ISSUES ON INTELLIGENCE RESOURCE MANAGEMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80M01133A001000120001-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 105
• Document Creation Date: December 14, 2016
• Document Release Date: March 28, 2003
• Sequence Number: 1
• Publication Date: November 1, 1974
• Content Type: REPORT

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ISSUES ON T_NTELLIGENCE PESOURCE MANAG
Prepared for the
Commission on the Organization of the
for the Conduct of Foreign Policy
November 1974
Dept of State review(s) completed.
NSC Referral Not Required
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CONTENTS
Pace
SUriqA-r:Yi.
INTRODUCTION
BACKCaOUND 5
A. The Schlesinger Report 5
B, Consolidated Intelligence Community Report 17
C. EconorcEic Intellicence 23
D. U.S. Embassies 28
II. PRINCIPAL ISSUES 31
ITT. ROLE Of DCI VIS-14.-VIS THE DOD 33
IV. OJLTI-YEAR PROGRLKING AND BUDGETING 43
V. GROWING IMPORTANCE OF ECONOAIC INTELLIGENCE 50
VI, THE ALLOCATION OF COLLTIOJ RESOURCES 58
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SUMMTIRY
The Commission has several important opportunities
to contribute to ipetter 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 DCT 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 Colimunity and. Office of the DCI, (b) in preparing
Congressional presentations, (c) in allocation of resources,
and (d) througl-, more centralization of collection activities
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for economic intelligence in CIA. (See pp 50-57)
4. Endorse &ertain 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
Com:Ilunity. (See pp 58-65, particularly Option C)
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11.
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INTRODUCTION
This caper is concerned with issues in the management
of foreign intelligence collection activities for purposes
of supportino 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 ircludir 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 revie 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 "KIQs" (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 13mited largel to USJ.b 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.
IRAC
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 ssues. 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 im
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 imp ovements 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 js 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. Thel:e was not time during this study to investi-
gate how much of a "lag" may exist in weeding out collection
activities that have outli\7ed 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 anC. 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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rilitary officers (and only one LSO), and an inactive
NSCIC. This matter will be discussed further in connection
with program guidance by the DCI for the consolidated
intelligence budget.
Deuartment 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 diffosod, and proglars 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 sinqle 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 hut 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 instrAction to establish a unified
National Cryptological Col,Imand, under the Director of the
National. Security Administration, for SIGINT (signals
intelligence), has not been fully implemented. This move
was opposed by the 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
Led been expected, but over time it should make an important
contribution, particularly in terms of coordinating collection
resources.
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
progra is jointly supervised by a 2-man committee composed
of the Assistant Secretary for Intelligence and the DCI.
Both DOD and the DCT spend large sums for research on this
progr.
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 techncal intelligence equipment and staff located over-
seas to determine if we arc 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 Ducget
As a result of the President's November 1971 directive,
the DCI has pulled together Consolidated Ccm=nity Budgets
for two years, and is now working on the third one. This
Consolidated Budget is prepared with the help of the IRC,
sent to the President through the OMB, and defended before the
Congressional Subcommittees on intelligence patters. (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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for the DCI to prepare the Consolidated Community Budget,
and it consisted largely of a summary statistical compila-
tion of the various member budgets plus some thoughtful
discussions of considerations involved in such an exercise.
The second year the DCI had more time to prepare the
Consolidated Budget, and made a start toward influencing
the budget substantively, but the DCI's impact was not very
great. Both the OMB and DCI felt that the timing of the
DOD budget cycle was such that there was almost no time to
consider any major issues that might be raised through the
Consolidated Budget process.
Although the DCI may have had less impact than was
hoped for in the size and contents of the Consolidated
Budget, it is understood that the Congressional Subcommittees
of the appropriation committees reviewing this Budget found
it very helpful in getting a better perspective on the
activities of the whole Community, and were pleased with
the presentations by the DCI. Attention is now focused on
next year's budget preparation.
The problems faced by the DCI in preparing a consolidated
budget include the following:
a. IRAC may flush up budgetary problems but
it is not a suitable committee in which to obtain a
consensus on collection priorities or on shifts of
resources between agencies, because each member feels
defensive about his own budget.
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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 'El showdown the DOD would probably win.
c. If the DCI 11F).5 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.
e. It is not clear whether the DCI should bc-
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 ons, the DCI, and
the Controller in DOD are understandably complex and
unique and still appear to leave something to be
desired.
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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
Comm
,unity. 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 budclet 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 ex,aple, 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 OMB
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 Mint OMB/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
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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 ap-oroved 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 it the
Presidential decisions proposed above involved a net
increase in expenditures.
DC' representative should still attend OMB/DOD joint
budget reviews, but larc ly 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
arc 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-
mnt 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 85% of the 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 (NI0s) 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 verJ 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
Lath 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 cf the Treasury and his Deputy on current intelli-
gence early each morning, and then brief the Secretaries
and ether 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 Reauirements 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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-II. 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-
tlVes 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 DCT VIS-A-VIS THE DOD
Issue 41: What steps should be taken to strengthen
the hand of the DCI in fulfilling his re-)onssibilities
;7 ?
_
reaarding 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 rea3 value
for educational purposes, acquainting each member
with each other's budgetary and programming problems,
airing opposing points of view on various issues,
and sec:c.ing 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 fo-,-
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
alternaLive 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 resourec 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, indicatine 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 second 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
Defene 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 Committe.e 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 iyot "scater 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.
For:
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 satelfite 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. Those studies
should include analyses of the future cost implications
of the various options.
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IV. MULTI-YEAR PPOGRAMING AND BUDGETING
Issue #2: What steps should the DCI take in order
to insure that adequate recognition is taken of the future
cost iJaplications 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 vill be composed of man-
datory expenditures based on past budget decisions.
Thus thc,:e will be less and less flexibility in the
budget to take care of high priority new programs,
emerg(ncy devlonments, etc. unless sharp increases
are permiLted in total expenditures.
5. Budget offjcials in OMB and the office of
the DCI are very much interested in the idea of the
2-year budget.
Against:
I. 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 budgelJs for the next five years showing the changes
programs
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are introduced. 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 net five years for major categories
of items with long lead time; up date it annually; secure
approval of the plan for hi cher authority; and assume respon-
sibility- for insuring that the current annual budget proposals
are consistent with the approved 5-year plan.
For:
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
raid-term plan that would anticipate the priority
raw intelligence needs, include necessary budget
deciE;ions for the entire period and would be in
line with anticipated limits on future annual
badget. 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 5y earplan would
provide an opportunity not only to take a look at
proposed now projects for collecting intelligence,
but also to idontify those on-going projects that
have outlived their usefulness. It is very diffi-
cult to act 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 intelligenc
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 Lc reconc
with the DOD plan? Is there any praci cal 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 a above)?
2. Unless the authority of this 5-year plin
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 auarters to a 2-year budget instead of
an annual budget. Congr ss 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.
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V. GROWING IMPORT CE OF ECONOMIC II.T1LLLIGENCF,
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. Cont rue the present arrangements, CIA
---------
responding phomptly 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.
For:
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 respon_ibilities among different
departments become clearer; it is not feasible
to move toward more permanent, institutionalized
arrangements for collecting and proccssing economic
intelligence.
3. Since CIA is prohibited from engaging in
intelligence activities within the United States,
there appear- to he 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 infolmation
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
larsI. and most experienced group of professionals
in Washinten 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 officia3s 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 Trdlitary intelligence collected
today is for possible future use; hut most economic
intelligence collect_ed today is used every day for
guidance on matters vitally important now,
Option 13. Eicnthen the DCI 's control of economic
intelligence collection through (I) more centralization of
cconolJtic intelligence analysis in CIA; (2) restriction
largely to CIA. of economic intelligence collection from multi-
national corportions, on a classified basis; (3) assignment
of CIA station chiefs as principal advisors to U.S. Ambassadors
on all collectio:n activities perfoImed by persons attached
to U.S. Embassies incluing economic intelligence; (4)
extension of DCI regular budget briefings to other than the
Armed Services Committees of the Congress; and (5) creation
of a better balance between military-political oriented
and economic oriented senior officials in IRAC and the
DCI's IC staff.
For:
1. For at least most economic intelligence,
CIA is in a much better position than anyone else
to fit the pieces together and make sophisticated
analyses. CIA has the necessary experience, the
access to many kinds of highly classified technical
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pro?mc that collect economic as well as mllitary-
political raw intelli'jence, the extended relation-
ships with corporations for collecting other kinds
of intelligence, and the adequate research resources
for developing techniques for extracting economic
intelligenc from satellite photography, etc.
2. Multi-national corporations are reluctant
to divulge economic information about their companies
that might reach their competitors. CIA is in the
bet position to gain access to such confidential
information. and protect its sources.
3. The DCI has plans to "rate" the perfor-
mance of Embassies in intelligence collection, and
many Embassies will need help in improving their
effectiveness in collection activities, much of which
is concerned with other than military or political
matters. The CIA station chiefs could be very
helpful to the Ambassador in advising on improved
collection methods, focusing more on priority
collection needs, limiting clandestine collection
only to information not obtainable overtly, etc.
Most station chiefs know very little about economics,
but their advisory role would be concerned primarily
with organization, nrccedures, and collection
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techniques, not substance. Future training
programs for CIA station chiefs should cover
this advisory role.
4. In seeJdng a better balance between
military-political and economic collection
resources, it might help for the DCI to offer
to brief economic-oriented Congressional com-
mittees as well as the Armed Services Committees
on the intelligence budget each year.
5. In view of the overriding concern of
the Intelligence Community with military-political
intelligence during most of the past two decades,
it is to be expected that IRAC and the IC staff
would be staffed primarily by officials with
experience and a primary interest in such intelli-
gence. It is my observation that the comparatively
great increase in the importance of economic
intelligence in recent years has not been accom-
panied by an appropriate increase in economic-
intelligence-oriented officials at senior levels
in IRAC and the IC staff.
Against:
1. There is a danger of over-organizing
for economic intelligence collection, and
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particularly of spending too much money trying
to udanu the -very expensive techniques for
c:ollectincj military-political intelligence to
col] acting economic intelligence. For example,
there is much. excitement about the use of satel-
lite photoraphv as a source of agricultural
intelligence. During the past ten or fifteen
years there has been a tremendous improvement
in th(, c-..i.oestic statistical programs of develop?
ing countries. U.S. agricultural attaches and AID
agricultural technlcians have learned a lot about
interprctina these figures. In practice, of how
nflch valuc will satellite photography be as a
supplement to what we already know? The cost of
this photography would pay the salaries of whole
army of agricultural attaches. Or is the satellite
photography interesting because the users look upon
it as "free," i.e. costing them nothing?
2. With reference to using CIA station chiefs
as advisors to U.S. Ambassadors, they are trained to
recruit agents and seek military-political informa-
tion. Very few of them have any interest in or
knowledge of economic intelligence. At least for
the near future it might be better to think in
terms of CIA regional advisors who would specialize
in organizational and administrative problems of
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Embassies in collccLing information_ These
advisors would visit Embassies in their area on
a regular schedule, and would assist in laying
out collection programs and improvinc; collection
techniques -- overt as well as covert.
3. There is a. danger in link ting multi-natonal
corporat one too closely with CIA.
Discussion: It sees clear that there are further steps
the DCT. could Lake 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
._ _
Issue4 What steps should be taken to prepare a
nnal i:..ratc.cy for the allocation and use of intelligence
restu
Op',lion A. Do nothing beyond continuing the preparation
of the annual Consolidated Budget for the Intelligence
Community to -r_her with recommendations; and prepare an
annual reiew of the progress of the Community for the
Pr-,si.,71t, the first review being under way at this time.
For:
The Community has been subjected to very
shal, 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 Coniaunity 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 misailocations of resources. Further-
more, there are some built-in corrections that take
place over a period of Lime. 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 compara-
tively more 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-
nioue for allocating intelligence resources. Judg-
ments by experienced people will always be involved.
4. Some of the evaluation procedures of the DCI
are preididing 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 Conelidated Budget for the Community
with reco=endatiens has not turned out to be a very
dynamiC management tool; and the annual progress
report to the President is just that, a progress
repei7t, net a recommendation as to where we should
go -.7rom here. I have the impression that, to some
extent, the DCI is movin.,4 along without any firm
frac 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.
For:
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 intellj ence 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.
I. 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 over a]
budget policies of the Department of Defense? Is
it realistic'to ask outsideJ.s to analyze budget
data?
Option C. The DCI would prepare an annual report whose
principal product would he 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 0._); resu,lts of DCI evaluation studies (see, for
exampTh, item 14 under Option A of Issue Pyl; and near term
budget data and longer term issues resulting from 5 year
plannin (see Option C of Issue t2), the planning being sub-
divided into three or four functional categories cutting
across agency and departmental lines.
For:
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 wnj_eh 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 he 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 cearance of this
proposoC repoft would require T.:any hours of the
time of very senior officials.
Discussion: The annual Consoliated Budget for tho
_
Communtv, together with recommendations for the President,
has not been a success. Various improvements in forward
Plannincj, a.c.a analysis of stubborn. probleias, now under
discusion or under way, will lay the qyoundwork for the
develo7:acnt of a reco:nmended national strategy for intel-
ligence, A report setting forth such reco=cndations, with
options, would relace the present annual Conolidated
Bu.dcjet.
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}UE. (-,71 t
1 Dec
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TABLE OE CONTENTS
-
Page
Me Optilmr- Role for Intelligence -
Spol:1: for -EGODOMJC PhaF;es of Foreign Policy - - 16
S;iport: for Eood and Agriculture Froblems - - - - 25
lnivations in Intelligence Support - - - - - - 29
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TUTUn, .TITi'l-iJCPCF SUPPORT FOR FORETCN POLICY
By J. Smith
S U A R Y
widely agreed that United States foreign policy
will ioce- It citer intensjty thnn before on economic
and tecHunol plohlems in the remaining 1970's and the
190's. This rice emphasis will require a corresponding
change in i_ntelligenee support. In organizing resources
to p!:ovie this sulTort for foreign policy one should look
at existing cpailities scattered throughout the government,
not only at those in the intelligence organizations.
Optimum tsc. of U.S. intelligence agencies will require
some caution not to overburden them with tasks lying outside
the 11 primany role: warning against external military and
political threat to the security of the United States. On
some
)1)11ems now becoming urgent -- like the Soviet and
Chinese econo:Ries, world trade patterns, world oil production --
intelligence can make a special contribution; others -- like
environmental studies and world food grain production --
may bet tel he assigned to departments with policy responsi-
bilities.
Economic issues in foreign policy have great urgency
at pi esent and will retain front rank in the future.
Support for economic foreign policy can be better pro-
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SUP11-,tri 1O YORLIM POLJCY
11; IF 1tii}L
has it thot in Cho remtsining years of
the 197Cs and in the 110' the United Stares will confront on
array of prolilnms ir foreigci il icy fund=(rntaljy different from
these whi-h do7-irte-7 the previeus thirty- yeaiLP.. The emphais
on CnTcat erid related concerns will give way increas-
itly to policy iecs centeling around economic and technologi-
oeJ
There can be no serious quaTieT with this contention.
Lhc, "futuve" as perceived here is already upon us. The
great proble,:ts of cno-I:g1%,- alloc.ation, global food supplies, and
internatior,.a,1 moretarty stability -- to name three prime examples --
have already taken the center stage away from our former main
concern: the So-v_et military threat against the security of tha
United States.
It is important to remember, however, that what is envisaged
is a shift in emphasis, not an absolute change in basic U.S.
foreign nolicy. Tnis caveat is particularly important when con-
sidering how to focus and structure intelligence support for foreign
policy in oLe futtic. It is not uncomon for those who cite
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don'( of ecos..:Ic and ti.-chnologil
-to -,1!J:,4:,ef;t at the E..3e r.::reat exTan-
sion thc inte:1.1-]gence ,Ij.11 be -,.eedec.3
to c.,:-ojove the -21nhole facetE th.e? prob-jom.
Lc cio cr]. L7,royin for w?.1-
uroundc0, scp?,. studec,whlCfl erray thc alun-
ent ceonoic r ocho.i.c:,Ja. data. in mc,,-in:!'ful p..-ct;tern,:;
and vItich guide policy tord identifyln
Jut IOCco cor Upjoir:.ca w)] thc
tas L;'holad be ass ,..).ed
ty t P000 ove1i tho!Jgh a trenJ
alroy -ntellivonce TO exp00d
broad-ly itneo fields.
Several consic:eraiionc shouadE--erve ,z1-3
reEltrL? ::t
Yirst, national secur.ity aEainst external ii.,ililary
th-,-cat will romp ina major, if not dominant, concern
for US foreign policy in the future US intelidence
has a heavy investment in guarding a,7ainst this threat
and a substantial Ehare of its energie5- and reouI--ccs
rc:ust continl..:.e to provide this protection. Second, the
intelligence agencies do rot invarflab-ly have f:.omething
special to contribLzte on ccone:IAc or technolot7ical
iL,ro'rplefl, neither ih information or methodolog:,,, In-
Etead,
what the:y hLr;e is a t7-adition of cervice and the
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Next 35 Page(s) In Document Exempt
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STATI NTL
STATI NTL
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COMMISSION ON THE ORGANIZATION OF THE GOVERNMENT
FOR THE CONDUCT OF FOREIGN POLICY
2025 M STREET, N.W.
WASHINGTON, D.C. 20506
May 1, 1975
Intelligence Community Staff
Washington, D. C.
Dear
Although our plans are still somewhat uncertain,
we now plan to try to publish the South Asia study by
Lloyd and Susanne Rudolph and their associates. I,
therefore, am sending the Rudolph summary chapter and
the cases by Stephen Cohen and Philip Oldenburg which
'lay reflect information they received from people in
the CIA.
Our time constraints are severe, and I would hope
that you could give us an expeditious reading. Thanks
again for your help.
Cordially,
William I. Bacchus
Associate Research Director
Attachments
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SOUTH ASIA AND U.S. MILITARY POLICY
A CASE STUDY PREPARED FOR THE COMMISSION ON THE ORGANIZATION OF
THE GOVERNMENT FOR THE CONDUCT OF FOREIGN POLICY
STEPHEN P. COHEN
UNIVERSITY OF ILLINOIS AT URBANA
OCTOBER 23, 1974
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I. INTRODUCTION
Since 1965 two Administrations have had to fashion a coherent strategic and
military policy towards South Asia in the face of extraordinary complexity. This
complexity is most evident in two areas of choice: the proper integration of
American regional military interests with her global strategy, and the wise use
of military means in the service of this integrative process.
There is no doubt that the U.S. has pursued "global" or grand strategic
objectives in the world since 1945. At this level critical variables have included
Soviet, Chinese, European and (now) Japanese capabilities and intentions. What
has been in doubt is the relevance of this global pattern of interaction to
American involvement in regional sub-systems such as South Asia. At one extreme,
should South Asia be treated on its own terms, free from superpower competition? ,
At the other, should American policy in the region be guided exclusively by global
and superpower considerations?1 A striking characteristic of America policy
towards South Asia has been the oscillation between these two views: one purpose
of this paper will be to describe this oscillation and identify the important
organizational and issue-related causes for it.
A second area of complexity confronting U.S. military and strategic policy
is the extraordinary militarization of relations in South Asia.2 Military
tension between India and Pakistan--erupting in open warfare twice since 1964--
has become a regrettably permanent feature: this has in turn provided the
opportunity for major external powers to provide hardware and weapons to both
sides. For the U.S. this presents a number of difficult problems: how effective
are weapons as instruments of American policy? Who is to implement an arms
program, and who is to evaluate it? Can arms transfers enhance bi-lateral
relations in what is almost a zero-sum environment, should they serve America's
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regional interests, or can (and should) they serve extra-regional global American
interests? Thus, what confronts American policy-makers is both complexity of
situation as well as complexity of choice.
One issue has dominated American military policy in South Asia: the transfer
of weapons.3 The bulk of this paper will examine the determination of arms
transfer policy in the 1965-74 period with special attention to two decision
points. These are the reformation of weapons policy in 1966-67, and the "one-time"
exception to that policy of 1970. The two decisions illustrate radically different
judgements of both the strategic importance of South Asia and the use of weapons
as an instrument; the decisions were also concluded via two different organiza-
tional patterns. To provide a broader base of comparison we will also examine
another decision with military implications: the proposed expansion of the facility
on Diego Garcia. This episode provides additional confirming evidence about the
way in which America's South Asian military policy has been made in recent years
and helps provide some additional basis for evaluation of that policy.
II. NO ARMS FOR THE POOR: STATE GAINS CONTROL
By many standards, the 1965 Indo-Pakistan war was a success. From the mili-
tary point of view it was, according to participants on both sides, 'a bloody
good show', with just enough casualties to toughen the troops but not so many
that eyebrows were raised.4 For the political leadership in each country the war
served a purpose: for the Pakistanis it was vital in their attempt to keep the
Kashmir issue alive and before world opinion, for Lal Bahadur Shastri, it was a
successful baptism under fire. True, much of the moderate East Bengali leader-
ship was incensed at the lack of preparedness in East Pakistan--but at the time
this was a grievance which was merely noted, although it was to surface again
in 1971.
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Yes, the war was useful, and not only for the South Asians. China was able
to demonstrate her continuing and firm support of Pakistan through a bit of
saber rattling in the Himalayas (and they were to repeat the effort in 1971);
the Soviet Union demonstrated that it had established itself on the Subcontinent
by hosting a reasonably successful summit conference at Tashkent. And what of the
United States? An ally, Pakistan, and a sister democracy, India, had fought a war
which was widely viewed as subsidized by American taxpayers. The U.S. OLayed
little or no role in ending that war, and had received no thanks from either
side; what was there to rejoice about?
Very simply, the war came at the right moment for the U.S. in the way that
some calamities are welcomed by debtors and bigamists. For this was precisely
the position of the U.S. vis a vis India and Pakistan. It had undertaken substan-
tial arms programs in both countries, and attempted to manipulate their relation-
ship for the presumed benefit of all three parties, with dismal results. Promises
had been made to both sides which could not be kept without antagonizing one
state or the other: the 1965 war enabled the U.S. to get out of these commit-
ments with some shred of dignity and then actually proceed to construct a reason-
ably intelligent arms policy.
Before describing this effort note should be made of the way in which the
U.S. painted itself into a corner in South Asia, and the enormous military impact
it had come to have upon a region which by no stretch of the imagination was
strategically vital.
The U.S. had been engaged in the transfer of weapons and war material to South
Asia since the mid-1950's. Indeed, transfers occurred earlier, if one takes
into consideration the weapons and military infrastructure left in the region
as a consequence of World War II. The military importance of weapons transfers
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from the U.S.A. was historically crucial. Pakistan would not have become a
serious military power without U.S. equipment. Virtually her entire army and
Air Force were equipped with relatively modern U.S. weapons, most notably M-47
and M-48 Patton Tanks (once the main battle tank of NATO), F-86 Sabre aircraft,
and F-104 supersonic fighters (also frontline NATO equipment), and B-57 light
attack jet bombers. In addition, engineering, communications, and transportation
equipment was lavishly supplied. These transfers led directly to Indian pur-
chases (largely from the U.S.A., Britain, but later from France and the Soviet
Union) of equivalent weapons and very heavy Indian investment in a domestic arms
industry.
Until 1962, U.S. weapons were largely a Pakistani asset and an Indian
problem. However, after the conflict with the Chinese, they were given and
sold to India for the explicit purpose of defense against further Chinese in-
cursions.5 To this end, the U.S. provided equipment for six so-called mountain
divisions, road-building and engineering equipment, and the beginning of a modern
air defense system orientated towards the Himalayas.6 In addition, parts of
several ammunition and arms factories were shipped to India, although not all of
these were completed before the 1965 war. Negotiations for modern supersonic
aircraft fell through, as did talks about refurbishing the aging Indian Navy.
According to the terms of the assistance, this equipment was to be used only
against the Chinese. A huge U.S. military mission was installed in New Delhi
to inspect the disposition of American aid.7
This U.S. Military Supply Mission to India (USMSMI), housed in a rented
maharajah's palace, operated under direct orders from the Department of Defense.
But it was not the first such mission in South Asia: a gigantic Military Assistance
Advisory Group had been in Pakistan for years, directing the flow of American
weapons and training in that country.
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Both of these missions were classic expressions of then-prevalent
assumptions concerning the utility of direct military-to-military ties in fur-
thering U.S. policy. As Selig Harrison and others have noted, the Pakistan aid
program was based on the belief that even before Ayub's coup the military was a
dominant power in that country and that U.S. military personnel were perfectly
capable of dealing with them.8 At that time State was thought to be unable to handle
such large military assistance programs so it seemed perfectly natural to let the
military do it. They did, with characteristic zeal. Ties between U.S. officials
and Pakistani generals date from the early 1950's, and remain a factor in bi-
lateral relations.9 State Department officials even today note with a mixture
of sarcasm and awe the power of Pakistanis--especially the right "martial" types--
to influence visiting American dignitaries)-0
The officers attached to USMSMI had no such ego-building experience. The Indian
Government had long been wary of close relationships between their own generals
and foreign military personnel: they were quite aware of developments in Pakistan.
While their fears of a foreign-inspired coup among their own military may have
been exaggerated, they were deeply felt, and Indian civilians in the Ministry of
External Affairs and the Defense Ministry were scrupulous in restricting contacts
between their own and the U.S. military.
Thus, when the 1965 war finally came the American military found themselves
to be the subject of exaggerated expectations in Pakistan and exaggerated sus-
picions in India. Pakistan expected more help than it could get; India, needing
less, was angry when even that was not forthcoming.
Even to the U.S. military the war seemed to undercut much of the rationale
for the military aid programs in both India and Pakistan. True, there were still
"interests" in both countries, especially Pakistan, in the sense that a number of
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American generals tended to view substantial U.S. programs and installations as
interests in themselves--deriving interest from program. But even in Pakistan
this "interest" had deteriorated, and the spy-bases and radar installations located
in Peshawar and Gilgit had lost much of their value. Besides, as a number of U.S.
officers had observed, India demonstrated substantial improvement over her inept
performance against China three years earlier. A number of younger U.S. Army and
Air Force officers (the two services most concerned with South Asia at that time)
argued for an arms policy which at the very least would not antagonize this growing
power.
If Pakistan had lost much of her military lobby by 1965 she had begun to lose
support among State Department professionals even earlier. The rapid move of
India towards the West after the 1962 India-China war raised the strong possibility
that she could become a de facto ally of the U.S., and a strong, powerful, demo-
cratic one at that. This position was argued by both Galbraith and Bowles, some-
times to excess, but was shared by foreign service professionals who had seen duty
in both countries.11
While there was some sense of competition between the embassies
in Rawalpindi and Delhi before 1965, the war had done much to crystallize opinion
and bring them together.
Their shared analysis of both military and strategic possibilities in South
Asia remains almost intact today, and is worth presenting in summary form:12
a) Militarily, Pakistan could no longer hope to obtain any kind of
strategic superiority on the Subcontinent even with a major external arms
supplier. This judgement was confirmed by the outcome of the 1971 war
and was based largely upon a significantly better Indian performance in
1965 than 1962. Although the war of 1965 was something of a stalemate,
and almost degenerated into a war of attrition, it was precisely that
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kind of war which India was best able to mount against the numerically
smaller Pakistani forces. No amount of bluff and bravado about the
martial races of Pakistan could conceal the fact that Indians fought
well also. Pakistan, in short, was clearly not--and could never become--
the dominant or even major military power on the Subcontinent.
b) America had few if any direct or bi-lateral military interests
in South Asia itself. While the area remained of political importance
for a number of reasons (see below) these did not necessarily have
military implications. The Soviet threat to the Subcontinent was
hardly likely to take military form, the Chinese struggle with India
seemed to have cooled down considerably. The Chinese even failed to
intervene during the 1965 war, when such intervention would have had a
great impact. And, as noted above, the spy bases and other installations
in Pakistan were no longer vital to U.S. strategic planning, having been
largely replaced by satellites.
c) the U.S. did retain some bi-lateral non-military interests in the
region. The general goals of economic development, humanitarian relief,
encouragement of democratic regimes, favorable bi-lateral relations and
the reduction of Sub-continental tensions were (and still are) shared by
foreign service professionals dealing with the region. Strategically, they
viewed the region as important in the Cold War, but not as important as
in the 1950's, but this importance was based on non-military grounds.
d) As between India and Pakistan, few in Rawalpindi, New Delhi or
Washington would be willing to argue for an either/or choice. India was
important because of its size, democratic political system, and economic
difficulties; Pakistan was itself regarded as a substantial nation but in
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addition had been a loyal American ally for a number of years. Politically,
India had excellent ties with the non-aligned world, Pakistan with a number
of Arab states and other American allies. Of greater concern were the ties
of the two states with the two great Communist powers: India with the
Soviet Union, Pakistan with China.
While there are of course individual exceptions, it must be stressed that
even today there is remarkable agreement on the above analysis among civilian
FSOs dealing with South Asia. This shared perception of local conditions and
American interests made it possible for a major step in American military in-
volvement in South Asia to be taken.
Shortly after fighting broke out between India and Pakistan in 1965 the USG
announced an embargo on military shipments to both India and Pakistan. By the time
the war had terminated plans were underway in Washington to study the entire U.S.
arms program for the region. The embargo had had an uneven impact, because Pakistan
had been almost totally dependent upon the U.S. for her weapons, while India's
military had British, French, and indigenous equipment.13 In fact, the USG never did
give or sell frontline combat weapons (tanks and aircraft) to the Indian armed services
which had viewed America as the best possible source of weapons. When the then
Defense Minister (Y. B. Chawan) went to the Soviet Union in 1964 to examine Soviet
weapons he was accompanied by a group of reluctant Indian officers; ultimately
it became clear that American weapons were not to be forthcoming, and the Indian
military settled for what they could get.
While the Pakistanis had held discussions with the Chinese for some time con-
cerning arms assistance, the 1965 war made this an urgent priority. The Chinese
rapidly became Pakistan's major arms supplier and today just under half of her combat
aircraft and well over half of her medium tanks are of Chinese origin.14
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These developments developments were of some concern to the MAAG mission in Rawalpindi
and they kept pressure on DOD to support the lifting of the embargo to Pakistan.
But DOD itself was having second thoughts on arms programs in general, and
Pakistan in particular. By coincidence, a major DOD study of military assistance
had been completed in 1965 and concluded that most current programs were in great
need of reform.15
An initial break in the embargo occurred in early 1966 as a consequence of
urgent pleas from both the U.S. and Pakistani military in Rawalpindi. India
and Pakistan could purchase for cash or credit and on a case-by-case basis,
"non-lethal" end items. Additionally, they could purchase spare parts for non-
lethal material on a cash basis only. Crucially, India and Pakistan were to be
treated identically, a reflection of the rough equality of U.S. interests in both
states Further, a unique distinction had been introduced into the arms assistance
program: "lethal" vs. "non-lethal" equipment. The former were presumably weapons
that fired, the latter included unarmed transport (air and ground), communications
equipment, and logistics and engineering supplies.16
This relaxation of the
embargo was no boon for Pakistan. In fact, like the total embargo, it favored
India, which had been making large purchases of U.S. "non-lethal" equipment for
several years. But the new policy had another effect: it stimulated the Indian
and Pakistani search for new sources of weapons.
Meanwhile, the State Department's India and Pakistan desks had undertaken a
careful search for an arms policy which would maximize what they perceived to be
American interests in the region. A virtual embargo might have been continued
had India and Pakistan not been so successful in obtaining outside sources of
weapons from the two Communist powers, France, and Great Britain. Additionally,
Pakistan was still putting heavy pressure on the USG and tried to exploit what
they perceived as a sympathetic Lyndon Johnson. According to several sources
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however, Johnson declined to intervene in the decision-making process on the side
of the Pakistanis and the final policy determination was formulated within the
regional bureau of the State Department.
This policy, announced on September 23, 1967, remains in effect today. It
consisted of the 1966 modification of the 1965 embargo, plus the following points:
a) All equipment assistance on a grant basis would be terminated
(with the minor exception of the provision of road-building equipment for
India to use in constructing the East-West Highway in Nepal),
b) Withdrawal of the substantial U.S. Military Supply Mission
and MAAG group in India and Pakistan, respectively,
Resumption of grant aid training programs on a limited scale,
c) "Willingness to consider on a case-by-case basis the cash sale of
spare parts for previously supplied lethal equipment.H17
The criteria for the case-by-case consideration of spare parts were to be the
recipient's critical need, "contribution to reduction of military expenditures or
arms limitations" and contribution to "reasonable military stability" within the
Subcontinent.18
Thus, the U.S. did not declare its intention to withdraw entirely
from its earlier efforts to seek some balanced relationship between India and Pakis-
tan, but it did state that such efforts would be quite restricted. The U.S.
would not rebuild or expand Pakistani force levels, at the very most it would
guarantee that they would remain at approximately 1965 levels; a number of DOD,
MAAG, and attache studies had already determined that these levels were adequate
for Pakistan's internal security and for her defense against India. The U.S. had
tried to remove itself from a position of major arms supplier in South Asia, while
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still maintaining some limited military-to-military contact and holding some
leverage over Pakistan (via decisions on spare parts) and therefore (indirectly)
over India as well.
The reaction to this policy statement was stunned anger in Pakistan and wary
relief in India. On balance, the policy favored India, to the degree that the
U.S. would no longer be Pakistan's major arms supplier. U.S.-Pakistani relations
hit an all-time low in the years following the 1966-67 policy decisions, as
Pakistan felt vulnerable and betrayed. She even accepted some Soviet military
equipment, a development which sent tremors of concern through the Indian govern-
ment. Ironically, the Soviet justification for arms to Pakistan was the same as
that invoked by the Americans: it was needed to provide a token balance to
Chinese arms aid. The Soviets now argued in New Delhi that their supplies to
Pakistan made that state dependent upon her--the identical argument used before
1965 by the USG in both New Delhi and Rawalpindi. The Soviets, in brief, had
assumed much of the same responsibility for balancing Indian-Pakistani relations
that the U.S. had carried for a number of years. And the USG, deeply embedded in
the Vietnam struggle, was perfectly willing to let the Soviets assume that
responsibility.
Maintaining the 1967 arms restrictions has been a difficult task, complicated
by continual pressure from Pakistan and its supporters and the occasional diffi-
culty of knowing exactly what U.S. policy is. Such a policy is not self-enforcing
it depends upon knowledgeable individuals defending it from encroachment, nibbling
tactics, and sheer ignorance. At present, the critical officials are the desk
officers and Country Directors for India and Pakistan, plus the Deputy Assistant
Secretary of Defense (ISA) that deals with South Asian matters. He, in turn,
is assisted by two military officers of colonel rank (who may, however, be drawn
from any of the three services), who deal, respectively, with South Asia and the
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Indian Ocean region. There is a close, continuing relationship between these
two officers and the desk level FSOs in the State Department: they form the key
relationship in the application of the 1967 and related policy decisions. Others
may be brought in for special reasons, but policy implementation lies in the hands
of these half-dozen individuals.
My observation of this process in recent years indicates some weaknesses.
Desk officers usually come to their positions with considerable area expertise,
the honorary rank of colonel (so that they can be fitted into the Pentagon's
protocol system), and quite variable military experience. This has ranged from
none to some time spent at a war college. They must cope with a variety of
complicated military-related issues: when is a weapon "offensive" or "defensive";
what is a spare part and what is a complete weapons system (a 105 mm. shell would be
the former, a hand grenade the latter); what are India and Pakistan's "real"
military needs, as opposed to their announced needs; what civilian and commercial
equipment has military application; what is a "lethal" vs. a "non-lethal" item of
military equipment.
The first determination of such issues is made by these civilian officials,
and they are on occasion unable to muster the necessary expertise. Their counter-
parts in ISA will have technical expertise, but may or may not have area knowledge.
When ISA did have officers with both kinds of skills the task of coordination and
implementation of policy was enormously simplified, and lower-level officials
were quite effective in their presentation and defense of existing policy. Thus,
during the entire Bangladesh crisis, the 1966-67 policy was never broken by the
U.S., although a self-imposed embargo was both accidentally and deliberately
violated, and illegal third-country transfers of weapons may have been winked at.
All of these violations were initiated at the highest levels of the U.S. govern-
ment, and working level officials were deliberately deceived on more than one occasion.
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In retrospect the 1966-67 policy decision to remove the USG from the South
Asian strategic balance of power was a remarkable achievement brought about
because of several unusual circumstances. The hi-lateral military programs
in both India and Pakistan were proving to be personally and politically
unsatisfactory to those involved in them; they meant that the USG was fueling
both sides of an arms race; external Communist threats to the region seemed to
have declined; American resources and war material were urgently needed elsewhere;
the bureaucratic and public lobbies favoring arms supplies to India or Pakistan
were sobered by the 1965 war. Finally, a President preoccupied by the Vietnam
conflict was unwilling to intervene on behalf of one or the other country, and
permitted the State Department to make a final determination of U.S. policy.
But, as one participant in the process at that time noted, "policy" is a slippery
concept: it can serve indefinitely as a guide to future action, or it can be
swept away tomorrow. America had a "policy", but even it was to be made subject
to "exceptions."
III. LET THERE BE ONE, TWO, MANY EXCEPTIONS
When Richard Nixon acceded to the Presidency in 1968 he was determined to
make a mark in foreign policy above and beyond the immediate requirement of
terminating American involvement in the Vietnam war. With Henry Kissinger as
mentor and executor he fashioned a global foreign policy for the United States
and presented it to the world during his 1969 trip around the world. Unlike the
crude anti-communism of earlier administrations or the ad hocism of Johnson,
the Nixon Doctrine envisioned a world made up of several important power-centers,
and predicted U.S. foreign policy upon successful dealing with these centers.
The "battleground" of the Cold War, the so-called Third World, was clearly relegated
to a subservient position in this scheme of affairs, important only as individual
countries had a special relationship with one of the major power centers.
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Pakistan was was one such country. It had stubbornly pursued close ties with
China despite American and Soviet objections)-9
It is quite probable, therefore,
that when Nixon visited Pakistan in 1969, he initiated discussions about future U.S.
relations. At the same time he listened with considerable sympathy to
President Yahya Khan's request for a change in the 1966-67 arms assistance policy.
For reasons which we may never know, Nixon is reliably reported to have said to
those in his party that the U.S. should "do something for Pakistan".20
This could
have been a quid pro quo for Pakistan's role in making the China trip possible,
it could have grown out of Nixon's long-standing interest in Pakistan itself,
or both motives may have played a part.
The command to "do something for Pakistan" came back to the State Department
through NSC and State Department channels. Do what for Pakistan? The India
and Pakistan desks were to have their first taste of the new, Kissinger-ized
system of decision-making.
As a group, the two dozen or so senior officials in Delhi, Rawalpindi, and
Washington were not inclined to do anything for Pakistan.21 They understood
that Pakistan needed weapons, that the Pakistanis had continued their pressure
to have the 1966-67 policy altered, but by and large they were pleased with the
state of affairs in South Asia. No major war appeared likely in the foreseeable
future and relations with India were reasonably good. In their view the demand
to "do something" probably stemmed from the President's personal interest in the
fate of the generals in Pakistan; they were hardly inclined to sympathize, and none
were aware of the secret plans being made for the China trips of Kissinger and
Nixon.
The initial reaction of State was to temporize. Presumably, the decision to
assist Pakistan was a whim, and could be dragged out. Thus, papers circulated
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from the regional desks to NSC and back for numerous modifications and adjust-
ments, coordination with the Pentagon being handled by the staff of the Assistant
Secretary of Defense for International Security Affairs. A number of study
papers were prepared with various choices laid out for NSC and Presidential action.
To the dismay of the now perplexed desk officers and country directors in State,
several of these were sent back with the demand that more "real" choices be presented.
At least one desk officer noted at the time that he was not really sure whether
anyone at NSC was reading the papers from State, or whether he might not be per-
forming make-work tasks. State was in no hurry to rush to a decision but then the
NSC staff seemed to be demanding something from State, but not specifying what that
something should be. However, since State officials were unaware of the new
importance of the Pakistan-China link, they were unable to formulate a policy
to accomodate this development; they were serving as technical advisors, blindly
offering up suggestions without a clear understanding of the reasons for making
an exception to the 1966-67 policy. Some thought that it was Pakistan's relation-
ship with Iran and the Middle East which had triggered presidential concern, but
offered this explanation to a visitor with only half-hearted enthusiasm.
State pondered the demand to "do something" for a number of months. Then, in
mid-1970, after a meeting with CENTO ambassadors, President Nixon was approached
by the Pakistani Ambassador, who reminded him of the 1969 pledge. Furious at the
news that "something" had not yet been done, Nixon turned to an aide and demanded
immediate action. The bureaucracy was jolted, and a package deal was finally
put together.
This was announced in October, 1970 as a "one-time exception" to the 1966-67
policy. Pakistan was to be offered the right to purchase--for cash and hard
currency--a number of M-113 armored personnel carriers (300) as an alternative
to their request for M-48 tanks. Additionally, the U.S. would enter into negotiations
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for the purchase of a limited number of combat aircraft--but not the "hot" F-104's
so desired by the Pakistan Air Force. And that was all: no really new "offensive"
weapons were provided (as the APCs were defined as "defensive") and the aircraft
were to be replacements for interceptors Pakistan had lost by attrition and
accident (but not combat). The entire one-time exception was publicly justified
as a "symbolic offset to Pakistan's growing dependence on Chinese arms!' In
retrospect this seems an almost comical assertion in view of the fact that Pakistan
was by then serving as an intermediary with the Chinese. With the benefit of hind-
sight the one-time exception emerges as a symbolic reassurance to the Chinese
that the U.S. would assist a mutual friend. One can only speculate whether the
Chinese actively lobbied for the one-time exception as an indication that in areas
where their interests were parallel, the U.S. and China could work together,
and that the U.S. was willing to share the Chinese' burden in maintaining the Pakis-
tani military.
If such cooperation latter was a Chinese or Pakistani expectation the actual
content of the one-time exception must have been a disappointment, more symbol
than substance. The weapons to be provided were not particularly crucial for
Pakistan nor were the terms very good. Pakistan had hoped and tried for weapons
through the "third country route", obtaining U.S.-origin equipment from Iran,
Saudi Arabia, Turkey, or West Germany.22
However, Congress had passed restrictive
legislation concerning "third-country" transfers and was watching the situation
very closely. The White House staff had suggested using third-country transfers
as the vehicle for providing weapons under the "one-time exception", but it was
pointed out by the Country Directors of India and Pakistan that this would require
a determination that the U.S. would be willing to provide those weapons to Pakistan
directly. Neither State nor the White House staff seemed to be eager to claim
that U.S. policy now included the provision of "offensive" weapons. Even the
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President did not demand this. He was interested only in some visible, public
show of sympathy for Pakistan and "symbolic" support was indeed enough.
Ironically, Pakistan will never receive the aircraft that were being nego-
tiated under the one-time exception agreement, and only recently received shipment
of the APC's. When fighting broke out in East Pakistan in 1971 a new embargo was
imposed on shipments of weapons and war material to both India and Pakistan;
despite some leakage of largely Pakistan-owned equipment, the embargo was effective.
The APC's, which had been partially paid for, were manufactured right through the
Bangladesh crisis and waited for shipment until 1973 when delivery was resumed.
Even as the last shipment was arriving in Karachi, though, Pakistan undertook a
new campaign to have the U.S. make what could well become "the second one-time
exception".
Today, senior State Department officials at the regional level look back
upon the "one-time exception" with a sense of frustration and concern. Insisting
that it really was "exceptional", a "deviation" or an "aberration" because of
the extreme degree of Presidential initiative, they nonetheless fear a repetition
of the episode. It has made the working-level officer quite sensitive to South
Asia's marginal place in the Nixon-Kissinger world order, and they have become adept
at justifying or explaining bi-lateral policy issues in terms of broader strategic
and political consequences. One senses that they do this more out of duty and
loyalty than conviction.
IV. DIEGO GARCIA AND THE POLITICS OF PERSISTENCE
Diego Garcia, a small island located 1000 miles to the southwest of the
Indian Subcontinent in the Indian Ocean, has been the object of American naval
planning for over thirty years.23 This interest was intensified in the mid-1960's
when the U.S. Navy launched a full-scale effort to obtain Diego as a transit base
for ships proceeding to or from Southeast Asia. A project manager was appointed,
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studies were were made, and the "facility" became an annual object of negotiation
between the Navy and civilian managers in the Department of Defense. As Earl
Ravenal has testified, the staff of ISA/DOD took up the challenge and pointed
out that refueling could be done more efficiently and cheaply in the Persian
Gulf, that developing a U.S. facility would anger littoral states without yielding
any particular benefit, and that even a small facility might be the prelude for a
hrger and unnecessary establishment.24 Thus, until very recently, successive Navy
project managers for Diego Garcia have had limited success. A small breakthrough
occurred in the late 1960's when Diego was leased from the British and used as an
electronics communications facility.
All of the public evidence available (and much of the private evidence)
indicates a single-minded and intensive Navy interest in Diego, with annual requests
for a major facility and the grudging but hopeful acceptance of funds for a minor
one. In the scheme of things, until 1973, the Navy was the only agency which wanted
to expand Diego Garcia, and they were successfully neutralized by civilian DOD
officials in ISA working in collaboration with regional and functional bureaus
(Political Military Affairs) of the State Department. Interest outside of these
bureaucratic groups, and among the littoral states, was relatively insignificant.
The Middle East war of 1973 changed the entire political, strategic, and
bureaucratic context. The Navy claimed that its ship movements in and around the
Indian Ocean area (including the Gulf) were artificially constrained because of
lack of support facilities (similar complaints had been registered in 1971 during
the sailing of the Enterprise into the Bay of Bengal).25 The Navy was concerned
about distances, cost, and the larger Soviet naval presence in the Indian Ocean
region, which required a bigger balancing force. Suddenly, the notion of an
expanded Diego Garcia facility seemed to make considerably more sense to a number
of DOD and State Department officials at all levels, although there was still no
unanimity about-either h th role or mission of such a facility.
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However, even before these issues could be fully discussed within the
bureaucracy, the decision was made to go ahead with the expansion of Diego Garcia
and raise it to the level of a significant support facility (although something
less than an Okinawan or Guam-type base). According to a number of senior DOD
and State Department officials as well as Congressional observers, the decision
was made "over breakfast" between Secretaries Henry Kissinger and James
Schlesinger, and took Washington by surprise.26
A supplementary appropriation
bill was rushed to Congress, all-out staffing was begun within the bureaucracy,
and littoral states were hastily consulted and/or notified. In brief, Diego was
to be expanded, and then the expansion would be properly justified in and out of
the U.S. government.
The sudden unexpected expansion of Diego Garcia caused as much difficulty
for the Administration as the idea of expansion itself. The announcement came
during a period of great suspicion over executive secretiveness and stealth, and
generated enormous opposition within Congress, the press, and to a lesser extent,
the bureaucracy.
Gradually, a full-fledged political battle began to shape up. Some ambassadors
to littoral states expressed their strong private dismay at the way in which the
Diego Garcia expansion program was being handled; Congress took testimony from a
number of well-informed critics of Diego, and even the C.I.A. seemed to be con-
tradicting Administration and Navy estimates of the degree of threat from the
Soviet Union in the Indian Ocean.27
A number of supporters of an expanded Diego
Garcia facility, within and out of the Government, expressed public and private
reservations over the Navy's actual intentions, fearing a bloated, vulnerable,
and costly base which in turn would be used to justify additional aircraft carriers,
possibly trapping an undue portion of the American fleet on the wrong side of the
Suez Canal.
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At the time of writing funds for the expansion of Diego Garcia remain bottled
up in Congress, despite direct and public Presidential support for what has now
become a "base". It is clear that an initial attempt to rush expansion only led
to greater Congressional and public skepticism, which in turn has finally brought
about a public and bureaucratic debate over the strategic utility of Diego Garcia.
V. CONCLUSIONS
A comparison of the three decisions we have described in this report leads
to several conclusions about foreign policy decision-making.
The locus of decision was different in each case. In 1967 it was at the
working level of the State Department, the one-time exception was essentially a
Presidential command, and the Diego Garcia expansion decision was taken at the
Secretarial level. Thus, one came from the "bottom up" and two from the "top
down". The latter two decisions were staffed-out only after the basic decision was
made.
Other patterns emerge: the two arms assistance decisions were characterized
by very heavy foreign governmental input, and strong representational roles on the
part of the U.S. ambassadors to India and especially Pakistan. Diego Garcia has
had very little foreign input, except in the negative sense that several littoral
countries oppose an enhanced American presence in the Indian Ocean. Littoral
sentiment has been heavily discounted by most participants in the decision-making
process, unlike the two arms assistance decisions, when it was one of the main
factors.
Another difference between the decisions has been the role of the Pentagon.
As we have argued above, the U.S. military had begun to lose interest in South Asia
by 1965 because of local and global developments. While simple program interest
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and inertia led them to urge a continuation of some military relationship with
India and Pakistan, no single service or branch was willing to mount a defense
within the U.S. bureaucracy on behalf of MAAG or USMSMI programs. However, Diego
Garcia had been a pet project of the Navy for a number of years and it had assidu-
ously built up support among the other two services as well as its traditional
supporters in Congress and among the public.
Finally, the public and Congress have played quite different roles in the
three decisions. Again, the major contrast is between Diego and the two arms
assistance decisions. Diego has become a minor cause celebre, and was even the
subject of a question at President Ford's first press conference; hardly any
politician or journalist has taken a substantial interest in arms assistance to
South Asia (except during the Bangladesh crisis). For Diego, the Navy mobilized
its entire Congressional and public-relations lobby; arms assistance was simply
not a matter of much public interest in the U.S. in either 1967 or 1970. At the
very most a few scholars expressed their concern publicly but with no perceptible
impact. Also, a few arms manufacturers lobbied the Pentagon and the State
Department to have various restrictions relaxed or eliminated. But these com-
panies are probably more interested in selling equipment and weapons to India
(the larger market) than Pakistan, and have had no substantial impact on policy-
making.
As we have indicated, evaluation of the three decisions in this case study
presents certain problems and is strongly affected by one's stance or perspective.
From the viewpoint of American relations with South Asia as a region the original
1967 arms assistance cut-off made considerable sense and the subsequent one-time
exception of 1970 was calamitous. It further strained relations with India
without substantially aiding Pakistan and kept alive the hope in both countries
that the U.S. might once again enter into a permanent and arms assistance relation-
ship on the sx42ga
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But from a so-called "global" perspective a different calculation was made
by Kissinger and Nixon. Did not the enormous gain of better U.S.-Chinese
relations (including the effect of this on U.S.-Soviet relations) outweigh the
temporary and relatively trivial setback to U.S.-Indian relations. When one
adds the gains the U.S. obtained in Pakistan itself, the impact of this on Iran
and the Middle East, and the success of the China trip, it would seem to outweigh
the losses suffered in U.S.-Indian relations. Is not India, in the global scheme
of things, a marginal factor anyway? Put in these terms the one-time exception
was a sound decision as was U.S. policy in Bangladesh.
However, this ex post facto rationalization is no more complete than a
purely regional perspective. Had a broader circle of participants been involved
in the actual policy decisions during the 1970-71 period it is quite probable
that a way could have been found to minimize the harmful impact on U.S.-Indian
relations and still bring off the China visit. The fundamental organizational
implication of our study of U.S. strategic and military policy in South Asia
pertains to the form and quality of coordination of that policy with other, allegedly
more important areas. Are bi-lateral ties ("good" relations with India and Pakistan)
to be consistently sacrificed to extra-regional considerations? If not, who is
to determine when relations with South Asian policy must suffer, when an extra-
regional interest must give way, or whether regional and global policies can be
integrated and coordinated? One solution would be to insist upon more inter-
regional transfers of personnel and periodic consultation between relevant
Country Directors (most urgently, the India, China, and Soviet CD's). But this
is obviously not enough. Additionally, the Assistant Secretaries might consult
more frequently with each other on issues which cut across their geographic bound-
aries. The Bureau of Political Military Affairs and the Munitions Control Board
cannot bring about such coordination in military and arms assistance matters
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because they lack day-to-day contact with the regions. Ultimately, however, even
this is not enough in a situation where policy is made at the very top of the
hierarchy, as in the one-time exception and Diego Garcia cases. The failures in
these decisions were not of organizational structure but of leadership, and of a
leadership which felt comfortable with an organizational structure which could
be manipulated to permit the intermittent shutting off of influence and participa-
tion of some concerned actors.
On the other hand, if one takes the view that U.S.-South Asian relations should
be permanently subordinated to some global vision then the present structure
is perfectly adequate. It provides for extraordinary regional expertise without
regional influence within the State Department. South Asia claims only half of
an Assistant Secretary's responsibilities (and probably the lesser half). American
interests in South Asia receive attention at higher levels, but relatively little
advocacy. Yet one must ask whether the present organization reflects a realistic
judgement of the region's importance? It does, if one gives overwhelming weight
to security and strategic concerns and is prepared to perpetually subordinate
humanitarian, developmental, and certain libertarian and ideological interests.
A kind of Seeley's Law appears to operate in these matters at least in recent
years: the U.S. will eagerly trade off "soft" long-term interests, for which
there is a small and weak Washington constituency, for "hard" and short-term
military and global gains which may have a tremendous political and domestic
payoff. The tragedy does not lie in the fact that government seeks such visible,
tangible gains, but that it does so little to reconcile them with other, longer-
run interests.
Our case study shows that such a reconciliation is possible. The 1967 revision
of arms assistance policy was the result of a confluence of favorable forces, and
any organizational reform should be directed towards creating such a situation.
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In that case relatively little attention was paid to global military or strategic
considerations: U.S.-regional relationships had high priority. It was what I
have elsewhere termed a strategy of bilateral or balanced relations , in which
South Asia would not be treated as a dependent variable vis a vis the rest of the
world.29 That decision did not please the states of the Subcontinent, but it did
establish the basis for a realistic relationship between the U.S., India, and
Pakistan by removing a terrible impediment to normal economic, political, and
c)11?J
cultural ties. Had regional factors been given at least as great a weight in/as
global factor in formulating American policy in South Asia from 1969 onward it is
not likely that the U.S. would again be the object of military pressure from both
Pakistan and India--the former pleading for another dose of weapons, the latter
threatening to develop nuclear arms. It may well turn out that the gains of
1970-71 will be paid for during the rest of the decade.
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COHEN/SOUTH ASIA AND U.S. MILITARY POLICY
FOOTNOTES
1. For a discussion of this problem see Wayne Wilcox, Leo E. Rose, and Gavin
Boyd, eds., Asia and the International System (Cambridge: Winthrop
Publishers, 1972, v, and more recently, William P. Bundy, "International
Security Today," Foreign Affairs 53, 1 (October, 1974), 24-44.
2. I have explored this at length in my "Security Issues in South Asia,"
Asian Survey, forthcoming.
3. By transfers I include a wide variety of programs: direct grants, loans, and
sales of equipment (the latter for hard or soft currency and by deferred
or immediate payment). In addition, military assistance may also take
the form of cash subsidies to the recipient state. Quite often, as in
the case of both India and Pakistan, a military relationship will en-
compass a mix of several programs. Additionally, it may also involve
direct cash subsidies in local currencies.
4. For three contrasting views see Russell Brines, The Indo-Pakistani Conflict
(New York: Praeger, 1968), Lt. Gen. B. M. Kaul (Indian Army), Confronta-
tion With Pakistan (Delhi: Vikas Publications, 1971), and Brig. Gulzar
Ahmed (Pakistan Army), Pakistan Meets Indian Challenge (Rawalpindi:
Al Mukhtar Publ., n.d.).
5. See K. Subrahmanyam, "Military and Foreign Policy," Foreign Affairs Reports
(New Delhi), XVII, 11 (Nov., 1968), pp. 118, for an Indian analysis.
6. This system, mysteriously named "Peace Indigo," has just been completed.
Earlier, the U.S. had sold at concessional rates significant numbers of
World War II Sherman Tanks (800) and medium C-119 transports (55).
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FOOTNOTES -2-
7. Most of this equipment has stayed in the Himalayas, but some can be used
against Pakistan as well as China (the radar net, mountain divisions
in Kashmir). There are some indications that the Indian military has
spread around equipment intended for the mountain divisions to other
units.
8. Selig Harrison, India, Pakistan and the United States (Washington: The New
Republic, 1959).
9. Stephen P. Cohen, Arms and Politics in Bangladesh, India, and Pakistan (Buffalo:
SUNY, Council on International Studies, 1973).
10. Typically a senior American officer has been met in Rawalpindi by a higher
ranking Pakistani officer, or, in the past, by Ayub or Yahya, and in
New Delhi by a middle-ranking civilian Defense Ministry bureaucrat.
11. For a view of the U.S. policy process in the period after the 1962 Indo-
China conflict see Shivaji Ganguly, "U.S. Military Assistance in India
1962-63: A Study in Decision-king," India Quarterly (July-Sept.,
1972), 1-11.
12. I have drawn these from various conversations, official statements, and
actions.
13. For a careful study of India's attempts to achieve self-sufficiency in
crucial major weapons systems see Wayne A. Wilcox, "The Indian Defense
Industry: Technology and Resources," in Frank B. Horton III, et al,
(eds.) Comparative Defense Policy (Baltimore: Johns Hopkins University
Press, 1974), pp. 479-481.
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14. This is according to recent International Institute for Strategic Studies
figures, which are accurate. In terms of American equipment, this
amounted to over 80% of Pakistan's weapons at the peak of the aid program,
but is now around 35-407, and declining. During the 1971 War "friends"
of the Pentagon were anxious to prove that weapons used by the Pakistan
Army in East Bengal were of predominately Chinese origin. Several
articles making this point were inserted in the Congressional Record
of Nov. 16, 1971, by Cong. John Schmitz (Rep., Calif.).
15. For a discussion see Roger E. Sack, "United States Military Aid to the Ayub
Khan Regime," a companion paper being presented to the Commission.
16. For the official policy statements plus supporting data see: 93rd Congress,
House Committee on Foreign Affairs, Subcommittee on the Near East and
South Asia, Hearings (United States Interests in and Policies Towards
South Asia), March, 1973, and Report, May, 1973.
17. Hearings, op. cit., p. 86.
18. Ibid.
19. See Shivaji Ganguly, Pakistan-China Relations, A Study in Interaction (Urbana:
Center for Asian Studies, 1971).
20. This is one version reported (and presumably believed by) a number of
officials in State; they speak of offhand and casual presidential commit-
ments, and the one-time exception seemed to be this at one time. In
retrospect the commitment may not have been so casually entered into.
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21. A few exceptions, especially the various U.S. ambassadors to Pakistan, have
consistently argued over the years for increased military assistance to
Pakistan. It is not entirely certain that all of these persons have
done so out of a strong sense of conviction; such a representation of
Pakistan's presumed interests has, however, eased their relationship
with various Pakistani leaders.
22. When India or Pakistan wanted to buy U.S.-origin weapons from third countries
(Great Britain, West Germany, Iran, Turkey) they had to obtain American
permission for the transfer under present agreements. This meant that
both South Asian states plus one or more NATO or CENTO ally were simul-
taneously lobbying the U.S. Government, creating a very complicated and
delicate political problem. There have been transfers from the U.K.
to India and from West Germany to Pakistan via Iran; some of the latter
raised legal and political difficulties. For extensive documentation and
testimony see, U.S. Congress, Joint Economic Committee (Subcommittee on
Economy in Government), Hearings on Economic Issues in Military Assistance,
January-February, 1971.
23. For an alleged chronology of Navy interest see: U.S. Congress, Committee on
Foreign Affairs, Subcommittee on the Near East and South Asia, Hearings
(Proposed Expansion of U.S. Military Facilities in the Indian Ocean),
Feb.-March, 1974, p. 156. The Navy claims initial interest in the 1960's,
but studies underway indicate a much earlier concern with an Indian
Ocean facility.
24. Ibid., p. 86.
25. See the testimony of Admiral Zumwalt, op. cit., pp. 129 ff.
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26. There are various apocryphal stories circulating among the reasonably well-
informed. One version has Diego Garcia "traded" by Kissinger for DOD
support on the SALT talks; another has it that the Secretary of State
though the island was so unimportant that he "gave" it to the Navy.
Both interpretations are possible and not incompatible. If true, the
most important aspect of these perceptions is that the decision to expand
did come from the very top of the bureaucracy and was only then staffed
out in the State Department.
27. The testimony of the Director of the C.I.A. lent some support to those who
were opposed to Diego Garcia. William Colby noted three times in that
testimony that it was the C.I.A.'s judgment that an increase in the U.S.
presence in the Indian Ocean region would lead to an increase in the
Soviet force levels. However, he did also state that should the U.S.
do nothing, Soviet force levels would gradually increase anyway. His
testimony before the Subcommittee on Military Construction (Senate)
is reprinted in the Congressional Record of August 1, 1974.
28. Stephen P. Cohen, "U.S. Policy in South Asia," unpublished memorandum, Center
for Asian Studies, University of Illinois at Urbana, June 15, 1972.
See also William Bundy, 22.. cit. and William Barnds, India, Pakistan,
and the Great Powers (New York: Praeger, 1972).
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