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CHURCH COMMITTEE REPORTS

PART ONE
THE CENTRAL INTELLIGENCE GROUP AND THE CENTRAL INTELLIGENCE
AGENCY, 1946-1952
INTRODUCTION
The years 1946 to 1952 were the most crucial in determining the
functions of the central intelligence organization. The period marked
a dramatic transformation in the mission, size, and structure of the
new agency. In 1946 the Central Intelligence Group (CIG), the CIA's
predecessor, was conceived and established as a coordinating body to
minimize the duplicative efforts of the departmental intelligence components
and to provide objective intelligence analysis to senior policymakers.
By 1952 the Central Intelligence Agency was engaged in
clandestine collection, independent intelligence production, and covert
operations. The CIG was an extension ot the Departments; its personnel
and budget were allocated from State, War and Navy. By 1952
the CIA had developed into an independent government agency commanding
manpoWer and budget far exceeding anything originally
imagined.
T. The OSS Precedent
The concept of a peacetime central intelligence agency had its origins
in World War II with the Office of Strategic Services (OSS).
Through the driving initiative and single-minded determination of
William J. Donovan, sponsor and first director of OSS, the organization
became the United States' first independent intelligence body
and provided the organizational precedent for the Central Intelligence
Agency. In large part, CIA's functions, structure, and expertise
were drawn from OSS.
A prominent attorney and World War I hero, "Wild Bill" Donovan
had traveled extensively in Europe and had participated in numerous
diplomatic missions tor the government after the war. A tour of
Europe for President Roosevelt in 1940 convinced him ot the necessity
tor a centralized intelligence organization. Donovan's ideas about
the purposes an intelligence agency should serve had been shaped by
his knowledge of and contact with the British intelligence services,
which encompassed espionage, intelligence analysis, and subversive
operations-albeit in separately administered units. The plan which
Donovan advocated in 1940 envisioned intelligence collection and
analysis, espionage, sabotage, and propaganda in a single organization.
Essentially, this remained the basic formulation for the central
intelligence organization for the next thirty years.
The immediacy of the war in Europe gave force to Donovan's proposal
for a central agency, the principal purpose of which was to
provide the President with integrated national intelligence. Acting on
Donovan's advice, Franklin Roosevelt established the Office of Coor-
(4)
5
dinator of Informtion (COl) in the summer of 1941. Cal with
Donovan as Coordinator, reported directly to the President. Its specific
duties were to collect and analyze information for senior officials,
drawing on information from the Army, Navy, and State Departments
when appropriate. A year after its creation, when the United States
was embroiled in war with Germany and Japan, the Office was renamed
the Office of Strategic Services (OSS) and placed under the di1'
ection of the Joint Chiefs of Staff.
The British provided invaluable assistance to ass. British experts
served as instructors to their American counterparts in communications,
counterespionage, subversive propaganda, and special operations.
In real terms the British provided American intelligence with
the essence of its "tradecraft"-the techniques required to carry out
intelli~enceactivities.
OSS was divided into several branches. The Research and Analysis
(R&A) branch provided economic, social, and political analyses, sifting
information from foreign newspapers and international business
and labor publications. The Secret Intelligence (SI) branch engaged
in clandestine collection from within enemy and neutral territory.
The Special Operations (SO) branch conducted sabotage and worked
with resistance forces. The Counterespionage (X-2) branch engaged
in protecting U.S. and Allied intelligence operations from enemy
penetrations. The Morale Operations (MO) branch was responsible
for covert or "black" propaganda. Operational Groups (OG) conducted
guerrilla operations in enemy territory. Finally, the Maritime
Unit (MU) carried out maritime sabotage.
Although by the end of the war OSS had expanded dramatically,
the organization encountered considerable resistance to the execution
of its mission. From the outset the military were reluctant to provide ass with information for its research and analysis role and restricted
its operations. General Douglas MacArthur excluded ass from China
and the Pacific theater (although OSS did operate_in Southeast Asia).
In addition to demanding that OSS be specifically prohibited from
conducting domestic espionage, FBI Director J. Edgar Hoover and
Nelson Rockefeller. then Coordinator of Inter-American Affairs. insisted
on maintaining their juriSdiction over Latin America, thereby
excluding OSS from that 'area.
These operational limitations were indicative of the obstacles which
OSS encountered as a new organization in the entrenched Washington
bureaucracy. On the intelligence side, ass failed to establish a consistent
channel of input. Roosevelt relied on informal conversations
and a retinue of personal aides in his decisions. The orderly procedure
of reviewing, evaluating, and acting on the basis of intelligence was
simply not part of his routine. Roosevelt's erratic process of decisionmaking
and the Departments' continued reliance on their own sources
of information frustrated Donovan's hope that OSS would become
the major resource for other agencies.
Nonetheless. General Donovan was firm in his conviction that a centralized
intelligence organization was an essential element for senior
policymakers. Anticipating the end of the war, Donovan recommended
the continuance of all ass functions in a peacetime agency directly
responsible to the President. Having endured the difficulties surrounding
the establishment of ass, Donovan had by 1944 accepted the fact
6
that a separate, independent intelligence agency would have to coexist
with the intelligence services of the other Departments. In a November
1944 memorandum to Roosevelt in which he recommended the maintenance
of a peacetime intelligence organizlltion Donovan stated:
You will note that coordination and centralization are
placed at the policy level but operational intelligence (that
pertaining primarily to Department action) remains within
the existing agencies concerned. The creation of a central
authority thus would not conflict with or limit necessary intelligence
functions within the Army, Navy, Department of
State, and other agencies.
Donovan's hope that OSS would continue uninterrupted did not
materialize. President Harry S Truman ordered the disbandment of
OSS as of October 1, 1945, at the same time maintaining and transferring
several OSS branches to other departments. The Research and
Analysis Branch was relocated in the State Department, and the Secret
Intelligence and Counterespionage Branches were transferred to
the War Department, where they formed the Strategic Services Unit
(SSU). Although it is impossible to determine conclusively, there is
no evidence that OSS subversion and sabotage operations continued
after the war. SSU and the former R&A Branch did continue their
activities under the direction of their respective departments.
The OSS wartime experience foreshadowed many of CIA's problems.
Both OSS and CIA encountered resistance to the execution of
their mission from other government departments; both experienced
the difficulty of having their intelligence "heard"; and both were
characterized by the dominance of their clandestine operational
components.
II. Tlw Origim of tlw Oentrallnwlligence Gr<YUp
As the war ended, new patterns of decisionmaking emerged within
the United States Government. In the transition from war to peace,
policymakers were redefining their organizational and informational
needs. A new President influenced the manner and substance of the
decisions. Unlike Franklin Roosevelt, whose conduct of foreign policy
was informal and personalized, Harry Truman preferred regular
meetings of his full cabinet. Senior officials in the State, War, and
Navy Departments were more consistent participants in presidential
decisions than they had been under Roosevelt. In part this was a
result of Truman's recognition of his lack of experience in foreign
policy and his reliance on others for advice. Nonetheless, Truman's
forthright decisiveness made him a strong leader and gained him the
immediate respect of those who worked with him.
Secretary of State .Tames F. Byrnes had little diplomatic experience,
although he had an extensive background in domestic politics,
having served in the House and Senate and on the Supreme Court.
Secretary of War Robert P. Patterson, a lawyer by training, had
been immersed in the problems of war supply and production. In
194!l he faced the issue of demobilization and its implications for
the U.S. postwar position. Secretary of the Navy James V. Forrestal
7
was probably the individual with the most fully developed ideas on
foreign policy in the cabinet. As early as May 1945 he had expressed
concern over the potential threat of the Soviet Union and for the
next hvo years he continued to be in the vanguard of U.S. officials who
perceived the U.S.S.R. as the antagonist to the United States.
Among the Secretaries, Forrestal was also a vocal proponent of
more effective coordination within the Government. He favored something
similar to the British war cabinet system, and along with it a
central organization to provide intelligence estimates. In the fall of
1945, Forrestal took several initiatives to sound out departmental
preferences for the creation of a central agency. These initiatives
were crucial in developing a consensus about the need for centralized
intelligence production, if not about the structure of the organization
serving the need.
Truman himself shared Forrestal's conviction and supported the
Secretary's efforts to review the problem of centralization and reorganization.
From October through December 1945, U.S. Government
agencies, spurred on by Forrestal, engaged in a series of policy
debates about the necessity for and the nature of the future U.,g.
intelligence capability. Three major factors dominated the discussion.
First was the issue of postwar defense reorganization. The debate
focused around the question of an independent Air Force and
the unification of the services under a Department of Defensewhether
there should be separate services (the Air Force becoming
independent) with a Joint Chiefs of Staff organization and a civilian
Secretary of Defense coordinating them, or a single Department of
National Defense with one civilian secretary and, more importantly,
one chief of staff and one unified general staff. Discussion of a separate
central intelligence agency and its structure, authority, and
accountability was closely linked to the reorganization issue. .
Second, it was clear from the outset that neither separate servIce
departments nor a single Departml:\nt of National Defense would
\villingly resign its intelligence function and aceompanying personnel
and budgetary allotments to a new central agency. 1£ such an agency
came into being, it would exist in parallel with military intelligence
organizations and with a State Department political intelligence organization.
At most, its head would have a coordinating function
comparable to that envisioned for a relatively weak Secretary of
Defense.
Third, the functions under discussion were intelligence analysis
and the dissemination of intelligence. The shadow of the Pearl Harbor
disaster dominated policymakers' thinking about the purpose of
a central intelligence agency. They saw themselves rectifying the
conditions that allowed Pearl Harbor to happen-a fragmented military-
based intelljf!ence apparatus, which in current terminology
could not distinguish "signals" from "noise," let alone make its assessments
available to senior officials.
Within the government in the fall of 1945 numerous studies explored
the options for the future defense and intelligence organizations.
None advocated giving a central independent group sale
responsibility for either collection or analysis. All favored makin~ the
8
central intelligence body responsible to the Departments themselves
rather than to the President. Each Department lobbied for an arrangement
that would ~ive itself an advantage in intelligence coordination.
In particular, Alfred McCormack, Special Assistant to Secretary of
State Byrnes, was an aggressive, indeed, belligerent, advocate of State
Department dominance in the production of national intelligence.
President Truman had encouraged the State Department to take the
le,ad in oI'~anizing an intelligence coordination mechanism. However,
as McCormack continued to press for the primacy of the State, Department,
he encountered outright opposition from the military and from
Foreign Service stalwarts who objected to the establishment of a separate
office for intelligence and research within State.
Among the studies that were underway, the most influential was
the Eberstadt Report, directed by Ferdinand Eberstadt, an inve,stment
banker and frie,nd of Forrestal. Eberstadt's recommendations were
the most compre,he,nsive in advancing an integrated plan for defense
reorganization and centralized decisionmaking. In .June 1945, Forrestal
commissioned Eberstadt to study the proposed merger of the
\Var and Navy Departments. In doing so, Eberstadt examined the
entire structure of policymaking at the senior level-undoubtedly
with Forrestal's preference for centralization well in mind. Eberstadt
concluded that the War and Nayy Departments could not be merged.
Instead, he proposed a consultatIVe arrangement for the State Department,
the Army and the Navy, and an independent Air Force through
a National Security Council (NSC).
Eberstadt stated that an essential element in the NSC mechanism
was a central intelligence agency to supply "authoritative information
on conditions and developments in the outside world." Without such
an agency, Eberstadt maintained, the NSC "could not fulfill its role"
nor could the military services "perform their duty to the nation."
Despite the fact that the Eberstadt Report represented the most affirmative
formal statement of the need for intelligence analysis, it did
not make the giant leap and recommend centralization of the departmental
intelligence functions. In a section drafted by Rear Admiral
Sidney Souers, Deputy Chief of Naval Intelligence, and soon to become
the first director of the central intelligence body, the report
stated that each Department had its independent needs which required
the maintenance of independent capabilities. The report recommended
only a coordination role for the agency in the synthesis of
departmental intelligence.'
The Presidential Directive establishing the Central Intelligence
Group reflected these preferences. The Departments retained autonomy
over their intelligence services, and the eIG's budget and
staff were to be drawn from the separate agencies. Issued on January
22, 1946, the Directive provided the CIG with a Director of
Central Intelligence (DCI), chosen by the President. The CIG was
responsible for coordination, planning, evaluation, and dissemination
1 Amid this major effort to define the role of a cenlJral intelligence agency, only
one individual advocated the creation of an independent agency which would
centralize the intelligence functions in the Government. General John Magruder,
Chief of SiSru, openly questioned the willingness of tbe separate agencies to cooperate
in intelligence production. On that basis he argued for a separate agency
wholly responsible for the collection and analysis of foreign intelligence.
9
of intelligence. It also was granted overt collection responsibility.la
The National Intelligence Authority (NIA), a group comprised of
the Secretary of State, the Secretary of War, the Secretary of the
Navy, and the personal representative of the President, served as
the Director's supervisory body. The Intelligence Advisory Board
(lAB), which included the heads of the military and civilian intelligence
agencies, was an advisory group for the Director.
Through budget, personneL and oversight, the Departments had
assured themselves control over the Central Intelligence Group. CIG
was a creature of departments that were determined to maintain independent
capabilities as well as their direct advisory relationship
to the President. In .January 1946. they succeeded in doing both; by
retaining autonomy over their intelligence operations, they established
the strong institutional claims that would persist for the lifetime of
the Central Intelligence Agency.
Ill. The Directors of Oentral Intelligence, 19.46-19Sg
At a time when the new agency was developing its mission, the role
of its senior official was crucial. The Director of Central Intelligence
was largely responsible for representing the agency's interests to the
Department and for pressing its jurisdictional claims. From 1946 to
1952, the strength of the agency relative to the Departments was dependent
on the stature that the DCI commanded as an individual.
The four DCls during this period ranged from providing only weak
leadership to firmly solidifying the new organization in the Washington
bureaucracy. Three of the foul' men were career military officers.
Their appointments were indicative of the degree of control
the military services managed to retain over the agency and the acceptance
of the services' primary role in the intelligence process.
Sidney W. Souers (January 19.46-June 19J,fJ)
In January 1946, Sidney W. Souers-the only one of these DCls
who was not a career military officer-\yas appointed Director of Central
Intelligence. Having participated in the drafting of the CrG directive,
Souers had a fixed concept of the central intelligence function.
one that did not challenge the position of the departmental intelligence
services.
Born and educated in the Midwest, Souers was a talented business
executive. Before the war he amassed considerable wealth revitalizing
ailing corporations and developing new ones, particularly in the
aviation industry. A naval reserve officer, Souers spent his wartime
service in naval intellience, rising to the rank of Rear Admiral. His
achievements in developing countermeasures against enemy submarine
action brought him to the attention of then Secretary of the
Navy Forrestal, who appointed him Assistant Director of the Office
of Naval Intelligence in .Tuly 1944. Later that year, Souers assumed
the post or Deputy Chief of Naval Intelligence.
1. Participants in the drafting of the January 1946 Directiye haye stated that
clandestine collection was an intended function of the CIG at that time, although
it was not formally assigned to (jIG until June 1946. See p. 14. It is unclear how
widely shared this understanding was. Commenting on the maintenance of ss1',
Secretary Patterson wrote to the President in October 1945, saying that "the
functions of OS8, chiefly clandestine activities, had been kept separate in the
Strategic Services Unit of the 'Val' Department as the nucleus of a possible central
intelligence service...."
10
The combination of his administrative skills and his intelligence
background made him Forrestal's choice to head the newly created
Central Intelligence Group. Souers accepted the job with the understanding
that he would remain only long enough to build the basic
organization. Holding to that condition, Souers left CIG in June
1946 and returned to manage his business interests in Missouri.
The close relationship between Souers and President Truman resulted
in Souers' return to Washington a year later to assume eventually
the position of Executive Secretary of the National Security
Council, a job he held from September 1947 until 1950. It was probably
in this position rather than as DCI that Souers exerted the most
influence over the central intelligence function. His stature as a
fonner DCI and his friendship with Truman lent considerable weight
to hifi participation in the early NSC deliberations over the CIA.
Lieutenant General Hoyt S. Vandenberg (June 1946-May
1947)
The appointment of Lieutenant General Hoyt Vandenberg as DCI
on .Tune 10, 1946 marked the beginning of CIG's gradual development
as an independent intelligence producer. Vandenberg was an
aggressive, assertIve personality. As a three-star general, he may have
viewed the Del's position as a Illeans of advancing his Air Force
career. His actions during his one-year term were directed toward
enhancing eIG's stature. Soon after leaving eIG he became Air
Force Chief of Staff, acquiring his fourth star at the sallie time.
Vandenberg's background, personal connections, and strong opinions
contributed in a significant way to changes which occurred over the
next year.
A graduate of West Point, Vandenberg had served as head of the
"\.nny's intelligence division, G-2, and immediately prior to his appointment
as DCI had represented G-2 on the Intelligence Advisory
Board. This experience gave him the opportunity to observe the problems
of directing an agency totally oependent on otheI' departments.
One of Vandenberg's important assets in the never-ending battles
with the military was the fact that he was a high-ranking military
careerist. As such, he could deal with the military intelligence chiefs
on more than equal terms. Vandenberg was also well-connected on
Capitol Hill. The nephew of Arthur Vanderberg, ranking Republican
on the Senate Foreign Relations Committee, Vandenberg
gained wide access to members of the House and Senate.
Vandenberg's achievements touched on two areas: administrative
authority and the scope of CIG's intelligence mission. He first addressed
himself to the problem of the budget. The existing arrangement
required the DCI to request funds from the Departments for
operating expenses as they developed. There were no funds earmarked
in the departmental budgets for eIG's use; therefore, the DCI was
dependent OIl the disposition of the Department secretaries to release
the money he needed.
Since eIG was not an independent agency, it could not be directly
granted appropriations from the Congress. Vandenberg pressed the
Denartment.<; to provide CrG with a specific allotment over which the
ncr would have dispersal authority. Although both Secretary of War
Patterson and Secretary of State Byrnes objected, arguing that
CIG's budget had to be kept confioentlal, Admiral Leahy, President
'l'ruman's Chief of Staff, provided Vandenberg with the support he
11
needed. Through the certification of vouchers, the DCI could pay
personnel and purchase supplies.
Under Vandenberg, CIG moved beyond a strict coordination role
to acquire a clandestine collection capability, as well as authority to
conduct independent research and analysis. 2 During this period, eIG
also replaced the FBI in Latin America.3 When Vandenberg left the
CIG, he left an organization whose mission had considerably altered.
Admiml H08COP H. Hillen/wetter (ilJay 19.!/1-October 1950)
Rear Admiral Roscoe Hillenkoetter assumed the position of DCI
at a time when the Central Intelligence Group ,,-as about to be reconstituted
as the Central Intelligence Agency and when international
pressures placed widely disparate demands on the fledgling agency.
Under Hillenkoetter, the Agency experienced undirected evolution in
the area of intelligence, newr fulfilling its coordination function, but
developing as an intelligence producer. In this period the Agency
also acquired its covert operational capability. Hillenkoetter's part
in these chanp:es was more passi\'e than active. Having only recently
been promoted to Rear Admiral. he lacked the leverage of rank to deal
effectively with the military.
Hillenkoetter had spent most of his almost thirty-year naval career
at sea, and he remained a sea captain in mind and heart. A graduate
of Annapolis in 1919, he sened in Central America, Europe, and the
Pacific. His assignments as naval attache had given him some exposure
to the intelligence process. However, the position of the DCI
required bureaucratic expertise; Hillenkoetter did not have the instincts
or the dynamism for dealing with senior policymakers in
State and Defense.
In fairness to Hillenkoetter, he labored under the difficulty of
serving during a period of continuing disagreements between Secretary
of State Dean G. Acheson and Secretary of Defense Louis A.
Johnson. vYith the Agency having to execute covert operations which
were to serve the policy needs of the two Departments, the antagonism
between the two Secretaries left the DCI in a difficult position. Hillenkoetter
left the Agency in 1950 to resume sea command.
General Waltp" Bedell Smith (October llJ50-Feb7'U(J,ry 1953)
It was precisely because of Hillenkoetter's weakness that General
Walter Bedell Smith was selected to succeed him in October 1950.
Nicknamed the "American Bulldog" by vVinston Churchill, Smith was
a tough-minded. hard-driving, often intimidatinp: military careerist.
Smith came to the position of DCI as one of the most highly regarded
and most senior-ranking military officers in the government.
During vVorId War II, he had served as Chief of Staff of the Allied
Forces in North Africa and the Mediterranean, and later became
Dwight Eisenhower's Chief of Staff, after Eisenhower's appointment
as Commander of the European theater. Following the war, Smith
served as U.S. Ambassador to the Soviet Union.
2 For a full discussion of these changes, see pp. 13, 14.
3 CIG's acquisition of nominal authority in Latin America may have been a
symbolic gain. but the organization faced institutional obstacles in the assumption
of its mission there. In mid-1946, jurisdiction for Latin America was reas~
igned to the CIG. TIl(' process by which the transfer occurred is unknown. but it
is clear that FBI Director Hoover had conceded his authority grudgingly. A
formal agreement between the two agencies (presumably initiated by Hoover)
stipulated that no FBI Latin American files were to be turned over to the CIG.
70-725 0 - 76 • 2
12
The Korean \Var placed enormous pressures on the Agency during
Smith's term, and had a major impact on the size and direction of the
CIA. Although by the time of Smith's appointment the Agency's
functions had been established-overt and clandestine collection,
covert operations, intelligence analysis, and coordination of departmental
activities-Smith supervised s,veepillg administrative changes
which created the basic structure that remams in effect to this day.
As DCI, Smith easily outranked the service intelligence chiefs with
whom he had to deal. His stature and personality made him one of
the strongest Directors in the Agency's history.
IV. The El'ollltion of the Oentr'al Intelligerwe Fwnction, 1946-1949
A. The Pattern Established, 1,946-1949
The eIG had been established to rectify the duplication among the
military intelligence services and to compensate for their biased
analyses. The rather vaguely conceived notion ,vas that a small staff
would assemble and review the raw data collected by the departmental
intdligence senices and produce objective estimates for the use of
senior American policymakers. Although in theory the concept was
reasonable and derived from real informational needs, institutional
resistance made implementation \'irtually impossible. The military
intelligence services jealously guarded both their information and
what they believed were their prerogatives in providing policy
guidance to the President, making CHi's primary mission an exercise
in futility.
Limite'd in the execution of its coordinating responsibility, the
organization gradually emerged as an intelligence producer, generating
current intelligencp summaries and thereby competing with
the Departments in the dissemination of information. The following
section will explore the process by which CIG, and later the CIA,
created by the Xational Security Act of 1947, drifted from its original
purpose of producing coordinated national estimates to becoming primarily
a current intelligence producer.
In .Tanuary 1946, Souers assumed direction over a feeble organization.
Its personnel had to be assigned from other agencies, and its
budget ,vas allocated from other departments. Clearly, the Departments
were not inclined to relinquish manpower and money to a
separate organization, even if that organization was little more than
an adjunct of their own. Postwar personnel and budget cuts further
limited the support which the Departments were willing to provide.
Those who were assigned could not remain long; some were of
mediocre ability. By U.S. Government standards, CIG was a very
small organization. In .Tune 19-Hi. professional and clerical personnel
numbered approximately 100.
CIG had two overt collection components. The Domestic Contact.
Service (DCS) solicited domestic sources, including travelers and
businessmen for foreign intelligence information on a voluntary and
witting basis! The Foreign Broadcast Information Service (FBIS),
an element of OSS, monitored overseas broadcasts. There were two
staffs. the Interdepartmental Coordinating and Planning Staff
• The term "witting" is used by intelligence professionals to indicate an individual's
knowledgeable association with an intelligence service.
13
(leAPS), which dealt with the Departments, and the Central Reports
Staff (eRS), which was responsible for correlation and evaluation. A
Council, comprised of three Assistant Directors, dealt with internal
matters.
In 1farch 1946, the Central Reports Staff consisted of 29 professionals,
17 "on loan" from the Departments of State. 'Val', and Navy,
and 12 full-time analysts. The cTucial element in the conception of
eRS was Souers' plan to have four fuJI-time representatives from the
Departments and the JCS who would participate in the estimates production
process and speak for the chiefs of their agencies in presenting
departmental views. The plan never developed. The departmental representatives
were eventually assigned, but they were not granted the
requisite authority for the production of coordinated intelligence.
Only one was physically stationed with CIG. The Departments' failure
to provide personnel to CIG was only the first indication of the resistance
which they posed on every level.
The military particularly resentrd having to provide a civilian
agency with military inte11igE'ncE' data. ThE' serVICes regarded this
as a breach of profE'ssionalism, and morE' importantly, believed that
civilians could not understand, let alone analyze, military intelligence
data. The intensity of the military's feelings on the issue of civilian
access is indicated by the fact that CIG could not receive information
on the capabilities and intentions of U.S. armed forces.
Almost immediately the State Department challenged eIG on the
issue of access to the President. Truman had requested that eIG provide
him with a daily intelligence summary from the Army, Navy,
and Stattl Departments. However, Secretary of State Byrnes asserted
his Department's prerogative in providing the President with foreign
policy analyses. While eIG did its summary, the State Department
continued to prepare its own daily digest. Truman received both.
The United States' first major postwar intelligence evaluation
project further revealed thE' obstruction which the Departments posed
to eIG's mission. In March 194,6, the Army, Navy, and Air Force
intelligence services WE'rE' directt'd to join with CIG "to produce the
highest possible quality of intE'lligence on thE' U.S.S.R. in the shortest
possible time." Intended to be broadly fOCUSE'd, the study began in
an atmosphere of urgency. RE'cent events had aroused alarm over the
growing belligerency of the Soviet Union and had revealed the United
States' relative ignorance of Soviet military strength in relation to
its own. •
The project was ridden with contention from the start. The military
regarded the project as their own and did not expect or want CIG to
review and process their raw intelligence materials for evaluation.
Security restrictions prevented assignment of work to interdepartmental
task forces and required that subject areas be assigned Department
by Department. Each agency Was interested in the. project
only as it served its individual purposes. For example, the Air Foree
regarded the study exclusively as a means of evaluating the U.S.S.R.'s
air capability. CIG's intended role as an adjudicator between Departments
was quickly reduced to that of an editor for independent departmental
estimates. The report was actually published in March 1948,
two years after it had ooen commi!3sioned.
In the spring of 1946 the NIA, probably at the request of Vandenberg,
authorized eIG to carry out independent research and analysis
14
"not being presently performed'~ by the other Departments. The
authorization led to a rapid increase in the size and functions of CIG's
intelligence staff. In August 1946, DCI Vandenberg established the
Office of Research and Evaluation (ORE) to replace the Central Reports
Staff, which had been responsible for correlation. ORE's functions
were manifold-the production of national current intelligence,
scientific, technical, and economic intelligence, as well as interagency
coordination for national estimates. At the same time, CIG was
granted more money and personnel, and Vandenberg took full advantage
of the opportunity to hire large numbers of people. One participant
recalled Vandenberg as saying, "If I didn't fill all the slots I
knew I'd lose them." By the end of 1946, Vandenberg took on at least
~oo people for ORE.
With its own research and analysis capability, CIG could carry out
an independent int~lligence function without having to rely on the
Departments for guidelines or for data. In effect, it made CIG an
intelligence producer, while still assuming the continuation of its role
in the production of coordinated national estimates. Yet acquisition
of an independent intelligence role meant that production would outstrip
coordinated analysis as a primary mission. Fundamentally, it
was far easier to collect and analyze data, than it had been or would be
to work with the Departments in producing coordinated analysis. In
generating its own intelligence. eIG could compete with the Departments
without the problem of departmental obstruction.
The same 1946 directive which provided the CIG with an independent
research and analysis capability also granted the CIG a
clandestine collection capability. Since the end of the war, the remnant
of the OSS clandestine collection capability rested with the Strategic
Services Unit (SSU), then in the 'War Department. In the postwar
<lismantling of ass, SSU was never intended to be more than a temporary
body. In the spring of 1946, an interdepartmental committee,
whose members had been chosen by the President, recommended that
eIG absorb SSU's functions.
The amalgamation of SSU constituted a major change in the size,
structure, and mission of CIG. Since 1945, SSU had maintained both
personnel and field station8. Seven field stations remained in North
Africa and the Near East. Equipment, codes, techniques, and communications
facilities were intact and ready to be activated.
The transfer resulted in the establishment of the Office of Special
Operations (OSO). OSO was responsible for espionage and counterespionage.
Through SSU, the CIG acquired an infusion of former ass personnel, who were experienced in both areas. From the beginning,
the data collected by OSO was highly compartmented. The
Office of Reports and Estimates did not draw on OSO for its raw
information. Overt collection remained ORE's major source of data.6
The nature and extent of the requests made to ORE contributed to
its failure to fulfill its int~nded role in national intelligence estimates.
President Truman expected and liked to receive CIG's daily summary
of international events. His known preference meant that work on the
• The acquisition of a clandestine collection capability and authorization to
carry out independent research and analysis enlarged eIG's personnel strength
considerably. As of December 1946, the total eIG staff numbered approximately
1,816. Proportionately, approximately one-third were overseas with 080. Of
those stationed in Washington, approximately half were devoted to administrative
and support functions, one-third were assigned to 080, and the remainder
to intelli~ence production,
15
Daily, as it was called, assumed priority att~mtion---every day. The
justification for the Daily as an addition to other departmental summaries
was that CIG had access to all information~unlike the Departments
that had only their own. This was not true. Between 1946 and
1949~ CIG and later CIA received almost all its current information
from State. Although CIG had been created to minimize the duplicative
efforts of the Departments, its acquisition of an independent intelligence
production capability was now contributing to the problem.
The pressures of current events and the consequent demand for information
within the government generated a constant stream of
official requests to ORE. Most were concerned with events of the
moment rather than with national intelligence, strictly defined. ORE,
in turn, tended to accept any and all external requests-from State,
from the JCS, from the NSC. As ORE attempted to satisfy the wideranging
demands of many clients, its intelligence became directed to
a working-level audience rather than to senior policymakers. As such,
it lost the influence it was intended to have. Gradually, ORE built up
a series of commitments which made it less likely and less able to direct
its efforts to estimate production.
The passage of the National Security Act in .July 1947 legislated
the changes in the Executive branch that had been under discussion
since 1945. The Act established an independent Air Force; provided
for coordination by a committee of service chiefs, the Joint Chiefs of
Staff (JCS), and a Secretary of Defense; and created the National
Security Council (NSC)! The CIG became an independent department
and was renamed the Central Intelligence Agency.
Under the Act, the CIA's mission was only loosely defined, since
efforts to thrash out the CIA's duties in specific terms would have
contributed to the tension surrounding the unification of the services.
The five general tasks assigned to the Agency were (1) to advise
the NSC on matters related to national security; (2) to make recommendations
to the NSC regarding the coordination of intelligence activities
of the Departments; (3) to correlate and evaluate intelligence
and provide for its appropriate dissemination; (4) to carry out "service
of common concern" and (5) "to perform such other functions and
duties related to intelligence affecting the national security as the
NSC will from time to time direct ...." The Act did not alter the
functions of the CIG. Clandestine collection, overt collection, production
of national current intelligence, and interagency coordination
for national estimates continued, and the personnel and internal structure
remained the same.7a
As the CIA evolved between 1947 and 1950, it never fulfilled its
estimates function, but continued to expand its independent intelligence
production. Essentially, the problems that had developed in the
CIG continued. Since its creation in 1946, incentives existed within
ORE for the production of current rather than national coordinated
T Not until the Act was amended in 1949 was provision made for a statutory
chairman for the ros or for a Depg,rtmen:t of Defense. It then took a series of
presidential reorganization decrees in the 1950's to give the Secretary of Defense
the power he was to have by the 1960's. As of 1947, the positions of the Secretary
of Defense and the DCI were not dissimilar, but the DCI was to remain a mere
coordinator.
T. For chart showing CIA organization as of 1947, see p. 96.
16
intelligence. ORE was organized into regional branches, comprised of
analysts in specialized areas, and a group of staff editors who were responsible
for reviewing and editing the branches' writing for inclusion
-in the ORE summaries. Since the President's daily summary quickly
became ORE's main priority, contributions to the summary were visible
evidence of good work. Individuals within each of the hranches
were eager to hare their material included in the Daily and Weekly
publications. To have undertaken a longer-term project would have
meant depriving oneself of a series of opportunities for quick recognition.
Thus, the route to personal advancement lay v,ith meeting the
immediate, day-to-day responsibilities of ORE. In doing so, individuals
in ORE perpetuated and contributed to the current intelligence
stranglehold.
The drive for individuals in the branches to have their material
printed and the role of the staffs in reviewing, editing and often rejecting
material for publication caused antagonism between the two
groups. The branches regarded themselves as experts in their given
fields and resented the staff's claims to editorial authority. A reor'ganization
in 1947 attempted to break down the conflict between the reviewers
and the producers but failed. By 1949, the regional branches,
in pffect, controlled the publications.
The branches' tenacious desire to maintain control over CIA publications
frustrated successive effort,s to encourage the production of
estimates. Several internal studies conducted in 1949 encouraged the
re-establishment of a separate estimates group within ORE, devoted
exclusively to the production of national estimates. The branches resisted
the proposed reorganizations. primarily because they were unwilling
to resign their prerogatives in intelligence production to an
independent estimates division.
A July 1949 study conducted by a senior ORE analyst stated that
ORE's emphasis in production had shifted "from the broad long-term
type of problem to a narrowly defined short-term type and from
the predictive to the non-predictive type." The same year a National
Security ('ouncil-sponsored study concluded that "the principle of
the authoritative NIE [National Intelligence Estimate] does not yet
have established acceptance in the government. Each department still
depends more or less on its own intelligence estimates and establishes
Its plans and policies accordingly." 8 ORE's publications provide
the best indication of its failure to execute its estimates function.
In 19·!9, ORE had eleven regular publications. Only one of these,
the ORE Special Estimate Series. addressed national intelligence
questions and was published ,vith the concurrence or dissent of the
Departments comprising the Intelligence Advisory Committee. Less
than one-tenth of ORE's products 'Yere serving the purposes for
which the Office had been created.
B. The Rrorga,nization of the Intelligence Function, 1950
Bv the time Walter Bedell Smith became DCI, it was clear that
the 'CTA's l'l'cord in providing national intelligence estimates had
fallen far short of expectation. The obstacles presented by the departmental
intelligence components, the CIA's acquisition of au-
, From t1lP Du!lPH-.Jaeksoll-('orrpa Survpy_ See p_ 17.
17
thority to carry out independent research and analysis, demands from
throughout the government for CIA analyses, and internal organizational
incentives had contributed to the failure of the coordinated
national estimates function and to ORE's current intelligence orientation.
In 1950 ORE did little more than produce its own analyses
and reports. The wholesale growth had only confused ORE's missi~
n and le.d the organization into attempting analysis in areas already
bemg servIced by other department.'"
These problems appeared more stark following the outbreak of the
Korean \Var in June 1950. Officials in the Executive branch and
members of Congress criticized the Agency for its failure to predict
more specifically the timing of the North Korean invasion of South
Korea. Immediately after his appointment as DCI in October 1950,
Smith discovered that the Agency had no current coordinated estimate
of the situation in Korea. Under the pressure of war, demands for
information were proliferating, and it was apparent that ORE could
not meet those demands.
The immediacy of the war and the influence of \Villiam H. Jackson,
who served with him as Deputy Director for Central Intelligence
(DDCI), convinced Smith of the necessity for changes. After
taking office, Smith and Jackson defined three major problems in
the execution of the CIA's intelligence mission: the need to ensure
consistent, systematic production of estimates; the need to
strengthen the position of the DCI relative to the departmental intelligence
components; and the need to delineate more clearly CIA's
research and analysis function. Within three months the two men
had redefined the position of the DCI; had established the Office
of National Estimates, whose sole task was the production of
coordinated "national estimates"; and had limited the Agency's independent
research and analysis to economic research on the "Soviet
Bloc" nations. Nevertheless, these sweeping changes and the strength
of leadership which Smith and Jackson provided did not resolve the
fundamental problems of jurisdictional conflicts among departments,
duplication, and definition of a consumer market continued.
Jackson, a New York attorney and investment banker, had gained
insight into the intelligence function through wartime service with
Army intelligence and through his participation in the DullesJackson-
Correa Survey.9 Commissioned by the National Security
Council in 1948, the Survey examined the U.S. intelligence establishment,
focusing principally on the CIA. The report enumerated the
problems in the Agency's execution of both its intelligence and operational
missions, and made recommendations for reorganization. Virtually
all of the changes which Smith made during his term were
drawn from the Survey in which .Tackson participated.10
Sa For chart showing CIA organization as of 1950 prior to the reorganization
and including the clandestine operational component discussed on pp. 25 ff., See
p, 97-
• Matthias Correa, a New York lawyer and a wartime assistant to Secretary
Forrestal, was not an active participant in the Survey. Allen W. Dulles, later
to become DCI, and Jackson were its principal executors.
,. There is some indication that Jackson assumed his position with the understanding
that he and Smith would act 011 the Survl'~"s recolllllll'ndation;;,
18
The lAO and the Office of National Estimates
In an August 1950 memorandum to Smith, CIA General Counsel
L~wrence R. Houston stressed that the Intelligence Advisory CommIttee
had assumed an advisory role to the NSC and functioned as a
supervisory body for the DCI-eontrary to the initial intention.lOa The
lAC's inflated role had diminished the DCI's ability to demand departmental
cooperation for the CIA's national estimates responsibility.
Houston advised that the DCI would have to exert more specific
direction over the departmental agencies, if coordinated national intelligence
production was to be achieved. Smith acted on Houston's
advice and informed the members of the lAC that he would not submit
to their direction. At the same time, Smith encouraged their
participation in the discussion and approval of intelligence estimates.
Basically, Smith cultivated the good will of the lAC only to avoid
open conflict. His extensive contacts at the senior military level and
his pervasive prestige freed him from reliance on the lAC to accomplish
his ends.
Smith's real attempt to establish an ongoing process for the oroduction
of national estimates focused on the Office of National Estimates
(ONE). At the time Smith and .Jackson took office, there were at least
five separate proposals for remedial action in ORE, all of which recommended
the establishment of a separate, independent office for the
production of national estimates.ll Jackson himself had been the
strongest ndvocate of such an office during his participation in the
Dulles-.Jackson-Correa Survey, and he was prepared to act quickly
to implement a separation of the re:earch and reporting function from
the estimates function. As a first step, ORE was dismantled.
To organize the Office of National Estimates, Smith called on
'William Langer, the Harvard historian who had directed the Research
and Analysis Branch of OSS during the war. In addition to
his intellectual capacities, Langer possessed the bureaucratic savvy
and personal dynamism to carry out the concept of ONE. He was
determined to keep the organization small and loosely run to avoid
bureaucratic antagonisms.J 2
As organized in 1950, the Office of National Estimates had two
components, a group of staff members who drafted the estimates and
a senior body, known as the Board, who reviewed the estimates and
coordinated 'the intelligence judgments of the several Departments.
.Jackson envisioned the Board members as "men of affairs," experienced
in government and int~rnational relations who could make
sa~!e, pragmatic contributions to the work of the analysts. At first all
stafi' members were generalists, expected to write on any subject, but
gradually the staff broke down into generalists, who wrote the estimates
and regional specialists, who provided expert assistance.
'Vith the help of recommendations from Ludwell Montague, an
historian and a senior ORE analyst, and others, Langer personally
selected each of the O~E staff members, most of whom were drawn
10. See p. 25 for more diseussion of the Intelligence Advising Committee.
11 The individuals who advanced the recommendation included John Dross of
the Office of Policy Coordination, General Magruder of SSD, Ludwell Montague
of ORJ<J. and 'William ,Jackson in the Dulles-Jackson-Correa Survey,
12 Oue storr, perhaps apocryphal. has Bedell Smith offering Langer 200 slots
for OXE, to which Langer snapped hack, "I can do it with twenty-five,"
19
from ORE. ny the end of Xovember. OXE had a staff of fifty professionals.
SeHn Board members were also hired. They included four
historians. one fornlPr combat commander, and one lawyer.'3
As a cOl'l'ective to what he regarded as the disproportionate number
of academics on the Board, .Jackson devised the idea of an outside
panel of consultants who had wide experience in public affairs and
who could bring their practical expertise to bear on clraft estimates.
In 19i1O the "Princeton consultants".14 as the' came to be called. included
George F. Kennan. Hamiltoll Fish Armstrong, the editor of
Foreign Affairs, and Vannevar Bush, the atomic scientist.'5
As OXE was conceived in 1950. it ,,'as to he entirely dependent on
departmental contributions for research support. Although Langer
found the arrangement somewhat unsatisfactory for the predictable
reasons and considered prO\'iding aXE with its own research capability,
the practice continued. HowHer, as a result of the CIA's
gradual development of its own independent research capabilities over
tho .next twenty Fars. aXE increasingly relied on CIA resources.
The shift in OXE's sourcrs meant that the initial draft estimates-the
estimates over which the Departl1wnts negotiated-became more CIA
products than interdepartmental products.
The process of coordinating thr Departmrnts' judgments ,,'as not
easy. A major problem mlS the nature of lAC representation and
interaction between the lAC' and thr Hoard. At first. the lAC members
as senior officers in their respeetivr agrncies ,vere too removed
from the subjects treated in the estimatrs to provide substantive discussions.
An attempt to have the Board meet with lower-ranking
officers meant that these officers ,vere not close enough to the poEe."
level to make departmental decisions. This problem of substantive
backgronnd vs. dpcisionmaking authority ,vas nevpr really rpsolved
and resulted in a prolonged npgotiating proeess.
Almost immediatrlv the militarv challenged aXE on the nature of
the estimates. demanding that 'they bp ~ factual and descriptive.
~rontague. howr\'er. insisted that they br problem-oriented in order
to satisfy the nep(ls of the XSc. Jaek;,:on. Langer, ~rontagueand others
viewed the NIEs as providing senior policymakers with essential
information on existing problems.
ONE's link to policymakers existed through the NSC, where meetings
opened with a briefing by the DCI. Bedell Smith's regular attendance
and his personal stature meant that the Agency was at least
listened to when briefings were presented. Former members of ONE
have said that this was a period when they felt their work really was
making its way to the senior level and being used. The precise way in
13 Thp hil'torianl': Hherman Kpnt, Ludwell )Ionta~lle. DeForrest Van Slyek.
and Raymond Honta~. Gpneral Clarenep Huplmer. retired TJ.H. Commander of all
r.H. forepl' in I'~llrtlpe, reprpspnted tllP military. )Iaxwell }<'oster. a Roston
lawyer, and Calvin Hoover. a professor of economics at Duke University, were
tIll' otht>r two llIl.'mhers. Roth rt'Sig"Iled within a few IJlonth~, however.
,. They met at tile Gun Club at Princeton University.
" O:\,E'I' praeticp of 1ll'in~ an outside ~rOllp of st>nior consultants for key estimates
continued into the 1960's, although the conl'ultants' contribution became
less sllhst;\lltial as till' OXE analysts developed depth of background and underI'tan(
1in~ in their rt>l'pective fieldl'.
20
which these NIEs were used is unclear. Between 1950 and 1952 ONE's
major effort dominated by production of estimates related to the Korea
'Val', particularly those involving analyses of Soviet intentions.
T he Office of Research and Reports
The estimates problem was only symptomatic of the Agency's
broader difficulties in intelligence production. By 1950 ORE had
become a directionless service organization, attempting to answer requirements
levied by all agencies related to all manner of subjectspolitics,
economics, science, technology. ORE's publications took the
form of "backgrounders," country studies, surveys, and an occasional
estimate. In attempting to do everything, it was contributing almost
nothing. On November 13, 1950, the same order that created ONE also
renamed ORE the Office of Research and Reports (ORR), and redefined
the Agency's independent intelligence prOduction mission.
The Dulles-Jackson-Correa Survey had recommended that out of
ORE a division be created to perform research services in fields
of common concern that might be usefully performed centrally.
Specificallv, the report suggested the fields of science, technology, and
economics: The report pointedly excluded political research, which it
regarded as the exclusive domain of the State Department's Office of
Inh'lligence Research. Once again, having participated in the Survey
group, Jackson was disposed to implement its recommendations.
The issue of responsibility for political research had been a source
of contention between ORE and State, which objected to the Agency's
use of its data to publish "Agency" summations on subjects which
State believed were appropriately its own and which were covered
in State's own publications. Jackson had already accepted State's
claims and was more than willing to concede both the political researrh
and coordination functions~to the Department. In return, the
Office of Research and Reports was to have responsibility for economic
research on the "Soviet Bloc."
There were three components of ORR: the Basic Intelligence Division
and Map Division, both of which were maintained intact from
ORE, and the newly created Economic Research Area (ERA). Basic
Intelligence had no research function. It consisted of a coordinating
and editing staff in charge of the production of National Intelligence
Surveys. compendia of descriptive information on nearly every country
in the world, which were of primary interest to war planning
agencies.'6 The Map Division consisted of geographers and cartographers.
most of whom were veterans of OSS. As the only foreign map
spec!alists in the go\'ernment, the division provided government-wide
serVIces.
The Economic Research Area became the focus of the Agency's
research and analysis effort, and the Agency's development of this
capability had a major impact on military and strategic analvsis
of the Soviet Fnion in the decade of the 1950·s. ERA benefitted
enormously from Jackson's appointment of Max Millikan as Assistant
Director of ORR. A professor of economics at the Massachusetts Institute
of Technology. Millikan had participated in the Office of Price
1. ORE had assumed this function in 1948.
21
Administration and War Shipping Administration during the war
and later served in the State Department's Office of Intelligence
Research.
Millikan came to ORR in .January 1951 and devoted his exclusive
attention to organizing ORR's economic intelligence effort. He divided
ERA into five areas: Materials, Industrial, StratBgic. Economic
Services. and Economic Analysis, and embarked on an extensive
recruitment program among graduate students in corresponding
specialties. In .July 1951, ORR personnel numbered 461, including the
Map and Basic Intelligence Divisions and some ORE personnel who
had been retained. By .January 1952. when Millikan left to return
to MIT, ORR's strength had increased to 654, with all of that growth
in ERA. ORR continued to grow, and in February 1953, it employed
766 persons.
This remarkable and perhaps excessive escalation was a result of
the redefinition of the Agency's research and analysis mission and the
immediate pressures of the Korean \Var. Although the Agency was
limited to economic research, its intelligence had to service virtually
all levels of consumers. Unlike ONE, ORR's intelligence was never
intended to be directed to senior policymakers alone. Instead, ORR
was to respond to the requests of senior and middle-level officials
throughout the government, as well as serving a coordinating function.
The breadth of ORR's clientele practically insured its size. In
addition, the fact that ORR was created at the height of the Korean
War, when the pressure for information was at a consistent peak,
and when budgetary constraints were minimal, meant that personnel
increases could be justified as essential to meet the intelligence needs
of the war. After the war there was no effort to reduce the personnel
strength.
Despite ORR's agreement with State regarding jurisdiction for
political and economic intelligence, there remained in 1951 twentyfour
government departments and agencies producing economic intelligence.
Part of ORR's charge was to coordinate production on the
"Soviet Bloc." In May 1951 the Economic Intelligence Committee
(EIC) was created as a subcommittee of the lAC. With interdepartmental
representation, the EIC, under the chairmanship of the Assistant
Director, ORR, was to insure that priority areas were established
among the agencies and that, wherever possible, duplication was
avoided.17 The EIC also had a publication function. It was to produce
reports providing "the best available foreign economic intBlligence"
from U.S. Government agencies. The EIC papers were drafted in ORR
and put through the EIC machinery in much the same way that
ONE produced NIEs. Because of ORR's emerging expertise in economic
intelligence, it was able to exert a dominant role in the coordination
process and more importantly, on the substance of EIC
publications.
The Agency's assumption of the economic research function and the
subsequent creation of the EIC is a prime example of the ill-founded
attempts to exert control over the departmental intelligence components.
While the Agency was given primary responsibility for eco-
"The EIC included representatives from State, Army, Navy, Air Force, CIA,
and the JCS sat on the EIC.
22
nomic research on the "Soviet Bloc," other departments still retained
their own intelligence capabilities to meet what they regarded as their
specific needs. Senior officials, particularly the military, continued to
rely on their departmental staffs to provide them with information.
The EIC thus served primarily as a publication body. Yet the assignment
of a publication role to the EIC only contributed to the already
flooded intelligence paper market within the government.
The fundamental problem was one of accretion of additional functions
without dismantling existing capabilities. To assume that a second-
level committee such as the EIC would impose real control and
direction on the entrenched bureaucratic interests of twenty-four government
agencies was at best misplaced confidence and at worst foolhardy
optimism. The problem grew worse over the next decade as
developments in science and technology created a wealth of new intelligence
capabilities.
The Office of Current Intelligence
Completely contrary to its intended functions, ORE had developed
into a current intelligence producer. The Dulles-Jackson-Correa Survey
had sharply criticized CIA's duplication of current intelligence
produced by other Departments, principally State. After his appointment
as Deputy Director o,f Central Intelligence, Jackson intended
that CIA vmuld completely abandon it.<; current political intelligence
function. State's Office of Intelligence Research would have its choice
of personnel not taken into ONE and ORR, and any former ORE
staff members not chosen would leave.
In spite of Jackson's intention, all former ORE personnel stayed on.
Those who did not join State, ONE, or ORR were first reassigned the
task of publication of the Daily. Subsequently, they joined with the
small COMINT (communications intelligence) unit which had been
established in 1948 to handle raw COMINT data from the Army. The
group was renamed the Office of Current Intelligence (OCI) on J anuary
12, 1951. Drawing on COMINT and State Department information,
OCI began producing the Ourrent Intellige1We Bulletin which
replaced the Daily. As of January 1951 this was to be its only function-
eollating data for the daily CIA publication.
Internal demands soon developed for the Agency to engage in cur- ,
rent political research. Immediately following the disbandment of
CIA's current politicial intelligence functions, the Agency's clandestine
components insisted on CIA-originated research support. They
feared that the security of their operations would be jeopardized
by having to rely on the State Department. As a result of their requests,
OCI developed into an independent political research organization.
Although OCI began by providing research support only
to the Agency's clandestine components, it gradually extended its intelligence
function to service the requests of other Departments. Thus,
the personnel which Jackson never intended to rehire and the organ~
zation wh!ch was not to exist had survived and reacquired its preVIOUS
functlon.
The Office of Scientific Intelligence
The Office of Scientific Intelligence (OSI) had been created in 1949,
and like other CIA components, had confronted military resistance
23
to the execution of its coordination role.'s OSPs real conflict with the
military lay with the division 0,£ responsibility for the production of
scientific and technical intelligence. The chief issue was the distinction
between intelligence relating to weapons and means of warfare already
reduced to known prototypes and intelligence at the pilot-plant stage,
anterior to prototypes. The military resisted OS1's intrusion into the
first area and fundamentally, wished to restrict OSI to research in the
basic sciences.
In August 1952 the military succeeded in making the distinction in
an agreement which stipulated that the services would have primary
responsibility for the production of intelligence on all weapons,
weapons systems, military equipment and techniques in addition to
intelligence on research and development leading to new military
material and techniques. OSI assumed primary responsibility for research
in the basic sciences, scientific resources and medicine. Initially,
this order had a devastating effect on the morale of OSI analysts.
They regarded the distinction which the military-had drawn as artificial,
since it did not take into account the inextri~ble links between
basic scientific research and military and weapons systems research.
Ultimately, the agreement imposed few restraints on OSI. With technological
advances in the ensuing years, OSI developed its own capability
for intelIigence on weapons systems technology and continued
to challenge the military on the issue of basic sCIence-technology
research.
The OSI-military agreement included a provision for the creation
of the Scientific Estimates Committee (SEC) which, like the EIC, was
to serve as a coordinating body as well as a publication source for interagency
scientific intelligence. Like the ErC, the SEC represented a
feeble effort at coordination and a source for yet another publication.
In January 1952, CIA's intelligence functions were grouped under
the Directorate for Intelligence (DDI). In addition to ONE, the
DDT's intelligence production components included: the Office of
Research and Reports (ORR), the Office of Scientific Intelligence
(OSI), and the Office of Current Intelligence (OCI). Collection of
overt information wus the responsibility of the Office of Operations
(00). The Office of Collection and Dissemination (OCD) engaged in
the distribution of intelligence as well as storage and retrieval of
unevaluated intelligence.
The immediate pressures for infonnation generated by the Korean
'yar resulted in continued escalation in size and intelligence produchon.
Government-wide demanns for the Agency to provide information
on Communist intentions in the Far East iwd around the world
iustified the increases. By the rnd of 1953 DDI personnel numbered
~,338. Despite the sweeping changes, the fundamental problem of
duplication among the Agency and the Departments remained. Smith
and .Jackson had painstakingly redefined the Agency's intelligence
f~ctions, ye~ the AgencJ:'s position among the departmental intellIgence
sel'VICeS was stilI at the mercy of other intelligence
produc,ers.
180SI's creation was prompted by the Dulles-Jackson-Correa Survey's evaluation
of the poor state of scientific intelligence in the CIA.
24
C. Departmental Intelligence Activities
Apart from their role in the production of coordinated national
estimates CIG and CIA were intended to exercise some direction over
the intelligence activities of the State Department and the militarydetermining
which collection and production functions would most
appropriately and most efficiently be conducted by which Departments
to avoid duplication.
The intention of CIA's responsibility in this area was essentially
a management function. The extent to ,vhich Souers, Hillenkoetter,
Vandenberg and Bedell Smith saw this as a primary role is difficult
to determine. Each DCI was concerned with extracting the cooperation
of the Departments in the production of national intelligence.
That ,vas a difficult enough task.
A major problem related to the coordination of departmental
activities was the role of the Director of Central Intelligence, specifically
his relationship to the military intelligence chiefs. The Director
had no designated authority over either the departmental intelligence
components or over' the departmental intelligence chiefs.18a Thus, he
('fmld not exert any real pressurp on behalf of the Agency and its
objrctives. Confronted with objections or a challenge from the Army
n-2 chief, for example, the Director had no basis on which to press his
argnmrnts OI' preferences except in terms of the Agency's overall
mission. This give him little or no leverage, for the intelligence chiefs
could appeal to their Department heads, who served as the Del's
supervisors. The military chiefs of intelligence and the military staffs
flcted in a way which assumed that the DrI was one among equalsor
less.
By the end of his term Vandenberg had become convinced that the
only means by which CIG conld accomplish its coordination mission
,"as through control of the departmental intelligence agencies. Apnroaching
the Intelligence Advisory Board, Vandenberg asked that
they grant the DCI authority to act as "executive agent" for the departmental
secretaries in matters related to intelligence. In effect, the
DCI was to be given authority for supervision of the departmental
intelligence components. The lAB approved Vandenberg's request
llnd drafted an agreement providing for the DCl's increased authority.
Hm"l""ever, Hillenkoetter preferred not to press for its enactment
and instead, hoped to rely on day-to-day cooperation, By failing
to act on Vandenberg's initiatiYe. Hillenkoetter undermined the position
of the DCI in relation to the Departments.
Consideration of the 1947 National Security Act by the C{)ngress
was accompanied by active deliberation in the Executive about the
newly constituted Central Intelligence Agency. The DCI's relationship
to the departmental intelligence components, the Departments'
authority over the Agency, and the Departments' roles in the production
of national intelligence continued to be sources of contention.
The fundamental issue remained one of control and jurisdiction: how
much would the CIA gain and how much would the Departments be
Irilling to concede?
to. Through the 1947 Act the DCI was granted the right to "inspect" the intelligence
components of the Departments, but the bureaucratic value of that right
was limited and DCIs ha"e traditionally not invoked it.
25
As the bill took shape, the Departments resented the DCI's stated
role as intelligence advisor to the NSC, thereby responsible to the
President. The military intelligence chiefs, Inglis of the Navy and
Chamberlin of the Army, favored continuation of the Intelligence
Advisory Board. They advocated providing it with authority to grant
approval or dissent for recommendations before they reached the NSC.
If enacted, this arrangement would have given the Departments veto
power over the Agency and, in effect, would have made the lAB the
advisory body to the NSC.
Robert Lovett, Acting Secretary of State, made a similar recommendation.
He proposed an advisory board to insure "prior consideration
by the chiefs of the intelligence services" for matters scheduled
to go before the NSC. The positions of both Lovett and the military
reflected the reluctance of the Departments to give the CIA the primary
intelligence advisory role for senior policymakers.
More specifically, the Departments themselves resisted conceding a
direct relationship between the President and the DCI. Such an arrangement
was perceived as limiting and threatening the Secretaries'
own advisory relationships to the President.
Between 1946 and 1947, in an effort to curb the independence of the
DCI, the military considered succ~ive pieces of legislation restricting
the Director's position to military careerists. Whether the attempted
legislation was prompted by the concern over civilian access
to military intelligence or by a desire to gain control of the Agency
is unknown. In either case, the Departments were tenaciously protecting
what they perceived to be their best interests.
In spite of continued resistance by the Departments the National
Security Act affirmed the CIA's role in coordinating the intelligence
activities of the State Department and the military. In 1947 the Intelligence
Advisory Committee (lAC) was created to serve as a coordinating
body in establishing intelligence requirements 19 among the
Departments. Chaired by the DCI, the lAC included representativc."J
from the Department of State, Army, Air Force, the Joint Chiefs of
Staff, and the Atomic Energy Commission.20 Although the DCI was
to "establish priorities" for intelligence collection and analysis, he
did not have the budgetary or administrative authority to control the
departmental components. Moreover, no Department was willing to
compromise what it perceived as its own intelligence needs to meet
the collective needs of policymakers as defined by the DCI.
V. OlMulestine Aetilvities
A. Origins of Covert Action
The concept of a central intelligence agency developed out of a concern
for the quality of intelligence analysis available to policymakers.
The 1945 discussion which surrounded the creation of CIG focused
on the problem of intelligence coordination. Two years later debates
on the CIA in the Congress and the Executive assumed only the coordination
role along with intelligence collection (both overt and
clandestine) and analysis for the newly constituted Agency.
,. Requirements constitute the informational objectives of intelligence collection,
e.g., in 1947 determining Soviet troop strengths in Eastern Europe.
20 Note: With the creation of the CIA and NIA and the lAB were dissolved.
26
Yet, within one year of the passage of the National Security Act,
the CIA was charged with the conduct of covert psychological, political,
paramilitary, and economic activities,2l The acquisition of this
mission had a profound impact on the direction of the Agency and
on its relative stature within the government.
The precedent for covert activities existed in OSS. The clandestine
collection capability had been preserved through the Strategic Services
Unit, whose responsibilities CIG absorbed in June 1946. The
maintenance of that capability and its presence in CIA contributed to
the Agency's ultimate assumption of a covert operational role.
The United States, initiation of covert operations is usually associated
with the 1948 Western European elections. It is true that this was
the first officially recorded evidence of U.S. covert political intervention
abroad. However, American policymakers had formulated plans for
covert action-at first covert psychological action-much earlier. Decisions
regarding U.S. sponsorship of clandestine activities were gradual
but consistent, spurred on by the growing concern over Soviet
intentions.
By late 1946, cabinet officials were preoccupied with the Soviet
threat. and over the next year their fears intensified. For U.S. policymakers.
international events seemed to be a sequence of Soviet incursions.
In March 1946, the Soviet Union refused to withdraw its
troops from the Iranian province of Azerbaijan; two months later
civil war involving Communist rebel forces erupted in Greece. By 1947,
Communists had assumed power in Poland, Hungary, and Rumania;
and in the Phillipines the government was under attack by the Hukbalahaps,
a communist-led guerrilla group.
For U.S. officials, the perception of the Soviet Union as a global
threat demanded new modes of conduct in foreign policy to supplement
the traditional alternatives of diplomacy and war. Massive economic
aid represented one new method of achieving U.S. foreign policy
objectives. In 1947, the United States embarked on an unprecedented
economic assistance program to Europe with the Truman Doctrine
and the Marshall Plan. By insuring economic stability, U.S. officials
hoped to limit Soviet encroachments. Covert operations represented
another. more activist departure in the conduct of U.S. peacetime foreign
policy. Covert action ,vas an option that was something more
than diplomacy but still short of war. As such, it held the promise of
frustrating Soviet ambitions without provoking open conflict.
The suggestion for the initiation of covert operations did not originate
in CIG. Sometime in late 1946, Secretary of War Robert Patterson
suggested to Fonestal that military and civilian personnel study this
form of war for future use. What prompted Patterson's suggestion is
unclear. However, from Patterson's suggestion policymakers proceeded
to consider the lines of authority for the conduct of psychological
operations. Discussion took place in the State-War-Navy Coordinating
Committee (SWNCC), whose members included the Secretaries of the
21 Psychological operations were primarily media-related actiVities, including
unattributed publications, forgeries, and subsidization of publications; political
action involved exploitation of dispossessed persons and defectors, and support
to political parties; paramilitary activities included support to guerrillas and
sabotage; economic activities consisted of monetary operations.
27
three Depaltments, Byrnes, Patterson and Forresta}.22 In December
1946, a SWNCC subcommittee formulated guidelines for the conduct
of psychological warfare in peacetime and wartime.23 The full
SWNCC adopted the recommendation later that month.
Discussion continued within the Executive in the spring and summer
of 1947. From all indications, only senior-level officials were involved,
and the discussions were closely held. From establishing guidelines for
the possibility of psychological warfare, policymakers proceeded to
contingency planning. On April 30, 1947, a SWNCC subcommittee was
organized to consider and actually plan for a U.S. psychological warfare
effort. On June 5, 1947, the subcommittee was accorded a degree
of permanency and renamed the Special Studies and Evaluations Subcommittee.
By this time, the fact that the U.S. would engage in covert
operations was a given; what remained were decisions about the organizational
arrangements and actual implementation. Senior officials
had moved from the point of conceptualization to determination of a
specific need. Yet it is not clear whether or not they had in mind specific
activities geared to specific countries or events. .
In the fall of 1947 policymakers engaged in a series of discussions
on the assignment of responsibility for the conduct of covert operations.
There was no ready consensus and a variety of opinions emerged.
DCI Hillenkoetter had his own views on the subject. Sometime in
October 1947 he recommended "vitally needed psychological operations"-
again in general terms without reference to specific countries
or groups--but believed that such activities were military rather than
intelligence functions and therefore belonged in an organization
responsible to the .TCS. Hillenkoetter also believed congressional authorization
would be necessary both for the initiation of psycholog-ical
warfare and for the expenditure of funds for that purpose. Whatever
Hillenkoetter's views on the appropriate authorization for a psychological
warfare function, his opinions ,vere undoubtedly influenced by
the difficulties he had experienced in dealing with the Departments.
It is likely that he feared CIA's acquisition of an operational capability
would precipitate similar problems of departmental claims on
the Agency's operational functions. Hillenkoetter's stated preferences
had no apparent impact on the outcome of the psychological warfare
debate.
Within a few weeks of Hillenkoetter's statement, Forrestal, the Secretaries
of the Army, Navy, and Air Force, along with the JOS, advanced
their recommendations regarding the appropriate organization
to conduct covert psychological warfare. In a proposal dated
November 4, they held that propaganda of all kinds was a function of
the State Department and that an Assistant Secretary of State in
consultation with the DCI and a military representative should be
responsible for the operations.
.. SWNCC was established late in 1944 as an initial attempt at more centralizI'd
dl'cisionmaking.
.. In peacetime. psychological warfare would be directed by an interdepartmental
subcommittee of SWNCC with the approval of the JCS and the National
Intelligence Authority. During war, a Director of Psychological Warfare would
assume primary responsibility under a central committee ,responsible to the
President. The eommittee would consist of representatives from the SWNCC
find from eIG.
70-72 5 0 - 76 - 3
28
On Ko\'ember 24, President Truman approved the November 4- recommendation,
assigning psychological warfare coordination to the
Secretary of State. "Within three weeks, the decision was reversed.
Despite the weight of numbers favoring State Department control,
the objections of Secretary of State George Marshall eliminated the
option advanced by the other Secretaries. Marshall opposed State
Departllwnt responsibility for covert action. He was vehement on the
point and believed that such activities, if exposed as State Department
actions, would embarrass the Department and discredit American
foreign policy both short-term and long-term.
Apart from his position as Secretary of State, the impact of Marshall's
argument derived from the more general influence he exerted
at the time. ~farshall had emerged from the war as one of America's
"silent heroes." To the public, he was a quiet, taciturn, almost unimpressive
figure, but as the Army Chief of Staff during the war, he
had gained the universal respect of his civilian and military colleagues
for his commitment, personal integrity, and ability.
In the transition from military officer to diplomat, he had developed
a strong sense that the United States would have to adopt an activist
role against the Soviet Union. Immediatdy after his appointment as
Secretary in February 1947, he played a key role in the decision to aid
Greece and Turkey and quickly aft~r, in June 1947, announced the
sweeping European economic recovery program which bore his name.
It was out of concern for the success and credibility of the United
States' recently articulated economic program that Marshall objected
to State Department conduct of covert action. Marshall favored placing
covert activities outside the Department, but still subject to guidance
from the Secretary of Stat~.
Marshall's objections prevailed, and on December 14 the National
Security Council adopted NSC 4/A, a directive which gave the CIA
responsibility for covert psychological operations. The DCI was
charged with ensuring that psychological operations were consistent
with U.S. foreign policy and overt foreign information activities. On
December 22 the Special Procedures Group was established within the
C1.\'s Office of Special Operations to carry out psychological
operations.
Although Marshall's position prevented State from conducting psychological
warfare, it does not explain why the CIA was charged with
the responsibility. The debate which ensued in 1947 aft~r the agreement
on the need for psycholo¢cal warfare had focused on control and
responsibility. At issue were the questions of who would plan, direct,
and oversee the actual operations.
State and the military wanted to maintain control over covert
psychological operations. but they did not want to assume operational
responsibility. The sensitive nature of the operations made the Departments
fear exposure of their association with the activities. The
CIA offered advantages as the organization to execute covert operations.
Indeed. in 1947 one-third of the CIA's personnel had served with
OSS. The presence of former OSS personnel, who had experience
in wartime operations. provided the Agency with a group of individuals
lvho could quickly develop and implement programs. This,
coupled with its overseas logistical apparatus, gave th~ Agency
a ready {'apability. In addition, the Agency also possessed a system
29
of unvouchered funds for its clandestine collection mission, which
meant that there was no need to approach Congress for separate appropriations.
,Vith the Departments unwilling tp assume the risks
involn>d in covert activities, the CIA provided a convenient
IllPchanism.
During the next six months psychological operations were initiated
in Central and Eastern Europe. The activities were both limited and
amateur and consisted of unattributed publications, radio broadcasts,
and blackmail. By 1948 the Special Procedures Group had acquired
a radio transmitter for broadcasting behind the Iron Curtain, had
established a secret propaganda printing plant in Germany, and had
hegun assembling a fleet of balloons to drop propaganda materials into
Eastern European countries.
Both internally and externally the pressure continued for an
expansion in the scope of U.S. covert activity. The initial definition
of covert action had been limited to covert psychological warfare. In
May 1948, George F. Kennan, Director of the State Department's
Policy Planning Staff, advocated the development of a covert political
action capability. The distinction at that time was an important and
real one. Political action meant direct intervention in the electoral
processes of foreign governments rather than attempts to influence
public opinion through media activities.
International events gave force to Kennan's proposal. In February
1948, Communists staged a successful coup in Czechoslovakia. At
the same time, France and Italy were beleaguered by a wave of Communist-
inspired strikes. In March 1948, near hysteria gripped the
U.S. Government with the so-called "war scare." The crisis was precipitated
by a cable from General Lucius Clay, Commander in Chief,
European Command, to Lt. General Stephen .T. Chamberlin, Director
of Intelligence, Army General Staff, in which Clay said, "I have
felt a subtle change in Soviet attitude which I cannot define but which
now gives me a feeling that it [war] may come with dramatic
suddenness."
The war scare launched a series of interdepartmental intelligence
estimates on the likelihood of a Soviet attack on Western Europe
and the United States. Although the estimates concluded that there
was no evidence that the F.S.S.R. would start a war, Clay's cable had
articulated the degree of suspicion and outright fear of the Soviet
Union that was shared by policymakers at this time. Kennan proposed
that State, specifically the Policy Planning Staff, have a "directorate"
for overt and covert political warfare. The director of the
Special Studies Group, as Kennan namerl it. woulrl be under State
Department control, but not formally associated with the Department.
Instead. he would have concealed funds and personnel elsewhere, and
his small staff of eight people would 00 comprised of representatives
from State and Defense.
Kennan's concept and stat~ment of function were endorsed by the
NSC. In June 1948, one month after his proposal, the NSC adopted
NSC 10/2, a directive authorizing a dramatic increase in the range of
covert operations directed against the Soviet Union. including political
warfare. economic warfare, and paramilitary activities.
30
·While authorizing a sweeping expansion in covert activities, NSC
10/2 established the Office of Special Projects, soon renamed the Office
of Policy Coordination (OPC), within the CIA to replace the Special
Procedures Group. As a CIA component OPC was an anomaly. OPC's
budget and personnel were appropriated within CIA allocations, but
the DCI had little authority in determining OPC's activities. Responsibility
for the direction of ope l'Psted with the Office's director. designated
by the Secretary of State. Policy guidance-dpcisiolls on the
need for specific activities----eame to the OPC director from State and
Defense, bypassing the DCI.
The organizational arrangements established in 1948 for the conduct
of covert operations reflected both the concept of covert action as defined
by U.S. officials and the perception of the CIA as an institution.
Both the activities and the institution were regarded as extensions of
State and the military services. The Departments (essentially the
NSC) defined U.S. policy objectives; covert action represented one
means of attaining those objectives; and the CIA executed the operations.
In a conversation on August 12, 1948, Hillenkoetter, Kennan, and
Sidney Souers discussed the implementation of NSC 10/A. The summary
of the conversation reveals policymakers firm expectation that
('o\,prt political action wouM f'erve strictly as a support function for r.s. foreign and military policy and that State and the services would
define the scope of covert activities in specific terms. The summaries
of the participants' statements as cited in a CIA history bear quoting
at length:
Mr. Kennan made the point that as the State Department's
designated representative he would want to have specific
knowledge of the objectives of every operation and also of
the procedures and methods employed in all cases where those
procedures and methods involved political decisions.
Mr. Souers indicated his agreement with Mr. Kennan's
thesis and stated specifically that it has been the intention of
the National Security Council in preparing the document
that it should reflect the recognition of the principle that the
Departments of State and the National Military Establishment
are responsible for the conduct of the activities of the
Office of Special Projects, with the Department of State taking
preeminence in time of peace and the National Military
Establishment succeeding the pre-eminent position in wartime.
Admiral Hillenkoetter agreed with Mr. Kennan's statement
that the political warfare activity should be conducted
as an instrument of U.S. foreign policy and subject in peacetime
to direct guidance by the State Department.
Mr. Kennan agreed that it was necessary that the State
Department assume responsibility for stating whether or not
individual projects are politically desirable and stated that
l1:S the State Department's designated representative he would
be accountable for providing such decisions.
Likewise. reflecting on his intentions and those of his colleagues in
1948, Kennan recently stated:
31
we were alarmed at the inroads of the Russian influence
in 'Western Europe beyond the point where the Russian troops
had reached. And we were alarmed particularly over the situation
in France and Italy. 1Ve felt that the Communists were
using the very extensive funds that they then had in hand
to gain control of key elements of life in France and Italy,
particularly the publishing companies, the press, the labor
unions, student organizations, women's organizations, and all
sort of organizations of that sort to gain control of them and
use them as front organizations. . . .
That was just one example that I recall of why we thought
that we ought to have some facility for covert
operations. . . .
... It ended up with the establishment within CIA of a
branch, an office for activities of this nature, and one which
employed a great many people. It did not work out at all the
way I had conceived it or others of my associates in the Department
of State. We had thought'that this would be a
facility which could be used when and if an occasion arose
when it might be needed. There might be years when we
wouldn't have to do anything like this. But if the occasion
arose we wanted somebody in the Government who would
have the funds, the experience, the expertise to do these things
and to do them in a proper way.24
Clearly, in recommending the development of a covert action capability
in 1948, policymakers intended to make available a small contingency
force that could mount operations on a limited basis. Senior
officials did not plan to develop large-scale continuing covert operations.
Instead, they hoped to establish a small capability that could be
activated at their discretion.
B. The Office of Policy Ooordination, 1948-1952
OPC developed into a far different organization from that envisioned
by Forrestal, Marshall, and Kennan in August 1948. By 1952, when it
merged with the Agency's clandestine collection component, the Office
of Special Operations, OPC had expanded its activities to include
worldwide covert operations, and it had achieved an institutional independence
that was unimaginable at the time of its inception.
The outbreak of the Korean War in the summer of 1950 had a significant
effect on OPC. Following the North Korean invasion of South
Korea, the State Department as well as the Joint Chiefs of Staff
recommended the initiation of paramilitary activities in Korea and
China. OPC's participation in the war effo'rt contributed to its transformation
from an organization that was to provide the capability for
a limited number of ad hoc operations to an organization that conducted
continuing, ongoing activities on a massive scale. In concept,
manpower, budget, and scope of activities, OPC simply skyrocketed.
The comparative figures for 1949 and 1952 are 'staggering. In 1949
OPC's total personnel strength was 302; in 1952 it was 2,812 plus 3,142
overseas contract personnel. In 1949 OPC's budget figure was $4,'700"
000; in 1952 it was $82,000,000. In 1949 OPC had personnel assigned
.. GeorgI:' F. Kennan testimony, October 28, 1975, pp. 8-10.
32
to seven overseas stations; in 1952 OPO had personnel at forty-seven
stations.
Apart from the impetus provided by the Korean ·War several other
factors converged to alter the nature and scale of OPO's activities.
First, policy direction took the form of condoning and fostering
activity without providing scrutiny and control. Officials throughout
the government regarded the Soviet Union as an aggressive force,
and OPC's activities were initiat€d and justified on the basis of this
shared perception. The series of NSC directives which authorized
covert operations laid out broad objectives and stated in bold terms
the necessity for meeting the Soviet challenge head on. After the first
19.,18 directive authorizing covert action, subsequent directives in 1950
and 1951 called for an intensification of these activities without establishing
firm guidelines for approval.
On April 14, 1950, the National Security Council issued NSC 68,
which called for a non-military counter-offensive against the U.S.S.R.,
including covert economic, political, and psychological warfare to
stir up unrest and revolt in the satellite countries. A memo written
in November 1951 commented on the fact that such broad and comprehensive
undertakings as delineated by the NSC could only be
accomplished by the establishment of a worldwide structure for covert
operations on a much grander scale than OPC had previously contemplated.
The memo stated:
It would be a task similar in concept, magnitude and complexity
to the creation of widely deployed military forces
together with the logistical support required to conduct
manifold, complex and delicate operations in a wide variety
of overseas locations.
On October 21, 1951 NSC 10/5 replaced NSO 10/2 as the governing
directive for covert action. It once again called for an intensification
of covert action and reaffirmed the responsibility of the DCI in the
conduct of covert operations. Each of these policy directives provided
the broadest justification for large-scale covert activity.
Second, OPC operations had to meet the very different policy needs
of the State and Defense Departments. The State Department encouraged
political action and propaganda activities to support its
diplomatic objectives, while the Defense Department requested paramilitary
activities to support the Korean War effort and to counter
communist-associated guerrillas. These distinct missions required
OPC to develop and maintain different capabilities, including manpower
and support material.
The third factor contributing to ope's expansion was the organizational
arrangements that created an internal demand for projects.
The decision to undertake covert political action and to lodge that
responsibility in a group distinct from the Departments required the
creation of a permanent structure. OPC required regular funding to
train and pay :personnel, to maintain overseas stations (and provide
for the supportmg apparatus), and to carry out specific projects. That
,funding could not be provided on an ad hoc basis. It had to be budgeted
for in advance. With budgeting came the need for ongoing activities
to justify future allocation&-rather than leaving the flexibility of
responding to specific requirements.
33
To fulfill the different State and Defense requirements OPC
adopted a "project" system rather than a programmed financial system.
This meant that operations were organized around projects-individual
activities, e.g. funding to a political candidate-rather than
general programs or policy objectives, and that OPC budgeted in
terms of anticipated numbers of projects. The project system had important
internal effects. An individual within OPC judged his own
performance, and was judged by others, on the importance and number
of projects he initiated and managed. The result was competition
among individuals and among the OPC divisions to generate the
maximum number of projects. Projects remained the fundamental
units around which clandestine activities were organized, and two
generations of Agency personnel have been conditioned by this system.
The interaction among the OPC components reflected the internal
competition that the project system generated. OPC was divided between
field personnel stationed overseas and Headquarters personnel
stationed in Washington. Split into four functional staffs (dealing
with political warfare, psychological warfare, paramilitary operations
and economic warfare) and six geographical divisions, Headquarters
was to retain close control over the initiation and implementation
of projects to insure close policy coordination with State
and Defense. Field stations were to serve only as standing mechanisms
for the performance of tasks assigned from 1Vashington.
The specific relationship between the functional staffs, the geographical
divisions and the overseas stations was intended to be as follows:
1Vith guidance from the NSC, the staffs would generate project outlines
for the divisions. In turn, the divisions would provide their respective
overseas stations with detailed instructions on project action.
Very soon, however, each of the three components was attempting to
control project activities. 1Vithin the functional staffs proprietary attitudes
developed toward particular projects at the point when the
regional divisions were to take them over. The staffs were reluctant
to adopt an administrative support role with respect to the divisions
in the way that was intended. Thus, the staffs and the divisions began
to look upon each other as competitors rather than joint participants.
In November 1949 an internal study of OPC concluded that:
... the present organization makes for duplication of effort
and an extensive amount of unnecessary coordination and
competition rather than cooperation and teamwork. ...
A reorganization in 1950 attempted to rectify the problem by assigning
responsibility for planning single-country operations to the
appropriate geographical division. This meant that the divisions assumed
real operational control. The staffs were responsible for coordinating
multiple country operations as well as providing the guidance
function. In principle the staffs were to be relegated to the support role
they were intended to serve. However, the break was never complete.
The distinctions themselves were artificial, and staffs seized on their
authority o\-er multiple country activities to maintain an operational
role in such areas as labor operations. This tension between the staffs
and the divisions continued through the late 1960's as some staffs
achieved maximum operational independence. The situation is a COIDmental'}'
on the project orientation which originated with OPC and
34
the recognition that promotion and rewards were derived from project
management-not from disembodied guidance activities.
The relationship between 'Vashington and the field was subject to
pressUl'es similar to those that influenced the interaction between the
diYisions and the staffs. Predictably, field personnel began to develop
their o,,-n perspective on suitable operations and their mode?f conduct.
Being "there", field personnel could and did argue that theIrs was the
most realistic and accurate view. Gradually, as the number of overseas
personnel grew and as the number of stations increased, the stations
assumed the initiative in project development.
The regional divisions at Headquarters tended to assume an administrative
support role but still retained approval authority for
projects of particular sensitivity and cost. The shift in initiati ve first
from the staffs to the divisions, then to the stations, affected the relative
desirability of assif:,rnments. Since fulfillment of the OPC mission
was measured in terms of project development and management, the
sought-after places were those where the projects originated. Individuals
who were assigned those places rose quickly within the Directorate.
O. Policy Guidance
Responsibility for coordination with the State and Defense Departments
rested with Frank G. 1Visner, appointed Assistant Director for
Policy Coordination (ADPC) on September 1, 1948. Describeu almost
unanimously by those who worked with him as "brilliant," vVisner
possessed the operational instincts, the activist temperament, and the
sheer physical energy required to develop and establish OPC as an
organization. 'VisneI' also had the advantages of independent wealth
and professional and social contacts which he employed skillfully in
advancing OPC's position within the "Washington bureaucracy.
"'isner was born into a prominent Southern family and distinguished
himself as an undergraduate and a law student at the University
of Virginia. Following law school, vVisner joined a New York
la'v firm where he stayed for seven years. After a brief stint in the
Xavy, 'VisneI' was assigned to OSS and spent part of his time serving
under Allen Dulles in 'Viesbaden, Germany. At the end of the war
he returned to law practice, but left again in 1$)47 to accept the post
of Deputy to the Assistant Secretary of State for Occupied Areas. It
was from this position that Wisner was tapped to be ADPC.
Although the stipulation of NSC 10/2 that the Secretary of State
designate the ADPC was intended to insure the ADPC's primary identification
with State, that did not occur. "Wisner quickly developed an
institutional loyalty to OPC and its mission and drew on the web of
New York law firm connections that existed in postwar vVashington
as .,v~l~ as on his State Department ties to gain support for OPC's
actlnhes.
The guidance that State and Defense provided OPC became very
general and allowed the maximum opportunity for project development.
Approximately once a week 'VisneI' met with the desiO"nated
representatives of State and Defense. Given that Kennan h~d
been a prime mover in the establishment of ope, it was unlikely that
as the State Department's designated representative from 194:8 to 1950
he would discourage the overall direction of the organization he had
helped create. From 1948 to 1949 Defense was represented by General
35
.Joseph T. MeNarney, the former Commander of U.S. Forces in
Europe. Having stood "eyeball to eyeball" with the Russians in Germany,
McNarney was highly sympathetic to the OPC mission.
With the broad objectives laid out in NSC 10/2, the means of
implementation were left to OPC. The representatives were not an
approval body, and there was no formal mechanism whereby individual
projects had to be brought before them for discussion. Because it
was assumed that covert action would be exceptional, strict provisions
for specific project authorization were not considered necessary. With
minimal supervision from State and Defense and with a shared agreement
on the nature of the OPC mission. individuals in OPC could
take the initiative in conceiving and implementing projects. In this
context, operational tasks, personnel, money and material tended to
grow in relation to one another with little outside oversight.
In 1951, DCI Walter Bedell Smith took the initiative in requesting
more specific high-level policy direction. In May of that year, after a
review of NSC 68, Smith sought a clarification of the OPC mission
from the NSC.26 In a paper dated May 8,1951, entitled the "Scope and
Pace of Covert Operations" Smith called for NSC restatement or redetermination
of the several responsibilities and authorities involved
in U.S. covert operations. More importantly, Smith proposed that the
newly created Psychological Strategy Board provide CIA guidance
on the conduct of covert operations.21
The NSC adapted Smith's proposal making the Psychological
Strategy Board the approval body for covert action. The body that
had been responsible for exercising guidance over the CIA had receiveel
it frolll the DCI. 'Vhatevel' the dimensions of the growth in
OPC operations, the NSC had not attempted to limit the expansion.
D. OPO Activities
At the outset OPC activities were directed toward four principal
operational areas: refugee programs, labor activities, media development,
and political action. Geographically, the area of concentration
was Western Europe. There were two reasons for this. First, Western
Europe was the area deemed most vulnerable to Communist encroachment;
and second, until 1950 both CIA (OSO) and OPC were excluded
from the Far East by General Douglas MacArthur, who refused to concede
any jurisdiction to the civilian intelligence agency in the Pacific
theater-just as he had done with OSS during the war.
OPC inherited programs from both the Special Procedures Group
(SPG) and the Economic Cooperation Administration (ECA). After
the issuance 0.£ NSC 10/2 SPG turned over to OPC all of its resources,
including an unexpended budget of over $2 million, a small staff, and
its communications equipment. In addition to SPG's propaganda activities
OPC acquired the ECA's fledgling labor projects as well as
the accompanying funds. Foreign labor operations continued and be-
"" Soon after his appointment as DCI in October 1950, Smith succeeded in having
OPC placed directly under the jurisdiction of the DCI, making Wisner reo
sponsible to him mther than to the Department of State and Defense. See pp. 3738.
21 The Psychological Strategy Board (PSB) was an NSC subcommittee established
on April 4, 1951 to exercise direction over psychological warfare programs.
Its membership included departmental representatives and PSB staff members.
36
came a major focus of CIA activity on a worldwide basis throughout
the 1950's and into the mid-1960's.
The national elections in Europe in 1948 had been a primary
motivation in the establishment of OPC. By channeling funds
to center parties and developing media assets, OPC attempted to influence
election result&--with considerable success. These activitie.'3
formed the basis for covert political action for the next twenty years.
By 1952 approximately forty different covert action projects were
underway in one central European country alone. Other projects were
targeted against what was then referred to as the "Soviet bloc."
During his term in the State Department Wisner had spent much
of his time on problems involving refugees in Germany, Austria and
Trieste. In addition, his service with OSS had been oriented toward
Central Europe. The combination of State's continuing interest and
,Visner's personal experience led to OPC's immediate emphasis on
Central European refugee operations. OPC representatives made contact
with thousands of Soviet refugees and emigres for the purpose of
influencing their political leadership. The National Committee for
Free Europe, a group of prominent American businessmen, lawyers,
and philanthropists, and Radio Free Europe were products of the
OPC program.
Until 1950 OPC's paramilitary activities (also referred to as preventive
direct action) were limited to plans and preparatio~for s~aybehind
nets in the event of future war. Requested by the Jomt ChIefs
of Staff, these projected OPC operations focused, once again, on Western
Europe and were designed to support NATO forces against Soviet
attack.
The outbreak of the Korean War significantly altered the nature
of OPC's paramilitary activities as well as the organization's overall
size and capability. Between fiscal year 1950 and fiscal year 1951, OPO's
personnel strength jumped from 584 to 1531. Most of that growth took
place in paramilitary activities in the Far East. In the summer of ] 950,
following the North Korean invasion of South Korea, the State
Department requested the initiation of paramilitary and psychological
operations on the Chinese mainland. Whatever MacArthur's preferences,
the JCS were also eager for support activities in the Far East.
This marked the beginning of OPC's active paramilitary engagement.
The Korean War established OPC's and CIA's jurisdiction in the Far
East and created the basic paramilitary capability that the Agency
employed for twenty years. By 1953, the elements of that capability
were "in place"-aircraft, amphibious craft, and an experienced group
of personnel. For the next quarter century paramilitary activities remained
the major OIA covert activity in the Far East.
E. OPO Integration and tlw OPO-OSO Merger
The creation of OPC and its ambiguous relationship to the Agency
precipitated two major administrative problems, the Del's relations~
ip to OP9 and antagonism between OPO and the Agency's clande~tme
collectIon component, the Office of Special Operations. DCI
Walter Bedell Smith acted to rectify both problems.
As OPO continued to grow, Smith's predecessor, Admiral Hillenkoetter,
resented the fact that he had no management authority over
OPC, although its budget and personnel were being allocated through
37
the CIA. Hillenkoetter's clashes with the State and Defense Departments
as well as with Wisner, the Director of OPC, were frequent.
Less than a \veek after taking office Smith announced that as DCI he
would assume administrative control of OPC and that State and
Defense would channel their policy guidance through him rather than
through Wisner. On October 12, 1950, the representatives of State,
Defense and the Joint Chiefs of Staff formally accepted the change.
The ease with which the shift occurred was primarily a result of
Smith's own position of influence \vith the Departments.
OPO's anomalous position in the Agency revealed the difficulty of
maintaining two separate organizations for the execution of varying
but overlapping clandestine activities. The close "tradecraft" relationship
between clandestine collection and covert action, and the frequent
necessity for one to support the other was totally distorted with the
separation of functions in OSO and OPC. Organizational rivalry
rather than interchange dominated the relationship between the two
components.
On the operating level the conflicts were intense. Each component
had representatives conducting separate operations at each station.
Given the related missions of the two, OPC and OSO personnel were
often competing for the same agents and, not infrequently, attempting
to wrest agents from each other. In 195:3 the outright hostility between
the two organizations in Bangkok required the direct intervention of
the Assistant Director for Specia.l Operations, Lyman Kirkpatrick.
There an important official was closely tied to OPO, and OSO was
trying to lure him into its employ.
The opO-osa conflict was only partially the result of overseas
competition for assets. Salary differentials and the differences in mission
were other sources of antagonism. At the time of its creation in
1948 ope was granted liberal funding to attract personnel quickly
in order to ~et its operation underway. In addition, the burgeoning
activities enabled people, once hired, to rise rapidly. The result was
that ope personnel held higher-ranking, better-paid positions than
their OSO counterparts.
Many OSO personnel had served ,vith OSS, and their resentment
of OPO was intensified by the fact that they regarded themselves
as the intelligence "purists," the professionals who engaged
in collection rather than action and whose prewar experience
made them more knowledgeable and expert than the
OPO recruits. In particular, OSO personnel regarded OPO's highrisk
operations as a threat to the maintenance of OSO security and
cover. OPC's favored position with State and Defense, its generous
budget, and its visible ac.complishments all CDntrasted sharply with
OSO's silent, long-term objectives in espionage and counterespionage.
By June 1952 ope had overtaken OSO in personnel and budget
allocation. Soon after his appointment as DCI, Smith addressed the
problem of the OPC-OSO conflict. Lawrence Houston, the CIA's
General Counsel, had raised the issue with him and recommended a
merger of the two organizations.28 Sentiment in OSO and ope
2B The Duiles-Jackson-Correa survey had also advised a merger of OPC, 080
and the Office of Operations, the Agency's overt collection component.
38
fav<?red the principle of a merger. Lyman Kirkpatrick, the Executive
AssIstant to the DCI, Major General W. G. Wyman, Assistant Director
for Special Operations, Wisner, and 1Villiam Jackson all appeared
to have favored a merger-although there was disagreement on the
form it should take.
Between 1951 and 1952 Smith made several cosmetic changes to
foster better coordination between OPC and OSO. Among them was
the appointment of Allen W. Dulles as Deputy Director for Plans in
January 1951.29 Dulles was responsible for supervising both OPC and
OSO, although the two components were independently administered
by their own Directors. During this period of "benign coordination"
Smith consulted extensively with senior officials in OPC and OSO.
OPC's rapid growth and its institutional dynamism colored the
attitude of OSO toward a potential merger. In the discussions which
Bedell Smith held, senior OSO personnel, specifically Lyman Kirkpatrick
and Richard Helms, argued for an integration of OPC
functions under OSO control rather than an integrated chain of
command down to station level. Fundamentally, the OSO leadership
feared being engulfed by OPC in both operations and in personnel.
However, by this time Bedell Smith was committed to the idea of an
integrated structure.
Although some effort was made to combine the OSO and OPC
Western Hemisphere Divisions in June 1951, real integration at the
operations level did not occur until August 1952, when OSO and OPC
became the Directorate of Plans (DDP). Dnder this arrangement,
Wisner was named Deputy Director for Plans and assumed the
command functions of the ADSO and ADPC. Wisner's second in
command, Chief of Operations, was Richard Helms, drawn from the
OSO side to strike a balance at the senior level. At this time Dulles
replaced Jackson as DDCI.
The merger resulted in the maximum developnwnt of covert action
over clandestine collection. There were several reasons for this. First
was the orientation of Wisner himself. Wisner's OSS background and
his OPC experience had established his interests in the operational
side of clandestine activities. Second, for people in the field, rewards
came more quickly through visible operational accomplishments than
through the silent, long-term development of agents required for
clandestine collection. In the words of one former high-ranking DDP
official, "Collection is the hardest thing of all; it's much easier to plant
an article in a local newspaper."
F. Oongressional Review
The CIA was conceived and organized as an agent of the Executive
branch. Traditionally, Congress' only formal relationship to the
Agency was through the appropriations process. The concept of Congressional
oversight in the sense of scrutinizing and being fully
informed of Agency activities did not exist. The international atmosphere,
Congress relationship to the Executive branch and the Congressional
committee structure determined, the pattern of interaction
between the Agency and members of the legislature. Acceptance of the
29 Dulles had been serving as an advisor to successive DCls since 1947. Smith
and Jackson prevailed upon him to join the Agency on a full-time basis.
39
need for clandestine activities and of the need for secrecy to protect
those activities contributed to Congress' relatively unquestioning and
uncritical attitude regarding the CIA, as did the Executive branch's
ascendancy in foreign policy for nearly two decades following \Vorld
'Val' II. The strong committee system which accorded enormous power
to committee chairmen and limited the participation of less senior
members in committee business resulted in informal arrangements
whereby selected members were kept informed of Agency activities
primarily through one-to-one exchanges with the DCI.
In 1946, following a Joint Committee review Uongress enacted the
Legislative Reorganization Act which reduced the number of committees
and realigned their jurisdictions.30 The prospect of a unified military
establishment figured into the 1946 debates and decisions on Congressional
reorganization. However, Congress did not anticipate having
to deal with the CIA. This meant that after the passage of the
National Security Act in 1947 CIA affairs had to be handled within a
committee structure which had not accommodated itself to the existence
of a central intelligence agency.
In the House and Senate the Armed Services and Appropriations
Committees were granted jurisdiction over the Agency. No formal
CIA subcommittees were organized until 1956. Until then small ad
hoc groups composed of a few senior committee members reviewed the
budget, appropriated funds, and received annual briefings on CIA activities.
The DCIs kept senior committee members informed of
large-scale covert action projects at the approximate time of implementation.
There was no formal review or approval process involved;
it was simply a matter of courtesy to the senior members. The initiative
in gaining information on specific activities rested with the
members.
For nearly twenty years a small group of ranking members dominated
these relationships with the Agency. As Chairman of the House
Armed Services Committee, Representative Carl Vinson, a Democrat
from Georgia, presided over CIA matters from 1949 to 1953 and from
1955 to 1965. Clarence Cannon served as chairman of the House Appropriations
Committee from 1949 to 1953 and from 1955 to 1964 and
chaired the Defense Subcommittee which had supervising authority
over CIA appropriations. Cannon organized a special group of five
members to meet informally on CIA appropriations. In the Senate
between 1947 and 1954 chairmanship of the Armed Services Committee
was held by Chan Gurney, Millard Tydings, Richard Russell and
Leverett Saltonstall. In 1955 Russell assumed the chairmanship and
held the position until 1968.
Because the committee chairmen maintained their positions for extended
periods of time, they established continuing relationships with
l?qI:s and preserved an exclusivity in their knowledge of Agency actlVlt18S.
They were also able to develop relationships of mutual trust
and understanding with the DCIs which allowed informal exchanges
to pr~va.il over formal votes and close supervision.
Wlthm the Congress procedures governing the Agency's budget
assured maximum secrecy. The DCI presented his estimate of the
3Q The Act limited members' committee assignments, provided for professional
staffing, tried to regularize meetings, and made some changes in the appropriations
process as well as legislating other administrative modifications.
40
budget for the coming fiscal year broken down into general functional
categories. Certification by the subcommittee chairmen constituted approval.
Exempt from floor debate and from public disclosure, CIA appropriations
were and are concealed in the Department of Defense
budget. In accordance with the 1949 Act the DCI has only to certify
that the money as appropriated has been spent. He does not have to
account publicly for specific expenditures, which would force him to
reveal specific activities.
To allow greater flexibility for operational expenditures the Contingency
Reserve Fund was created in 1952. The Fund provided a sum
independent of the regular budget to be used for unanticipated large
projects. For example, the initial funding for the development of the
U-2 reconnaissance aircraft was drawn from the Contingency Reserve
Fund. The most common use of the Fund was for covert operations.
Budgetary matters rather than the specific nature of CIA activities
were the concern of Congressional members, and given the perception
of the need for action against the Soviet Union, approval was
routine. A former CIA Legislative Counsel characterized Congressional
attitudes in the early 1950s in this way:
In the view of the general public, and of the Congress which
in the main reflected the public attitude, a national intelligence
service in those days was more or less a part and parcel
of our overall defense establishment. Therefore, as our defense
budget went sailing through Congress under the impact
of the Soviet extension of power into Eastern Europe, Soviet
probes into Iran and Greece, the Berlin blockade, and eventually
the Korean War, the relatively modest CIA budget in
effect got a free ride, buried as it was in the Defense and other
budgets. When Directors appeared before Congress, which
they did only rarely, the main concern of the members was
often to make sure that we [the CIA] had what we needed
to do our job.
Limited information-sharing rather than rigorous oversight characterized
Congress relationship to the Agency. Acceptance of the need
for secrecy and Congressional procedures would perpetuate what
amounted to mutual accommodation.
By 1953 the Agency had achieved the basic structure and scale it
retained for the next twenty years.30a The Korean War, United States
foreign policy objectives, and the Agency's internal organizational
arrangements had combined to produce an enormous impetus for
growth. The CIA was six times the size it had been in 1947.
Three Directorates had been established. In addition to the DDP
and the DDI, Smith created the Deputy Directorate for Administration
(DDA). Its purpose was to consolidate the management functions
required for the burgeoning organization. The Directorate
was responsible for budget, personnel, security, and medical services
Agency-wide. However, one quarter of DDA's total personnel
strength was assigned to logistical support for overseas operations.
The DDP commanded the major share of the Agency's
300 For chart showing CIA organization as of 1953, see p. 98.
41
budgeL personneL and rt'sources; in 1952 clandestine collection and
con~rt action accounted for 74 percent of the Agency's total budget; 31
its personnel constituted (;0 percent of the CIA's personnel strength.
While production rather than coordination dominated the DDI, operational
activities rather than collection dominated the DDP. The DDI
and the DDP emerged at different times out of disparate policy needs.
There were, in effect, separate organizations. These fundamental distinctions
and emphases were reinforced in the next decade.
31 This did not include DDA budgetary allocations in support of DDP operations.

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