There is little doubt among "lay" observers that
there are mechanisms for control in being. The mechanisms
can undoubtedly be improved but a net gain would be registered
if only the existing organizational provisions were used properly
or modified somewhat. 'A combination of the two is probably
what we must aim for.
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Better Use of Existing Provisions
Let us now examine control in the sense of initisation
and approval of projects. The existing system provides a
means for review which, though it is limited as to input by
interested and above all knowledgeable officers, should
function well enough to protect the interests of the U.S.
That it does not provide guarantees of protection is more a.
human than an organizational failure. (The same can be said
of many if not most of our serious problems.) Nevertheless,
with some relatively minor changes, the system can be much
improved.
The present system of Embassy/Station, or Washington
initiatives, prepared and reviewed in the field (Ambassador
and Station Chief usually but sometimes by the operations
group of the Country Team) or through CIA/State agreement
at Bureau level, sounds fine in theory and in actuality provides
a relatively good review prior to approval by the 40 Committee.
The weakness in this facet of the system is largely a function
of the knowledge and experience of those occupying the positions
that are "cleared" to receive such information or to be
consulted on the subject.
A zealous, or indeed over-zealous, Chief of Station has
a fine opportunity to influence a new Ambassador, particularly
if he be a political appointee. The same can be said of an
Assistant Secretary's or Deputy Assistant Secretary's CIA
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counterpart in Washington. In other words, there exists
the possibility, if not the probability, that the cards
are stacked to favor-the views of The Agency whatever1they
maybe regarding a given covert action proposal.
To mitigate these difficulties we should extend the "need-
to-know" circle to include those officers with more detailed
knowledge and experience; e.g. - Deputy Chief of Mission,
Chief Political or Economic Section and DIA representatives
as appropriate in the field, and country directors or desk
officers in Washington. Obviously such a move increases
the problem of security but the value of input from these
individuals would far outweigh any risk of an increase in the
probability of leaks.
40 Committee - Weaknesses & SuFRestions
In addition, we should examine and revise the functioning
of the 40 Committee. The fact that it (as well as the ex-post
facto executive oversight group PFIAB) are served by
Secretariats headed by CIA officers may present more of a
cosmetic than a substantive problem. NevertYPless, a change in
this aspect of the system would provide additional protection.
The fact that the now-defunct "Special Group-Counter Insurgency"
had a State Department representative on the Secretariat
served as an "early warning" system witj5in the bureaucracy.
An experienced Foreign Service Officer on loan to the staff
could play a devil's advocate role, removed as he would be
from parochial enthusiasms or even bemusements. However, we
cannot overlook the fact that the members of the committee
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as now constituted are powerful and often egocentric men
and their actions can lead to short circuits in the system.
There are too many instances where the fiat of power and
position has silenced or ignored informed and experienced
officers who foretold theproblems involved in, or indeed
the failure of, a given course of action.
It has been pointed out that (contrary to the procedures
of its predecessors and of the Special Group), the Committee
seldom meets and most of its business is transacted by
phone. Such a system is inherently weak. The fact of prior
consultation among deputies or discussion at "working"
or expert levels may or may not insure adequate review.
The present system certainly does not provide the insurance
of substantive discussion among principals, perhaps
leavened, if not enlighted, by the observations of two
or three trustworthy, prestigious and experienced individuals
other than the "interested parties" who now participate in
the telephone polls and rare meetings in the OEOB.
The 40 Committee itself should be enlarged through the
addition of two or three prestigious "ex-users" of intelligence
or ex-coordinators of covert operations (e.g. ex-Assistant
Secretaries of State, ex-ambassadors, retired senior military
or even ex-Cabinet members such as Melvin Laird).
Better use of the present machinery could go a long way
toward the goal of adequate control "before the fact". The
same can be said of ex-post facto review or "oversight".
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The Congress, Executive bodies such as the President's
Foreign Intelligence Advisory Board (PRIAB) and the National
Security Co'jncl_l Intelligence Committee (NSCIC) provide
for a means of, but do not necessarily "deliver", adequate
control. In addition we should improve the present somewhat
desultory annual review system by more rigorous require-
ments for Embassy Country Team or Ambassador/Station Chief
on-going review, as well as Bureau level reviews in
Washington.
The Need for Secrecy - Penalties
DCI Colby's official position on Congressional oversight
is that anything Congress wants will be provided. The Agency
has worked with the specified sub-committees in the past and
forcefully asserts that appropriate members have been
appropriately briefed. Nevertheless, doubts have been
expressed both in Congress and elsewhere as to the efficacy
of this system of briefings.
On the other side of the coin is the question of security
which only reached serious proportions with the Harrington
expose of alleged Agency actions to undermine the Allende
marxist regime in Chile.
The overall question of security, whether in the Congress
or in the Executive, is one which has received much attention,
particularly since the Ellsberg-Pentagon Papers incident.
There is no doubt that present provisions are inadequate.
Given the virtual impossibility of obtaining any legislation
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as far-reaching as
the British "Official Secrets Act"
we must try for something less but more adequate than the
protection (or lack of it) afforded by our present laws.
Director Colby has made certain proposals which should be
thoroughly considered by the Congress, though there would
seem to be constitutional problems involved. The Director's
proposals were discussed by him at the September 13, 1974
Conference on CIA and Covert Actions under the auspices
of the Fund for Peace. His position was that it was necessary
with regard to individuals who had signed secrecy agreements
with government agencies "to impose penalties on those who
take upon themselves the choice of which secrets to reveal,
rather than relyin on the established declassification
procedures of our government".
This would not apply to news media or others who have not
consciously assumed an obligation to respect secrecy. Colby
argues cogently that even agricultural production statistics,
census information and tax returns are better guarded than
many more significant government secrets.
The DCI has informed Commission Chairman Murphy that
the Agency is responsible in detail to the authority of four
Congressional Committees and that they, along with other
interested Members of Congress, are briefed regarding Agency
covert action programs. Within the Executive he points out that
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he is responsible to the President and to the NSC. His
Agency responds to the substantive requirements of the Secretary
of State, Secretary of Defense and others with foreign
intelligence interests. In addition to Congressional review,
Director Colby points out that the PFIAB is asked to review
CIA and other intelligence community acts.
Joint Congressional Committee - Pros and Cons;
With regard to the role of the Congress, Mr. Colby has
said that it is up to that body to prescribe the system of
"oversight" by legislative authority. While he, for obvious
reasons, has not made suggestions as to possible improve-
ments in the system, it is a fact that there is considerable
support within the Agency, as well as elsewhere in the
Executive, and in the Congress too for that matter, for a change
to a Joint Cc mittee form (Joint Committee on National
Security) as in the Joint Committee on Atomic Energy.
Since such a Committee would write its own rules, security
would be better than under the existing system whereby standing
committee rules apply, and therefore briefings could be more
detailed and candid. This view is strongly supported, inter
alia, by Senators Humphrey and Baker, Congressman Zablocki
and by Ray Cline, former Director of the Bureau of Intelligence
and Research in the State Department. (Although the Joint
Committee question is a matter for consideration in another
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paper for the Commission, I believe a failure to mention it
briefly here would seem a rather obvious omission of a
pertinent aspect of the problem of oversight and control.)
Such a change would ease congressional and public concern
over CIA activities. It would also provide a better."forum
for registering Congressional doubts and/or complaints and
the initiation of advisory action with respect to any
errors which might become apparent". (Ransom, p. 164) It
would also tend to counter the rather general belief that the
present committees are not doing the job adequately.
On the other hand there may be opposition to such
change from within the existing oversight committees since a
National Security Committee dould probably want to "control"
all Departmental Intelligence work - even that of DIA which
is not the prime responsibility of the Armed Services
Committees.
It has been suggested that an alternative to a new
committee would be the revision of House rule number 12 (and
the comparable Senate rule) to preclude access by other
members to papers or transcripts concerning intelligence.
In his dissenting view on the 1955 Mansfield resolution,
Senator Hayden (Arizona) expressed the view that the existing
system was adequate, that close studies of much secret
"executive" acts might better be left to"the FBI and that the
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creation of the Joint Committee would raise constitutional
questions. Only the latter point deserves a full study,
perhaps in Mr. Harris' paper.
Other Oversight Groups
PFIAB's role in ex-post facto oversight, though
mentioned in Mr. Colby's letter to Chairman Murphy, is
minimal. This fact is not a result of anything other than
choice by the Chairman and-other members of the Board and
the limitations placed on their activities by other
demands on members' time. It meets only every two months
for two days. It has conducted ex-post facto, "hit or
miss" reviews of some covert action programs. It could do
much more, particularly in reviewing on-going project - viability
in sensitive areas. Its membership of prestigious individuals
from many different professions, provides a unique, critical
and disinterested forum for airing the potential for danger of
on-going actions.
Its "post mortem" studies should also result in more
objective observations than could be expected if a politically
or bureaucratically oriented body. If Mr. Rockefeller continues
as a member, as he has indicated he would like, the group may
take on new vitality and value in this important task. In
doing so, however, PFIAB needs a comewhat less parochial
staff. It could be alleged that its present CIA-provided
Secretary (There is a Navy staff member too, in view of the
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fact the Chairman is an Admiral) might try to avoid the
consideration of "sacred cows" or other potentially
dangerious projects-in-being.
Various observers have suggested alternatives for improved
W.
control mechanisms.' Benjamin Welles in his September 12
article in The Christian Science Monitor proposes an independent
review panel of retired judges, academics, industrialists,
scientists and ex-consumers of intelligence such as
Ambassadors, Admirals and Generals - the latter group
preferably recently retired. It should be a simple matter
to modify the PFIAB to include this meritorious suggestion.
The Killian Committee, established as a result of recommenda-
tions by the Hoover Commission (1953-55), was a similar body
and asked as an early PFIAB. Such men as Robert Lovett,
Benjamin Fairless, J. P. Kennedy, E. L. Reyerson, and senior
military representatives reportedly did well in this role.
This vital function is not being adequately performed now.
Another control mechanism not adequately used is the
National Security Council Intelligence Committee (NSCIC),
established by Presidential directive November 5, 19741.
The NSCIC was established as a result of weaknesses
discerned by the Schlesinger study group and was supposed
to provide guidance on national substantive intelligence needs
and a continuing evaluation of intelligence products.
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Its chairman is thesame over-worked, harassed individual
(Assistant to the President for National Security Affairs) who
chairs the 40 Committee. Indeed, membership is virtually the
same. on both organizations - (Under Secretary of StattS for
Political Affairs, Deputy Secretary for Defense, Chairman of
the Joint Chiefs of Staff and the Director of Central
Intelligence). Aside from this duplication of interests
represented in both groups-and the possible problems arising
therefrom, the group has seldom met. A month after establish-
ment in late 1971, there was a 30 minute meeting. The next
one was 2 1/2 years later, in August 1974!
Provision must be made for regular meetings of this
important review group, along with adequate staffing to ensure,
insofar as possible, effective review of at least major
on-going programs.
The Need for Leadership and Vigilance
We know there is a serious control problem inherent in
the system. The efficient functioning of any or all of these
before-or-after-the-fact control mechanisms depends almost
wholly on the interests and wishes (and personality) of the
Very Important Persons who control the. First there must be
the energy and determination of top policymakers to make
control effective. Do they have the time or the "attention
span" to carry out this essential leade]ship task? A problem
they face is that the information or "intelligence" they
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receive is mainly supplied by the. system they are supposed
to be controlling. Have they the time to be objective in
their consideration?- Do they have the inclination to call
upon knowledgeable members of their staffs for dissenting
views, or do they consider themselves already adequately
informed?
As long as chairmen and/or members do not feel the need
for action, or as long as they do not have the time nor the
inclination to use the expertise of the bureaucracy, control
is not adequate. To ensure against this weakness, we can
only count on Presidential and Cabinet leadership, plus
continued vigilance and cuestions by members of the control
groups, by the Congress and the media.
Obviously it is neither an easy nor a sure thing to
exhort a President or a Cabinet member to action. Perhaps
the most that can be provided is adequate staff work initiated
by any one or more of the members of the various oversight/
control groups, which then must be acted upon by the total
membership.
John Bruce Lockhart, in an address last year (qp.cit.),
commented as follows on the problem of control: "I believe
the weaknesses in the whole intelligence set-up is that those
in charge are inadequately educated about the whole problem
of control ... Secret Services are as competent or incompetent
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as the governments that control them".* Perhaps the
word "effective" is a better choice than competent, but
the point is crucial to any consideration of th problem
of clandestine operations.
*The Relationship Between Secret Service and Government
in a Modern State" - a lecture at RUST, 11/21/73
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RECON,1ENDATIC TIS
1. Limit covert operations to those certified by the
Secretary of State and the President (as represen#aed
on NSC) as of great importance to our national security.
2. Maintain the present link between-clandestine intelligence
collection and covert operations in its present form within
CIA (DDP).
3. Strengthen the control/approval mechanism in 40
Committee. The President and Secretary of State should
be required by law (amend the 1947 act as necessary) to
monitor adequately the 40 Committee functioning. This
requires an enlarged staff - which should have repre-
sentatives of other agencies than CIA, e.g., senior repre-
sentatives of INR and DIA.
The "privileged" circle in CIA, State, DIA, etc.,
must be enlarged to include more of the experts on a
given subject being readied for presentation to the
Committee. Seniority or position cannot insure
either substance or security. Provide by regulation
for regular meetings and discussions and include a
provision that any agency or non-government represen-
tative may object at cabinet level if the meetings are
not held.
Provide by regulation that the 40 Committee include
representatives from outside the bureaucracy (not from
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the Congress), perhaps retired former users
intelligence; i.e. ex-military, ex-Assi~?'.
of State, or ex-ambassadors. i E yule?e ~i,ac each covert
action recommendation include a thorough examination of
follow-up requirements to be pi'e'. Jc -' '>~
to capitalize on successful operations, not just a
"disaster plan" in event of failure or disclosure.
4. Establish a Joint Congressional Committee for National
Security or failing that modify House Rule 7? -tn~
comparable Senate Rule.
5. Require by law and regulation that particulee?1~.r : _ r
operations be reviewed at specified i.nterva_ : (i . - .
frequently than the present annual review) i~y: t`__
Ambassador and Chief of Station in the field a'--c' be;
the 40 Committee and that the President, tip
NSC, report to the appropriate Congressicllel
the results of these reviews.
6. Provide by law and regulation for system,`-
all other on-going programs - both in the c aced
Washington, with the requirement of cent-
the Ambassador and Chief of Station, as well
Washington entities; e.g., PFIAB for certain
and Under Secretary of State for Political e re
for lesser categories.
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7. Through Presidential initiative revitalize the PFIAB.
Include in its terms of reference a requirement to
impress upon members their independent responsibilities
and urge them to use the resignation weapon if nof"
satisfied with the attitude of the chairman or reactions
by NSC, State or the White House. Provide for a
secretariat which is not solely in CIA hands but which
includes (as in the modified 40 Committee) State and
DIA.
8. The NSCIC must be revitalized and given specific
responsibilities enumerated in the revised National
Security Act. It should have an identity of its own,
and not be dependent on an overworked and seldom
available Assistant to the President for National
Security Affairs.
9. Provide by regulation and regular reminders from INR
for periodic review of all clandestine operations and
covert actions and their respective "Disaster Plans"
in the respective Embassies - with problems, if any
referred to Washington for decision.
10. Request a thorough Congressional consideration of DCI
Colby's suggestions for the revision of laws covering
disclosure of secrets.
11. Action proposals from the field to have more than high
Bureau clearance in State - desk officers, office directors
and INR should have a mandatory review though not veto
function.
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12. Intelligence should be used wherever possible and when
deemed appropriate by the Ambassador. The Agency should
have to present cogent arguments to the 40 Committee
to prevent the use of information which the Ambassador
or Secretary of State believes in the national
interest.
13. Every effort must be made, perhaps through numerical
limitations, to lessen CIA presence on Embassy rosters.
14. While it may only be a gesture, the Commission should
emphasize the fact that the best system will not work
without Presidential and Cabinet interest, vigilance
and monitoring.
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ISSUES ON INTELLIGENCE RESOURCE MANAGE-
Robert M. Macy
Prepared for the
Commission on the Organization of the Govern.:
for the Conduct of Foreign Policy
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Suggest you may wish to take a last look
at the Macy paper. It is also being
reviewed by Ed Proctor, and
F- I Is there anyone else who.
should see it for Security purposes? _,f
STATINTL
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CONTENTS
SUMMARY
TATTDn TTt1M7f' i
Page
i.
I.
BACKGROUND
A. The Schlesinger Repcrt
5
B. Consolidated Intelligence Community Report 17
C. Economic Intelligence
D. U.S. Embassies
II.
III.
PRINCIPAL ISSUES
ROLE OF DCI VIS-A-VIS THE DOD
33
IV.
MULTI-YEAR PROGRAMMING AND BUDGETING
43
V.
GROWING IMPORTANCE OF EONO,%IIC INTELLIGENCE
50
VI.
THE ALLOCATION OF COLLECTION RESOURCES
58
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SUMMARY
The Commission has several important opportunities
to contribute to better management of intelligence resources,
as follows:
1. Recommend ways to strengthen the hand of the DCI
in allocating intelligence resources, particularly by
extending the present shared responsibility of the DCI with
DOD for satellite intelligence programs to other DOD intel-
ligence programs. (See pp 33-42, particularly the discus-
sion of Option C)
2. Endorse the moves already made toward multi-year
planning and budgeting by the Executive Branch and the
Congress and encourage further moves in this direction
(See pp 43-49)
3. Recommend that the DCI take steps to strengthen
further the collection of economic intelligence without
waiting for all of the issues regarding top management
for economic policy within the Executive Branch to be
settled. Such steps would focus on raising the priority
accorded economic intelligence relative to military-
political intelligence (a) in staffing top positions in
the Community and Office of the DCI, (b) in preparing
Congressional presentations, (c) in allocation of resources,
and (d) through more centralization of collection activities
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for economic intelligence in CIA. (See pp 50-57)
4. Endorse certain discussions and moves now taking
place within the Community that point toward developing a
national strategy for intelligence. An annual report
presenting the options for such a strategy would replace
the present annual Consolidated Budget for the Intelligence
Community. (See pp 58-65, particularly Option C)
ii.
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INTRODUCTION
This paper is concerned with issues in the management
of foreign intelligence collection activities for purposes
of supporting U.S. foreign policy, particularly those
activities carried on by CIA, DOD and U.S. Embassies.
There have been a number of significant changes and improve-
ments in the management of the Intelligence Community in
recent years, so that in preparing this paper it was neces-
sary to rely primarily on interviews for background, not on
published documents which are usually not up to date. The
Community has a number of minor management problems which
could have been identified in this paper, but it was con-
sidered more constructive to concentrate on a few major
issues. If these important issues can be resolved most of
the others will probably fall into place.
I have been asked to include in this report an annex
presenting budgetary figures for the Community. These
figures are now disclosed in detail to Congressional sub-
committees of appropriations committees, but with the under-
standing that the figures would not be made "public." Thus,
it was considered inappropriate to include them in this
report.
I would also point out that certain activities for
which we did not receive security clearance were considered
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"off limits" for the Commission and its staff. These
activities are of very significant size and are shown as
separate line items in the DOD and Consolidated Community
Budgets.
I have also been asked to consider "alternative roles
for intelligence consumers in determining intelligence
expenditures or consumer-agency funds for acquisition of
special intelligence products". This proposal arises from
the fact that for consumers within the U.S. Government,
most finished intelligence is "free." To illustrate its
importance, suppose an Assistant Secretary of State needed
certain intelligence that could be obtained by very expen-
sive satellite photography, or an inferior product could be
obtained from overt sources. He might be unwilling to pay
for the more expensive photography if the money to pay for
it had to come out of his own budget. He would be satisfied
with the inferior product.
The basic idea of making the intelligence consumer
more cost conscious through requiring him to pay for the
intelligence has merit. However, I have been unable to
figure out practical ways to achieve such a result. For
example, suppose certain finished intelligence were produced
from raw data collected by NSA and from certain agents, and
partially confirmed by overt sources.' 200 persons were
involved in its preparation. Dr. Kissinger was then briefed
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for 30 minutes on_this intelligence. How much should he
pay for it? He did not know in advance what the intelli-
gence included. He may already have known most of it
through personal conversations with foreign diplomats. Or,
if Dr. Kissinger received 10 telephone calls last week,
each including some intelligence, would he have to pay
some pro-rata amount for such information? How much? How
would such payments affect the allocation of intelligence
resources?
Suppose NSA has tried very hard for 5 years to crack
the top codes of 3 countries, but with no success so far.
However, if such codes could be broken the results would
probably be dramatic and 5 U.S. Departments would be very
much affected. Should these 5 departments share the cost
of this part of the NSA operation even though no finished
intelligence was produced? If the amounts each agreed to
pay did not cover the total cost of the NSA operation, would
it be terminated?
How far would you go with the above idea? Would CIA
have to pay for all Embassy cables? Would AID have to pay
for all foreign agricultural reports of the Department of
Agriculture? Imagine just the paperwork involved.
Suppose the State Department was unwilling to pay for
satellite photography. Would that mean that State would not
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be permitted to see any of the results of this photography
in the future?
If the payments by consumers were restricted to
intelligence consumers within the Department or Agency now
producing the intelligence, at least some of the problems
mentioned above would be avoided. However, the intelligence
collected by DOD, for example, now includes a lot of eco-
nomic intelligence of use only to other Departments and
Agencies. Who within DOD would pay for it? The satellite
photography is of vital importance to the Secretary of
Defense and the Joint Chiefs of Staff. Does it make sense
to give the Air Force the choice of spending a given amount
of money on the satellite program or on other Air Force
activities? If the Army refuses to pay for satellite pho-
tography, does this mean the Army will not be permitted to
see the results of this intelligence activity?
I do not think this whole idea will stand close examination,
and have not discussed it in this report.
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I. BACKGROUND
The following notes are presented as background infor-
mation for a review of the issues and options presented in
this report. It is assumed -that the reader has some knowledge
of the structure and operation of the Central Intelligence
Agency (CIA), and the intelligence activities of the Depart-
ment of Defense (DOD).
A. The Schlesinger Report
The intelligence situation was reviewed by the
Schlesinger Study Group in 1971. It was found that there
was virtually no policy level guidance to the Intelligence
Community on substantive intelligence needs. It was also
concluded that the review of the quality, scope and time-
liness of the Intelligence Community product was neither
systematic nor continuing. The President instructed
Dr. Kissinger to set up the NSC Intelligence Committee to
(a) provide guidance on national substantive intelligence
needs, and (b) to provide continuing evaluation of
intelligence products.
The NSC Intelligence Committee (NSCIC) was established
in late 1971, and had one 30 minute meeting a month later.
Over two and a half years elapsed before the next meeting
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was held on August 25, 1974, for a little over an hour.
The working group of the Committee met once in April 1973,
and was reactivated after the August 23 meeting in-antici-
pation of another Committee meeting which was held in
October, 1974.
The President's instruction to provide policy level
guidance on intelligence needs through the NSCIC was not
met, but the DCI attempted to provide a substitute in the
form of "KIQss" (key intelligence questions), which were
developed by collectors and processors, not consumers at the
policy level.. The KIQs were sent to the various members
of the NSCIC for guidance, and useful reactions were obtained,
particularly from the DOD.
The President's request for continuing evaluation of
intelligence products also has not been met. Several "crises"
studies were conducted by the Intelligence Community. No
formal evaluations have been completed, and there is no
mechanism so far for continuing review. The past crises
studies did provide some guidance in refining and strength-
ening the KIQs.
The President also requested Dr. Kissinger as Assistant
to the President for National Security Affairs to establish
a Net Assessment Group in the NSC staff for product review
and production of net assessments. A'small group was estab-
lished but no net assessments were produced and the group
was transferred to the Pentagon in the summer of 1973.
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The Schlesinger Report in 1971 included an evaluation
of the DCI. He was too absorbed in the day-to-day oper-
ations of the CIA.' The involvement of his personal staff
in the management of the Intelligence Community was minimal
and generally ineffective. The management of the Community
that did take place was limited largely to USIB and its
many subcommittees that operated largely through consensus
and a lot of log-rolling between agencies.
IC Staff
President Nixon directed the DCI in November 1971 to
exercise positive leadership in planning, reviewing and
evaluating intelligence programs; and to restructure and
strengthen his personal staff to accomplish this. Since
that time the DCI's personal staff -- the IC staff -- has
been very substantially expanded and became much more
involved in Community management and the provision of guidance
for planning of programs.
The IC staff has introduced the KIQs program (key
intelligence questions) as a guide for collection of intel-
ligence. This program is revised annually. I have examined
the latest edition of this program, and feel that it is too
general. It is a start, but not sufficiently selective. It
does not clearly define which collection resources should
be used for answering the various questions.
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The difficulties involved in compiling the KIQs are
formidable. If you ask the intelligence processors and
consumers what they need from the collectors they may ask
for everything they can think of because it is "free." In
theory some arrangement ought to be feasible for having the
consumer pay for intelligence and thus restrict his demands
to his priority needs. I have not been able to figure out
a practical way to introduce this "user charge" principle
into the intelligence collection process.
"Crises" studies have been carried out which include
analyses of the adequacy of intelligence for a past crisis --
quality, gaps, etc. -- and thus obtain useful guidance for
refining the KIQs. Members of the NSCIC were asked to review
the KIQs, and useful comments were received, particularly
from DOD.
It seems to me that the KIQs are one of those management
tools that cannot be administered through the usual institu-
tionalized "consensus" approach. The experienced collectors
and processors of intelligence "know" which collection
resources are really worth their cost and which are of
little value. But, they are going to protect their own
program and not "tell." It is suggested that this is a
situation where the DCI can and has used the institutional
approach as a starter, but now must rely on his IC staff
to refine the KIQs on their own initiative to conform as
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closely as possible-to the realities of the situation,
pending more guidance from the NSCIC.
In the November 1971 Presidential directive, the DCI
was instructed to prepare and submit through OMB a consoli-
dated intelligence program budget, including technical
intelligence; and was also directed to "allocate all intelli-
gence resources." That is really a rough assignment for an
official who has only a presidential directive, whereas DOD,
which has 85% of those resources, has a statutory base for
allocating these same resources. This whole subject will
be discussed later in this report.
The Presidential directive included instructions to
establish an Intelligence Resources Advisory Committee (IRAC)
to advise on the consolidated budget and allocation of re-
sources. The Committee has been established, meets regularly,
and has active working groups. It is not in a lead role; and
the DCI, who chairs the Committee, faces resistance from
DOD in involving the IRAC in the CCP, GDIP, and tactical
programs, i.e., all of the DOD intelligence programs other
than the satellite programs, which are jointly managed by
DOD and the DCI. Generally speaking, IRAC, concerned with
collection resources, complements USIB, which is concerned
with finished intelligence.
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IRAC has been-controversial. Its members have
certainly benefited from it through gaining a much deeper
understanding of the collection activities and problems
of other members of the Community. The Committee has been
helpful to the DCI in identifying some of the major collection
resource issues. However, each.member tends to be very
defensive about his own organization's resources, so the
Committee is not a good management tool to obtain a consensus
on collection priorities, or on shifts of resources between
agencies.
On-going Programs
If IRAC has serious shortcomings, just how will the
DCI maintain effective surveillance over on-going programs?
There is a natural tendency to concentrate on proposals for new
projects. In preparing the annual budget, it is a great
temptation to accept 80% to 90% of the budget items uncri-
tically because they are about the same size as last year,
or within budget guidelines for increases, and concentrate
nearly all of the budget review on proposed new items. The
end result is that a substantial part of the various programs
of the U.S. Government may be continued for a number of
years without critical review. 50% or more of today's product
line of a well managed U.S. industrial.company may not even
have existed 5 years ago. We need an aggressive policy of
keeping the "product line" of the U.S. Intelligence Community
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up to date.
It is certainly reasonable to expect a heavy turnover
of intelligence collection methods and kinds of material
collected. There has been a technological revolution in
collection techniques during the past 15 years that is still
going on. The increased sophistication of local internal
security and counterintelligence programs around the world
is obviously affecting the collection techniques that will
work in a given country. I have in mind such considerations
as the growing difficulties in cracking codes and recruiting
high level agents in many countries. Additionally, it is
becoming much easier to collect much useful information
overtly as developing countries build highways, remove travel
restrictions, introduce greatly improved national statistical
systems, expand their technical publications, etc. Last but
not least, U.S. intelligence needs for supporting U.S. foreign
policy change over time. For example, there is a growing
need for economic intelligence, part of which can be obtained
by more thorough exploitation of information in domestic
agencies right here in Washington.
One way to force a review of the "base" -- of the on-
going programs -- is to maintain a very tight budget, or
even to cut the budget, as has happened in the Intelligence
Community during the past few years. Experience shows, how-
ever, that too often a tight budget results in a delay
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in introducing improvements rather than drastic cuts in
low priority items. Or, management may take the easy way
out and introduce a horizontal cut. A somewhat more
sophisticated approach is to introduce performance budget-
ing that helps to'identify activities that are not measuring
up. In any event it seems clear that a tight or reduced
budget by itself does not guarantee a careful review of on-
going projects.
The sharply reduced budget of the Intelligence Community
in recent years has undoubtedly forced the elimination of a
lot of over staffing in some on-going programs and a much
harder look at some on-going and proposed new technical
collection programs that were formerly examined almost wholly
from the standpoint of technical feasibility. We need more
sophisticated approaches, however, for continuing future
reviews of on-going programs by DCI.
The comparatively new IRAC plus the IC staff should be
able to identify those on-going collection programs that are
not working well or are obsolete. For example, I understand
that a review of scientific journals from around the world
is proving to be more rewarding than scientific espionage
activities. It is well known that espionage activities in
general are becoming less and less effective in many countries.
And so on. There was not time during this study to investi-
gate how much of a "lag" may exist in weeding out collection
activities that have outlived their usefulness. I am concerned
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that the DCI's hand may be too weak to force the termination
of low-priority collection programs on a timely basis, and
note, for example, that the DCI apparently must use military
officers on active duty to head up the IC staff so that
this staff is acceptable to DOD.
Another aspect of updating on-going programs is the
need to insure that when new techniques are accepted, old
techniques that they replace would be dropped. The IRAC
is in a good position to propose such action, particularly
because high level research officials of DOD have been tapped
for IRAC meetings. Also, the DCI has the IC staff and the
Office of Research and Development of CIA available for such
purposes. It is suggested that we need a tougher policy
providing that termination of old techniques is a condition
for using new techniques after the latter have been thoroughly
field tested.
The really tough part of the review of on-going collection
programs involves the impact of changing U.S. foreign policy
on collection requirements. This leads us back to the lack
of policy level guidance on substantive intelligence needs
discussed earlier in this paper.
In summary, the DCI has been handicapped in keeping a
tight rein on on-going collection programs of the Community
because of his lack of authority, certain fundamental weak-
nesses of IRAC for such purposes, an IC staff dominated by
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military officers (and only one FSO), and an inactive
NSCIC. This matter will be discussed further in connection
with program guidance by the DCI for the consolidated
intelligence budget.
Department of Defense
The Schlesinger Study of 1971 concluded that the
Secretary of Defense, with the bulk of intelligence resources,
exercised no strong leadership within DOD, staff support
was diffused, and programs were not well coordinated. The
President's November 1971 directive provided for (1) a
broadening of the DCI's responsibilities to include tactical
intelligence (some of the IC staff prefer to call such intel-
ligence "military forces support"), (2) the establishment of
National Cryptological Command for SIGINT, (3) the establish-
ment of a single Office of Defense Investigations, and (4) the
establishment of a Defense Map Agency.
The Presidential instruction to include tactical intelli-
gence in the coordination responsibilities of the DCI has
been implemented. For years there had been a recognition that
the historic distinction between "tactical" intelligence and
national intelligence would not stand close scrutiny. For
example, the sighting of a submarine may be initially classified
as tactical intelligence but a day or two later it will also
become national intelligence. This broadening of the DCI's
collection coordination responsibilities is a significant
improvement.
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The Presidential instruction to establish a unified
National Cryptological Command, under the Director of the
National Security Administration, for SIGINT (signals
intelligence), has not been fully implemented. This move
was opposed by thb OSD staff, the JCS, and CIA, so very little
was done about it. It might be added that the Consolidated
Cryptological Program (CCP), operated by the director of
NSA, appears to be more controversial than the other DOD
intelligence programs. The collection activities in the
field, called the Central Security Service, have been cut
back sharply as part of the intelligence budget cuts in
recent years. The intercept stations overseas have been
heavy users of expensive manpower, but are now being more
fully automated.
The Presidential instruction to establish a single
Office of Defense Investigations out of the investigative
agencies of the three military services has been implemented.
The investigators are concerned with counterintelligence
work and security checks on DOD personnel.
Action has also been taken to implement the President's
directive of November 1971 to merge the mapping agencies
of the three military services into one Defense Mapping
Agency. These mappers make important use of satellite
photographs and have mapped the entire globe.
In 1972 another step was taken that holds much promise,
namely the establishment of the Office of Assistant Secretary
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of Defense for Intelligence. Its impact has been less than
had been expected, but over time it should make an important
contribution, particularly in terms of coordinating collection
The largest intelligence program is the satellite or
reconnaissance program. Its output is widely regarded as
the most valuable in the Intelligence Community, and it has
enjoyed top priority for available intelligence funds. This
program is jointly supervised by a 2-man committee composed
of the Assistant Secretary for Intelligence and the DCI.
Both DOD and the DCI spend large sums for research on this
program.
Over the years, the introduction of technical intelli-
gence collection methods by DOD (and to a lesser extent by
CIA) has led to the necessity of obtaining rights to install
technical collection equipment such as CCP intercept stations
in other countries. Some form of "bribery" such as military
and economic assistance programs of unusual size or duration
are usually involved. Thus, the true cost of technical
intelligence programs may be substantially higher than
indicated by their budgets. It is proposed that the DCI
seek policy guidance from the NSCIC on the whole matter,
and then conduct a joint study with DOD of the true cost
of technical intelligence equipment and staff located over-
seas to determine if we are not paying too high a price
for their use in some countries. It is recognized that
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the analysis will be complicated in some countries by the
presence also of military base rights.
B. Consolidated Intelligence Community Budget,-
As a result of the President's November 1971 directive,
the DCI has pulled together Consolidated Community Budgets
for two years, and is now working on the third one. This
Consolidated Budget is prepared with the help of the IRAC,
sent to the President through the OMB, and defended before the
Congressional Subcommittees on intelligence matters. (I am
advised that there has never been a leak of information from
these Congressional Subcommittees.) The budgets of some of
the Intelligence Community members were reduced sharply over
a 3 year period, and the Consolidated Budget is now being
held at approximately a stable total dollar amount which is
not expected to increase significantly during the next several
years. This fiscal policy is forcing further decreases in
numbers of personnel and procurement of hardware because of
inflation.
Since there can only be one President's budget, the
figures in the Consolidated Community Budget must agree
exactly with the figures in the individual budgets of
Community members. Thus, the preparation of the individual
budgets and the consolidated budget must be very closely
coordinated. The first year there was not much time
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b. The-DOD has legislative authority to
prepare its budget, but the DCI has only a Presi-
dential directive to prepare the consolidated budget
including the intelligence categories of the DOD
budget. In a showdown the DOD would probably win.
c. If the DCI has difficulty in prevailing
on a substantive issue in the DOD's intelligence
budget, such issues-could be taken to the NSCIC for
decision, but that committee has not been meeting
regularly. However, the DCI has the option of send-
ing recommendations to the President with the
Consolidated Budget.
d. It is not clear whether the DCI should be
concerned only about substantive issues, or also play an
active role in determining fiscal policy controlling
the preparation of the consolidated budget. The DOD
budget has fiscal guidelines which were worked out
with the Military Division of OMB which presumably
cover all of that budget. The International Affairs
Division of OMB is responsible for intelligence
programs of the Community. The working relationship
between the two divisions of OMB, the DCI, and
the Controller in DOD are understandably complex and
unique and still appear to leave something to be
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e. It was probably assumed when the DCI was
asked to prepare a Consolidated Intelligence Budget
that it would.be sent to the OMB in the Fall at
the same time OMB received the individual budget
submission from the members of the Intelligence
Community. Thus, the OMB could review the intelligence
categories in the members' budgets and the DCI's
proposals in the latter's Consolidated Budget at the
same time. Unfortunately, the DOD budget submission
is on a different time schedule. Many years ago the
Military Division of OMB adopted the unorthodox pro-
cedure of holding joint hearings with the Controller's
office of DOD on the DOD budget, lasting into December
each year. Thus, the usual time interval between the
submission of a departmental or agency budget to the
OMB and the completion of the Presidential budget in
late December does not exist, so the DCI has to sit
in on the regular budget hearings in order to get his
views presented to OMB in time to be considered.
f. Ideally, the DCI would work out substantive
program guidelines early in the budget cycle for the
guidance of those preparing the various individual
budgets included in the consolidated Intelligence
Community. At this time it is doubtful if the IC
staff has a sufficiently detailed knowledge of all
of the intelligence programs in DOD to prepare
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comprehensive guidelines. Concentration on a few
priority issues is one answer.
Experience to-date suggests the need to take a hard
look at the President's directive of November 1971 regarding
a Consolidated Intelligence Budget. The Secretary of Defense,
for example, has statutory responsibilities for keeping a
close watch on military capabilities and actions around the
world. It is difficult to see how you can build a fence
around his intelligence activities and assign authority to
the DCI to "allocate all intelligence resources" without in
effect assigning responsibility to the Secretary of Defense
for activities over which he does not have authority.
On the other hand, it is suggested that the basic idea
behind the President's November 1971 directive providing for
the DCI to send a consolidated budget to him through the 0MB
with his recommendations is basically sound. The DCI is in
much the best position to take a broad look at where the
Community has been and where it ought to go, and recommend
to the President the key actions that should be taken and
incorporated into the consolidated budget. The DCI cannot
achieve such an objective, however, by making suggestions
in joint 0MB/DOD budget hearings in the Pentagon where he
has little more than an observer status (except for the
satellite programs).
It has been suggested that the answer lies in the
direction of giving the DCI statutory authority over the
Consolidated Intelligence Budget. I think this would be
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a mistake, not only because of the position in which it
would leave the Secretary of Defense, with his responsi-
bility for activities over which he did not have authority;
but also because of the risks involved in exposing the
DCI's and CIA's basic authorities to amendment in the
Congress. Intelligence activities are unusually contro-
versial at this time, and some very undesirable amendments
might be initiated and approved by the Congress.
A more promising approach would appear to be as follows.
The DCI would not get involved in budget details. He would
not be concerned with "whether they should buy 9 or 12
airplanes, but whether there should be any airplanes in the
budget." He would select perhaps not more than six very
major issues in the DOD intelligence programs. Careful
studies of these issues would be made by the IC staff,
including discussion in IRAC. The DCI's recommendations
on these six items would be sent to the President for
approval via the NSCIC (or perhaps the CIEP where appropri-
ate), fairly early in the budget cycle. Decisions by the
President would be forwarded not later than perhaps 1 August
by the DCI to DOD for incorporation in its intelligence budget.
In addition to the Presidentially approved decisions,
the DCI would also forward to the DOD at about the same time
a list of important programs or projects that should be
sharply reduced or eliminated. Such a listing would not only
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help promote a more intensive look at on-going programs
during the joint OMB/DOD review but would help to blunt an
effort to get the intelligence budget total raised-if the
Presidential decisions proposed above involved a net
increase in expenditures.
DCI representatives should still attend OMB/DOD joint
budget reviews, but largely for purposes of background
information. -
Looking to the future, the staff of the DCI is well
aware of the shortcomings of the management information
systems of the Intelligence Community which are addressed
primarily to accounting and fiscal criteria. These systems
are not designed to relate resources allocations to substan-
tive tasks and information, i.e. they are not a good manage-
ment tool today to measure the effectiveness with which
revenues meet requirements. There is a need for a better
system for tying the budget and program review together.
C. Economic Intelligence
The CIA and most of the rest of the Intelligence
Community were designed and staffed for the Cold War period
of the 1950s. Since then we have entered a period of detente
and lessened tensions overseas. Today we need an Intelligence
Community capable of meeting not only-the continuing require-
ment for secret intelligence in the interests of national
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security, but also the overriding challenges of providing .
solid intelligence on world-wide inflation, food shortages,
energy crises, narcotics control, and so on. Can this
challenge be met as additional tasks by the Community? Or
does the situation call for a more fundamental reorienta-
tion?
This issue is important not just in terms of helping
our President to meet his priority concerns. It is also
important in terms of continuing Congressional and public
support of CIA. Political action programs to fight Com-
munism no longer have unqualified support. Support of
military actions seems to be at an all time low. If, however,
the CIA could clearly identify itself as one of those work-
ing toward solutions to our domestic and world-wide economic
problems, its image might be significantly improved.
Let us consider the environment within which the Director
of Intelligence (DCI) works today. The basic authority for
the DCI and CIA still is found in the National Security Act
and a related piece of legislation, enacted in the late
1940s and concerned with the Cold War. The personal staff
of the DCI for coordinating the Intelligence Community,
known as the IC staff, is directed by military officers on
active duty. About
Community Budget is for the
Department of Defense. Policy guidance is supposed to be
supplied by the NSC Intelligence Committee chaired by an
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Assistant to the President who in the past has shown little
interest in the field of economics, plus the Undersecretary
of State, the Deputy Secretary of Defense, and the Chairman
of the Joint Chiefs of Staff. (A representative of` the
Treasury Department has recently been added.) The CIA
chiefs of station overseas are preoccupied with such responsi-
bilities as recruiting agents, and it is reported that few
of them have any capabilities or interest in the field of
economic intelligence. This does not appear to be an ideal
environment for grappling with many, perhaps most, of the
crucial intelligence needs of the next decade.
It is true that CIA has the best group of economic
intelligence analysts in Washington, a subcommittee of USIB
is concerned with economic intelligence, and one of the 11
National Intelligence Officers (NIOs) is concerned with
economic matters.
However, until the past few years economic intelligence
was largely focused on Russia and China, and was often
collected for purposes of estimating the war making potential
of a given country, not for support of programs to cure
the economic ills of the U.S. and elsewhere.
More recently there have been some very significant
developments in the management of U.S. economic policy, both
foreign and domestic, which took place outside the well known
"Nixon-Kissinger orbit." At the top was the Committee on
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Economic Policy, run by senior officials in the White House
and the Treasury Department. In addition, several "problem-
oriented" committees were established to grapple with such
matters as trade, monetary policy, and oil. CIA officials
concerned with intelligence on such matters quickly estab-
lished working relationships with these committees and have
been very responsive to their needs for economic intelligence
on a world-wide basis. Relationships have been very flexible
up to this time with commendable initiative being. shown on
both consumers and producers of intelligence. A very high
percentage of the intelligence provided these committees
has been based on specific requests, such as for inter-
national negotiations. In some cases this flow of intelli-
gence has been facilitated by "brokers" attached to com-
mittees who are knowledgeable about both intelligence pro-
duction and intelligence needs.
Four Treasury officials, either on loan from or with
backgrounds in the Intelligence Community, brief the
Secretary of the Treasury and his Deputy on current intelli-
gence early each morning, and then brief the Secretaries
and other high officials of domestic departments such as
Commerce and Agriculture later each morning. These brief-
ings are done with the full knowledge and support of the
DCI. It might be added that during the past 2 years, col-
lection agencies have had their priority requirements
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extended beyond the military area to cover world-wide
economic intelligence, through the KIQs (key intelligence
questions), introduced by the DCI and updated annually; and
CIA has recently produced excellent weekly summaries on such
topics as trade and energy.
The various ramifications of the world's economic ills
are still being sorted out, and Mr. Rush's departure has
left the top guidance for our economic policy making tem-
porarily in a fluid state. It seems clear, however, that
much progress has been made at high levels in coming to grips
with our world-wide economic problems, and that economic
intelligence is not an important limiting factor at this
time.
Looking to the future, there appear to be several
issues that will have to be resolved. Should these problem-
oriented committees dealing with world-wide economic prob-
lems eventually be drawn into the NSC orbit? Or should
CIA's present orientation to the NSC be broadened to encom-
pass a separate complex of high level economic committees
as major consumers? Shall the KIQs be screened by these
new committees? Should the NSCIC's mandate to provide policy
level substantive intelligence requirements guidance be
shared with the CEP (Council on Economic Policy)? If the
old Board of Requirements is revived, should it be attached
to the NSCIC or the CEP? Should the DCI present the Con-
solidated Intelligence Budget not only to the Armed Services
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Next 2 Page(s) In Document Exempt
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--3I. PRINCIPAL ISSUES
The review of intelligence resources management indi-
cates that there are a number of major issues on which the
Commission on the-Organization of the Government for the
Conduct of Foreign Policy could make an important contri-
bution. All of these issues are well known to senior mem-
bers of the Intelligence Community, and most of them are
under active discussion. In this paper an attempt is made
to identify these issues and present several options for
consideration.
The first issue is concerned with Presidential direc-
tives to impose the DCI between the Department of Defense
and the President with respect to the programming and
budgeting of intelligence resources. Such a move was first
attempted back in 1961. It did not work. A second attempt
was made in 1971 through President Nixon's directive
(reaffirmed by President Ford in October 1974) implementing
the recommendations of the Schlesinger study. Although
there was considerable enthusiasm for this DCI "leadership"
role in allocating intelligence resources during 1972 and
1973, today there is much disillusionment among key officials,
and the time is ripe to consider the options.
The second issue is concerned with the future cost
implications of budget decisions involving intelligence
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resources. This issue raises questions about multi-year
budgets, five year plans, etc. Options on this issue are
under current discussion in the Executive Branch and some
actions have been taken. The Congressional budget reform
legislation included provisions bearing directly on this
issue.
The third issue is concerned with the rather disor-
ganized ad hoc situation-prevailing today with respect to
economic intelligence. Although the major problems involve
top management of economic policy and the dispersal around.
Washington of economic intelligence analysts, there is also
an economic intelligence resource aspect worth discussing.
The fourth issue is concerned with what action should be
taken to provide a better substantive frame of reference
for the operation of the intelligence community. More
specifically, should there be a more conscious national
strategy for the allocation and use of intelligence
resources? How will such a strategy be developed?
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III. ROLE OF DCI VIS-A-VIS THE DOD
Issue #1: What steps should be taken to strengthen
the hand of the DCI in fulfilling his responsibilities
regarding the allocation of intelligence resources?-
Option A. The DCI would support a policy of collecting
all of the raw intelligence that was technically feasible
with a minimum of budgetary restraints; and would restrict
his budgetary activities largely to (1) providing a forum
(IRAC) for acquainting each member of the Intelligence
Community with the others' programming and budgetary acti-
vities and problems, (2) obtaining a consensus when possible
on issues brought before IRAC, and (3) preparing a compila-
tion of various members' annual budgets for Congressional
presentation.
For:
1. It is rather naive to think that the DCI
could have much direct impact on the DOD budget when
(a) the DOD budget includes 4/5 of the funds for
foreign intelligence activities; (b) the Secretary
of Defense has statutory authority for programming
and budgeting intelligence activities, whereas the
DCI has only a Presidential directive; (c) the strong
intelligence policy guidance and support from
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Dr. Kissinger and his NSCIC (National Security
Council Intelligence Committee) as contemplated in
the Presidential Directive of November 1971,'has
not materialized; and (d) above all, it has always
been true that only the OMB (Office of Management
and Budget) stands between the President and Departments
and Agencies on budgetary matters.
2. Experience has shown the IRAC (Intelligence
Resources Advisory Committee) does have real value
for educational purposes, acquainting each member
with each other's budgetary and programming problems,
airing opposing points of view on various issues,
and seeking a consensus where possible.
3. It makes sense to adopt a policy guideline
of technical feasibility, with a minimum of fiscal
and programming restraints, rather than rely on
consumer requests in programming collection acti-
vities. It is not realistic-to wait for users of
intelligence to tell collectors what they need.
Sometimes procurement and operational lead times
of as much as 2 years or more are necessary for
collecting certain kinds of intelligence. Further-
more, in this highly volatile world situation it
is just not feasible to set detailed priorities for
intelligence collection needs.
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4. Collectors are in .a much better position
than consumers to assess trends in collection
needs, and to-make highly technical choices of
alternative means for collecting raw intelligence.
Against:
1. Officials favoring this Option (and there
are many) are saying in effect, "Just give us the
money we need and leave us alone; we are the experts;
we know best." The U.S. Government went through an
extended period when there was comparatively little
in the way of budget restraints or policy guidance,
and the result was not only an overextended Intelli-
gence Community but also a number of intelligence
activities with excessive funding. The record clearly
shows that an option similar to Option A leads to
too many wasteful practices to be acceptable.
.2. More specifically, periods in the past,
with conditions approximating those in Option A
appeared to lead to (a) excessive preoccupation with
technical innovations and technical challenges for
collecting raw intelligence almost without regard to
cost/benefit consideration, (b) the accumulation of
a large amount of "fat" in intelligence expenditures,
and (c) an environment which discouraged the DCI
from exercising strong leadership in achieving
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coordinated and efficient operations within the
Community.
3. The sharp cuts in intelligence budgets
during the past few years, initiated largely by the
OMB, do not seem to have resulted in significant
shortages of raw intelligence, a clear indication
that wasteful practices had been in effect.
4. IRAC, established by the Presidential
Directive of November 1971, has been of value as noted
above, but each member tends to be very defensive
about his own organization's resources, so this
Committee is not a good management tool for obtain-
ing a consensus on collection priorities.
Option B: The DCI would make every effort to carry
out the Presidential Directive of November 1971 to "allo-
cate all intelligence resources" through making maximum
use of IRAC, building up his IC staff, and preparing each
year a Consolidated Intelligence Community Budget with his
recommendations, for review by the President.
For:
1. In a situation where the needs for foreign
intelligence have expanded to many parts of the U.S.
Government for an ever-widening number of purposes
and the collection resources are concentrated in
DOD, and to a lesser extent in CIA; it stands to
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reason that there must be some neutral central
point such as the DCI responsible for allocating
these resources in an objective and fair manner.
Stated more bluntly, just because over 4/5 of the
money is in the DOD budget, the allocation of
collection resources should not necessarily be
dominated by military-political requirements.
2. Although on the surface the problems
faced by the DCI in injecting himself into the
DOD budget process appear to be most formidable,
in practice it is difficult to recall any major
issue on which the DCI and the Secretary of Defense
did not reach agreement. So long as there is a
will to cooperate among the top officials, adminis-
trative difficulties tend to disappear.
3. If the DCI submits his proposed Consoli-
dated Intelligence Community Budget to the President
with his recommendations several months in advance
of the deadline for completing the President's Budget
(end of December of each year), then there will be
time to give proper consideration to the DCI's recom-
mendations, and through a channel that does not
involve the DCI in a direct confrontation with DOD
on a major issue. ?
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Against:
1. Although it may appear on the surface
that the DCI is making real progress in asserting
his authority over the allocation of collection
resources, indicating that Option B is feasible,
in fact this Option is not working. The DCI
has not reached agreement with the Secretary of
Defense on many major issues as they arose because
the DCI has not been in a position to raise the
tough questions and take a firm stand. The well
known weaknesses of IRAC as a channel for allo-
cating resources were mentioned above. The IC staff,
which is the DCI's principal staff resource to
turn up the tough questions, is dominated at the
top by military officers on active duty. One of
them told me in so many words that "if the IC staff
was not run by a military officer it would not be
acceptable to DOD." Finally, the DCI has been
waiting for the members of the Community to com-
plete their budgets before he prepared the Con-
solidated Community Budget. The Consolidated Budget
thus arrives at OMB at the end of the budget season
when it is too late to consider major revisions.
In effect, the DCI is only secon. guessing members'
budgets, not exercising leadership in presenting in
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advance his views on what should be in the members'
budgets.
2. In setting forth the above observations,
I wish to emphasize that I have great sympathy-for
the position'in which the DCI finds himself. I
think we must find better ways to take advantage
of the great potential value of his office.
3. However, it is difficult to find any
escape from the dilemma that the Secretary of
Defense has a fundamental responsibility to keep
a constant watch on military and potentially ex-
plosive political developments around the world,
and if you attempt to transfer at least some
aspects of his authority over such surveillance
activities to the DCI, you are putting the Secre-
tary of Defense in the untenable position of being
held responsible for activities over which he does
not have full authority.
Option C: The management of all of the technical
intelligence collection programs financed by the DOD budget
would become a shared responsibility, just as the satellite
program is today with its Executive Committed composed of a
representative from DOD, and the DCI; and the DCI, in
carrying out his leadership role in allocating intelligence
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resources, would not "scatter his shots" but would con-
centrate each year on perhaps not more than six major
issues, studying them in depth, including an analysis of
their cost implications for future years.
1. The joint management of the satellite
program is reported to be working very well and
appears to avoid at least most of the difficulties
encountered by the DCI in his efforts to influence
the program and budgets for the rest of the DOD
intelligence activities. It is recognized that the
predecessor of the satellite program (the U-2
program) was started by CIA, so that the adminis-
trative and jurisdictional problems involved in
extending this joint management approach to other
DOD activities would probably be more difficult
than those encountered in establishing joint
management for the satellite program.
2. By concentrating on a few major issues,
presenting the options to the President for
decision, and forwarding the decisions to the
DOD several months before the end of the budget
cycle, the timing problems faced by the DCI in
influencing the present DOD budget process are
reduced, and the issue of the DCI getting between
the President and the DOD does not have to arise.
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Against:
1. If the DCI jointly manages all of the
very expensive technical collection programs; he
may lose some of his objectivity in allocating-
resources, in enforcing the principle of using only
clandestine sources when overt sources are not
available, and so on. In other words, he may tend
to get a vested interest in these technical collec-
tion programs.
2. If the DCI concentrates on studies of a
few major issues, and decisions on these issues
involve a net increase in expenditures, the DOD
may thereby have a lever with which to insist on
an increase in the planned total expenditures for
the year in question.
Discussion: It seems pretty clear that the DCI will
be unable to exercise the kind of positive leadership
envisioned by the Office of the President unless the joint
management role he now has for the satellite program is
extended to the other technical collection organizations in
DOD. This may appear to be a rather drastic measure, but
the alternatives have been tried over the years with very dis-
appointing results.
I have found considerable support in the DCI`s office
and in the OMB for the proposal that the DCI should focus
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on studies of a few major issues each year. These studies
should include analyses of the future cost implications
of the various options.
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IV. MULTI-YEAR PROGRAMMING AND BUDGETING
Issue f2: What steps should the DCI take in order
to insure that ade uate recognition is taken of the future
cost implications of budget decisions?
Option A. Adopt a 2-year budget for intelligence
programs.
For:
1. With today's intelligence budgets so
dominated by long lead items, it makes sense to
prepare budgets for a 2-year period in order to
reflect more fully the future costs of budget
decisions.
2. Intelligence resources program adminis-
trators can proceed in a more orderly, positive way
if they know what they can count on for the next 2
years, rather than just one year.
3. The disclosure of future expenditure
implications of proposed major budget decisions
is often the most effective way to keep future
budgets within prescribed limits. A 2-year budget
will disclose a substantial part of such future
expenditures.
4. If the future cost implications of budget
decisions are not carefully analyzed, the inevitable
result will be that over the years a rapidly increasing
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part of the annual budget will be composed of man-
datory expenditures based on past budget decisions.
Thus there will be less and less flexibility in the
budget to take care of high priority new programs,
emergency developments, etc. unless sharp increases
are permitted in total expenditures.
5. Budget officials in OMB and the office of
the DCI are very much interested in the idea of the
2-year budget.
Against:
1. A 2-year budget would have to be prepared
each year.
2. Important budget decisions usually have cost
implications extending far beyond two years.
Option B. The DCI would prepare a projection of
collection requirements for the next five years, up-dating
it annually; and calculate the budgetary implications for the
next five years of major budget decisions currently under
consideration.
For:
1. The DCI has already made a start toward this
Option B by preparing a projection of intelligence
needs for the next five years, to be up-dated annually.
2. The Congress already requires the preparation
of budgets for the next five years showing the changes
in the President's budget for each year if no new programs
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are introducgd. Such a calculation is one way
of showing the future cost implications of budget
decisions included in next years budget.
3. An annual budget can be quite misleading
if the future budgetary implications of its long
lead time items are not properly analyzed. For
example, approval of a new $50,000 training pro-
gram and $100,000 for the site of a new technical
collection device, might in effect be committing
the DOD or CIA to a $50,000,000 expenditure during
the next three years. Because of the "technological
revolution" in the intelligence collection field
during the past two decades, such considerations have
become increasingly important.
Against:
1. The five year "perspective" of intelligence
needs issued by the DCI is so all inclusive that it is
not a good guide to high priority future needs or a
restraint on low priority items. On the contrary, it
is difficult to think of anything excluded from the
list. Thus this five year perspective tends to place
a stamp of approval for the next five years on anything
the Community wants to collect.
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2. The-five year projection of the current
budget is of limited value because it does not include
anticipated budget decisions during the intervening
period.
Option C. The DCI would prepare an Intelligence
Community Plan for the next five years for major categories
of items with long lead time; up date it annually; secure
approval of the plan for higher authority; and assume respon-
sibility for insuring that the current annual budget proposals
are consistent with the approved 5-year plan.
1. This five year projection of budget
decisions would include not just the budget deci-
sions proposed in the current budget, but anticipated
budget decisions for the intervening years.
2. This five year plan would not include
those activities of an administrative nature which
do not have any long lead time aspects and would
remain about the same during the 5-year period
(e.g. the controller's office).
3. Instead of relying primarily on analyses
of a few major ad hoc decisions each year to keep
the budget on the track, it would be much better to
look ahead a few years, anticipate changes in the
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priority intelligence needs, and put together a
mid-term plan that would anticipate the priority
raw intelligence needs, include necessary budget
decisions for the entire period and would be in
line with anticipated limits on future annual
budgets. This plan would be approved by higher
authority, and the DCI would insure that it is
used as an approved-guide in preparing annual
(or 2-year) budgets.
4. The preparation of this 5-year plan would
provide an opportunity not only to take a look at
proposed new projects for collecting intelligence,
but also to identify those on-going projects that
have outlived their usefulness. It is very diffi-
cult to get attention focused on low priority on-
going programs during the annual budget process if
increased funding is not requested, attention
usually being focused almost entirely on proposed
new programs and above-average increases in on-going
activities. It is probably much easier to get
agreement to eliminate unproductive activities or
duplications from a mid-term plan by arguing that
"you surely are not going to continue those programs
for the next five years."
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5. Longer term plans are already being pre-
pared for some intelligence programs.
Against:
1. The, DOD already has a classified 5-year
plan for its entire DOD budget (including intelligence)
which is presented each year. Last year the DCI was
officially permitted to see it for the first time.
How would a Community-wide 5-year plan be reconciled
with the DOD plan? Is there any practical way other than
to extend the joint DOD-DCI management plan for the
satellite program to other DOD technical collection
programs (Option C of Issue #1 above)?
2. Unless the authority of this 5-year plan
is very clearly spelled out, it will tend to be
ignored during the rough and tumble of the annual
budget hearings.
3. The existence of an official 5-year plan
raises important security problems. The plan would
have to be highly classified and very closely held.
Discussion: Steps are already being taken in the
direction of 5-year plans and serious consideration is
being given in some quarters to a 2-year budget instead of
an annual budget. Congress appears to favor moving in
these directions, as indicated by some of the provisions of
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the recent Congressional budget reform legislation. It
is suggested that moves in these directions are desirable,
and that the Commission should give serious consideration
to giving its blessing to these trends. w
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Issue #3. What steps should the DCI take to help
overcome the rather ad hoc, disorganized way economic
intelligence is being collected and processed today.?
Option A. Continue the present arrangements, CIA
responding promptly to whatever requests it receives for
economic intelligence from different parts of the U.S.
Government, with the KIQs (Key Intelligence Questions)
including economic intelligence requirements from whatever
source.
1. Informed officials indicate that the
economic intelligence requirements of the U.S.
Government are being met today in spite of rather
loose organizational arrangements, and that rela-
tionships between CIA and consumers of such intelli-
gence are excellent.
2. Until the "top management" arrangements
of the U.S. Government for foreign and domestic
economic policy matters are firmly established;
and until the probable long-run pattern of
economic committees for various major problem
areas (food, trade, oil, etc.), and the assignment
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of economic responsibilities among different
departments become clearer; it is not feasible
to move toward more permanent, institutionalized
arrangements for collecting and processing economic
intelligence.
3. Since CIA is prohibited from engaging in
intelligence activities within the United States,
there appear to be limits on what leadership the
DCI can exercise with reference to the many overt
sources of economic intelligence in the Executive
Branch.
4. Domestic and foreign economic matters are
so important at this time, that we can afford to have
rather loose arrangements with considerable duplica-
tion of effort to encourage lots of initiative and
fresh thinking and to provide the President with
alternative sources of information for policy guid-
ance during this crucial period.
Against:
1. There is so much at stake, that the
collection and processing of economic intelligence
should be thoroughly professionalized. Loose
arrangements are bound to result in an unacceptable
amount of erroneous or misleading economic information
floating around Washington, and a lot of "shooting
from the hip."
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2. More. specifically, there is concern in
some quarters that all processing of economic
intelligence is not carried out "under one roof."
Those favoring such an arrangement point out
that CIA is recognized as having by far the
largest and most experienced group of professionals
in Washington for analyzing economic intelligence,
but unless a firm decision is made soon there
will be a rapidly growing duplication of effort
in several Departments in the near future.
3. Most of the U.S. intelligence resources
and most top officials of the Community are oriented
toward military-political intelligence collecting,
and there are plans on the drawing board for a lot
more investment in resources primarily oriented
for such purposes. Even a superficial look at
(a) the small percent of the total intelligence
budget earmarked for economic intelligence, (b) the
few senior officials of the Community whose primary
interest is in economic intelligence, and (c) the
presentation of nearly all of the Community Budget
only to the Armed Services Committees, suggests
that a fresh look at the allocation of intelli-
gence resources is in order, and need not wait
for a firming up of the organization of the U.S.
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Government in the economic field. A point to
remember: most military intelligence collected
today is for possible future use; but most economic
intelligence collected today is used every dam for
guidance on matters vitally important now..
STAT
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25X1
Discussion: It seems clear that there are further steps
the DCI could take to strengthen the collection of economic
intelligence without waiting for all of the problems of top
management for economic policy to be settled. It is recog-
nized that much has been done during the past few years to
broaden the geographic coverage of economic intelligence,
and that CIA has done a commendable job during the last
two years of meeting many new demands for such intelligence
on short notice.
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VI. THE ALLOCATION OF COLLECTION RESOURCES
Issue #4: What steps should be taken to prepare a
national strategy for the allocation and use of intelligence
resources?
Option A. Do nothing beyond continuing the preparation
of the annual Consolidated Budget for the Intelligence
Community together with recommendations; and prepare an
annual review of the progress of the Community for the
President, the first review being under way at this time.
1. The Community has been subjected to very
sharp budget cuts in recent years, together with
a tight budget for the near future in the face of
inflation. It takes time to digest these cuts,
and the Community should not be kept off balance
by the prospect of possible major reallocations
of resources in the near future. It deserves a
breathing spell.
2. It is reasonable to assume that these
budget cuts resulted in correction of some of the
most serious misallocations of resources. Further-
more, there are some built-in corrections that take
place over a period of time. If you cannot recruit
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high level agents in Europe any more, resources
for such purposes are reduced. If you can get
more good science intelligence out of foreign,
publications than from agents, you spend compaXa-
tivelymore on exploiting published sources. If
you find it more and more difficult to crack codes
in sophisticated countries, you reduce the number
of intercept stations in those areas. Such changes
are taking place all of the time behind the scenes.
3. There is no "scientific," precise tech-
nique for allocating intelligence resources. Judg-
ments by experienced people will always be involved.
4. Some of the evaluation procedures of the DCI
are providing important guidance for better allocation
of resources. For example, one of the key intelli-
gence questions (KIQs) will be selected for analysis.
A study will be made to determine what raw intelli-
gence is being collected and what collection gaps
there are in answering this question; and also,
to determine if there is proper coordination between
the amount of intelligence collected and the amount
used. Thus this study provides the "base line"
information, against which the situation six months
later is evaluated.
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Against:
1. The Consolidated Budget for the Community
with recommendations has not turned out to be a very
dynamic management tool; and the annual progress
report to the President is just that, a progress
report, not a recommendation as to where we should
go from here. I have the impression that, to some
extent, the DCI is moving along without any firm
frame of reference, or strategy. There is a lot
of professionalism in the handling of details and
specific projects, but some of the major deficiencies
seem to be something the Community just has to live
with from year to year.
2. At least some of the people with whom I
have talked regarding the allocation of intelligence
resources (especially those who are probably not
in full sympathy with the President's view that we
should maintain a very strong military posture)
believe that since the DOD budget includes over 4/5
of the total intelligence funds, the DOD budget for
intelligence is obviously too high. They think
that a careful study of the allocation of resources
will result in a recommendation to reduce the pro-
portion of the total intelligence budget allocated
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to DOD for military-political intelligence. I don't
think such a result is necessarily so, but a study
would be useful to help settle the sharp differences
of opinion existing within the U.S. Government-
today on the equitable allocation of intelligence
resources.
3. It is true that there have been many studies
of the Intelligence-Community, but nearly all of them
seem to have been concerned with "moving the boxes
around on the organization chart," and not with the
allocation of resources or the general strategy for
intelligence.
Option B. Organize a high level study group, composed
primarily of individuals from outside the Intelligence Com-
munity, to make a detailed study of the allocation of col-
lection resources within the Community, and submit options
for taking corrective actions.
1. A study made largely by individuals outside
the Community would have more credibility than
recommendations developed within the Community.
2. Many new technical collection devices
and improved equipment are becoming available, and
outside experts could be helpful in determining the
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best "mix" of these collection methods for the
foreseeable future from a cost/benefit point of
view.
3. The study group would require reports
and make sample checks to determine what propor-
tion of raw intelligence now collected is processed
and used, and attempt to make some rough checks of
the comparative cost/benefit of alternative col-
lection methods.
4. The issue of the proper allocation of
collection resources appears to be sufficiently
controversial that an outside look would be help-
ful at this time.
Against:
1. It will be difficult to recruit quali-
fied persons for the outside study group who are
not employed by companies selling the complex
highly technical equipment used for intelligence
purposes or selling research services to DOD.
Would such outside experts be more objective
than informed personnel employed by CIA or
DOD?
2. Could such a study group produce mean-
ingful recommendations in the absence of any
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approved national strategy for intelligence resources?
Could it analyze budget figures for intelligence
activities of,DOD without reference to the overall
budget policies of the Department of Defense? Is
it realistic'to ask outsiders to analyze budget
data?
Option C. The DCI would prepare an annual report whose
principal product would be a proposed national strategy for
intelligence, with options. The input in preparing this
report would be the various Community members' budgets;
results of studies of major issues in depth (Option C of
Issue #1); results of DCI evaluation studies (see, for
example, item #4 under Option A of Issue #4; and near term
budget data and longer term issues resulting from 5 year
planning (see Option C of Issue #2), the planning being sub-
divided into three or four functional categories cutting
across agency and departmental lines.
1. This annual report would replace the Con-
solidated Intelligence Community Budget with recom-
mendations prescribed in President Nixon's November
1971 Directive. The Consolidated Budget has not
proved to be very successful. .
2. This Option would provide a means of
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making maximum use of the various studies and
analyses discussed earlier for purposes of
securing Presidential policy guidance for intel-
ligence activities.
3. An overall national strategy for intel-
ligence would replace present intelligence guide-
lines which tend to be little more than the sum-
mation of ad hoc decisions reached on individual
projects. The DCI would have a firmer foundation
on which to exercise his leadership role.
4. Certain major issues, such as whether all
electronic transmissions taking place in a given part
of the world should be recorded and analyzed, can
only be raised effectively in a broad report
structured as proposed in Option C.
Against:
1. Option C assumes there is enough stability
in the world to justify making projections several
years ahead with some confidence. This assumption
can be questioned at this time.
2. It is possible to be overorganized, to
have too precise policy guidelines that reduce
flexibility and may stifle initiative.
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3. The preparation and clearance of this
proposed report would require many hours of t-h
time of very senior officials.
Discussion: The annual Consolidated Budqet far the
Community, together with recommendations for the Presi_ient,
has not been a success. Various improvements in fonV,,-:r-f<
planning, and analysis of stubborn problems, now under
discussion or under way, will lay the groundwork for ` he
development of a recommended national stz- atc ; y for it. 1-
ligence. A report setting forth such recommendation,
options, would replace the present annual Ccrisoiidatnt
Budget.
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