REPORT OF SURVEY OF STRATEGIC SERVICES UNIT(Sanitized)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81-00728R000100060005-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 27
• Document Creation Date: December 14, 2016
• Document Release Date: November 14, 2002
• Sequence Number: 5
• Publication Date: March 14, 1946
• Content Type: REGULATION

 Approved for Release 2002/11/20 CIA-RDP81-00728R000100.060005-3
Capy N., 2.+ 4
14 March 1916
25X1A
25X1A
TO s Rear Admiral Sidney in. Soues
Director of Central Intelligence
SUBJECT : Report o Survey of c Services Unit
1. To make a detailed study of SSU facilities, resources
and operations;
2. To recommend:
(a) Which of the resources, facilities and operating
functions should be continued in the national interest after the
liquidation of. SSU;
(b) What disposition should be made of the preserved
resources an"" facilities;
(c) What assignments should be made of responsibility
for conducting the preserved operating functions;
I. INTRODUCTORY:
A. The Committee Directive: Under CIO Directive
the present Committee was required:
(d) What budgetary arrangements should be made.
The Committee has considered that this assignment should be
read in the light of:
1. The President's letter of September 20, 1915, directing
the Secretary of War to liquidate SSU "whenever he deems it compatible
with the national interest;" and
2. The absence of any final, long term, decision
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 taa flR~
IIF'"' ~
4 ~~19
25X1A
25X1A
25X1A
25X1A
respecting this Government's institutions for the collection of
foreign intelligence by clandestine methods, referred to in the
010 Directive
The decision that the SSU as such was to be liquidated and
abolished under War Department aegis the Committee considered to
be irrevocable.
B. The 5urv07 Coverage:
1. On February 21, 1916, the undersigned Committee,
comprising specially designated representatives of the Director
of Central Intelligence and the Intelligence divisions of the
State Department, 0-2, ONI and A-2 commenced a survey of the
resources, facilities and operational functions of the Strategic
Services Unit in accordance with GIG Directive
(Tab A).
(a) With Brigadier General Louis J. Fortier as
steering member, the Committee interviewed Brigadier General John
members conducted more intensive investigations of branches of
SSU, as follows:
Director of SSU and SSU staff employees (Tab D).
(b) On February 25, 26 and 27 individual Committee
SI - Captain Thomas Cullen
I-2 - Mr. Samuel Klaus
Operational Auxiliaries -- Brigadier General
Louis J. Fortier
Services Branch - Colonel Roy Boberg
Personnel and Staff Divisions - Colonel S. P.
Walker
(c) Following Committee consideration of the
reports by the individual members upon the investigations conducted
by them, the Committee determined to conduct joint investigation
of a number of selected operations and facilities. Accordingly
on March 1, 5 and 6 the Committee conducted a Joint investigation
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 25X1A
25X1A
25X1A
Approved For Release 2002/11/20 CIA-RD081-007281 000100060005-3
of the 31 Office and its branches and of the Reproduction Division
and certain aspects of the Budget and Fiscal Division of the
Services Branch (Be* Tab E)O
(d) The Committee invited Brigadier General
to make such further statements and produce such additiorxa.l
witnesses as lie thought should be brought before the Committee.
Accordingly, in response to the Committee's invitation,
produced thereafter additional witnesses and submitted
certain documents for the committee's consideration (See Tabs D
& E).
(a) Individual members of the Committee consulted
with persons in their respective agencies who have been served by
SSU. Expressions of opinion were obtained with respect to the value
of the material disseminated by SSU and the effect of a termination
of SSU activities on the operations of the respective agencies
(See Tab 9;).
2. The Committee desires to note that the survey was
limited in its coverage in the following particulars:
(a) No investigation was made by the Committee of
the field stations and missions of SSU in Europe, Asia and Africa.
In this respect the Committee had to rely on representations made
by Washington staff personnel, or.. the cursory perusal of some field
reports, and on conversations with a few former field operatives of
OSS.
(b) No detailed examination Tras conducted of the
particular capabilities or productivity of individual Washington
or field personnel;
(c) No exhaustive attempt was made to evaluate on an
4'y
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 11 ;. t
ti v 4,ktA ~~"
Approved For Release 200~11 I;/ 0 : CIAt P8 ~-9 1 OU100060005-3
individual basis bne current production of the atauf or the field.
25X61
25X611
25X61
II. FINDINGS.
A. History of SSM The Strategic Services Unit is the lineal
descendant of the Office of the Coordinator of Information,
established by President Roosevelt In 19111 under the direction of
Colonel William J. Donovan. The primary relevant function of this
office was the coordination and preparation by experts drawn from
various fields of scholarship of intelligence material significant
for the National defense and their analysis for the use of the
President and top Government officials.
Early during the vrrar
propaganda functions of 001 were tra~.nsferred to the Office of War
Information and the remaining functions and personnel of 30I, under
General Donovan, imro placed under the supervision, of the Joint
Chiefs of Staff in an organization called the Office of Strategic
Services. Thereafter 055 operations 'pro performed strictly under
the directives of the Joint Chiefs of Staff. 055, included a research
organization called Research & Analysis; intelligence services, SI
and X-2 (X-.2 having been established in 1913 for the performance
of counter intelligence functions); and various special operations -
including sabotage, intelligence activities behind enemy lines, etc.
The only field activity performed by OSS in the United States was.,
it seems, by the Foreign Nationalities Branch which maintained
contacts with various foreign groups in thia? country with a view to
obtaining intelligence of use to the total OSS function.
With the progress of the war much of the OSS activity was
shifted to the field and OSS missions were set up close to the
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 r k ..,. I'1'.tF,,.. f{.yytry ,gYYy M+,.n~ Re.
Approved For Release 2002/11/20 C.IA RDP81a d0728R4?0 0060005-3
theaters of military operation, leaving general direction to the
headquarters in Washington.
The personnel, like the operations, were characterized by
strong military elements; the Army and Navy supplied a majority
of the personnel and a considerable portion of the equipment and
facilities.
Beginning with V-J Day, Qeneral Donovan ordered a liquidation
of 055.
OSS was abolished by Executive Order, dated September 20, 1915,
effective October 1, 19115. The Research and Analysis and Presentation
Branches (the latter concerned with preparation of charts, visual aids
and the like) were transferred to the State Department and the remining
portions transferred, under the name of Strategic Services Unit, to
25X1A the War Department. fwaappointed by the
Secretary of War to Be Director of SSU with the following instruc-
tions: "Subject to the authority and policies determined by the
Assistant Secretary of War, and such persons as he may ct-vsignate, you
will continue the program of liquidation of those activities and
personnel so transferred which are no longer necessary or desirable, and
preserve as a unit such of these functions and facilities as are
valuable for permanent peacetime purposes, or which may be required by
Theater Commanders or occupational authorities to assist in the discharge
of their responsibilities.' The Assistant Secretary of War in a
-- memorandum dated September 20, 1915, instructed) I to the
same effect. (See Tab E).
At the present time the special, para-military operations of OSS
have been substantially liquidated or are in the process of
liquidation; the unliquidated functions are those which relate to or
Approved For Release 2002/11/20 : CIA-RDP81-007288000100060005-3
 Approved For Release 2002/11/ 0 tt,clA-RpP81-0'07288000100060005-3
servo primarily the collection, analysis and dissemination of
foreign intelligence.
B. Organization o~s A chart of the present orgtiniza-
tion of SSU is attached hereto (Tab B). Individual analyses of
the main divisions, based on joint and several surveys by the
Committee members, are attached hereto (Tab E).
1. Number of Employees: Attached hereto (Tab F) is a
breakdown of the personnel employed by SSU, their classifications
and salaries. It is to be noted that as of March 1, 1946, she opera-
25X911
2. General Observations:
25X1A
25X1A
25X1A
(a) . In general, it may be said that the core of
present SSU operations is the field staff, which in charged with
seeking information along lines of possible security interest to
the United States. These operatives, belonging either to the SI
office (originally charged with seeking "positive" intelligence)
or X-2 (originally charged with seeking "counter" intelligence), are
divisible into those attached to the military missions still
functioning abroad S
The Washington staff is concerned
with (1) directing or evaluating field operations, disseminating
the intelligence obtained among interested Government agencies,
and planning directives and future operations in consultation with
interested Government age iea,;; d c r tb organization
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 and that ho appears to be engaged in actively liquidating those
operations of SSU which could have no permanent peacetime value to
the United States. It is noted, however, that he is simultaneously
attempting to meet the requirem:cnts of military commanders in the field
in special areas and special military contingents of SSU personnel
involving intelligence duties. It is noted also, however, that valuable
personnel who could profitably serve any peacetime authority engaged
in analogous work have probably been leaving the organisation for
more secure employment elsewhere.
The loss of the Research and Analysis Branch, formerly in 05S
and now in the State Department, has apparently resulted in creating
a gap between the investigating units SI and X-2 and the primary
consumer which also provided the day to day directives for investiga-
tion. Nevertheless the existing units, though skeleton in form,
appear to operate on a day to day basis without mortal impairment.
3. Field Operations: Detailed tabulation of the dis-
tribution of field personnel of SI and R-2 is shown in an annexed
exhibit (Tab C). The following, however, may be noted:
(a) B an arrangement dating from the earlier days
Approved For Release 2002/11/20 CIA-RDP81-00728R000100060005-3
Approved For Release o /20 6728R000100060005-3
as a whole. The personnel in the field read in Washington are
partly civilian and partly military, the percentage of the former
being constw tly on the increase as military porvonnol either leave
the organization on their discharge from the military sex'vices or
become reemployed as civilians.
(b) The Committee has noted that acting under the
direction of the Secretary of 'War,
has succeeded
25X1 A in reducing the personnel employed from about
25X1A
 A p ved For Release 200Z/11/20. CIA`'tz6ft '-OY 8 o00100060005-3
o?Se OSS, SFU hav no operating representatives in' the West'wrn
Hemisphere, which is reserved to the FBI, while the FBI is largely
25X61
. (d) It is to be noted that the field operations is
based on the skillful construction of networks of locally recruited
agents, subagents and informants. To the extent that these agents
are paid out of unvouchered funds or otherwise by SSU, and act under
the control of the SSU representatives, they must be considered part
of the $SU organization. No information is available here on this
subject as a whole, although there appear to be files in which are
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 kept tnee-namet eox unese2/agi zrtaC ni ~rltxnon Raa0 11a00 onoe ning them.
t Washington Staff
(a) S1. Oice: In the SI office nominally there
is a division between the Processing and Planning Branch and the
Operations Branch. The latter in theory is divided into areas and
country desks,, and deals directly with the field representatives in
comnuiiications, transmission of operational directions and intel.li-
Bence, and the like. The former is divided more generally into
geographical areas but includes also three specialized sections .,
economic, technical and propaganda; the Branch is concerned with
the formulation of general directives, broad syntheses and the
preparation of materials for reports and dissemination to interested
agencies. In practice, however, especially in the area desks, there
is at present a tendency to disregard the distinctions between
processing and operations.
(b) X-2 Branch: The core of X-2 in Washington
appears to be its geographical area desks, directed by the Chief
of Intelligence and Operations working in conjunction with the Chief
of the Branch and his assistant. X-2 maintains its own liaison section.
While X-2 and. SI have theoretical separation, under the
direction of General Magruder attempts are being made -to compel
a closer affiliation between the two branches.
(c) Operational Auxiliaries: (described in Tab E).
These center, in terns of importance to 5SU operations, in a
communications section which is concerned with handling of ciphers
and indoctrination of staff in their use. Communications between
Washington and the field are either through the Army installations
or through the State Department. A special cipher system is
Approved For Release 2002/11/20 CIA-RDP81-00728R000100060005-3
 Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
employed for SSU oommunioati,ons. In addition the Operational
Auxiliaries Branch includes some personnel engaged in research in
such subjects as special wireless oouanunioation equipment for
cslandestirte agentss, documentation intelligence (largely deriving
from the days when 088 engaged in placing agents behind enemy lines),
and secret inks.
(d) am es Branch: The services organization
(described in Tab L) is the central management unit. It is prepared,
25X9 the Cosvnittee was told, to handle Oemployees. Its chief
special operational function, in addition to the functions usually
performed by a management unit, is the handling of unvouchered funds
and procurement of secure funds for agent operations in the field
and the indoctrination of field men in the use of such funds. This
branch has also had a Reproduction Section, which through special
security provisions was prepared to handle highly confidential
printing and reproduction jobs of superior quality in reasonably
small, quantity. The section, for example, has prepared secret
documents for international conversations, maps for the Joint Chiefs
of Staff, secret documents for the State Department, and the like.
The unit, also contains a few individuals engaged in research in
micro-photography, of use to clandestine agents in the field, and
i.n special problems of reproduction arising from the unit= s own
work.
(e.)' Perso el: The Personnel Division (described
in Tab E-:Personnel) has a security section, apparently geared
in cooperation with the staff officers of the operating branches to
recruit and screen in the United States staff and field personnel.
C. Operating Trinctiions:
1. Absence of Directives: SSU today operates without
10
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 Appro d For Release 2002111/20: CIA-RDP1-007288000100060005-3
any authoritative directive for the procurement of intelligence.
This arises from the fact that 033 directives wore concerned solely
with the prosecution of the war efforts against Germany, Italy and
Japan. 038 received its directives from the Joint Chiefs of Staff.
The war against Germany, Italy and Japan having ceased and the Joint
Chiefs of Staff having ceased to issue directives to SSU, the
organization has operated solely in accordance with instructions of
the Secretary of 'ar to preserve the intelligence elements of permanent
value until the formulation of an authoritative final policy with
respect to the procurement of foreign intelligence. Thus there are,
strictly speaking, node ure operating functions in S5U at all.
2. Be Facto Functionss Nevertheless since VE Day, and
definitely since VJ Day, the main de facto operations of 33U
have been concerned with:
(a) Planning for long term foreign clandestine
intelligence operations by the United States; .
) The transmission of such information, of a more
1. F._ T. 1C~p~._ 7 x
(b) Obtaining information in the field of an
investigational character, asrequested by military commanders
in military zones of occupation, such as information with respect
to the activities in the Russian ,ones;
(a) Assisting the diplomatic missions in obtaining
factual information from police and intelligence sources, such as
is involved in visa and passport applications;
(d) The continued maintenance of liaison with
intelligence authorities of friendly and neutral countries with
which the OS3 representatives had maintained liaison during the
war;
Approved For Release 2002/11/20 CIA-RDP81-00728R000100060005-3
 Approved For Release 200/11/20 CIA DP81'-OQ7tAR00Q,100060005-3
or less e002-et character, as would appear to be- of interest to
Washington agencies, such as the activities of the Ruaaians in
their own zones and in other oountriee, and activities of local
intelligence agencies and developments of a political and technical
nature in countries to which SSU representatives have access;
(f) The residual problems of the Axis defeat,, the
examination of captured documents made available to SSU, the
interrogation of captured enemy personnel to the extent permitted
by military authorities, and miscellaneous assistance to the
military commanders in the areas of military occupation; as well
as dealing with aspects of the repatriation of Axis agents, enemy
assets in neutral countries and the like.
3. Operational Distinctions between SI and X-2s
(a) The distinction between the activities of SI
and X-2 has to a considerable extent been broken down, first with
the a d.usion of SI representatives from certain areas, such as
the Iberian Peninsula, and to some extent Germany; secondly; with
the lack of specific allocation of functions between SI and X-2
for present problems. In consequence the older distinction between
"positive" and "counter" intelligence has broken down.
(b) X-2, X-2 representatives are operating under an
X-2 directive to obtain information concerning (1) the intelli-
gence organizations of the countries in which they are stationed;
(2) the activities of foreign intelligence organizations in those
countries; and they are required to assist the State Department
missions in obtaining facts to enable the missions to pass upon
applications for visas and passports, as well as in such special
" r
i?li, 9 -
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 Approved For Release 2002 1 CIA-F P f- x'1$`1 000100060005-3
assignments of a factual character which the missions may give to
X-2 representatives. To some extent X..2 still "vets;" that is,
checks upon the security as disclosed by files of persons to be
employed by SU openly or as agents.
(c) it SI appears to be engaged specifically in
investigations of a technical and political character. The
technical work includes investigations into the atomic energy
problem in cooperation with the Manhattan District. The Committee,
however, has made no attempt to evaluate this work or to consult
with the Manhattan District with respect to it.
(d) It is quite clear to the Committee that much of
the distribution of tacks between SI and X-2 in casual and fortuitous
depending on the contacts made by the field representatives rather
than upon a clear division of authority. It is also clear that
in view of the lessening distinction between
the two branches, is attempting to fuse them together, at least
in Washington.
D. Resources and Facilities: From a housekeeping standpoint,
the Committee has been informed and believes that SSU'has equipment
sufficient to handle up to
employees. Unnecessary equipment
and facilities, such as those used in the other operations of OSS
which have been abolished, is being disposed of, we were told. The
chief assets of 5SU are, therefore, its registries and files, and
a small amount of special equipment which may be useful for future
clandestine operations.
1. Files: The intelligence files of SSU naturally
relate mainly to the Axis problem. They include carded informa-
tion on individuals and organizations
6. ,41 Iz
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
25X1
 Approved For Rele "ClalO o 1tfl/Xe.2 Gib iWegj2 MQg0fift%0?po7?ts
made by SI and X-2 personnel; cables and other communications of
information; lists of names of foreign agents and suspects in
the subversive field in foreign countries, and the like. Studies
have also been made, and are being made, of such current problems
as Soviet infiltration and regional political activities. The
operational files include rosters of former employees of OS5 here
and abroad, with personnel and biographical data that may be use-
ful for future recruitment and investigation.
1Vhile the Committee was not authorized by CIO Directiv
to conduct an examination into the Research and Analysis and
Presentation Branches of O5S transferred to the State Department,
the Committee deems it desirable to note that the files of those
branches bear an important relation to the usefulness and value
of the files of SSU. This fact arises from two causes; (1) During
the existence of OSS, R&A was closely geared to the secret intelli-
gence branches as their chief customer and their chief guide in
the selection and pursuit of secret :intelligence targets and the
evaluation of secret intelligence information; the total of 085
information in this respect is, therefore, the sum of the files of
SSU and of the files of R&A, at least as of October 1, 1915, when the
two organizations were separated; (2) A working arrangement exists,
the Committee has been informed, between the S1 and R&A by which the
files of R&A up to October 1, 1945, are available to SI; indeed m t er-
change of accession materials and to some extent mutual consultation
continue between SSU and R&A personnel.
The Committee notes further that files of other branches,
25X1
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 now d Mdx"0FedRoMs Qr ii*?Qsx P I-"7c 9I t1QQQWe-4a rid
reports on experience in clandestine operations are important and
ohould be considered as among the valuable assets of 3$U.
2. B ui, rnents The laboratory equipment of the
Reproduction Branch (see Tab E - Services), it, Is understood, has
been transferred to the State Department. Should this transfer be
reconsidered, the Committee notes that the plant is apparently of
unusual value, and voll-suited for exploitation by any organiza-
tion characterized by a high degree of security in its operations
and its literary production at least fron-external appearance and
the tissurance of its directors.
The small laboratory facilities and intelligence collections
of the Cover and Docuwentation Section (See Tab E - Operational
Auxiliaries Branch) are likewise of considerable intelligence valtae,,
and particularly suited to any organization concerned with future
clanddstine intelligence operations.
The remaining equipment, such as vehicles and the like, are
easily the subject of ordinary Oovernrnent procedures of transfer
and liquidation.
E. Evaluation of SSUs Individual members of the Committee have
obtained oral or written statements from representatives of agencies
which are serving; as customers for the SSU production. (See Tab E).
The agencies consulted were the State Department, particularly the
former R&A Branch of 05S, and the Economic Security Division, a-2,
A-2 and ONI. It appears quite clear from these evaluations that SSU
has been producing intelligence materials of definite value to sections
in the agencies mentioned and that any cessation in the gathering
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 Approved For Release 2002/11/20 ;CIA RDP81-Q0~7 88000100060005-3
and dissemination of such intolligenoo would definitely impaixr the
work of the customer agencies. It may be pointed out, however, that
(1) in some a ;encios, such an R&A in the State Depw.tnent, an impair-
ment would be suffered also by the "going underground" of SOU since
rcuch of the value, of SSU is said Go lie in the close personal
intorchangos between individuals in both acencios; (2) much of the
product of SSU is not obtained clandestinely at the present time and
might well be obtained by other agencies working overtly should 53U
"go underground" - as, for exa p] o, the interviewing of political
figures, the collection of newspaper clippings and like services not
now being performed for various reasons by diplomatic missions or
other U.S. representatives abroad;- (3) the product of SU has boon
diminishing in quantity in many areas and in any event is of variable
quality and would stand considerable improvement.
F. Security of Perso : The Committee has been assured by
various supervisory officials of SSU and particularly by the Chief
of the Security Section that the loyalty of the present SSU staff is
on the vrholo unquestioned. 1Iovrever, there are several qualifications
to this conclusion:
1. Personnel originally recruited by OSS was not subjected
to any rigorous personnel security investigation; some of this
personnel is still in SSU.
2. Some of the personnel now in the R &A Branch (transferred
to the State Department), which maintains close liaison in various
ways with the personnel of SSU and is the chief customer of SSU
intelligence procurement, has definitely been questioned as to bias
in security investigations already conducted.
3? Security checks within OSS were first begun some time
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
after the formation of the original organization; but clearpnoos
were made in many instances on the basis of checks by other
organizations of the Government? such as the Civil service Commission,
and with respect to the thoroughness of such investigations by third
party organizations the Chief of the Security Section reserves his
own judgment.
4. The personnel policies of SSU, being directed toward
25X6^
25X6^
the procurement of specialists and experts in specific
the policies of any future organization for clandestine intelligence
directed toward different ;.doological targets.
It follows therefore that the personnel of any new organization
built out of SSU elements should be selected on a case by case basis,
with reexamination, in the light of new formulations of security
policies? of each employee.
problems, are necessarily fundamentally different from
III. CONCLUSIONS AND COt4LtENT'S.
A. The Committees Assumptions. In performing the mission
outlined in CIG Directive
the GorAmittee found it necessary
to proceed from certain assumptions:
1. Three possibilities were presented as alternative
recommendations with regard to the distribution of the essential
operating functions and the usable resources and facilities of
SSU:
(k) These could be transferred to the Central
Intelligence Group as a going concern to form the nucleus of
permanent future CIO operations (as envisaged by paragraph 3 of
the Presidentta letter of January 22, 19106);
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
25X1A
 Approved For R lease 2002/11/20 CfA-RDP8'1rbd~`~2 I x00'100060005-3
~bj They could be offered in whole or in part for
distribution among existing intelligence authorities to be
continued so far as convenient and possible in the national interest,;
(o) They could be completely terminated, all personnel
being recalled and dismissed, permitting the 010 and other
interested agencies to make individual arrangements for the
recruitment of likely personnel and providing for the distribu-
tion of files and equipment among interested government agencies.
These possibilities permitted such practical alternatives as
the abolition of SI, the transfer of X-2 to the State Department,
transfer of specialized equipment to Governmental research laboratories,
etc.
2. In determining which of these solutions should be
recommended the Committee was impressed by several paramount
considerations:
(a) There is immediate need for the continued
maintenance of foreign intelligence covergge throughout the
world and for the implementation of clandestine and semi-clandestine
operations in the areas hitherto covered by SSU. The national
interest in an emergency sense rather than in ideal long term
conditions seemed more determinative to the Committee.
(b) No other intelligence authority has been
established with appropriate directions to perform throughout
the world the functions of the character of those performed by
SSU and there is no other operating unit presently directly
available to the Director of Central Intelligence for the collec-
ti.on, evaluation and dissemination of clandestine intelligence,
nor has any long term decision on policy and operations been
made by the National Intelligence Authority.
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 st!~My, qtr .': ~, r,Th
dry ! i
Approved For Release 2002/1 X120 FCiA-RDP$1 00 '23 000100060005-3
(c) The present SSU organi,,sation is geared to perform
a minimum job in this field; it has plans and personnel with experience
in the area and in the subject matter and it is a going concern? egdpped
with auxiliary services.
B. Conclusions t
1. The Committee, concerned with S,SU alone and what the
Committee conceives to be to the national interest and the
preservation of existing organization and facilities for tapping
foreign intelligence systems, is ?:ier'fore led to the conclusion
that the present SSU organization provides a going concern for
operations in this field. The problem facing this country are
of an emergency nature. The GIG has no alternative organization
now in the most important field of necessary operation. The
Committee freely concedes that the organization has defects and
deficiencies and its continuance will require administrative
decisions with respect to jurisdictional demarcations of other
Govern rental agencies concerned with aspects of foreign intelli-
gence. On balance, therefore, the Committee has concluded that
the elements of value to the Government at the present time out-
weigh deficiencies.
2. Until, therefore, a long term plan is evolved the
Committee believes the present SSU organization should be placed under
010 and properly and closely supervised, pruned and rebuilt, should
function under specific directives in selected and clearly defined
fields of vital interest to the United States in which clandestine
operations and planning for clandestine operations are deemed necessary.
3. The Committee is aware that other intelligence
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 Approved For Release 20Q2/1'1/20 : CIA=RDP81-00728R000100060005-3
25X1A
gathering agencies of the Government with contaots in the foreign
field exist - the Foreign Service, the Mi.litery, Naval and Air
Attache services and particularly FBI. It dove not believe, how-
ever, that it is for the Committee to determine what extensions
to the present functions of these agencies should be recommended
especially since the Committee has not undertaken or been authorized
to survey any of these intelligence agencies.
C. Jurisdictional Conflicts: The Committee is aware, however,
of the possibility of some jurisdictional inconsistencies and
conflicts. With respect to those activities which FBI has been
reportedly performing for the diplomatic missions in the Western
Hemisphere and X-2 has been performing in the Eastern Hemisphere,
it is desirable that an early arrangement be made between the
Secretary of State, the Departmoru. of Justice (and the Director
.of the FBI) and the Director of GIG, reconsidering the division
now existing on a geographic basis of analogous functions between
the two organizations. The subject is of importance to CIG in the
2. A clear demarcation in the field between the activities
of the auxiliary mission members - such as the activities of the
military services - and SSU is needed; but the Committee concludes
that a closer integration of directives, guidance and coordination
of SSU in Washington and in the field are of greater importance
for the success of the SSU effort.
3. The Committee believes that further consideration
should be given to a plan which will permit the special development
Approved For Release 2002/11/20 : CIA-RDP81,-00728R00010Qc 0005,,,3,-;
 Approved For Release 2002/11/20 CIA-F DP$'' -O0~18R000"100060005-3
of purely clandestine intelligence operations under the CIO in close
coordination with the total needs of CIO for foreign intelligence
by whatever means obtained, leaving more overt United States
Governmental intelligence collection activities to other agencies
prepared and authorized to act in the field with a minimum of
embarrassment to the United States.
D. Immediate Directives: The directives for immediate opera-
tions to the present SSU group, under CIG, should, based on a quick
canvass overall of needs for information from sources not otherwise
available, concentrate on:
1. Current activities of the Soviet Union and its
satel.ites.
2. The preparation of plans for long term penetration
by various devices of the key institutions of the Soviet Union
and its satellites for information of a security nature and aid
to possible military operations of the United States.
3. The observation and reporting of Soviet activities
in other countries,
25X6
25X6
E. Liquidation Procedures The Committee believes that the
SSU liquidation should continue substantially as proposed by
in his draft letter for the signature of the
Secretary of War. However, the Director of Central Intelligence
25X1A
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
,~ k @o A el 418 ~7~~h ~~ ty' for the
direction of the liquidation, the transfer of such personnel and
facilities to the Central Intelligence Group am he desires and the
terms upon which new employment shall be provided.
F. dgeta s The Committee is aware that the assumption
by CIG of operational functions will require that at an early
stage CIG undertake the duty of preparing the budgets, seeking
funds and defending budgetary requests before the Bureau of the
Budget and committees of Congress, The Committee does not believe
that in this long run CIO can or should rely solely on other depart-
ments in such matters, Nevertheless, the Comnittee believes that the
War Department should continue to provide the funds necessary both
for the SSU liquidation and for the current operations to be carried
one until such time as CIO is in a position to present and defend
a cohesive program under established procedures and as a going
concern. The Committee is led to this conclusion chiefly by three
considerationss
1. Practically speaking, it would be difficult to separate
the liquidation financing from tha current operation financing during
the period of liquidation of SSU; since the War Department has
already allocated funds for this purpose the Committee believes
these funds should be so spent.
2. The current operations to be carried on beyond the
fiscal year are so akin to proper continuing War Department functions
that it is believed that the War Department should ask for and make
available to GIG the funds proposed by SSU to War Department for
the fiscal year 1947.
3. It is of great importance that so far a s it is
 pose i6ofMpr&AeU1,2~ f 2 , lA DP81
o -00728P,090100060 05-3
governmental expenditures for
secret intelliggn.nco and the nature of the items of expenditures should,
be concealed. The War Department Budget in especially suited for
this purpose.
The Committee is recommending, therefore that by appropriate
arrangements between the Director of Central Intelligence and the
Secretary of War the War Department's handling of all budget figures,
supporting data and breakdown of items and expenditures be under
conditions of secrecy c,nd in accordance with the desires of the
Director of Central Intolligence. A budget for SSU has already been
prepared and accepted by the budgetary authorities of the War
Department for the fiscal year 1947. The committee concludes
that this budget should for the time being be adopted (see Tab E).
G. Internal Reorganization: Internally the SSU organization
should be reorganized with a view to redistribution of field
personnel for the accomplishment of the above mentioned missions,
the pruri of administrative personnel in Washington, and the
closer coordination of the research and other activities of the
Government with the SSU organization through GIG. The Committee
emphasizes the need for security both as to the existence of the
CIG operation and to its activities.
For this purposes the Director of CIG should appoint his
own staff for change-over and determination of liquidation items
and procedures, to work closely with
and. his
office.
The Committee emphasizes the necessity for removing all
personnel of CIG from Civil Service Control (substituting, how.
ever, at least equivalent protections) and recaamnends that procedural
25X1A
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 Approved For Release 2002/ 1/30 : CIA-RDP81-00728R000100060005-3
problems in effecting such a decision should be further explored
with appropriate authorities. The problem of financing, transfer
of budget allocations and the like should also be considered
with special emphasis on operating completely on unvouahered funds
with oubutantirallq, however, the same internal control as that
provided by the unvouchorod funds arrangorasnt of SSU.
The security functions wdUlin the new unit should be earnpi,asized
with a reorientation in Wrzns of the now problems facing the 010
and porsonnel chosen for transfer to C10 should be hired on an
individual basis with do n vo sonurtty checks
in each case.
I.V. RECOMMENDATIONS:
The Co=lttao roco=uancth that:
1. The Secretzwy of ;tar turn over the liquidation and
further disposition of the rc.,ources, ,fracil.i tics, operating functions
and personnel of SSU to the Director of Central Intelligence, and
for this purpose the $ecre tart' of War be requested to communicate
to the Director of i3U an instruction substantially in the form of
"exhibit 1..
2. Vie Director of SSU continue the liquidation of SSU
as speedily as possible under the supervision of the Director of
Central Intelligence.
3, The Director of Central, Intelligence designate one
or more assistausts (a) to effect, in consultation with the Director
of SSU, an orderly liquidation coordinated with further GIG opera-
tions, and (b) to incorporate functions, personnel, resources and
facilities as a branch of 010 to eccuto such directives as the
Director or 010 with appropriate approval may issue. `."hose assistants
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 Approved For Release 2002/1 /2b CIA-RDP81-00728R000100060005-3
should include:
(a) A deputy for the management of the staff
and field operations;
(b) A security and personnel chief;
(c) A planning chief; and
(d) An operations chief.
Norio of these assistants should be dravm from the personnel of
SSU but they should utilize existing SSU staff to the extent deemed
advisable and should coordina+,a their activities with the policy
and directives of NIA and CIO.
4. The Director of GIG issue operating directives to
the working organization along the lines and in the order of
priority indicated in paragraph 14 (d) of the "Conclusions and
Comments" section above ic, 1 s report.
5. With respect to budgetary implementation, the War
Department continue to assume full budgetary responsibility
for the liquidation of SSU and the current operations herein
recommended as follows:
(a) Out of War Department funds, as already
agreed between the Director of SSU and the War Department, to the
end of the fiscal year 1946.
(b) Obtaining appropriations in the name of the
War Department for the fiscal year 1937 in line with the budget
recommendations previously submitted by SSU for that fiscal year
and accepted by the budget authorities of the War Department.
(a) Keeping secret, as far as possible under the
law, the existence, amounts and nature of the items of requests,
appropriations and expenditures, all handling thereof and consulta-
tion thereon being in accordance with the desires of the Director
Approved For Release 2002/11/20 : CIA-RDP81-00728R000100060005-3
 Approved For Release 2002/1 /20 : CIA-RQP81-007288R000100060005-3
of Central Intelligence ~..
6. The Director of CIO make appropriate Civil Service
and internal bugetary arrangements to invest the personnel and
operations of the new organization with the maximum of security,
secrecy and control;
7. That all action taken hereunder be secret so far
as permissible.
25X1A
GIG
Representing
SAL= KLAUS
Representing
Dept. of State
S. P. WALKER THOMAS F. C
Colonel, OSC Capt., USNR
Representing G-2, WD Representing ONI
R. H. BOBI RG
Colonel, AAC
Representing A-2
26 -
Approved For Release 2002/11/20 CIA-RDP81-00728R000100060005-3