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CHURCH COMMITTEE REPORTS
XV. DEPARTMENT OF DEFENSE
The Department of Defense is the nation's primary consumer of
intelligence information. It controls nearly 90 percent of the nation's
spending on intelligence programs, and most technical collection systems
are developed, targeted, llnd opetated by DOD personnel. The
sheer size and complexity of the Defense intelligence establishment
make it difficult to comprehend the problems and issues which confront
policymakers and intelligence managers. Overall security needs
and bureaucratic interests, as well as differing intelligence needs, further
complicate the quest for solutions to the community's substantive
problems and impede efforts aimed at implementing management
reform.
This section of the report summarizetl the Committee's investigation
into the intelligence activities of the Department of Defense.
It is limited in content to information that can be released publicly.
Although many significant factual details about the national intelligence
apparatus are thus not included, the Committee does not believe
that such omissions seriously detract from a clear presentation of the
central findings of its work.
The Committee focused on national intelligence activities, i.e., those
which produce information primarily of interest to national decisionmakers.
Tactical intelligence activities, which are organic to or in
direct support of operational units, received less attention. This area
could not be ignored, however, because new collection and processing
technology has significantly affected the relationship between the national
intelligence systems and the operational commands.
After an initial review of the entire defense intelligence program,
based on documents, briefings, and studies provided by the executive
branch, the Committee investigated the following issues of particular
interest:
-The resource management and organizational dimensions
of the Defense national intelligence community.
-The role of the Defense Intelligence A~ency in relation to
the CIA and intelligenee functions of the military departments.
-The monitoring and reporting activities of the National
Security Agency.
-Military counterintelligence and investigative activities of
the Department of Defense.
-The chemical and biologiral research of the Department
of Defense as it relates to intelligence missions.
The investigation revealed abuses of authoritv in all these subject
areas, some of which were alreadv known to the intellif"ence community,
Congress, or the public. Arter a brief review of the relation
(319)
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of intelligence to the major objectives of U.S. military forces, and
the history and evolution of intelligence organizations, this report
addresses these specific Defense intelligence issues in turn. The concluding
section assesses the future requirements for Defense intelligence,
particularly as they are affected by technological developments.
A. OBJECTIVES AND ORGANIZATION OF THE DEFENSE INTELLIGENCE
COMMUNITY
The mission of the Department of Defense intelligence apparatus
is to provide the defense establishment with accurate and timely information
on the military capabilities or political intents of foreign
states to assure that U.S. policymakers are forewarned of, and U.S.
military forces prepared for, any event which threatens the national
security.
There are several important consumers of Defense intelligence.
National security policymakers are interested in three areas of national
importance: crisis management, which calls for not only advance
warning of possible military, economic, or political disruption, but
also continued, detailed tracmg of developments once they are underway;
long-range trends in foreign military, economic, and scientific
capabilities, and political attitudes which might warrant a major
U.S. response; and the monitoring or verification of specific international
agreements which are either in force, such as the SALT
agreem~nt or the Middle East ceasefire, or contemplated, such as
Mutual and Balanced Force Reductions talks in Europe.
Defense planners, responsible for designing the structure of U.S.
military forces, constitute a second important group of intelligence
consumers. Although their interests are less far-rangmg than those of
the policymakers, their demands for insights into the capabilities of
opposing military forces are generally' phrased in broader terms than
other DOD intelligence consumers, If only because the macroscopic
analysis which supports major force structure decisions is seldom
sensitive to detailed intelligence inputs.
In contrast to the estimative character of the intelligence products
most required by policymakers and defense planners, two other consumer
groups, the developers of weapon sy-stems and the operating
field forces, have greater interest in detaIled, factual information.
Satisfaction of these demands is generally more a matter of collection
and compilation than analysis and inference. The major
distinction between the two groups lies in their subject interests.
The weapon systems developers emphasize scientific and technical
detail regarding the operating characteristics and performance
parameters of foreign weapon systems (knowledge of which can
be useful in optimizmg the design of U.S. systems). The military
field commands emphasize "order of battle" data, or the unit identities
and the strength, equipage, and disposition of opposing field forces.
The sequence of operatIOns in meeting the intelligence demands of
these disparate groups of consumers involves three (or, in the case of
~ignals jntelli~ence, four) basic steps: (1) collection-the gathermg
of potentially relevant data; (2) production-the translation of
321
these data into finished intelligence products through screening,
analysis, and drawing of inferences; and (3) dissemination-deli~ery
of the finished products to the right consumers at the right tIme.
If the collected data are in the form of electronic signals, another
step, "processing," between the first and the second, is required to
refine the raw signals before they are submitted for human evaluation
during the production phase.
A brief review of the major objectives of U.S. military forces may
help to place the intelligence contribution in perspective.
1. Objectives of U.S. Military Forces
The paramount objective of U.S. forces is to deter nuclear attacks
upon the United States and its allies by maintaining an unambiguous
capability to inflict massive damage on the attacker, even after absorbing
a first strike by the aggressor's nuclear forces. The defense intelligence
community supports this objective by monitoring the technical
developments and force deployments of potential enemies, especially
those which might attempt to gain the capability for a disarming first
strike. U.S. technical collection systems are able to alert leaders to an
imminent attack by detecting movement or changes in the status of the
Soviet Union's strategic forces. Thus warned, the United States can
counter and react to such changes. This so-called strategic warning
may be essential to the survival of some components of the U.S. retaliatory
force.
Tactical warning, based on indications that a nuclear attack has
actually commenced, is the primary responsibility of the alert and
warning networks of the operational military commands. Although
U.S. intelligence collection systems are not designed specifically to
provide such warning, they have some inherent ability to do so.
lt is generally agreed that no measures would prevent a nuclear
exchange from devastating all the participants; thus, relatively
little attention has been devoted to developing intelligence systems
designed to improve the outcome of an all-out nuclear war for the
United States or its allies.
The second purpose of U.S. forces is to deter conventional (i.e., nonnuclear)
military attacks on its allies. Althoug-h U.S. nuclear forces,
both strategic and theater, contribute to this objective by introducing
the threat of escalation into a potential aggressor's calculation, the
general purpose forces (land combat, naval, and tactical air) of the
United States and its a.JIies are considered the prime deterrent to conventional
military attack. Planning for the general purpose forces
focuses on being able to defend Western Europe, while at the same
time being able to conduct a lesser war in the Pacific theater. Again
intellig-ence plays an important role in following the technical and
force-level changes of potential enemies, and in predicting future
trends. Current intelligence is also relied, upon to provide adequate
warning of the massive redeployment of men and materiel that would
precede a conventional attack.
In the event of war, it will be critical to adapt the missions of
t~e pational intelligence-~athering systems to the needs of operatIOnal
commanderS'. The planning for such contingencies poses a major
challenge for leaders of the defense intelligence community. .
322
The ongoing arms limitations negotiations on strategic and
theater forces in Europe are guided by the principle of rough equality
between opposing capabilities. Asymmetries in such factors as geography,
teclmology, and manpower must be accommodated so that both
sides believe there is an overall balance. Intelligence systems play a
critical part in monitoring this balance since they are the only reliable
means available for Yel'ifying the status of forces of potential adversaries.
In fact, advances in technical intelligence collection systems
have made the current arms limitation agreements feasible. Establishing
compliance with the strategic arms agreements in force, as well as
providing assistance in cnrrent negotiations, is now among the most
vital missions of the national intelligence apparatus.
The technical capabilities of U.S. intelligence systems are probably
now adequate to meet the demands of present agreements. "'iYhether
they can mcet the needs of future agreements is unclear and dependent
upon the specific terms negotiated. Some of the proposals
advanced in connection with the Vladivostok Agreement and the
Mutual and Balanced Force Reduction (MBFR) talks would test
the abilities of current or envisioned intelligence systems to detect
or verify with high confidence. Three of the most difficult enforcement
areas which could arise under future agreements and which
pose major problems for the intelligence community are:
-MIRV missiles which are concealed in silos or submarines;
-Cruise missiles whose launchers are easily concealed in
bombers and submarines, and which may carry either conventional
or nuclear warheads;
-~Iobile forces and wpapons (particularly nucll:'ar systems)
in Europe which can be transferred quickly to and from the
theater, and are also readily concealed.
2. Evolution of Defen8e Intelligence Organizati()n8
The complexities of modern defense have burdened the intelligence
community with issues and responsibilities which could hardly have
been anticipated when the United States emerged as the world's foremost
military power three decades ago. In endeavoring to fill its expanding
role in support of the nation's security interests. the defense
intelligence apparatus has undergone periodic reorganization, generally
leading towa,rd more centralized management control. The
desire to make the defense intelligence community more responsive
to the needs of policymakers has motivated this trend.
At present, the most likely near-term prognosis is for a continuation
of the general peace, interrupted at times by regional conflict and
crisis, but not erupting into a major war or likely to involve direct
U.S. military participation. The problem has been that in order to
avert the big war. the U.S. has had to project a credible appearance of
being able to win it, or, at least, not lose it decisively. This means
it could not permit its war-fighting capacity, for which the military
services hold the final responsibility. to erode unilaterally. Since the
defense intelligence apparatus is a major contributor to that capacity,
and since most of the important intellip'ence assets are operated by the
armed forces, it is not surprising that the services have resisted efforts
to channel these resources in different directions.
323
The existing organization of the defense intelligence commuI!ity
will be discussed in the following section. It is important to apprecIate
that it was not designed expressly to selTe tOllay's intelligence requirements
or to manage today's intelligence functions. Rather, it
should be perceived as basically a service to the military, adjusted
through several decades of institutional compromise.
3. Early Beginnings
The first traces of U.S. military intelligence activities appeared in
the Revolutionary 'Val', when General George 'Vashington, as commander
of the colonial Army, recruited and trained a corps of intelligence
agents to report on' British aeti vities. This effort, which included
the use of codes, secret ink, and disguises, was short-lived,
and the agents ,vere mustered out of service with the rest of the
Continental Army. Following 'Vashington's precedent, commanders
of U.S. military forces in later conflicts created ad hoc intelligence
units on their own authority to selTe their individual needs. Andrew
Jackson had an intelligence operation in the War of 1812, and Winfield
Scott had an intelligence unit in his command in the Mexican
War. A number of the military commanders in the Civil War
organized their own intelligence networks, and two autonomous
organizations, both named the rnited States Secret Service, engaged
in intelligence activities for the Fnion, although neither had any legal
authority to operate.
In 1882, the Secretary of the Navy established an Office of Naval
Intelligence to collect and record "such naval information as may
be useful to the department in the time of war, as well as in peace." 1
This office developed a naval attache system to overtly collect information
on foreign naval activities. It initiated a series of publications
summarizing the information it had collected to keep the Navy abreast
of foreign naval developments, and specifically provided the NlIval
War Board with information during the Spanish-American "Tar.
The first comparable Army unit was the Military Intelligence Division
of the Office of Adjutant General, established in 1885 to gather
information on forei~l armies. It, too, was active during the SpanishAmerican
\Var, but by the outbreak of World 'Val' I the entire Division
had shrunk to t\~·o officers and two clerks.
Both the Army and Navy greatly expanded their intelligence complements
durinO' \Vorla 'Val' 1. The Army alone had more than 300
officers and 1,000 civilians engarred in iiltelligence work. In 1917,
a War Department Cipher Rlll'eau was created by administrative directive.
This unit, sometimes referred to as the "American Black
Chamber," solved more than 45.000 cryptograms (including one from
the Sunday Times) and broke the codes of more than twentv nlltions.
It was dissolved at the snecific direction of Secretary of State Henry
L. Stimson in 1929. who reportedly said: "Gentlemen do not rf'ad each
other's mail." 2 This and similar measnres left the service intelligence
arms poorly prepared for 'Vorld War II.
"A. P. Nihlaf'k. Th" Hi"forll "rid AimQ of f'hA Office Of Naval lnfdlirwrlce.
Division of Operatj()ns. United ~tates Navy Department (Washington, D.C.:
U.R Government Printing Office. 1920).
• Herbert O. Yardley, The American Black Ohamber (Indianapolis: BdbbsMerrill,
1931), pp. 332, 348.
324
One of the first steps taken by President Roosevelt in the aftermath
of Pearl Harbor was to order the creation of the Office of Strategic
Services (OSS) in June 1942 under the direction of General William
Donovan. During World 'Val' II, OSS, together \vith the Army and
Navy intelligence organizations, was coordinated by the Joint Intelligence'
Committee of the Joint Chiefs of Staff.
A list of the functions of the principal OSS branches demonstrates
the scope of its activity. The Research and Analysis section produced
economic, military, social, and political studies, and estimates for strategic
areas from Europe to the Far East; the Secret Intelligence group
gathered information from within neutral and enemy territory; Special
Operations conducted sabotage and worked with the varIOUS resistance
groups; Counterespionage protected United States and allied
intelligence operations; Morale Operations created and spread
"black propaganda"; Operational Groups trained, supplied, and sometimes
led guerrilla groups in enemy territory; the Maritime Unit conducted
marine sabotage; and Schools and Training was in charge of
the overall training and assessment of personnel, both in the United
States and abroad. In addition, ass was directed to plan and conduct
such "special services as may be directed by the United States
.Joint Chiefs of Staff." Only Latin America, the FBI's bailiwick, and
the Pacific Theater, General MacArthur's, were outside the OSS
sphere of operations.
Jurisdiction over subjects of tactical military interest, such as order
of battle data and enemy weaponry estimates, was left with the
traditional srrvice arms. OSS aIm did not prevail completely over
other intelligence operations of the services, which achieved a number
of notable wartime successes. Army Intelligence, for example, captured
a high-level N'azi planning group in North Africa, obtained a
map of all enemy minefields in 'Sicily, and captured the entire Japanese
secret police force on Okinalwa. Naval Intelligence, soon after
United States' entry into the war, deduced the impending appearance
of German guided missiles, such as the HS 293, the V-bombs, and
homing torpedoes.
After 'Vorld 'Val' II. President Truman issued an Executive Order
abolishing the OSS on September 20, 1945. The Department of War
absorbed some of its functions, such as the work of its Secret Intelligence
group and of its Counterespionage program. The State Department
assumed others.
The demise of the OSS did not, however, end the concept of a
central intelligence organization. On January 22, 1946, President
Truman established a National Intelligence Authority to advise him,
and created a Central Intelligence Group to assist the NIA in coordinating
national intelligence matters. These two organizations evolved,
through the National Security Act of 1947, into the National Security
Conncil and Central Intelligence Agency.
The rapid demobilization of the armed forces after the war, the creation
of the first peacetime central intelligence organization, and President
Truman's conviction that the military must be subordinated to
civilian control were all factors which seemed to portend a diminished
role for the armed forces within the post-war intelligence community.
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The National Security Act of 1947, which created the CIA and NSC,
also strengthened civilian authority over military services by drawing
the 'Val' and Navy Departments together under a single Secretary of
Defense. The new Secretary was given authority over all facets of the
administration of the defense establishment. The identities of the
Army and the Navy were preserved, however, under separate civilian
secretaries who now reported to the Secretary of Defense rather than
directly to the President. At the same time, the air elements of the
Army were reformed under a new Department of the Air Force, with
the same status as the bvo older service departments.
The broad powers granted the Secretary of Defense permit him
to effect major organizational changes within the Defense Department
by the simple expedient of issuing a directive. The Defense Intelligence
Agency was created by such a directive in 1961. The Eisenhower
administration had concluded in the late 1950s that a consolidation
of the services' general (defined rather awkwardly as all non-SIGINT,
nonoverhead, nonorganic intelligence activities) was needed, an idea
"'hich the Secretary of Defense in the new Kelmedy administration,
Robert F. McNamara, quickly endorsed.
The Joint Chiefs of Staff and Secretary McNamara disagreed on
the form the new agency should take. The JCS were concerned with
preserving the responsiveness of the service efforts to the military's
tactical intelligence requirements. They therefore wanted a joint
Military Intelligence Agency subordinate to them, within which the
independence of the several military components, and hence their
sensitivity to the needs of the parent service, would be retained.3
McNamara wanted a much stronger bone1. He was determined to
utilize better the service assets to support policymakersand force
structure planners, and to achieve management economies.
The Defense Intelligence Agency which emerged was a compromise.
It reports to the Secretary of Defense, but does so through the JCS.
The Joint Staff Director for Intelligence (the J-2) was abolished
and replaced by the Director of the new DIA. The functions of the
Office of Special Operations-the small intelligence arm of the Office
of the Secretary of Defense (OSD)-were absorbed by DIA.4 There
has been continuing controversy among the services due to their
reluctance to cede responsibilities to DIA because they feared downgrading
wartime combat capabilities. Moreover, the OSD level of the
Defense Department has pressed continuously for greater centralization;
'both of these controversies have hampered DIA throughout its
existence.
Unlike the DIA, the National Security Agency (NSA) is a presidenti'al
creation. Established in response to a Top Secret directive
o Mpmoranda. from Recretary of Defensp Robert McNamara to Chief, Joint
Chiefs of Staff, Lyman Lemnitzer, 2/8/61; from Lemnitzer to McNamara, 3/2/61;
from McNamara to Lemnitzer. 4/3/61; from Lpmnitzer to McNamara, 4/13/61.
• Memorandum from Deputy Secretary of Defense Roswell Gilpatric to Secretaries
of the Military Departments; Director of Defense Research and Engineering;
Chief; Joint Chiefs of Staff; Assismnt Secretaries of Defense; General Counspl:
Rpecial Assistant; and Assistants to the Secretary, 7/5/61; DOD Directive
5105.21, 8/1/61.
326
issued by President Truman in October 1952, NSA assumed the responsibilities
of its predecessor, the Armed Forces Security Agency
(AFSA), ,yhich had been created after 'World 'War II to integrate
the national cryptologic effort. NSA was established as a separate
agency within DOD reporting directly to the Secretary of Defense.
In addition, it was granted SIGINT operational control over the three
Service Cryptologic (collection) Agencies (SCAs): the Army Security
Agency, Kaval Security Group Command, and Air Force
Security Service. Under this arrangement NSA encount€red many of
the same jurisdictional difficulties which were to plague DIA. In an
effort to strengthen the influence of the Director of the National Security
Agency (DIRNSA) O'"er their activities, the SCAs were confederated
in 1971 under a Central Security Service (CSS) with the
DIRNSA as its chief. The mission of NSA/CSS is to provide centralized
coordination, direction, and control for the United States
Government's Signals Intelligence (SIGINT) and Communications
Security (COMSEC) activities.
4. Ourrent Organization
Describing the management structure of the Defense intelligence
community would be a difficult t'ask under the best of circumstances.
Authority and influence within any big organization are often determined
as much by personalities and working relationships as by formal
chains of commands or job descriptions. For the sprawling and
complex Defense intelligence network, the task is particularly
challenging. Moreover, the community is in the midst of an executive
branch-direct€d transition which may alter second-level management
relationships throughout the Department of Defense. The executive
branch has not yet revealed exactly what kind of structure it intends,
if indeed its full reorganization phn has been decided.
Of necessity, the description which follows applies to the organization
of the Defense intelligence community as it existed during most
of 1975.5
As the Defense intelligence community is presently organized, the
Secretary of Defense has three groups of assets: (1) the Defense agencies
reporting directly to him, of which the National Security Agency,
the Central Security Service, and classified national programs are the
most significant (but also including the Defense Mapping Agency and
the Defense Investigative Service); (2) the Defense Intelligence
Agency, which reports to him through his principal military advisers,
6 The most significant change apparently now being considered would affect
the Office of the Assist~nt Secretary of Defense for Intelligence (ASDjI). This
position is currently (as of April 1976) vacant. Reportedly, the duties of the
ASDjI will be assumed by a new Deputy Secretary who will also have executive
jurisdiction over the related fields of telecommunications and net threat assessment.
In this case, the ASDjI position could be abolished. The pOssibility cannot
he ruled ont. however, that thp. executi,"e envisions the new Deputy Secretary
as an additional oversight position. in which case a new ASDjI reporting to him
could he appointed. This is along the lines suggested by the Report to the Presidp.
nt and the Secretary ()f Defense hv the Blue Rihhon Defense' Panel, ,July 1,
1970, on National Command and Control Capability and Defense Intelligence
Iherp.inafter cited as the Fitzhugh Rl'port, after its chairman, Gilbert W.
Fitzhugh).
327
the Joint Chiefs of Staff, and is responsible for preparing Defense
intelligence reports and estimates drav,ing upon the data collected by
other arms of the intelligence apparatus; and (3) the intelligence arms
of the individual military services under the immediate operational
control of the service chiefs, which encompass the military's general
intelligence collection agencies, their counterintelligence and mvestigative
arms, and activities of tactical interest.
One of the largest organizations in the Defense intelligence community
is the National Security Agency. Military :personnel, facilities,
and equipment playa predominant role in carrymg out the mission
described by NSA Director, General uw Allen, Jr., in public session:
This mission of NSA is directed to foreign intelligence,
obtained from foreign electrical communications and also
from other foreign signals such as radars. Signals are intercepted
by many techniques and processed, sorted and analyzed
by procedures which reject inappropriate or unnecessary
signals. The foreign intelligence derived from these signals is
then reported to various agencies of the government in response
to their approved requirements for foreign intelligence.
6
Other agencies reporting directly to the Secretary of Defense are
concerned with more speCIalized subject areas than the cryptologic
group and make smaller demands on resources. The Defense Mapping
Agenc.y is responsible for all defense mapping, charting, and geodetic
activitIeS. Although a substantial percentage of this Agency's activities
are of vital intellIgence interest, others are related only marginally to
intelligence, and some have no defense connotation at all. ~imilarly,
the Defense Investigative Service, responsible for carrying out background
investigations, is generally not considered in the mainstream
of the national intelligence effort.
Aside from the Defense Investigative Service, each of the military
services retains independent investigative arms responsible for both
counterintelligence and criminal matters. These agencies fall within
the ordinary military chain of command, and report to the Chief of
Staff for each service. Other intelligence activities of national importance
conducted under the uniformed services include the reconnaissance
operations of Air Force aircraft and drones, and the general
intelligence collection and anal.ysis work of the U.S. Army Intelligence
Agency, the Naval IntellIgence Command, and the Air Force
Intelligence Service. The service intelligence agencies are primarily
oriented to supporting the tactical miSSIOns of the services, but they
also collect information used by DIA in producing finished intelligence.
The service agencies also continue to engage in activities related
to national intelligence, and participate in the national estimates
process as observers on the U.S. Intelligence Roard.6a
A simplified diagram of the DOD-funded intelligence organization
is presented on page 328. As is clear from the diagram,
the organizational structure is extremely complicated, with several key
individuals serving in more than one capacity, and disparate and diffuse
chains of responsibility, both for deciding what is to be done and
allocating the resources to do it.
"General Lew Allen, Jr., testimony, 10/29/75, Hearings, Vol. 5, p. 17.
"a USIB was abolished by Executive Order No. 11905, 2/18/76.
328
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Perhaps the most significant feature of the above chart however,
is what it does not show: a clear-cut line of authority extending from
the highest councils of the executive branch to the operating arms
of the intelligence apparatus. This is not surprising since this
structure is the product of many years of bureaucratic evolution.
Whether one views this arrangement as a crazy-quilt pattern, produced
piecemeal over time in response to internal pressures, or as a
finely balanced mechanism developed to meet needs as they arose, is
largely a matter of perspective. It is hard to avoid observing, however,
that if the apparatus has functioned even half as efficiently in allocating
intelligence resources as its proponents maintain, it is because its
participants have come to understand it well enough to make the system
work in spite of itself. On the brighter side, the profusion of checks
and balances inherent in the system may serve to reassure those who
fear the potential evils of concentrating too much power in the hands
of a single intelligence leader.
B. THE DEFENSE rNTELLIGENCE BUDGET
1. Problems of Definitirm
The magnitude of national resources devoted to intelligence activities
has recently been subject to considerable public speculation. Estimates
of U.S. military intelligence spending have ranged from $3-4
billion annually to $15 billion, with most settling around the $6.2
billion figure cited in a recent book.7
7 Victor Marchetti and John D. Marks, The CIA and the Cult of Intelligence
(New York: Dell, 1974), p. 95.
329
Much of the controversy stems from definitions. What constitutes
an intelligence activity ~ Which Governm~nt entitie~ are intellie;ence
organizations~ Unfortunately, the budgetmg practIces of the m~elligence
community, and particularly the Department of Defense whICh
controls the overwhelming bulk of intelligence resources, were not designed
with much attention to functional clarity..Wit~in DOD,.iI!'stltutional
pressures to lower the "fiscal profile" of mtellIgence actIvIties
and rivalries over control of organizational assets have led to such
discrepancies as placing the SR-71 program in the strategic forces
account (Program I, a totally different section of the Defense budget) .8
Other examples of current budget practices are the exclusion of all
communicatIOns security, counterintelligence, and mapping and charting
activities from the Consolidated Defense Intelligence Budget
(CDIB).
Although a case can be made that DOD's narrow definition of
intelligence activities offers certain management expediencies in permitting
the staff of the Assistant Secretary of Defense for Intelligence
(ASD/I) to concentrate its attention on the central elements of the
Defense intelligence effort, it produces such functional anomalies as
the exclusion of important intelligence activities from the ASD/I's
fiscal purview. Certainly, whatever degree of budgeting oversight t4e
Congress elects to assume should address a fiscal presentation assembled
on the basis of a more comprehensive definition of national intelligence
activities than DOD uses at present.
Furthermore, a congressional oversight committee, in attempting to
monitor DOD's counterintelligence budget, may want to group it with
the counterintelligence budgets of all other intelligence agencies to
provide management visibility to the national counterintellIgence effort
that is now lacking, even within the executive branch. Practical
difficulties in distinguishing counterintelligence activities from ordinary
criminal investigations (which, though totally different in purpose,
are quite similar in method and often share common assets)
should not be permitted to preclude an effort to establish a cross-agency
grouping of the counterintelligence budget.9
The same problem of distinguishing intelligence and nonintelligence-
related functions exists in the budgets for mapping and
geodetic activities, most of which are the responsibility of the Defense
Mapping Agency. Many of DMA's missions are only marginally
related to the intelligence function, but others are of vital importance
to.ll;1l segments of the intelligence community's market. At a tactical
mIlItary level, what intelligence commodity is of greater importance
to a fi.eld commander than accurate maps of his area of operations ~
As WIth counterintelligence, the difficulties inherent in trying to
separa~e the budgets of those facets of the mapping, charting, and
geodetIc effort which serve a national intelligence purpose from those
8 The SR-71s were recently transferred from this category to the Strategic
Forcl's (Program I in the Planning, Programing, and BUdgl'ting System).
• The invl'stigations for security clearances, prl'viously a hodgepodge of disparate
standards for uncoordinatl'd. redundant efforts, Wl're rl'cently consolidated
under a newly fonned Defl'nse Investigative Service (DIS). Nearly two-thirds
of the budget for Counterintelligence and Investigative Activities (CI&IA)
remains vested with the service agencies.
207-932 0 - 76 - 22
330
which do not should not be solved by the simple expedient of ignoring
all such activities.
Still more difficult definitional problems arise when one probes more
deeply the budgets of the armed forces in search of "tactical" as
opposed to "national" intelligence functions. The difference between
these two categories of intelligence lies in the eye of the consumer, not
in the intelligence-collection activity itself. Increasingly, intelligence
data-collection systems have grovm capable of serving both the broad
interests of the policymakers and defense planners and the more
specific technical interests of the weapons developers and field commanders.
In fact, a given set of collected data may often be of interest
to all these groups, although the analytical slant with which it is
presented is likely to differ markedly in response to consumer
preferences.
There is an extensive gray area encountered in attempting to define
military intelligence activities at the tactical or field command level.
Many components of the military forces make a definite contribution
to our intelligence effort during peacetime, but have other
important missions as well, particularly during war. A prime example
is the Navy's long-range, shore-based patrol planes, which play an
important ocean surveillance role in peacetime, but would be an active
part of U.S. antisubmarine warfare (ASW) combat forces during
war. Although tactical military intelligence and related activities
are included in the comprehensive cost estimates presented in the
following section, the Committee believes the budgets of such activities
should be excluded from the jurisdiction of a congressional intelligen'ce
oversight committee, with those committees in which it is currently
vested retaining fiscal review authority.
The problem of reflecting costs of activities which areonlv partly
intelligence-related in cost reporting is not confined to DOD. The
diplomatic missions of the Department of State are responsible for
political, economic, and commercial reporting, as well as normal representational
and diplomatic responsibilities. The Department's Bureau
of IntE'lligence and Research, which is both a consumer of
intelligence and a producer of finished analyses, was budgeted for
$9.5 million in FY 1976, of which 84 percent was spent on salaries.
However, much more is spent each year to support State's embassies
and consulates which, in addition to other duties, function in their
political reporting activities as a human intelligence collection system.
As with tactical military intelligence activities, the difficulties of trying
to segregate the intelligence portion of the budget costs of these
dual-purpose assets appear to outweigh the benefits.
93. The Size of the Defense Inte71igerwe Bud.Qet in FY 1.976
The Committee's apalvsis inrlicatE'd that rdeletedl billion 10 constihItes
the clirect costs to the U.S. for its nationa1 intelligencE' nrorrram
for FY ] 976. This includes the total approvE'd bnd~ets of CIA, DIA,
NSA, and national reconnaissance programs.lOa If the costs of tactical
10 Dpleted pending further Committee consideration.
lOa Direct costs of the inte1liQ'enf'e a~tivities of the ERDA, FBI, and State Department
are contained in their respective bUdgets.
331
intelligence by the armed services and indirect support costs lOb which
may be attributed to intelligence and intelligence-related activities are
added in, the total cost of intelligence activities by the U.S. Government
would be twice that amount. This represents about [deleted] percent
of the federal budget, and [deleted] percent of controllable federal
spending.1Oe
It should be stressed that this larger estimate represents a full cost
and includes activities which also fulfill other purposes. Thus the entire
amount could not be "saved" if there were no intelligence activities
funded by or through the Defense Department.
A breakdown of the DOD intelligence budget divided by activity
is shown in the table below. These estimates are based on a broader interpretation
of what constitutes an intelligence activity than that used
by DOD. The Department manages its national intelligence effort
through the Consolidated Defense Intelligence Program (CDIP), and
makes no formal effort to attribute indirect support costs. The summary
includes only those activities funded through the Defense Appropriation
Bill.
The costs of intelligence functions performed by the Departments of
State (Bureau of Intelligence and Research), Treasury, Justice (Federal
Bureau of Investigation), and the Energy Research and Development
Administration (which has assimilated the intelligence divi~
ion formerly operated by the Atomic Energy Commission) total
about $0.2 billion.
Full Oosts Of Intelligence and Related Activities Within the DOD Budget:
Fiscal Year 1976
(In millions )
DireCctrycpotsotlso:gy _
Communications security _
Reconnaissance programs _
Aircraft and drones _
Special naval activities _
Counterintelligence and investigation _
General intelligence _
Mapping, charting, and geodesy _
Central Intelligence Agency _
Subtotal, national intelligence efforL_____________________ [deleted] lOd Strategic vvarning _
Ocean surveillance____ _ _
Tactical intelligence_____________________________________________ _ _
VVeather reconnaissance_________________________________________ _ _
Reserve intelligence components_________________________________ _ _
SUbtotal, military intelligence efforL [deleted]
Total, direct costs___________________________________________ [deleted]
Indirect support costs:
Basic research and exploratory developmenL_____________________ _ _
Logistics _ _
Training, medical and other personnel activities___________________ _ _
Administration _ _
Total, indirect support costs [deleted]
Total, intelligence costs (budgeted by DOD) [deleted]
lOb Indirect support costs include costs for personnel, operations and maintenance
vvhich support intelligence activities. Examples are the operation of training"
facilities, supply bases, and commissaries.
10e Deleted pending further Committee consideration.
lOd Ibid.
332
[DELETED]
3. Who 0011trols the Intelligence Budget.'t
The nominal head of the intelligence community is the Director of
Central Intelligence (DCI), who IS also the Director of the Central
Intelligence Agency; these two roles, however, are to be viewed as
distinct. A cornerstone of President Nixon's 1971 directive, designed
333
to foster the intelligen~ community's responsiveness to policymakers
and promote management efficiency, was "an enhanced leadership role"
for the DCI. Yet the DCI was not given direct authority over the
community's budget, nor granted the means by which to control the
shape of that budget until the announcement of President Ford's
Executive Order of February 18, 1976.
As Director of the CIA, the DCI controls less than 10 percent of the
combined national and tactical intelligence efforts. His chairmanship
of the Executive Committees (ExComs), which oversee the management
of certain reconnaissance programs (wherein he serves in
what amounts to 'R partnership with the ASD/I), also affords him
some influence over the funds budgeted for these efforts. The remainder
spent directly by the Department of Defense on intelligence activities
in FY 1976 was outside of his fiscal authority. The DCI's influence
over how these funds are allocated was limited, in effect, to that of
an interested critic.
By persuasion, he could have some minor influence, but the budgets
themselves were prepared entirely within the Department of Defense.
The small staff of the DCI may have been consulted in the process,
but by the time it sees the defense portion of the national intelligence
budget, the budgetary cycle has been well advan~d,and hence the
budget has been largely fixed. Problems of timing also influence the
role of the Office of Management and Budget, which sets broad fiscal
guidelines in budget ~ilings, but plays an otherwise minor role in
shaping the Defense intelligence budget. .
The real executive authority over at least four-fifths of the total
resources spent on intelligence activities has resided with the Secretary
of Defense. Over the past few years, the Deputy Secretary of
Defense has shown a particular interest in the intelligence portion
of the DOD budget, in effect representing the Secretary on many issues
arising in this area. However, the major responsibility for management
of intelligence programs will lie with the newlv created
position of Deputy Secretary of Defense for Intelligence (Mr. Robert
Ellsworth) .
The Assistant &creta.rv of Defense for Program Analysis and
Evaluation (ASDIPA&E) holds general review authority over the
so-called mission forces, the operational forces which include much
of the tactical intelligence assets of the military services. A third ASD,
the Comptroller. is responsible for reviewing the budgets of the agencies
concerned with counterintelligence investigations. and the newly
formed Defense Mapping Agency. As explained earlier. DOD considers
these activities peripheral to the intelliP.'ence effort. and their
costs account for only about 5 percent of the overall intelligence
budget.
The managers of the various intelligence programs collectively wield
the greatest influence on day-to-day intelligence operations. By the
334
budget yardstick, the most influential individual is ,the Director of
~SA (DIRKSA) who, including his dual role as Chief of the Central
Security Service, manages the largest single program contained in
the national intelligence budget, less than half of which is actually
in the KSA budget.
Close behind the DIRKSA, and also directly related to the collection
of signals intelligence data, is the Cnited States Air Force in
its role of managing certain reconnaissance programs. Decisions made
regarding the introduction and development of reconnaissance systems
have the greatest impact on the overall size of the intelligence
budget, not only because of the direct costs of perfecting and procuring
the hardware involved-as expensive as this technically complex equipment
has become-but also because of the continuing effect that the
choice of a collection system ha6 on processing and other operating
costs long after it has been made.
A third grouping of defense intelligence activities is the General
Defense Intelligence Program (GDIP). In effect an "all other" category,
the GDIP budget is ordinarily one-fourth Defense Intelligence
Agency (DIA) costs, and three-fourths service costs (including those
of the Air Force Intelligence Service, Naval Intelligence Command,
and a part of the U.S. Army Intelligence Agency). The GDIP encompasses
all of DOD's non-SIGINT, nonoverhead intelligence collection
and production activities deemed by the Department to be of
national importance. It does not include activities related to the military
field commands.
Although the general intelligence budget managed by the Director
of DIA (DIRDIA) has never been more than a fraction the size of the
DIRNSA's cryptologic budget, his problems, though similar, are
more formidable. Whereas opinion is divided on the DIRNSA's grip
over the service agencies that participate in the Consolidated Cryptologic
Program (through the Central Security Service), there is little
di6agreement on the DIRDIA's inability to exert significant influence
over the priorities and activities of the service components of the
GDIP.
As a consequence, the program management responsibilities for the
service general intelligence agencies previously held by the DIRDIA
were recently transferred to the ASD/I. The result is that the
DIRDIA, who purportedly still speaks for the Secretary of Defense
on "6ubstantive" matters within the intelligence community, exerts
direct control over only 4 percent of the Secretary's intelligence
budget.
The span of authority at each managerial tier-from executive
oversight through fiscal review to program management-is summarized
in the table on page 335.
~ .. ": :-.:);"j. tj':
;::y:':."',,;,~':'V·
h:.';:r;-=~r;i3te\ol tu:
I,'..:' ru:,,-,.:
r,., "
;; ..,:: 1,- :-i':i:",.e CO,?S
~••_~~.-2,j;:~ ~-~:":,!.;!:;
-:':-'eil· ro:.... .Ai!~nci·
"ho cO:'ltl'olc t-l,~ .rrl;;~l ~ l::-.:~nc~ SU:! 't?
u;..str1b"J.'.:,1cn ':> r:' tl';,,' ~'·a~76 U'i.dt;ct .
Request by O~'ganlzatlv-.l ulldLn;(',~iJlent 0;' ApproprIate:: r'unds
(doll, r, i, "Uliano)
----------,...,
[Figures deleted.]
'1"o~<:.l
C/.:I
(J,j
c.n
336
Defense agencies each draw on resources funded within the service
appropriations in addition to their own agency appropriations. TheBe
resources generally take the form of pay and allowances for military
personnel who are serving tours outside their parent service with
intelligence agencies. DIA's appropriation is supplemented by $39
million in this way; KSA's by $34 million; DIS by $16 million; and
the Defense ~Iapping Agency's by $12 million. The Defense Department
makes accounting corrections for these service-incurred costs
in its Fiscal Year Defense Pla,n (FYDP), and the amounts are included
in presenting the agency budgets. The important point to be
recognized is that the budgets of the Defense intelligence agencies
are not fully covered by the funds a,ppropriated to them.
Slightly over a third of the overall DOD-funded intelligence effort
is managed directly by the military services. The bulk of these funds
support the tactical military requirements of the field commands and
include many force components for which the intelligence mission is
secondary or of shared importance with other activities. However,
acti,-ities under service management are of national importance and
interest in two areas: peripheral reconnaissance (carried out both
by piloted aircraft, such as the "R-71, and unmanned drones), and
counterintelligence and investigation (conducted by the Air Force
Office of Special Investigations, the Naval Investigative Service, and
a number of decentralized Army military intelligence groups).
4. B1ldget Trends
The rreceding section defined a [deleted] billion "package" of DODfundec
activities as a reasonahle, comprehensive estimate with the
addition of selected non-defense activities of a national intelligence
budget subjected to separate congressional authorization. This section
focuses on budget trends for this grouping of national activities.
In terms of simple dollar amounts, the FY 1976 DOD budget submission
for national intelligence activities is the highest ever-over
twice the amount appropriated in FY 1962. During periods of rapid
inflation. however, "current dollars" are totally misleading as a measure
of time trends in the consumption of real resources. Some allO\vance
must be made for the year-to-year diminution in the purchasing
power of a dollar that is brought about by rising prices. The method
for doi~g so employs "price deflators" in an effort to express the worth
of a senes of heterogeneous "current-year" dollars in terms of the purchasing
power of a dollar in some specific "constant" base year. The
fact that these adjustments can seldom be achieved with precision does
not negate their usefulness.
The chart on page 337 indicates the trends in the DOD-funded national
intelligpnce budget (which includes the CIA as well as Defense
agr.ncies and the national activities ofthe military services) from fiscal
year 1962 through fiscal year 1976. The upper, climbing curve plots
Cllrrent dollar amonuts as appropriated by the Congress except for fiscal
year 1976. which is the amount requested by DOD. The lower, gradually
descending curve shows the equivalent trend in the national intelligence
budget after correcting, insofar as possible, for the effects of
inflation by expressing each of the historical budgets in terms of the
number of FY 1962 dollars it would take to purchase the same level
of effort.
337
Trel1ds in the Nationa I Intelligence Budget:
FY 1962-1976_"/
.,
....."..a.........
.0
" ::.
1962 1964 1966 1963 1970 1972 1974 1976
FISCAL YEAR
• a~ Includes CIA budg~t. Does not include costs of tactical military
"V'" intelligence activities.
After climbing rapidly during the first half of the 1960s, largely as
a result of major program initiatives to acquire sophisticated. reconnaissance
systems (including the $1 billion SR-71 development program),
the real "baseline" intelligence budget peaked at mid-decade
at about [deleted] billion. Although outlay continued to grow moder'
ately for several more years, the extra cost of supporting activities
directly related to the war effort in Southeast Asia grew even more
quickly, so that the amount available to support nonwar-related, or
baseline. activities began to diminish. Since the mid-1960s. the budget
has declined steadily, in terms of the resources that could be bought
with the dollars provided, to the FY 1976 level of [deleted] billion,
about equal in buying power to the budgets of the late 1950s.
338
.A review of DOD planning documents indicates that every effort
WIll be made by Defense leaders to avoid further erosion in the
intelligence effort below the FY 1976 level Conversely, it is not
anticipated that significant increases in funding (above those necessary
to compensate for continued inflation, now expected to average
5-7 percent annually over the next five ye!lrs) will be requested. If
the Congress accepts these plans, a roughly constant level of real
~pen~ing with gradually increasing annual appropriations to offset
mflatlOn can be expected.
Measured in today's prices, the budget request for Defense intelligence
programs is also well below past funding levels: off $0.5 billion,
or about 10 percent, from the FY 1962 level, and down nearly
30 percent from the pre-Vietnam peak of [deleted] billion. Compared
to FY 1962, the largest reductions have taken place in the resources
dedicated to some activities under NSA's management, which declined
by 31 percent in real terms; and the development, procurement, and
operation of reconnaissance systems, which went down 15 percent.
Spending in support of aircraft and drone operations, although far
below the peaks associated with the introduction of the SR-71, stands
,vell above the level of 1962. Spending for communications security is
also considerably higher today. Reflecting efficiencies achieved through
the consolidation of independent service programs within the Defense
Mapping Agency, real spending for mapping, charting, and geodetic
activities is about $100 million less in FY 1976 than it was in FY 1962.
Consolida.tion has also achieved economies in the field of counterintelligence
and investigation, although on a far smaller scale. The $125
million requested for these activities stands about 15 percent below the
pre-Vietnam level of effort.ll
During the Committee's inquiry, informed managers within the
Defense intelligence community frequently expressed the judgment
that the downward trend in the resources dedicated to their programs
has gone as far as it should. While acknowledging that no one
has succeeded in devising a sound method by which to relate the
value of the community's output to the quantity of resources used, they
argue that most of the savings from the elimination of duplication and
other forms of nonproductive effort have already been realized, and
that further reductions can only be achieved at the risk of curtailing
essential intelligence services.
5. Hmo A/uch is Enough.'!
Because of the difficulties inherent in trying to quantify the intelligence
community's output, no one has yet developed a rigorous method
by which to relate the amount of intelligence produced to the amount
of resources consumed in the intelligence effort. For this reason, it
is not possible to state with confidence the effect that changes in the
level of resources allocated to the intelligence mission could have on
U.S. national security. In other words, no one really knows what comes.
out of the intelligence apparatus as a function of what ~es into it.
The twin peacetime purposes for maintaining a national intelligence
organization are to reduce the probability of key decisionmakers
11 An E'stimated 20-40 percent of this amount will be spent for criminal, as
opposed to counterintelligence, investigations.
339
making a wrong decision, either by taking inappropriate action in
some ma;tJter important to U.S. interests or by failing to act at all, and
to aid in assuring that U.S. Armed Forces are adequately prepared to
execute decisions requiring military force. The intelligence apparatus
is supposed to promote good pohcy and military readiness by making
the policymakers and generals better informed than they might
overwrise be. However, the relationship between the quality of the
information supplied to a national leader and the quality of the decisions
made is obviously extremely complex and ill-defined.
Although good intelligence may create a bias in favor of policymakers
making good policy, it can offer no guarantees that such will transpire
in every instance. All too easily, a bad policy judgment may be
attributed to "in:telligence failures."
If the level of effort were increased substantially, the quality of
intelligence and na,tJional security would be enhanced. Conversely,
substantial reduotions could pose additional security risks. What cannot
be ascertained with precision is whether the benefits would be
worth the additional costs, or the savings the additional risks. At present,
the issue can only be evaluated subjectively, taking into account
those few factual statements that are at hand and the judgments of
intelligence experts (recognizing, of course, the institutional biases
the judgments may reflect).
On the one hand, the way in which the peacetime national intelligence
budget has been shrinking has been duly documented. Apparently,
bhese reductions have not significantly detracted from the overall
performance of the national intelligence apparatus or seriously jeopardized
U.S. security. Community managers interviewed durmg the
Committee's investigation generally felt that present funding was
adequate to provide 'Ull consuming groups with essential inteUigence
support. On the other hand, the same individuals were unanimous
in their opposition to any further cu'ts in the budget-a view endorsed
by the 1975 repont of the Defense Panel on Intelligence, which stated:
"We consider that 'the widely held concern over tJle inflated size of the
intelligence effoflt is no longer V'alid." The report maintained that further
"substantial" reductions should be contingent on one or more of
the following:
-A conscious decision to modify intelligence priorities and
coverage.
-The introduction of labor-saving devices (i.e., automation
of the intelligence process) .
-Reorganization of other management efficiencies.
In making the case against further reductions ,in the level of the
na:tlional intelligence effOI1:, it is commonly argued that the initelligence
is labor-intensive (meaning that people, not machines, contribute
the most to the community's product and account for the
grea,test share of ,its costs) , and that the number of intelligence workers
has declined sharply over the past several years. The community's
managers contend that further personnel cuts should be made only as
new equipment is introduced which can do more efficiently some of the
tasks now performed by people.
340
The trend in defense intelligence manpower has been sharply
downward: the fis<:al year-end strengt·h of 89,900 persons (civilian and
militnI"y, U.S. citizens and foreign nationals) planned for 1976 is
one-fifth less than that of fiseal year 1962, and 42 percent below the
HJ68 peak of 1.')3,800 persons (some of whom were, of course, engaged
in support of the Southeast Asia war effort). At the end of fiscal year
HIli>, lOUlOO pel'Sons were engaged in defense national intelligence
aetivihes.
It is not true 'that the (lefense national intelligence pffort is laborintensi,'
p. Quite the opposite. Intelligence is highly capital-intensive;
the defense intelligence community annually invests more per employee
than the DOD-wide average,u As shown in Table 5, investment
per man-year for the national intelligence sector of the Defense
budget will average $16,700, about 11 percent less than was spent in
1962 despite the manpower redudions that have taken place, but still
$2.800 morc than will be im-ested bv the general purpose forces at large,
and only $1,800 less than the highly capital-intensive strategic forces.
The downward trend in the investment rate for the intelligence components
does not suggest a vigorous effort on the part of community
managers to achieYe the gains in efficiency through automation that
they contend offer the best opportunity to realize further savings.
DEFENSE INVESTMENT RATES: FISCAL YEARS 1962-76
(Thousands of constant fiscal year 1976 dollars per man-year)!
Percent·
age
change,
fiscal rear
1962 1964 1968 1972 1974 1975 1976 962
Defense na!ional intelligence
components ___ . __________ 18.7 22.0 15.3 14.8 14.8 16.3 16.7 -10.7
Strategic military forces. _____ 37.1 26.2 23.1 25.5 18.0 17.8 18.5 -so. 1
General purpose military
forces ••• _..._....... ____ 12.1 12.4 , 15.9 ' 13.1 12.1 10.0 13.9 +14.9
I Investment defined as sum of total ob'iga'iooa' a'I'~1ri'V for associated ~DT & Eoroc"re'l1~nt and 'I1ilitary construe·
tion. Average p~rson,el strengths computed to include all military, U.S. civil;,n, and foreign national employees.
, These figures reflect increased investment in support of combat operations in Southeast Asia.
Lacking a sound methodology by which to relate outputs to inputs,
management of the intelligence community must remain as subjective
as the product in which it deals. The Committee did not receive the
impression that the intelligence community was in fact striving to
develop such a methodology, if indeed that is possible. The words of
former Assistant Secretary of Defense Robert Froehlke sum up the
existing situation lucidly: "The intelligence community does not know
the minimum level of resources that will satisfy an intelligence requirement.
There is no upper boundary set by requirements, only by the
resources that are made available."
U The Dl'partment of Defense has requested $37.6 hillion for investment
(RDT&E, Procurement and Military Construction) in FY 1976 and will consume
about 3.1 million man-years of labor for an average investment per manyear
of $12,000. This compares favorahly with the most capital-intensive sectors
of U.S. manufacturing, such as petroleum and chemicals, and is many times
greater than the investment spending of such truly labor·intensh'e industries as
textiles.
341
C. MANAGEMENT PROBLEMS OF THE DEFENSE INTELLIGENCE COMMUNITY
1. Previo-lls Studies
Senate Resolution 21's instructions that the Select Committee undertake
a "complete investigation and study" to determine "whether
there is unnecessary duplication of expenditure and effort in the collection
and processing of intelligence information by United States
a,gencies" strikes a familiar chord. Over the past decade, no fewer than
SIX major studies have been commissioned within the executive branch
to probe precisely the same question. Coinciding with the Congress'
inquiry, another executive study of the community's organization
was conducted, culminating in the actions taken by the President on
February 18, 1976.
Earlier studies have not always agreed on details, but all have concluded
that the defense intelligence community has performed neither
as effectively nor as efficiently as possible, due la.rgely to its fragmented
organization. More centralized management control is needed
if there is to be improvement in the cost-effectiveness of the community's
efforts. Notwithstanding this view, the community's organizational
structure has changed little over many years. Since many of the
past studies of the community's organization have tapped greater
resources than have been available to the Select Committee, the discussion
which follows draws heavily upon their findings.
Writing in 1971 from his vantage point in the Office of Management
and Budget (OMB), James R. Schlesinger compared the structure and
management methods of the intelligence community to those of the
Department of Defense prior to the Defense Reorganization Act of
1958. Obviously, this Act did not eradicate all of DOD's management
problems. Similarly, reorganization of the intelligence apparatus could
not in itself guarantee improved performance nor lowered costs.
But reorganization could, in Schlesinger's view, create the conditions
for inspired intelligence leadership. In his 1971 paper, Schlesinger
concluded: "the main hope for improving cost-effectiveness did in fact
lie in a fundamental reform of the intelligence community's decisionmaking
bodies and procedures." 13
In its letter of transmittal to the President, the 1970 Blue Ribbon
Panel on Defense (the Fitzhugh Report), summed up its appraisal
of the community's performance with the following criticisms:
-Intelligence activities are spread throughout the Department
of Defense with little or no effective coordination.
-Redundance in intelligence, within reason, is desirable, and
it is particularly important that decision-makers have more
than one independent source of intelligence.
-There is, as has often been charged, evidence of duplication
between the various organizations.
-There is a tendency within the intelligence community to
produce intelligence for the intelligence community and to
remain remote from and not give sufficient attention to the
requirements of others who have valid needs for intelligence.
13 Office of Management and Budget, "A Review of the Intelligence Community"
(Schesinger Report), 3/10/71.
342
-There is a large imbalance in the allocation of resources,
which causes more information to be collected than can ever
be processed or used.
-Collection efforts are driven by advances in sensor technology,
not by requirements filtering down from consumers
of the community's products.15
The Blue Ribbon panel also cited the following allegations made by
"responsible witnesses" during the course of its investigation, noting
that there was no way to confirm or disprove any of the charges
because there was no existing procedure to evaluate systematically
the efficiency of the intelligence process or the substantive value of its
output:
-The human collection activities (HUMINT) of the services
add little or nothing to the national capability.
-Defense attaches do more harm than good.
-The intelligence production analysts are not competent to
produce a sound, useful product.
-Once produced, the product seldom reaches the individuals
who need it.
Each of these issues is discussed below.
'2. 0 entralizing Management 0 oritrols
On this issue, the views of those who wish to avoid repetitions of
past abuses by the community and those stressing the importance of
improving the effectiveness and efficiency of the community's operations
may not be compatible. Critics of centralization feel that reforms
aimed at improving cost-effectiveness by concentrating budget and
operational authority within the community might, at the same time,
concentrate the power to undertake improper activities in the future.
Centralization proponents counter that the diffusion of authority is as
apt to encourage improper conduct as its concentration. A streamlined
management structure would, they argue, promote the visibility and
accountability of controversial programs.
If the Defense intelligence community were reorganized to promote
more effective, centralized controls, what form might it take?
The office of the Assistant Secretary of Defense for Intelligence
(ASD/I) has been the single most influential office in the preparation
of the national intelligence budget under recent organizational arrangements.
Although the ASD/I's authority is not absolute, he has
more to say about how and where the national intelligence community
invests its resources than any other individual by virtue of his fiscal
review authority over the Consolidated Defense Intelligence Program
(CDIP).
ASDII was established largely as a result of a recommendation by
the 1970 Blue Ribbon Defense (Fitzhugh) Panel, but it was not accorded
the full authority the Panel proposed, and certain other complementary
reforms were also not adopted. A classified supplement to
the Fitzhugh Report called for creation of an ASD/I who would
also serve as a new Director of Defense Intelligence (DDI).
16 Fitzhugh Report, 7/1/70.
343
Under this arrangement, the same individual would have direct line
authority over the operations of the DOD intelligence apparatus (via
his position as Director of Defense Intelligence) and responsibility for
review of resources allocated to it as Assistant Secretary of Defense for
Intelligence.
The Blue Ribbon Panel further envisioned a reorganization of the
DOD intelligence community along functional lines, separating collection
and production activities into two new agencies, the heads of
which would report to the ASD/I in his dual role as DDI.
Complementing its objective of creating a clear chain of command
from the operating aims of the Defense intelligence establishment to
the Department's top policymakers, the Panel also recommended the
establishment of a Deputy Secretary of Defense for Operations who
would represent the Secretary in all intelligence-related matters, and,
to whom the ASD/I-DDI would report directly. Although the recommendation
to establish a second Deputy Secretary of Defense was not
accepted in 1970, it is part of the 1976 executive reorganization plan.
3. Too Much Collection?
Numerous studies since the mid-1960s have concluded that a serious
imbalance exists between the amount of data collected by the technical
sensor and surveillance systems and the ability of the processors and
analysts to digest and translate these data into useful intelligence information.
These studies recommend that greater attention be given to
producing better insights from the information and less to stockpiling
data.
Analyzing the steep rise in the cost of intelligence activities during
the 19508 and early 1960s, Schlesinger was among the first to blame
the movement to employ ever more sophisticated technical collection
systems, which he believed had led to "gross redundancies" within
community operations. He concluded that the rapid growth in the
collection of raw intelligence data was not a substitute for sorely
needed improvements in analysis, inference, and estimation. The scope
and quality of intelligence output, he concluded, had not kept pace
with increases in its cost.
The Committee did not find any studies suggesting that more col·
lection capacity is needed, although deficiencies in the responsiveness
of existing collection systems have been frequently noted. Examples of
general observations on overcollection are:
-Like the rest of the intelligence community, it (the CIA)
makes up for not collecting enough of the right kind of information
on the most important targets by flooding the system
with secondary matter.
-The information explosion hI'S already p'ptten 011t of hand,
yet the CIA and the community are developing ways to intensify
it. Its deleterious effects will certainly intensify as
well, unless it is brought under control.
-The quantity of information is degrading the quality of finished
intelligence.16
1.0 "Forei!!"Il Jntellil!'ence Olllectil'n Requirements: The In'lpector General's Survey."
(hereinafter cited as the Cunningham Report). December 1966.
344
-Production resources can make use of only a fraction of the
information that is being collected. There exists no effective
mechanism for balancing collection, processing and production
resourcesY
The period of rapid growth in intelligence costs that undoubtedly
motivated much of the concern about overcollection has passed. Although
the level of total real spending has now returned to what it was
during the late 1950s, the efficiency with which intelligence resources
are being apportioned among the collection, processing, and production
functions remains an issue.
An examination of the distribution of the national intelligence
budget dollar in FY 1975 indicates that most of the community's resources
support collection activities. The community is still spending
72 percent of its funds for collection, 19 percent for processing raw
technical data, and less than 9 percent for the production of the
finished intelligence products (bulletins, reports, etc.) which the consumer
sees as the community's output. There has been no significant
change in the allocation over the past several years, nor is any
anticipated.
The collection of unused information results in /2,Teater inefficiencies
than merely the effort wasted on collection. Backlogs in processing
and analysis lead to duplicative efforts across the board, since the resuIts
of preceding collection missions are not always available to plan
and manage current missions. Moreover, the rush to keep pace with
the data disgorged by the technical collection systems encourages superficial
scanning, increasing the probability that potentially important
pieces of information will be overlooked.
4. Alternative Means of Collection
There are major disagreements within the community between proponents
of traditional collection methods employing undercover agents
(human intelligence, or HUMINT) and advocates ann operators of the
vast system of technical sensors. Approximately 87 percent of the
resources devoted to collection is spent on technical sensors, compared
to only 13 percent for HUMINT (overt and clandestine operations).
Most of the intelligence experts interviewed during the Committee's
inquiry tended to endorse the existing seven-to-one distribution
of resources in favor of technical collection, but the efficacy of the technical
sensors was not unanimously acclaimed. Deputy Secretarv of Defense
William P. Clements, Jr. commissioned the Defense Panel on
Intelligence (1975) 18 largely because of his concern with the failure
of the analytical community to alert national leadership to the October
1973 Middle East war.
The Defense Panel Report stressed the importance of upgrading
HUMINT, noting :"We are not getting [as of 19751 the level or quality
of information we need from this source." 18 The Report credited the
CIA's Clandestine Service as the most competent U.S. HUMINT
collectors, but held this arm was not very responsibe to DOD needs. It
17 Fitzhugh Report, 7/1/70.
1S Report of the Defense Panel on Intelligence, 1/75.
345
was concluded that the principal Defense HF~nNT collectors. the
Defense Attache System (DAS) managed by DIA, were yielding
:raluable retu:r:s at small cost, but greatlv needed a personnel upgradmg.
Other crItIcs have been less charitable to the attaches.
The problem of measuring intelligence output prevents ac~urate
assessment of the contribution of different colleotion methods. Shifts
in the uses of intelligence systems among peacetime, crisis, and wartime
situations further complicate appraisals, as docs the divergent
interests of the national and tactical consumer groups. Civilian policymakers
tend to plan for peacetime situations, whereas military commanders
envision quite different wartime demands on the intelligence
apparatus. The shifts of importance between peacetime and wartime
are illustrated by the fact that much of the economic intelligence collected
today would be accorded a much lower priority during a major
war. Similarly, the verification of arms control agreements, now a
major intelligence task, would be moot after the outbreak of hostilities
between the major powers.
Against this backdrop, only an approximate evaluation of the comparative
worth of the various methods of intelligence collection has
been possible for the Committee. The results of such an evaluation are
summarized as follows:
Performance was judged against two criteria: the ability of the
method to accomplish specified intelligence objectives, and characteristics
deemed desirable in intelligence systems.19
The analysis indicated that reconnaissance programs and SIGINT
systems rank high in characteristics and performance. Not surprisingly,
their costs are also the highest of all the competing systems.
HUMINT did not score as highly as might be expected, based on
the emphasis and funds accorded to this activity. Still, overall, the
evaluation indicated that a fairly good correla.tion exists between the
benefits achieved by collection activities and their costs.
The priorities for spending among different collection systems appear
to be appropriate. This does not mean that the.re is no need for
adjustment in the pattern of resource allocation for collection methods.
A major analytic effort on the part of the community offers the
only means for achieving such efficiencies.
Although the issue of proper balance between collection, processing,
and production is usually phrased in terms of overcollection, it might
also be described as a problem of underproduction. Deputy Secretary
of Defense Clements stated: "In every instance I know about where
there was a horrendous failure of intelligence, the information was
in fact available to have averted the problem. But the analysts and
the system didn't allow the raw data to surface." 2\)
19 The following intelligence objectives are considered: strategic warning;
crisis indic.'lltion; foreign weapons development; forei,iw military deployments;
political and military intent; economic information; political information; tacti·
cal military information.
The following characteristics were considered: ability to penetrate dE'nied
areas; accuracy and reliability of data; responsiveness; wartime survivability;
peacetime risks of incident.
20 Quoted by William Beecher in Report 04' the Defense Panel on Intelligence,
1/75.
207-932 0 - 76 - 23
346
Similarly, the Defense Intelligence Agency, the arm of the Defense
Department charged with the prime responsibility for intelligence
analysis and production, concluded in a 1973 report:
The great disparity in the relative na,tional investment in
c?llection sy~tems versus intelligence processing, exploitatIOn,
productIOn and support systems has now reached a platitude
[sic] where the anticipated payoff of a high cost collection
system is limited by the DIA's capability to exploit them
[sic] fully.
If production is the limiting step in the intelligence sequence, improved
overall efficiency might be achieved by enhancing this capacity
as well as by cutting back on collection. It is not clear, however, that
the DIA's suggestion to spend more on production, implied in the
above passage, would solve the largely qualitative shortcomings now
limiting the performance of some intelligence producers.
5. Setting Intelligence Priorities
Intertwined with the issue of how much should be spent on intelligence
activities is the question of how best to spend it. This poses a
whole series of complex, interrelated choices ranging from sub;ect
matter to "line balance" (i.e., synchronizing the collection, processing,
production, and dissemination among methods and means of collection).
The most critical resource allocation choices concern the subjects
and geographic areas against which the community should target its
energies. Logically this choice would reflect the changing interests of
intelligence Consumers, weighted according to national importance.
Lower-order choices, such as the design and selection of a new technical
collection system, would be made in order to meet consumer
demands.
Unfortunately, the system does not work this wa,y. Although expressed
with varying degrees of forcefulness, almost every previous
study of the management problems of the national intelligence community
has agreed that the formal mechanism for establishing priorities
to guide the community's allocation of resources (i.e., the socalled
requirements process) works poorly, if at all. In his 1968 report
to the Director of CIA regarding the actions taken in response to the
recommendations of the Cunningham Report, Vice Admiral Rufus
Taylor put the problem this way:
After a year's work on intelligence reauirements, we have
come to realize that they are not the driving force behind the
flow of information. Rather, the real push comes from the collectors
themselves-particularly the operations of large, indiscriminating
technical collection systems-who use national
intelligence requirements to justify what they want to undertake
for other reasons. e.g., military readiness, redundancy,
technical continuity and the like.
The Schlesinger and Fitzhugh reports concluded that the focus of the
community's efforts is determined by the program managers and operators
of the highly complex technical collection systems that dominate
the community's budget, rather than by the priorities of the intel1i347
gence consumers. Schlesinger called the formal requirements "aggregated
wish lists" that could be interpreted as meaning "all things to
all people," thereby creating a vacuum which left the individual intelligence
entities free to pursue their own interests. The Blue Ribbon Panel
noted that no effective mechanism existed for consumers, either national
or tactical, to communicate their most important needs.Z1 Requirements,
concluded the Panel, "appear to be generated within the
intelligence community itself."
In 1960, before major developments in data collection, a joint study
group criticized the requirements process and recommended sweeping
changes in the system. Six years later, the Cunningham Report described
the principal instrument in the reouirements process, the
Priority National Intelligence Objectives (PNIOs), as a "lamentably
defective document which amounts to a ritual justification of every
kind of activity anybody believes to be desirable," wryly adding, "We
found no evidence that an intelligence failure could be attributed to
a lack of requirements."
Poor communication between the producers of intelligence and the
consumers continues to be the greatest obstacle to improved efficiency
in the use of the community's resources.
6. Resource Allocation
Without judging the appropriateness of the community's subject
or geopolitical emphases, a brief description of the way in which
resources have been allocated follows.
In FY 1975, more than half the community's effort, about 54 cents
of each dollar, was targeted against military subjects such as doctrine,
dispositions, force levels, and capabilities. Twelve times more effort
went into collecting and processing information of this kind than
toward analyzing it. For technical and scientific subjects, the effort
was divided in the ratio of six parts collecting and processing to one
part analysis. Only about six cents on the dollar was focused on either
political or economic suhiects. Resource allocation by subject and
function is shown in the table below.
NATIONAL INTELLIGENCE PRIORITIES
DISTRIBUTION OF THE FISCAL YEAR 1975 INTELLIGENCE DOLLAR BY SUBJECT!
Collection Processing Production Total
53.8
15.5
3.4
3.2
24.1
100. a
100. a
100. a
4.1
2.3
.6
.7
.9
8.6
8.7
8.5
8.3
1.8
.3
.3
8.3
19.0
19.5
19.1
41.4
11. 4
2.5
2.2
14.9
72.4
71. 8
72.4
SubjMecitlitaarreya: _
Scientific and technical. _
PoliticaL _
Economic _
General. _---------------- Total, fiscal year 1975. _
Total, fISCal year 1974 _
Total, fiscal year 1976 (requested) _
1 Based on the budgets 01 the Centrallntelli~ence Agency, the State Department's Bureau 01 Intelligence and Research,
and that portion of the Defense Department s budget included within the Consolidated Defense Intelligence Prog,am
(CDJP). This does not include mission support costs.
:l1 Two separate consumer priority polls, one undertaken by the staff of the
DCI, the other by the DIA, were explained to the Committee. In neither instance
was there evidence that the study had produced a significant or lllilting impact
on management practices.
348
A second important way in which the existing priorities of the
national intelligence community are revealed is through the distribution
of spending across the geopolitical spectrum. There is little
doubt that the most formidable potential threat to the United States
is posed by the Soviet Union, with the second most dangerous potential
military antagonist being the People's Republic of China. Most
analysts would also hold that the nation's foremost commitment overseas
is to the defense of its ~ATO allies. Vital interests in Asia include
the security and pro-'Vestern orientation of Japan and the defense of
the Republic of Korea, to which the United States has had longstanding
treaty commitments. Instability in the Middle East, to a
lesser degree South America, and for the moment in Africa, would
seem to argue for special attention to these areas as well.
The attributable portion of the FY 1975 intelligence effort was
distributed among different target areas as follows: nearly two-thirds
of the resources consumed, 65 cents of each dollar, were directed
toward the Soviet Union and U.S. commitments to NATO; 25 cents
of each dollar were spent to support U.S. interests in Asia, with most
of this targeted against China; the Arab-Israeli confrontation in the
Middle East claimed seven cents; Latin America, less than two cents;
and the rest of the world, about a penny.
7. 111anagement Efficiency venus Security
In addition to the issues of balance in meeting the demands of both
national and tactical consumers, and in the distribution of resources
among the collection, processing, production, and dissemination functions
in the intelligence sequence, there is also an issue of balance in
the flow of information. Here the opposing considerations are security
and management efficiency. There is a legitimate need to protect
both what is known about a potential adversary's capabilities and the
way in which the knowledge was acquired.
The Committee's investigation surfaced considerable sentiment
that the community's preoccupation with compartmented security
may have reached a point where communications are so restricted
that effective analysis and dissemination of intelligence is impaired.
The Cunningham Report observed: "Some [intelligence] tasks require
piecing together many bits of information to arrive at an answer.
Compartmentalization hinders cross-discipline cooperation."
Supporters of the community's existing security arrangements
counter that few analysts with a proven "need to know" are denied the
clearances necessary to gain access to the information they require.
Yet the problem is more subtle than this. Merely allowing the dilIgent
analyst to acquire information is not enough. Kept in ignorance of
certain subject areas by the compartmentalization system, it is difficult
to determine which particular security barriers to storm in search
of that last, missing fact that could unlock the puzzle with which the
analyst is grappling.
The Cunningham Report also noted a "real need to make comparisons
and tradeoffs between intelligence activities and programs to
select the most efficient systems," a need which the Committee believes
to be unmet today, despite organizational changes. The manager
constrained to a narrow view by the blinders of compartmentalization
is hardly in the best position to make such tradeoffs.
349
D. AGENCIES AND ACTIVITIES OF SPECIAL INTEREST
1. The Defense Intelligence Agency
Formally established in August 1961 by Department of Defense
Directive 5105.21, the Defense Intelligence Agency (DIA) was envisioned
by its civilian proponents as a means of achieving more centralized
management control, thereby leading to a "more efficient
allocation of critical intdligence resources and the elimination of
duplicating facilities and organizations." 23 The Agency was granted
full authority for assembling, integrating, and validating all intelligence
requirements originating with the Department of Defense,
setting the policy and procedures for collecting data, and developing
and producing all finished defense intelligence products.
Currently, the Agency is organized into five directorates,each headed
by a Deputy Director. The Directorate for Estimates produces all
lJOD intelligence estimates, including DOD contributions to National
Intelligence Estimates (NIEs) for the National Security Council, as
well as forecasts in the areas of foreign force structures, weapon systems,
deployments, and doctrine. The Deputy Director for Estimates
is also responsible for coordinating with CIA, State, and NSA on
intelligence estimates, and assisting these agencies with information
on military capabilities and strategies.
Intelligence assessments of special interest to military forces in
the field are the responsibility of the Directorate for Production. Other
directorates specialize in determining foreign technological progress
and the performance of foreign weapon systems (the Directorate for
Science and Technology); coordinating service requests for intelligence
information (the Collection Directorate); and administering
the Defense Attache System (the Directorate for Attaches and Human
Resources) .
The national leaders who established the DIA were alert to the
danger that it might evolve into simply another layer in the intelligence
bureaucracy, and cautioned against thinking of it as no more
than a confederation of service intelligence activities.2'4 Nonetheless, a
decade later executive branch reviews criticized DIA for perpetuating
the very faults it had been designed to avoid-duplication and
layering.25 By 1970, each service actually had a larger general intelligence
arm than it had had before DIA was created. At that time,
the Blue Ribbon Defense Panel reported:
Each [military] departmental staff is still engaged in activities
clearly assigned to DIA such as intelligence production
including the preparation of current intelligence. The Military
Departments justify these activities on the basis that
DIA does not have the capability to provide intelligence they
need. It is interesting that DIA cannot develop a capability
to peform its assigned functions, while the Military
23 Press release accompanying the creation of DIA, cited in the Froehlke
R{'port. 7/69.
.. Gilpatric memorandum to Joint Chiefs of Staff, 7/1/69.
25 Fitzhugh Report, Appendix: "Natiomll Command and Cnntrol Caoability and
Defense Intelligence," 1970, pp. 33-34; William Beecher, Report of the Defense
Panel on Intelligence, 1/75.
350
Departments, which provide a large proportion of DIA personnel,
maintain the required capability and continue to perform
the functions.25a
In. trying to integrate massive and disparate defense intelligence
reqmrements, DIA had become increasingly bogged down in management
problems, notwithstanding a number of internal reorganizations
in search of the right mechanisms of coordination. At the
root of the DIA's difficulties lie the opposing pulls from Washingtonlevel
civilian policymakers, who demand broad insights of a largely
political character, and military planners and field commanders, who
require narrower and more specific factual data. DIA has never really
known which of these groups of consumers comes first. As the Fitzhugh
Report stated: "The principal problems of the DIA can be
summarized as too many jobs and too many masters."
In retrospect, a strong case can be made that the DIA has never
really had a chance. Strongly resisted by the military services, the
Agency has been a creature of compromise from the outset. For
example, the Director of the DIA was placed in a position of
subordination to the Joint Chiefs of Staff (JCS) by designating
him to serve as the J CS director for intelligence (replacing the
J-2 on the Joint Staff). Drawing again from the Fitzhugh Report,
this arrangement put the Director of DIA in the "impossible position"
of providing staff assistance on intelligence matters to both the
Secretary of Defense and the JCS, whose respective stances on a given
issue "often are diverse."
DIA was also reliant on the military for much of its manpower
which was initially drawn almost entirely from the intelligence arms of
the various services. The argument for manning the new DIA with
these personnel was to minimize the disruptive effects of organizational
change on the flow of intelligence information. This same case was
made for starting the DIA slowly. Asa consequence, the Agency never
had the impetus which many other newborn government entities have
enjoyed and profited from. Dominated and staffed in large part by
the professional military, it is not surprising that DIA has come to
concentrate on the tactical intelligence demands of the services and
their field commands.
Since DIA has always been heavily staffed with professional military
officers on short tours, who are dependent on their parent services
for future assignments and promotions, the perspective of Agency
analyses has often been biased to reflect the views of the services. When
evidence is doubtful, the services have incentives to tilt an intelligence
apnraif'al in a direction to support their own budgetary requests
to justify existing operations and proposed new ones.28 Intelligence
issues in the Vietnam war reflected thIS problem.
On the budget side of the problem. the Agency has been limited in
its ability to control the activities of the services by the lack of follow-
25. Fitzhugh Report, pp. 23,31-32.
28 Harry Howe Ransom, The Intelligence Establishment (Cambridge, Mass.,
Harvard University Press, 1971), p. 103; Department of Defense, The Senator
Gravel Edition: The Pentagon Papers, Vol. IV (Boston: Beacon Presf'. 1971) ;
Patrick J. McGarvey. CIA: The Myth and the Madness, pp. 149, 134; Penta!lO'n
Paners, passim; Chester Cooper, "The C.I.A. and Decision Making," Fareign
Affairs, January 1972.
351
up authority over intelligence activities: "Once money to support the
approved program is allocated to the services, they mayor may not use
it for its intended purposes." 29 In an effort to remedy this, program
management responsibilities over service components of the General
Defense Intelligence Program (GUlP) were recently transferred
from the Director of DIA to the ASDjI.
The services' concern with autonomy and preservation of wartime
capabilities may make the achievement of any appreciable reduction
in duplicative effort:::.n i~possible goal, at least for general intelligence
activities. The problem is not simply one of bureaucratic pettiness;
there exist unavoidable trade-offs between tactical and national intelligence
interests. The issue of which set of needs should dominate
Defense intelligence is a difficult one, with past disagreements on this
point having played a major part in the dissatisfaction with DIA that
has been expressed by the services, policymakers, and OSD staff.
The jurisdictional dilemma ,vas recognized by Schlesinger in his
1971 report: "If the services retain control over the assets for 'tactical'
intelligence, they can probably weaken efforts to improve the efficiency
of the community. At the same time there is little question about their
need to have access to the output of specified assets in both peace and
war." He cited service resistance to the National Security Act of 1947,
and to the 1961 DOD Directive establishing the DIA, concluding:
"Powerful interests in the military opposed, and continue to oppose,
more centralized management of intelligence activities."
A second factor contributing to the dissatisfaction frequently expressed
by DIA's customers has been the quality of the Agency's
analysis. Most often, this is perceived as a problem of professional
competence.
Illustrating the deficiencies in intelligence production as viewed
by policymakers, Beecher has quoted former Secretary of Defense
Schlesinger: "when you have good analysis, it's more valuable
than the facts on a ratio of ten to one. But all decisionmakers get are
factual 'snipets.' " Such tidbits, while often interesting in content, are
of limited worth if not woven into context. The "analyst" who serves
as no more than a conduit for transmitting facts is not providing analysis.
Yet, the job of the national intelligence analyst is to sort facts,
discarding those which do not appear relevant, and piecing together
what remains in a way that yields the broad insights policymakers
find most useful.
Besides a thorough understanding of his subject, the competent analyst
must possess the qualities of perception, initiative, and imagination.
Equally important, the analyst must be kept highly motivated and
must be permitted, on occasion, to be wrong. (This is the basis of the
argument for maintaining more than one source of key intelligence
estimates.)
Critics have often commented harshly on the quality of both civilian
and military personnel in DIA.30 There are two facets to the problem
of obtaining first-rate analysts: On the military side, ca}?able and
ambitious officers have traditionally avoided intelligence aSSIgnments,
'" Fitzhu~h Report, p. 23.
30 e.~., Ibid., p. 29; "Defense Panel on Intelligence," p. 6; McGarvey, OIA: Tne
Mytn and tne Madness, passim.
352
deeming such positions not conducive to career advancemE'nt. Of the
officers who have gone into intelligence. many of the best qualified
have tended to serve with their individual service agency rather than
joining DIA. DIA's leadership maintains, hmvever, that gains have
been made in correcting service biases in the intelligence career field.
Since 1974, promotion prospects for officers in the service intelligence
agencies have become equal to or better than the service-wide averages.
This offers scant consolation for DIA, however, since the promotion
rates for attaches and Navy and Air Force officers serving with the
Agency have not improved proportionately, and remain less favorable
than the service averages. There are, in fact, some indications that
promotion prospects for officers at DIA may be deteriorating.3!
On the civilian side of the personnel problem (about 55 percent of
the DIA's 2,700 professional-level employees are civilian), it is frequently
argued that a predominance of military officers in middlemanagement
positions limits advancement opportunities within the
Agency for civilian professionals. In addition, a significant portion
of those "civilian" personnel who have reached management ranks are
in fact retired military officers.
Many experts who have studied the DIA's personnel problems have
concluded that improvement in the competence of the Agency's civilian
analvsts is contingent upon a relaxation of the constraints imposed by
Civil Service regulations. The 1975 Report of the Defense Panel on
Intelligence commissioned by Deputy Secretary of Defense Clements,
asserted: "The professionalism of the intelligence production process
must be improved substantially." and it strongly recommended exempting
DIA's analysts from the Civil Service.
'Vhether exempting civilian professionals from the Civil Service
and increasing their management presence would bring about the
changes required to transform the DIA into an effective competitor to
the CIA in producing national intelligence estimates remains questionable.
The DIA has a problem of image. It is a problem that calls
for fundamental reform of its management attitudes and orientation,
as well as in its professional staffing. In the absence of the complementary
reforms,32 it would seem doubtful that the provision of greater
incentives for its civilian analysts, and greater management latitude
for the hiring and firing of these analysts by removing Civil
Service constraints would in itself suffice to bring about the needed
degree of improvement in performance.
Moreover, data on the civilian grade structure of DIA. compared to
that of the CIA, suggest that far too much emphasis may be
placed on the need to raise the salaries of DIA's civilian analysts. Conventional
wisdom holds that the CIA has outperformed the DIA because
its superior gTade structure permits it to attract and retain more
capable analysts. In fact. however. there is no significant difference in
the professional grade structure (defined here as GS-9, or equivalent,
and above) of the two agencies.
31 Memorandum from Vice Admiral DePoix to Secretary of Defense Schlesinger,
3/4174. Memorandum from Lt. Gen. Graham to Sf'hlesinger, 1l/19/74.
32 Such as a new hpadquarters facility-a rpquest that has been repeatedly
dpnipd by the Congress. but is an essential first step if a reyitalized DIA within
the eXisting organizational structure is decided upon as the preferred Nurse of
action.
353
About one-third of the upper management positions at DIA are
filled by military general officers, a much larger proportion than at the
CIA, where fewer military personnel serve.
Criticism of the professional standards of DIA's personnel has not
been restricted to the Agency's managers and production analysts. The
Defense attaches, ,,·ho serve under the Agency's direction as the Defense
Department's human intelligence (HUMINT) collection arm,
have also been a topic of considerable concern. One 1970 study of the
Defense Attache System warned that the representational and pr.otocol
responsibilities of attaches were assuming precedence over intellIgence
functions which should constitute the principal purpose of the attaches."
This preoccupation with nonintelligence activities remains
strong today.
The qualifications of the officers assigned to attache duty have been
questioned. The chances for promotion have usually been low in DAS
and the tendency has been to draw a high proportion of attacllCs from
among officers on their last tours before retirement. Former DIA
Director Donald Bennett dismissed 38 attaches outright for incompetence
"\vhen he took over the Agency in 1969.34
The arguments cited above suggest two basic alternatives for the Defense
general intelligence apparatus: either retain the current centralized
arrangement under the Defense Intelligence Agency, giving
its Director the authority he needs to fulfill his original mandate to
manage all of DOD's intelligence collection and production activities,
or disband the Agency, returning its resources to the military services
from which they were originally requisitioned, leaving the coordination
of the tactical military aspects of these activities to the JCS, and
forming a staff close to the Secretary of Defense to produce the national
intelligence estimates he requires.35
There should either be a major role for DIA, or for the service agencies,
but not for both, unless they genuinely serve different functions.
Duplication of intelligence analyses can be valuable if it promotes
diversity and motivates through competition. This assumes that the
separate analysts have different perspectivps on thp issues. In this
spnse, competition between CIA analysts and Defense Department analysts
for strategic estimates, is very useful. By arguing different points
of view in forums in the intelligence community they force disagreements
to the surface and expose evaluations to closer scrutiny. DIA
now has had little incentive to serve as a CIA-type foil to the services,
since DIA has been primarily a military organization.
Specific measures 'which might improYe the performance of DIA
within the existing organizational structure include the following:
a. Enlzan,ce profess/o·l/al competence.-Exempt DIA from Civil
Service regulations in the same manner as CIA and NSA. Open more
top-level jobs within DIA to civilian staffers. Increase incentives for
the military services to send better qualified officers to DIA. Waive
seniority requirempnts for Defense Attaches. Rotate DIA and CIA
strategic analysts through each agency on temporary tours.
33 Report of the DIA Defense Attache System Review Committee, 5/30/70,
pp. II-l. II-2.
34 Staff summary of Lt. Gen. Donald V. Bennett, USA (ret.) interview. 7/23/75.
35 A nucleus for which already exists in the Office of Net Threat Assessment.
354
b. Increa8e the responsiveness of the Agency to the Secretary of
Defense and his staff.-Give ASDII (or the new Deputy Secretary)
authority to deal with the substance of intelligence programs as well
as the allocation of resources. Have the Director of DIA report directly
to the Secretary of Defense, rather than through the JCS, as under
the present arrangement. Appoint a civilian as either the Director or
Deputy Director and make the Director subject to Senate confirmation.
c. Increa8e DIA's maruzgement authority to match its maruzgement
responsibility.-Allow DIA to establish more requirements for the
service intelligence agencies, and to eliminate intelligence products of
the military services which are unnecessarily duplicative.
d. Increase lateral communication between DIA and other components
of the defense intelligence apparatus.-To integrate better the
work of the operators, analysts, and planners, encourage communication
among DIA regional analysts and desk men in CIA, ISA, and
other policy staff offices in DOD and State.
92. The National Security Agency
The National Security AgencyICentral Security Service (NSAI
CSS) provides centralized coordination, direction, and control of the
Government's Signals Intelligence (SIGINT) and Communications
Security (COMSEC) activities.
The SIGINT or foreign intellig-ence mission of NSA/CSS involves
the interception, processing, analysis, and dissemination of information
derived from foreign electrical communications and other signals.
SIGINT itself is composed of three elements: Communications Intelligence
(COMINT), Electronics Intelligence (ELINT), and Telemetry
Intelligence (TELINT). COMINT is intelligence information derived
from the interception and analysis of foreign communioations.
ELINT is technical and intelligence information derived from electromagnetic
radiations, such as radars. TELINT is technical and
intelligence information derived from the interception, processing,
and analysis of foreign telemetry. Most SIGINT is collected by personnel
of the Service Cryptologic Agencies located around the world. The
Director, NSA/Chief, CSS has authority for SIGINT missions.
The COMBEC mission protects United States telecommunications
and certain other communications from exploitation by foreign intelligence
services and from unauthorized disclosure. COMSEC systems
are provided by NSA to 18 Government departments and agencies,
including Defense, State, CIA, and FBI. The predominant user, however,
is the Department of Defense. COMSEC is a mission separate
from SIGINT, vet the dual SIGINT and COMSEC missions
of NSA/CSS do have a symbiotic relationship,and enhance the performance
of the other.
A specific National Security Council Intelligence Directive
(NSCID) defines NSA's functions. It is augmented by Dirootor of
Central Intelligence Directives (DCIDs) and internal Department of
Defense and NSA regulations.
NSA responds to requests by other members of the intRlligence community,
such as CIA, DIA, and FBI, to provide "signals"
intelligence on topics of interest. An annual Jist of SIGINT requirements
is given to NSA and is intended to provide the NSA Director
355
and the Sl?A?retary of Defense with guidance for the coming year's
activities. These requirements are usually stated in terms of general
areas of intelligence interest, but are supplemented by "amplifying
requirements," which are time-sensitive and are expressed directly to
NSA by the requesting agency. NSA exercises discretion in responding
to these requirements; it also accepts requests from the executive
branch agencies. NSA does not generate its own requirements.
All requirements levied on NSA must be for foreign intelligence.
Yet, the precise definition of foreign intelligence is unclear. NSA
limits its collection of intelligence to foreign communications and
confines its activities to communications links having at least one foreign
terminal. Nevertheless, this is based upon an internal regulation
and is not supported by law or executive branch directive.
Although NSA limits itself to collecting communications with at
least one foreign terminal, it may still pick up communications between
two Americans when international communications are involved.
Whenever NSA chooses particular circuits or "links" known to carry
foreign communications necessary for the production of foreign intelligence,
it collects all transmissions that go over those circUIts. Given
current technology, the only way for NSA to prevent the processing
of communications of U.S. citizens would be to control the selection,
analysis, or dissemination phases of the process.
Communications intelligence has been an integral element of United
States intelli£'ence activities. Forei£'ll communications have been intercepted,
analyzed, and decoded by the United States since the Revolutionary
War. During the 1930s:elements of the Army and Navy collected
and processed forei~ intelligence from radio transmissions.
Much of their work involved decryption, as well as enciphering United
States transmissions. Throughout World War II, their work contributed
greatly to the national war effort.
Since President Truman authorized NSA's establishment in 195~
to coordinate United States cryptologic and communications activities,
tremendous advances have been made in the technology of communications
inteUigence. These advances have contributed to an
expansion in demands for a wider variety of foreign intelligence and of
requirements placed upon NSA/CSS SIGINT personnel and resources.
As new priorities arise in the requirements process, greater
demands will be placed upon NSA.
It is also necessary to face the problem of integrating intelligence
requirements for foreign policy and national security with Constitutional
constraints and safeguarding of domestic civil liberties. NSA's
intercept programs and possible violation of Fourth Amendment
ri~hts are discussed in the section, "National Security Agency SurVeIllance
Affecting Americans," in the Committee's Domestic Intelligence
Report.
E. MILITARY COUNTERINTELLIGENCE AND INVESTIGATIVE ACTIVITIES
1. Background
The Department of Defense defines "military counterintelligence
and investigative activity" as all investigative activity apart from
foreign intelligence-gathering. Although this nomenclature is rela356
tively recent, the military services have always conducted im'estigations.
None of these im'estigative acti vities are expressly authorized by
statute; rather, they have been justified as necessary to the military
mission. On occasion. investigati\'e activity by the military has exceeded
measures necessary to protect or support military operations.
In 1917, for example, Colonel Ralph Van Deman of the Army intelligence
bureau recruited ci"ilians in the Army Reserve and used
volunteer investigators to report on "unpatriotic" conduct. Van Deman's
men were soon dispersed throughout the country, infiltrating
such organizations as the Industrial Workers of the World, mingling
with enemy aliens in major cities, and reporting on all types of dissenters
and radicals. Much of this civilian surveillance continued after
'World War I, particularly in the area of labor unrest. In the 1920s
the Army had "War Plans "Thite" to deal with anticipated uprisings
of labor and radicals. In 1932 the Chief of Army Intelligence collected
information on the "bonus marchers" arriving in Washington,
D.C.
Similarly the activities of the Office of Naval Intelligence (ONI)
have not always been restricted to military affairs. Traditionally, ONI
has provided security for naval contractors, guarded ships, searched
crews, detected illegal radio stations, and investigated naval personnel,
enemy sympathizers, and civilians whose activities were "inimicable
to the interests of the Navy."
Then, in the late 19608 during a period of considerable civil unrest
in the United States, the three services-particularly the Army-were
called upon to provide extensive information on the political activities
of private individuals and organizations throughout the country.S6
2. Areas of Investigation
DOD's counterintelligence and investigative activities are conducted
for many purposes, both within the United States and abroadY
a. Violations of the Uniform Oode of Military Justice.-The UCMJ
is a code of criminal laws which applies to all military personnel of
the Department of Defense. The Secretary of each military department
is responsible for enforcement of its provisions within his department.
Investigations of UCMJ violations take place within the
United States and in foreign locations where military personnel are
stationed.
b. Security Olearances.-The Department of Defense conducts background
investigations to determine whether to award security clearances
to its military and civilian personnel or to the personnel of civilian
contractors. These investigations are done both in the U.S. and
abroad.
"For a detailed description of this and other improper military investigative
acU,Hies. see the Select Committee's report entitled "Improper .suneillance of
Pri,ate Citizens by the Military."
31 Examples include investigation5 of security leaks, investigations in support
of the Secret Service, in,estigations of theft at the facilities of Government
contractors, and investigations-once military forces have been called in-to
suPpress domestic violence. None of these activities, however, currently represents
a significant expenditure of investigative effort.
Military intellig-ence units a150 have certain counterintelligence functions to
perform which relate to a unit's combat responsibilities.
357
c. Counterespionage.38-Under an agreement with the Federal Bureau
of Investigation,39 each of the military departments conducts
counterespionage investigations on military and civilian members of
their respective military departments, although all such operations
are controlled by the FBI. In overseas jurisdictions where military
commanders have control over occupying forces, the military departments
are given more latitude to conduct counterespionage investigations,
but these are coordinated with the Central Intelligence Agency.
Counterespionage investigations may be offensive or defensive in
nature. Offensive investigations seek to obtain information on the
purposes or activities of a hostile intelligence service. Defensive counterespionage
investigations involve the identification of military personnel
who are working- for agents of a hostile intelligence service.
Counterespionage operations are undertaken in both domestic and
foreign settings.
d. Threats to DOD Personnel, Property, and OperatWns.-This type
of investigation is distinguished from a counterespionage investigation
because no hostile intelligence agency is involved. Rather, the
"threat" typically arises from civilian groups and individuals whose
activities might subvert, disrupt, or endanger the personnel, property,
or operations of DOD. While "threat" information is normally obtained
from local law enforcement authorities, the military has traditionally
reserved the right to conduct its own investigations of such
matters both in the U.S. and abroad.
In summary, one should remember that "military counterintelligence
and investigative activity" is not a static category. It includes
investigations undertaken for any reason apart from foreign intelligence
collection. These range from investigations of lost property to
investigations of fraud at servicemen's clubs. Moreover, the four general
categories cited above expand and contract to meet changing military
needs and demands from the Executive.
3. Supervisory Structure
The Secretary of Defense is ultimately responsible for all counterintelligence
and investigative activity conducted by the Department of
Defense. However, the Secretary has delegated management responsibility
for this activity to the Assistant Secretary of Defense (Comptroller)
.40 He, in turn, has delegated this responsibility to the Deputy
Assistant Secretary of Defense (Comptroller), who was assigned responsibility
for the Defense Investigative Program Office (DIPO).
DIPO apportions counterintelligence and investigative resources
within the Department of Defense. The Office has budgetary cont!'ol
of funds allocated for these 3ICtivities, and provides policy guidance.
However, although DIPO stays informed of activities of the investigative
agencies, It does not exercise formal operational control over
them. In fact, no element at the OSD level exerts centralized opera-
3ll The counterespionage investigations of the Deoortment of Defense are
described in detail in a classified staff report of the Committee.
3. The Delimitations Agreement of 1919. Each of the military departments has
promulgated the agreement as a departmental regulation.
4D DOD Directive 5118.3.
358
tional control over counterintelligence and investigative activitiesY
The one Defense Department agency engaged in such activity, the
Defense Investigative Service (DIS), and the three military departments
largely retain independent operational control of their own
activities.
4. The Defeme Im'estigatit'e Service (DIS)
DIS is the only Defense agency established specifically to carry out
counterintelligence and investigative activities.42 Created in 1972, its
chief function is performance of all security clearance investigations
for civilian and military members of the Department of Defense as
well as for all employees of Defense contractors. DIS also has been assigned.
responsibility for conducting "such other investigations as the
Secretary of Defense may direct," thus making it a special investigative
arm of the Secretary,,3
DIS performs the special function of operating a computer index
known as the Defense Central Index of Investigations (DCH).
This is a computerized index which contains not only references to previous
security clearance investigations, but also references to virtually
every DOD investigation conducted in the past." According to recent
congressional testimony, the Dell now contains references to DOD
files on approximately 15 million Americans.." DIS does not maintain
the files, but indicates to requesters which DOD counterintelligence and
investigative agency holds the file.
DIS has 280 offices across the United States, staffed by 2,620 military
and civilian employees. DIS does not have personnel located. overseas,
but is responsible for security clearance investigations that may
require tracking down leads overseas. Normally, an overseas element
of one of the services would support DIS in such cases.
5. The JJfilitary Department8
In the Navy and Air Force, all counterintelligence and investigative
activity, in both domestic and foreign contexts, is centralized in one
element. In the Army, such activity is dispersed.
a. Navy.-All foreign and domestic counterintelligence and other
investigative activity in the Navy is carried out by the Naval Investigative
Service (NIS). The Director of NIS reports to the Director of
Naval Intelligence, who has responsibility for foreign intelligence
gathering by the Navy. He, in turn, reports to the Chief of Naval
Operations. In 1975, 169 military and 744 civilian personnel·6 were
assigned to NIS.
n The Defense Intelligence Agency made an unsuccessful effort to gain control
of these activities in the late 1960s.
.. The National Security Agency and Defense Intelligence Agency also have
small elements with counterintelligence and investigative functions. These elements
exist solely to protect the activities of the agencies of which they are a
part.
.. DOD Directive 5105.42.
•• The DCn is routinely purged of references to files which have been destroyed
because of their age, files on deceased subjects, or files which DOD directives have
stipulated may not be retained.
.., Testimony of David O. Cooke, Deputy Assistant Secretary of Defense (Comptroller),
House Subcommittee on Government Operations, 1975 (unpublished) .
.. NIS agents are all civilian employees.
359
b. Air Force.-All Air Force investigative activity is carried out
by the Air Force Office of Special Investigations (AFOSI). In contrast
to NIS, the Director of AFOSI reports to the Air Force
Inspector General. In 1975, AFOSI had 1,537 military and 384 civilian
personnel assigned to it.
c. Army.-In the Army, criminal investigations are separated from
other types of counterintelligence and investigative activity. They
are carried out worldwide by the United States Army Criminal Investigation
Command, the Director of which reports directly to the
Army Chief of Staff.
Remaining counterintelligence and investigative activities are
apportioned between the United States Army Intelligence Agency
(USAINTA) and the military intelligence units located overseas.
USAINTA has responsibility for all acti,"ities within the United
States and in overseas locations where military intelligence units are
not located. 'Where military intelligence units are part of Army forces
stationed overseas (e.g., 1Vest Germany and Korea), they ordinarily
carry out counterintelligence and investigative activity in their respective
locations. 'Where an investiga,tion proves to be beyond their
capacity, USAIXTA elements may be called upon.
Both the commanding office of USAIXTA and the commanders of
military intelligence groups overseas report to the Army Assistant
Chief of Staff for Intelligence, who is responsible for the foreign intelligence-
gathering activities of the Army. In 1975, the Army had assigned
2,822 military and 1,346 civilian personnel to counterintelligence
and other investigative activities.
6. Results of Select Committee Inquiry
The Select Committee carried out an extensive investigation of the
counterintelligence and investigative activities of DOD insofar as they
have resulted in illegal and unwarranted intrusions into the political
affairs of civilians. The results of the investigation are published in
detail in the Committee Report entitled "Improper Surveillance of
Private Citizens by the Military."
The Committee found that while certain of DOD's past counterintelligence
and investigative functions resulted in the collection of information
on the political activities of private citizens, DOD has effectively
brought its counterintelligence and investigative activities under
control since 1971. The Committee found that DOD currently
maintains little information on unaffiliated individuals; that which it
does maintain arguably falls within the terms of the Department's
internal restrictions. Similarly, the Committee found that operations
against civilians had been authorized in accordance with departmental
directives.
Despite the success of the Department's internal directives to limit
intrusions into the civilian community, the Committee nevertheless
finds them inadequate protection for the future and recommends that
more stringent legislative controls be enacted.
F. CHEMICAL AND BIOLOGICAL ACTIVITIES
The terrible wounds inflicted by chemical weapons, such as chlorine
and mustard gas, in World War I spawned international attempts to
ban their use in warfare. The 1925 Geneva Convention succeeded
360
only in banning first use in war of chemical and biological weapons.
The United States signed this Convention but Congress failed to
ratify it; thus. the rnited States was not bound by its prohibitions.
Nevertheless. there was a widespread belief that the United States
would comply with the Convention.
Since the ban applied only to a country's first use of these agents,
both the Allied and the Axis pmvers in World 'War II researched
and stockpiled chemical and biological weapons in order to retaliate
against first USe by an enemy. Ironically. as the first President publicly
to commit the united States to the policy of the Geneva Convention,
President Roosevelt announced in June 1943, with the intent of
warning Japan against the use of such weapons: "I state categorically
that we shall under no circumstances resort to the use of such weapons
[poisons or noxious gases] unless they are first used by our enemies."
As he spoke, however, he knew the United States had intensified its
biological research effort three months earlier with the construction of
a facility for drug research at Fort Detrick, Maryland.
The threat of retaliation against a country using such weapons was
effective. Although Germany was thought to have a stockpile, it did
not touch it, e\'en in the last desperate months of 'World 'War II. After
the 'War, the United States program of research and development on
such agents continued in order to maintain a weapons capability sufficient
to deter first use by hostile powers. The Army's facility at Fort
Detrick remained the center of biological weapons research and development.
1. Ohemical and Biological Activities 46a
Against this background, the Central Intelligence Agency entered
into a spedal agreement with the Army on a project which the CIA
codenamed MKNAOMI. The original purpose of MKNAOMI is difficult
to determine. Few written records were prepared during its 18year
existence; most of the documents relating to it have been destroyed;
and persons with knowledge of its early years have either
died or have been unable to recall much about their association with
the project. However, it is fair to conclude from the types of weapons
develoned for the CIA, and from the extreme sef'urity associated with
MKNAOMI, that the possibility of first use of biological weapons by
the CIA was contemplated.
The Army agreed that the Special Operations Division (SOD) at
Fort Detrick would assist the CIA in developing. testing, and maintaining
biolo~rical agents and delivery systems. By this agreement,
CIA acquired the knowledge, skill, and facilities of the Army to develop
biological weapons suited for CIA use. In 1967, the CIA summarized
~IKNAOMI objectives:
a. To provide for a covert support base to meet clandestine
operational requirements.
b. To stockpile severely incapacitating and lethal materials
for the specific use of TSD [Technical Services Division].
c. To maintain in operational readiness special and unique
items for the dissemination of biological and chemical materials.
48. See Chapter XVI.
361
d. To provide for the required surveillance, testing, upgrading,
and evaluation of materials and items in order to
assure absence of defects and complete predictability of results
to be expected under operational conditions.47
In reviewing the records and tes6mony of SOD personnel, it is easy,
for the most part, to distinguish SOD's work for the Army from its
work for the CIA, even though verv few SOD scientists knew of the
CIA connection. For example, the 'CIA personnel who worked with
SOD 'were identified as militarv officers from the fictitious S'aff Support
Group, whose interest in SOD ,,'as markedly different from the
Army's. The CIA was careful to ensure that its moneys were ~Ta.nsferred
to SOD to cover the cost of CIA projects and the few eXlstmg
SOD records indicate which projects were to be charged frO"ainst the
funds received from "P-600," the accounting designation for CIA
funds.
SOD's work for the Army from 1952 until the early 1960s was
primarily to assess the vulnerability of sensitin installations, such as
the Pentagon, air bases, and subway systems, to biological sabotage by
an enemy. In order to conduct these tests, SOD personnel would develop
small, easily disguised devices-such as spray cannisters and
spray pens~ontaining harmless biological agents. SOD personnel
would surreptitiously gain access to the installation, leaving the devices
to release the biological agent. SOD personnel would then monitor its
spread throughout the installation. In this way, SOD could determine
how vulnerable the installation was to sabotage of this kind and could
advise those charged with security of the installation on countermeasures.
Although the CIA was interested in the kinds of delivery devices
which SOD could make for delivery of th biological agents, CIA
projects were distinct because they involved the mating of delivery
systems to lethal or incapacitating biological agents, instead of harmless
agents used in vulnerability tests. The CIA \YOuld ask SOD to produce
a delivery system and a compatiblr hio1c;gic:1 ] ~lf£rnt-a request
not made bv the Armv until the early IDeos.
SOD developed pills containing' severu] ditf"l'ent bieloc·;ca.; ngents
which could remain potent for "'eekQ or lJ]Outll'. nnd ,1:1 Jl ,fU"'~ and
darts coated with biological agents. SOD a180 denloped a spe.ci~] ["un
for firing darts coated with a chemical that codd ir.cnp'lcit'l.t.c ' oJ'" lrd
dog in order to allow CIA agents to knod;. Oilt i h,' gUfira. (10;:"
silently, enter an installation, and return the dog to consciG1J'lnt:-; \vhel
leaving. SOD scientists were unable to develop a similar inc.ipacir."nL
for humans.
SOD on occasion ph:vsically transferred biological agems in "bu1k'
form, various delivery devices, and most importantlv, delivery dence:::
c~ntaining biological agents, to CIA personnel. Although none of the
WItnesses before the Select Committee could recall any transfer of
such materials for actual use by the CIA, evidence available to the
Committee indicates that the CIA attempted to use the material. It is
fair to conclude that biological agents and delivery devices prepared at
Fort Detrick and transferred to the Staff Support Group were carried
"M('morandum from Chipf, TSD/Biologic~l Brllnch to Chief, TSD,
"MKNAOMJ: Funding, Objectives, and Accomplishments," 10/18/67, p. 1.
207·932 0·76.24
362
by CIA agents in attempted assassinations of foreign leaders. However,
the Committee found no evidence that such material was ever in
fact used against a person by the CIA.
By the early 1960s, the Army also became interested in the type of
work SOD was doing for the CIA. The Army apparently decided that
this type of surreptitious delivery device migllt be useful to Special
Forces units in guerrilla warfare. SOD developed special bullets containing:
poison darts which could be fired, with little noise, from standard
mIlitary weapons and small portable devices capable of spraying
biological agents into the air which would form lethal clouds. Ultimately,
the Army stockpiled a quantity of these bullets, but never
transferred them to field units.
SOD developed another capability according to existing records
which, so far as the Committee could determine, was never tapped by
Army or by the CIA. 'Whereas most SOD work was devoted to biological
weapons which "'ould kill one individual noiselessly and with almost
no trace of \vhich would kill or incapacitate a small group. SOD
did research the possibilities of large-scale covert use of biological
weapons. SOD scientists prepared memoranda, which were passed to
the CIA. detailing what diseases were common in what areas of the
world so that covert use of biological weapons containing these diseases
could easily go undetected. SOD researched special delivery devices
for these biological agents, but it never mated such delivery devices
with biological agents.
In addition to CIA interest in biological weapons for use against
humans, it also asked SOD to study use of biological agents against
crops and animals. In its 1967 memorandum, the CIA stated:
Three methods and systems for carrying out a covert attack
against crops and causing severe crop loss have been
developed and evaluated under field conditions. This was accomplished
in anticipation of a requirement which was later
developed but was subsequently scrubbed just prior to putting
into action.
~. Terminatwn
All the biological work ended in 1969. Shortly after taking office,
President Nixon ordered the staff of the National Security Council to
review the chemical and biological weapons program of the United
States. On November 25, 1969, he stated that the United States renounced
the use of any form of biological weapons that kill or incapacitate.
He further ordered the disposal of existing stocks of bacteriological
weapons.
On February 14, 1970, the President clarified the extent of his earlier
order and indicated that toxins-ehemicals that are not living organisms
but are produced by living organisms-were considered biological
weapons subject to his previous directive. The Defense Department
duly carried out the Presidential directive according to the instructions
and supervision of the National Security Council staff. However,
a CIA scientist acquired from SOD personnel at Fort Detrick approximately
11 grams of shellfish toxin, a quantity which was approximately
one-third of the total world production and which was sufficient
to prepare tens of thousands or darts. This toxin, a known danger
363
if inhaled, swallowed, or injected, was then stored in a little-used
laboratory at the CIA where its presence went undetecl:€d for five
years.
The transfer from SOD to the CIA resulted in a major quantity of
the toxin being retained by an agency in a manner which clearly violated
the President's order. The evidence to the Committee established
that the decision to transfer and to retain the shellfish toxin was not
made by, or known to, high-level officials of either the Defense Department
or the CIA. The Director of the CIA was told of the possibility of
retaining the toxin, but he rejected that course of action. The Committee
found that the decision to keep the toxin, in direct and unmistakable
contradiction of a widely announced Presidential decision, was
made by a few individuals in the CIA and SOD.
Nevertheless, the history of MKNAOMI and the atmosphere surrounding
it undoubtedly contributed to the mistaken belief of these
individuals that they were not directly affected by the President's
decision. T.he MKNAOMI project itself was contrary to United States
policy since 1925 and to Presidential announcement since 1943, for it
contemplated a first use of biological weapons by the CIA-albeit
in the context of small covert operations. Moreover, because of
the sensitive nature of MKNAOMI, these scientists gave their
superiors little written record of their work and received little or no
written guidance. The National Security Council staff, charged by the
President with determining what U.S. policy should be, did not discover
MKNAOMI in the course of its study and did not, therefore, consider
the possibility that the CIA had biological weapons or biological
agents. The CIA employee who claims to have made the decision, on
his own, to retain the toxin received no written instructions to destroy
them. Kept outside the National Security Council's study, the employee
had to rely only on the newspaper account of the President's
announcement and on his own interpretation of it.
G. MEETING FUTURE NEEDS IN DEFENSE INTELLIGENCE
The defense intelligence establishment poses two fundamental problems
for future national policy. The first is how to improve the quality
of intelligence and ensure that intelligence collection and production
are responsive to the needs of both the executive and legislative
branches; the second is how Congress can exercise responsible oversight
of the intelligence agencies. These goals require not only executive-
legislative cooperation in control of the intelligence establishment,
but also the desip.:n of a managerial and consultative system
which is conducive to efficiency in routine activities, and adaptive to
new priorities.
1. Anticfpating New Requirements
It is a truism that generals should not plan for the next war by
preparing for the last one; so too the intelligence community should
not simply prepare to predict the last crisis. Ideally, allocation of
intelligence resources should precede crises, not follow them. For example,
~ot;lcentration of a larger proportion of intelligence assets on
economIC Issues should have begun before the 1973 oil embargo and
energy crisis, not subsequently. In order to anticipate threats, which
is the essential function of peacetime defense intelligence, the agencies
364
must strengthen their ability to anticipate the proper targets for collection
and analysis.
The fundamental task of military intelligence will always be to
detect the numbers, characteristics, and locations of enemy weapons,
personnel, communications, and intelligence systems. As the world
changes, however, the identities of enemies and the relative importance
of different security threats change. The allocation of intelligence
resources which was appropriate in a bipolar world, where the
most likely threats were strategic nuclear war or large-scale conventional
military engagements in the third world, is less appropriate in
a world where power is becoming more diffused. For example, although
the energy crisis (which is increasing the spread of nuclear
power reactors and eroding the technical and economic barriers to
acquiring nuclear weapons) and the growth of regional power rivalries
(which increases incentives to acquire such weapons) are combining
to make nuclear proliferation an imminent threat, the Air Force unit
responsible for nuclear intelligence still directs virtually all of its
assigned technical collection resources against the USSR and China.48
In the short range, it is obvious that problems such as nuclear
proliferation and international terrorism will be given increasingly
high priorities in national intelligence. Since DOD has the vast
majority of collection assets, it should be increasingly involved in these
problem areas. In doing so, a new balance may have to be struck
between the national/peacetime intelligence priorities of the Department
of Defense and the intelligence community as a whole, and the
tactical/wartime requirements of the military. The critical problem
for improving intelligence in the long-range, however, is to identify
the mechanisms which are conducive to adaptation, re-evaluation of
priorities, and flexible distribution of collection and analysis assets.
Feedback from consumers of national intelligence-such policy and
research agencies as ISA, DDR&E, State, NSC, ERDA, and ACDAshould
be regularized, and DOD should also be responsive to the community-
wide committees (such asIRAC, NSCIC, USIB, or IC Staff)
which consider the interface between issue urgency and collection
capabilities.
2. Effects of New Technology
Technological change produces both new capabilities and new barriers
in intelligence collection. Unless the U.S. loses its wide lead in
capacity for technolomcal innovation, however, scientific advances are
likply to be a net benef1U8&
In the near future, expanded computer capabilities can be expected
to improve the integration and availability of processed information
by use of a central bank with data, pictures. and reports digitized for
quick retrievability according to title or substance. This would offer
the efficiency and thoroughness of a full text search, but it also raises
the issue of the proper extent of compartmentation.
Improved technolog-y also offers hedges against vulnerability and
political sensitivity. Development of unmanned mobile sensors for
dangerous peripheral reconnaissance missions can eliminate most of
the risks in current collection programs, or the potential for crises
.. Air Force briefing for Select Committee staff. July 1975.
... See the Committee's detailed report on Intelligence and Technology.
365
and embarrassments which followed the North Korean seizure of the
Pueblo and downing of the EC-121. Both a reduction in risk and an
increase in cost-effectiveness could be possible if improved technology
results in substantial manpower reductions.
Technology is interactive. Availability of new techniques for monitoring
or verification may provoke enemy countermeasures, and enemy
development of new weapons systems can produce the need for new
techniques of verification. (Heavy deployment of cruise missiles or
development of mobile land-based ICBMs by either the U.S. or
U.S.S.R., given current detection capabilities, would create virtually
insoluble problems of verification of strategic arms limitation agreements.
Development by either side of certain technical innovations, on
the other hand, could be undesirable. A breakthrough in ability to
detect and fix the location of submarines, for example, would destabilize
mutual nuclear deterrence by increasing the vulnerability of
the other side's second-strike capability.) The complex dynamics of
these interactions require substantial attention to coordinating R&D
for intelligence with policy considerations. The expense which goes
with technical sophistication also ~uggests the need for rigorous costbenefit
analysis in intelligence R&D, to judge the relative utility of
new capabilities.
3. Restructuring Defense Intelligence Organizations
The pattern of DOD intelligence organization is obviously important
for the division of authority and responsibility within the departments,
but it also has ramifications for the control and direction of
the intelligence community as a whole. Internally, there are divergent
interests and needs, particularly between the civilian leadership in
OSD and the military leadership in the JCS and unifiecl commands.
Externally, there is an imbalance between the responsibility of the
DCI to direct the collection and production of national intelligence,
and the predominance of DOD in control of actual assets.
Within the defense establishment there has traditionally been a
trade-off in the view of many observers, between the peacetime needs
of the Secretary of Defense for "national" intelligence on general
politico-military developments and trends, and the wartime needs of
the professional military for "tactical" intelligence on enemy forces
and operations. This distinction may be eroding since central national
sensors can have important tactical applications.
Nevertheless, the Secretarv of Defense and JCS have diff""'ent resnonsibilities,
and thus different intelligence priorities. Dissatisfaction
with fragmentation and duplication of service intelligence
support to the Secretary led to the formation of the Defense IntelligenC'e
Agencv 15 years ago. The DIA was supposed to integrate
military intelligence activities, and to serve the needs of hoth OSD
and the services. There has been widespread criticism of DIA's performance
since it was created.
The new Deputy Secretary of Defense position is designecl to assert
greater control of DOD intellieence from the OSD level. If OSD staff
resources for intelligence are Increased. and DIA's role is decreased,
the trade-off between service needs and the needs of national leadershi~
may be recognized, accepted. and dealt with, in contrast to the
earlIer attempt to "cure" the problem by combining managerial func366
tions in DIA. There has been a similar potential problem in NSA,
although it has provoked far less concern than DIA since NSA must
also serve national and tactical needs. In 1961 the JCS attempted to
gain control of that agency,49 and in recent years some critics at the
other extreme have suggested taking NSA out of DOD, since it serves
many non-military needs. The entire problem of dealing with the
mutual relations of national and tactical intelligence may be clarified
as the DCI assumes the additional authority granted to him by the
President's Executive Order of February 18, 1976.
While establishment of a Pentagon intelligence czar in the form of
the new Deputy Secretary may reduce fragmentation within the department
and improve the coherence of military intelligence, it will
probably have a major impact on the coordinating role of the DCI.
Given that the overwhelming volume of total U.S. intelligence collection
and production occurs within DOD, the Deputy Secretary
could become, in effect, a second DCI. The definition of the relation
between these two officials will be the single most critical factor in toplevel
organization for management of national intelligence.
4. Requirements for Oongressional Oversight
If Congress attempts to exercise more comprehensive and detailed
oversight of intelligence agencies, the biggest issue is likely to be what
information the executive branch should make available. On defense
intelligence there is likely to be less of a problem if Congress concentrates
on issues of intelligence process rather than substance. There is,
of course, a limit as to how far it is possible to evaluate the former without
considering the latter. Therefore, norms will have to be established
about what kinds of material (for example, finished intelligence) will
be subject to scrutiny by Congress on a routine basis. Provision should
also be made to keep basic information on budgets and resource allocation
in a clear and available form in the Pentagon, obtainable by
the oversight committee on demand. More consistent and thorough
documentation of the chain of command could also be required in
internal correspondence (thus avoiding the problem of "unattributable"
records of controverstal decisions turning up in the files, i.e.,
unsigned directives or cables which cannot clearly be traced to an authoritative
source).
If independent ongoing oversight of the substance of defense intelligence
is the goal, an oversight committee should have staff expertise
in several areas: (1) Political, to weigh the risks and gains of certain
programs and targets; (2) Scientific and Technical, to evaluate sensors;
(3) Economic, to judge cost-effectiveness; (4) Military, to consider
non-national strategic and tactical requirements of DOD
i.ntelligence.
.. Memorandum from the Chairman of the Joint Chiefs of Staff Lemnitzer to
Secretary of Defense McNamara, 3/2/61.

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