PRM/NSC-11, SECTION 3

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79M00095A000300030008-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 53
• Document Creation Date: December 20, 2016
• Document Release Date: October 26, 2006
• Sequence Number: 8
• Publication Date: May 3, 1977
• Content Type: MF

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-NATIONAL SECURITY COUNCIL
WASHINGTON, D.C. 20506
May 3, 1977
MEMORANDUM FOR: DAVID MCGIFFERT
W. BOWMAN CUTTER
HAROLD SAUNDERS
JOHN HARMON
JAMES TAYLOR
SUBJECT: PRM/NSC-11, Section 3
Attached for your consideration are the initial inputs completed by
the drafting team. They have not been edited yet into a uniform
format but they do represent the distillation of lengthy discussion
by the drafting team. The remaining inputs to the first two sections
of the approved outline will be forwarded soon, hopefully in time for
discussion at Friday afternoon's Section 3 Working Group meeting
(White House Situation Room, 3 p.m.) .
Time marches and we plan to get into the options for reorganization
next week. It would, therefore, be most helpful to have at least your
preliminary views on this. topic on Friday..
Samuel M. Hoskinson
Chairman
PRM/NSC-11, Section 3 Drafting Team
25X1
cc: Latimer
Inman
Donahue
Bader
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3 May-1977
PRM/NSC-11, Section 1
I. Objectives of US Foreign Intelligence
American foreign intelligence is a complex and costly
information service operated by
the Executive Branch of the United States Government to
support its conduct of foreign and national security affairs.
As a formal activity of government, intelligence is distin-
guished by:
a. Concentration on the information needs
of official decisionmakers;
b. Systematic collection, by human and
technical means, of information that other
governments try to keep secret;
c. Evaluation of all information, including
that from public sources, available to the US
Government;
d. Dissemination of resulting data and
judgments to those who need them;
* National Foreign Intelligence Program (NFIP) and
Intelligence Related Activities
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e. Disciplined efforts to keep secret that*
information about its operations and results of
the disclosure of which would undermine intelligence
effectiveness and national security.
US intelligence is unique in the world for the extraordinary
range and variety of organizations and activities that consti-
tute its consumership. The President is the most senior consumer
of US intelligence. He receives and uses intelligence directly.
More important, he is the chief executive of a large hierarchy
of intelligence-using organizations. US intelligence must serve
all elements of the US foreign policy and national security
establishment ici the Executive Branch, mainly the Office of
the President, the Departments of State, Defense, Treasury,
dnd the Arms Control and Disarmament Agency. To a lesser
degree, it also serves all other elements of government with
foreign affairs concerns. Congress has long been and is
increasingly important as a consumer of intelligence. The
US public indirectly derives much of its information,
especially on closed societies, from intelligence. Officially
cleared contractor organizations supporting foreign and
defense policy efforts draw on intelligence. Through various
permanent or temporary arrangements, friendly foreign govern-
ments also receive some US intelligence products. The
Intelligence Community itself consumes intelligence, stores it
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for the future or exploites it to. guide operational or develop-
mental decisions.
Within the. core of the US national security establishment
in the executive departments, consumers of intelligence exist
at all levels. They include:
a. The President, the National Security Council,
Cabinet, and sub-Cabinet officials;
b. Departmental planners of foreign, economic,
arms control, force structure, strategic, and R&D
policy.
c. Operational planners of political, economic,
and military actions.
d. Field planners and executors of policy and
operations.
Washington consumers dominate the constituency of US
intelligence. But there are many consumers who count outside
Washington. Like intelligence assets themselves, military
commands and diplomatic missions that use intelligence are
distributed around the world. Important military consumers
of intelligence, for example, commands and training facilities,
are distributed around the US.
The essential mission of US intelligence is to deliver
high quality information and judgments on foreign develop-
ments of enormous variety to this multiplicity of consumers.
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Achieving each of the hallmarks of quality presents US intel-
ligence today with serious challenges.
a. Intelligence information must be accurate.
Beyond sorting out the pervasive background noise
of world affairs that confronts any observer, this
means intelligence must penetrate the secrecy barriers
erected by skillful opponents.
b. Intelligence must cover needs that are
very extensive. As a global power, US interests
and, hence, information needs lack readily defined
limits. Some argue that US intelligence needs should
be expected to shrink as US commitments and involve-
ment around the world are reduced. But the contrary
effect appears to be occurring: as US unilateral
power to shape world events is reduced relative to
that of others, US needs for information to refine
its interests, commitments, and forces appear to
expand as policy devices become more difficult.
This presents US intelligence with thinly spread
resources and the requirement to focus its attention
more skillfully.
c. US intelligence must be responsive in two
senses. It must be relevant to the real needs of
US decisionmakers. It must not only be about the
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problems that concern them; it must help them make
decisions. This requires a close dialogue between
intelligence suppliers and consumers that proves
in practice very hard to achieve. It must also be
timely, a condition that may be measured in months
or years for some problems, or minutes for others,
particularly where support to commanders of military
forces is involved.
d. US intelligence must be analytically penetrating
and sophisticated. In theory, there is an unbroken
continuum between "facts" that an agent or inanimate
sensor can collect and report as intelligence, and
weighty policy judgments that political, military, and
other national leaders must make. Intelligence could
be asked to supply "just the facts," and leave to the
statesman or general the task of integrating and
analyzing the facts as part of the process of policy
choice. But US intelligence has long been required
to move beyond the raw data it collects to grapple
with judgments that are not too distant from policy
choice. For example, "What are Soviet strategic
objectives?" or "What is the future of Black Africa?"
are issues typical of those on the intelligence docket.
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This requires that intelligence must have high-quality
talent and organizational structures for demanding
research and analysis to support intelligence
production.
e. Finally, intelligence must be candid, objective,
and unbiased by policy preference. It must supply the
decisionmaker with information and judgments he ought
to hear, including those he may not want to hear. Where
large hierarchical organizations are involved, this
demand is obviously not easy to square with the impera-
tives of responsiveness to decisionmakers' needs and
of analytic sophistication on subtle or subjective issues.
It also means that where intelligence is serving well,
it must face some dissatisfaction from customers that
dislike its findings.
It is possible to adduce a number of general principles
that should govern the management and operations of a US
Intelligence Community intended to supply the kind of
high-quality intelligence service described above and to
meet other important criteria governing its functions, namely,
that it be efficient or generally cost-effective, and that
its operations be consistent with US legal and political
standards. Some of these principles relate to the organiza-
tional structure of the Community, others to the style of
management and oversight.
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1. Diversified Service
The Community must be structured and managed so as to
provide responsive intelligence support to the wide diversity
of consuming organizations at many levels. This means that
many consuming organizations must have their own intelligence
production entities who know and can respond to their unique
needs. In addition, consuming organizations must have means
of tasking or influencing the current activities of the
Community as a whole, in production and collection. They
must also have some means to influence the longer-range
programming decisions of intelligence that create capa-
bilities for the future. In principle, then, there must
be numerous entry points for statements of need and numerous
exit points for delivery of intelligence services, however
the Intelligence Community is structured.
2. Pooling Information and Collaborating in Judgment
The post-war intelligence system of the US grew out of
the need to assure communication among intelligence elements
the lack of which was perceived to have permitted surprise
at Pearl Harbor. It is a long accepted principle that US
intelligence must be so structured that, within the limits
of sound security and reasonable divisions of labor, the
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entire system must be able to share data and judgment within
itself and, on major issues, to collaborate in disciplined
agreement or disagreement. This is a process that can always
be improved and must take place, whatever the Community's
structure.
3. An Independent Source of Judgment
Another well established principle of US intelligence
management is that there must be at the center of the Community
an entity capable of pulling together the data and judgments
of other entities, but sufficiently strong and independent of
the policy process to offer intelligence judgments that are
to a maximum extent possible uncolored by policy preferences
that may influence the judgments of departmentally based
entities.
Taken together, these three features of intelligence
production structure -- diversity, pooling, and collaborating,
and a policy-independent source -- afford a system of checks
and balances required for effective intelligence performance
over the long term on issues requiring debate and judgment.
4. Readiness for War
It is increasingly apparent that, while devoted to assist
in the maintenance of peace, US intelligence must be capable
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of supporting the conduct of war with the minimum of dis-
ruptive transition. This capability must be appropriate to
a range of possible conflict situations from those like
Vietnam to a major central conflict with the USSR. In the
modern world intelligence structures cannot count on a
protracted period for adjustment to the needs of conflict
support, be they national entities or tactical elements
organic to military forces. This is particularly pertinent
with regard to unique national intelligence assets with wide
coverage, such as reconnaissance satellites.
5. Efficient Resource Management
US intelligence must be managed so as to provide the
most effective service at reasonable cost. Given the lack
of comprehensive "sufficiency" or "value" criteria for
intelligence, this is very difficult to accomplish in a
systematic and measurable way. Approximating the ideal and
elusive standard of cost-effectiveness for intelligence
requires careful structuring of authorities and decision
processes that govern the use of current resources and the
assembly of resources for the future.
a. Resource allocation means choices and
trade-offs. It must be decided what resources
should compete against what other resources.
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Some intelligence resources should clearly compete
against other intelligence resources under a central
system. Some intelligence should compete directly
against non-intelligence activities, such as combat
forces. At higher levels, the President and Congress
must balance intelligence against national security
outlays as a whole and the total federal budget.
Rational resource allocation means building a frame-
work with the right attention span, competitive
participants, and incentives for rational choice.
b. Because intelligence is a highly diversified
service function, no single central authority acting
alone can know enough about what is needed to make
effective resource decisions. There must be reliable
means for those served by intelligence -- its
constituency -- to state their needs to and bring
influence upon the intelligence resource management
system.
c. At the same time, there must be sufficient
centralizing authority to force painful choice where
it is needed on a rational basis, to compel programs
to be justified on the basis of their ultimate contri-
bution to intelligence product, and to preclude
resource allocation purely on the basis of organiza-
tional ownership and clout. The decisionmaking power
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of this central authority must be commensurate with the
responsibility it has to assure efficient resource
allocations. Three levels of decisionmaking power
can be brought to bear on intelligence resources:
(1) power to define goals, requirements,
and priorities;
(2) power to allocate funds;
(3) line management control over personnel,
actual operations, and support activities.
For some intelligence activities of national character,
all of the above powers might be rationally centralized.
For others, central authority might effect adequate
efficiencies through the first and second levels of
power. For yet others, decentralized resource alloca-
tion authority outside of intelligence is appropriate.
Power to define goals, requirements, and priorities
and power to allocate funds can be exercised with
collegial advice or after collegial decision.
6. Safeguards Against Abuse in Balance with Security
Many intelligence activities are secretive of necessity
and occur at the edge of interstate conflict, where govern-
ments have always assumed extraordinary powers. This makes
such activities susceptible to abuses more grave than
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corruption or misuse of authority that any public or private
enterprise must protect against. Intelligence abuses, like
military or police abuses, carry the potential of subverting
constitutional principles and basic individual rights.
Prevention of such abuses requires:
a. A viable system of laws and regulations
that defines the limits of proper intelligence
activities and a viable secrecy regime to assure
its effectiveness.
b. A set of oversight mechanisms within and
outside intelligence that places responsibility for
prevention of abuse in the hands of a few duly
constituted and informed officials and popular
representatives.
c. Clear lines of authority over and responsi-
bility for intelligence activities.
d. Strong leadership from the President and
all intelligence managers in cultivating professional
ethics among all engaged in intelligence activities,
upon which prevention of abuse ultimately. must rest.
Decisions on the principles and structures that govern
the management of US intelligence must be made against the
expectation that the next generation will be more difficult
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for the United States in many respects than the generation
past. US relative power in the world has diminished; that
of major adversaries has grown. Although US commitments
have been adjusted, US current and potential interests have
not diminished. They remain global, and an increasingly
complex and interdependent international environment has
made them more ramified. The international environment
remains volatile and rich in potential for violence.
Meanwhile, urgent domestic business constrains what can
be allocated to traditional goals of national security,
including intelligence.
But the burden on US intelligence necessarily grows.
At a minimum, bearing that burden adequately requires a
strong framework that can endure for a considerable period,
adjust to changing needs, and allow the intelligence busi-
ness of the nation to proceed with reasonable confidence
after the turmoil of recent years.
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Production of National Intelligence
In recent years all serious reviews of the performance of the Intelligence
Community have identified national intelligence production (analytic
reporting) to be a major problem area. In fact it has almost become
"conventional wisdom" that national intelligence production fails to
provide the President, the NSC and other senior policymakers with
the high quality intelligence analysis and judgments they require.
This situation is of great concern because as the Church Committee
report so aptly stated: "The production of finished intelligence is
a principal purpose of all U.S. intelligence activities; neglect of it
is unacceptable for the future. "
Beyond sweeping indictments, it is much more difficult to be precise
in defining the national intelligence production problem. In part,
this is true because the consumers are frequently not sure of their
own requirements and often react in a negative way to analysis that
does not fit their own preconceptions or necessarily support assumptions
underlying hard fought policy decisions. But the problem is also much
deeper than this.and does seem to reflect some genuine shortcomings in
performance as, well.
The most authoritative review of this problem was produced last year
for the NSC by the Intelligence Community Staff*. It found that yin
*Semiannual.NSC Intelligence Review: An Assessment of National
Foreign Intelligence Production, December 1976.
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the eyes of its users, the products of the Intelligence Community are
"uneven, a mixture of demonstrable strengths and significant weaknesses."
In summary, the most important specificT_andings of this study were:
o An increasing diversity and sophistication in the demands of
an expanding community of users.
o Inadequate Intelligence Community understanding of the needs of
various sets of users and of priorities among these needs.
? General user satisfaction with current, short-term reporting on
most topics and geographic regions, but a serious deficiency in
anticipatory analysis which alerts policy components to possible
problems in.the relatively near future .(one to three years) .
o User desire for more multi-disciplinary analyses which integrate
political,, economic, technological and military factors to provide a
broad appraisal of issues and events for developing US policies
and programs.
? User discontent with NIEs and interagency products, especially
regarding their utility, and relevance to policy issues.
o Problems in the Community's ability for early recognition of impending
crises, in integration of intelligence with information on US political
and military actions; and in the definition of responsibiliites of the
DCI and other Government officials concerned with warning and
crisis information.
? User concern about what they view as unnecessary compartmentation
of many intelligence products.
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The causes for this uneven record are many, but the critical aspects
appear to derive from certain systemic problems:
1. Demands and Resources
The numbers of intelligence users is expanding and their needs
are becoming more complex and sophisticated. Vital new issues concerning
international economic, political, social and-technological developments
demand equal analytical treatment with the more familiar and traditional
national security issues. But the Intelligence Community cannot easily
move to support these new concerns with its present relatively fixed
fiscal and manpower resources. This is because at the same time the
traditional issues of Soviet Chinese military capabilities and intentions
are becoming both more resistant to collection and more complex in terms
of the information required.
2. Producer-User Relationship
The Intelligence Community too often has a poor perception of user's
needs and cannot project future requirements with confidence. Current
mechanisms for adjusting intelligence priorities to match user needs are
complex, imperfect and do not involve users to the extent that they should.
At the same time, most major users of intelligence do not articulate their
needs for intelligence particularly well and inadequately project their
future needs. Thus intelligence managers have considerable difficulty
setting firm priorities for allocating intelligence resources. This difficulty
is particularly apparent in dealing with user needs that cut across traditional
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intelligence topics or regions, e.g. , information relating to nuclear
proliferation.
3. Allocation of Resources
Current management information systems at the Community level
do not provide senior managers with adequate understanding of the complex
ways by which parts of the intelligence process relate to one another.
Budgets and manpower accounts are organized and displayed by collection
or by organizations
resources are managed in terms of inputs to the intelligence process.
Resource decisions are not routinely made on the basis of their impact
on the outputs of the intelligence process (finished analytical reporting).
Further limitations are imposed by-
-- Data bases which relate past, current and programmed funds and
manpower directly to intelligence products.
-- Inadequate measures of the utility of specific intelligence products,
in terms of users needs.
-- Analyses which explicitly relate collection, processing and
production resources to specific products and future requirements
for products.
4. Balance of Production
The traditional intelligence output is solid, descriptive reporting-
the when, where, who, what and how of facts bearing on various issues.
Producers of finished intelligence tend to give priority to these responsibilities
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the first line demands of users for direct support. A vocal body
of users (and critics) also increasingly want deeper, more sharply
focused analyses to improve their understanding of current situations
and likely future developments bearing on the principal policy, program
and negotiating issues.
Producers have encountered substantial problems in moving from factual
reporting to complex analyses. Analytic products require more com-
prehensive and detailed data and the best and most experience personnel
to produce it. Moreover, analysis takes time - lengthy gestation periods
and closer review by supervisors. Finally, this kind of intelligence
production is in direct competition with the needs of both users and
producers for "bread and butter" work that underwrites order of battle
and capabilities documentation, reporting on scientific and technological
trends, and description of day-to-day political and economic developments.
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5. Intelligence Objectivity and the Policy Process
/lh
Good interpretive analysis often comes-close to the
of policy and intelligence. By tradition, however, intelligence producers
have favored passive over active support of users and -have been reluctant
to initiate a closer user-producer relationship. The worry has been that
a closer relationship might somehow compromise the objectivity of intelligence
judgments. As a result, many intelligence products have been less relevant
and timely with respect to user needs than could be the case.
In those areas where production and policy are closest (energy, economics,
terrorism, narcotics, SALT, MBFR and certain territorial negotiations)
maintenance of objectivityNhas not in fact proved to be a serious problem.
There is, of course, always a danger that close working relationships
between intelligence analysts and departmental staff officers or senior
policymakers could result in biased products that are structured to support
policy positions, as producers come to identify with the policies they helped
develop. This is a risk but one that can be minimized by the proper degree
of professionalism on both sides cwtc2 F^"t ^' ^u-~^a~
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6. Checks and Balances
A doctrine has developed that calls for the DCI to deliver neatly
packaged national intelligence, complete with dissenting views to the
President and NSC. At the same time, however, departmental intelligence
organizations are authorized to service directly two of the principle NSC
members--the Secretaries of Defense and State--and through them also
have a channel for direct dissemination of their product to the White House.
While these departmental entities insist that CIA's national product be
coordinated with them and exercise vigorously their right to dissent,
issue
neither hestitates to-ae uncoordinated views in conflict with a national
intelligence position. CIA also provides "uncoordinated" views to NSC
members. The result all too often has been a flood of overlapping papers
of varying degrees of validity, unleased on the policymaker.
Obviously, sheer duplication is to be avoided but as in many other
endeavors a certain amount of competition is healthy. Intelligence
analysis seeks to know the unknowable and penetrate the impenetrable.
When evidence is insufficient or ambiguous or absent, the more minds
and more lines of analysis pursued the greater the chance of approximating
the truth. When the competitive system works right each organization is
stimulated by the critical work of others; none can afford to stand pat on
conventional wisdom.
CIA. Of all US intelligence agencies, CIA has the broadest range of
analytic
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comprehensive analytical coverage, it has trouble adjusting to new
requirements, and on some topics of lesser importance it relies almost
totally on other agencies. Because CIA is able itself to produce on
most questions that are of major importance it is able to act as a check
on the production of other agencies; to goad them out of long-held positions
and into new lines of analytic attack on old problems. To get the best
national product, however, it is also necessary that the competing
departmental analysis centers be strong enough to keep CIA alert and
challenged. . CIA's critics believe it does not pay enough attention to
military factors and believe it tends at times to take an ivory tower
aN.cJ~ .
approachlto be isolated from the real world of policy interests.
DIA. This Agency has many problems. It is seriously handicapped by
the physical division of its production elements and it has never been able
fully to solve the problem of recruiting high-quality civilian personnel
to work with a military command and staff system. The high turnover
rate of its military officers is another problem. Its greatest problem,
however, is its multiple missions of providing intelligence support both
of the Secretary of Defense and his office and of the Joint Chiefs and their
field commanders. The wide range of requirements of these two sets of
customers are often different and together they are much more than the
present DIA structure can accomplish. DIA's efforts to serve national
authorities represented by the Secretary of Defense often complete with
the need to meet the tactical requirements of field commanders and the
strategic ones of the JCS. Critics feel that DIA analysis is too influenced
by the
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INR has for many years been a stepchild of the Department of State.
Several times the Department has been on the verge of eliminating it
as an intelligence production organization. The small size of INR staff
generally limits its contributions to national production, although the
analytical quality of its input is usually high. INR's greatest strength
is its direct involvement with a center of foreign policymaking in the
USG and ability to provide tailor-made support to that process. Critics
feel, however, that INR sometimes is overly influenced by foreign
policy decisions and is not independent enough.
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Service Intelligence Agencies. To some extent these agencies appear
to be vestigial and duplicatives, but they do some useful work that
contributes to national intelligence. Whether they continue to exist
would appear to be a departmental problem for Defense, not a national
one-
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B. Tasking of National Collection Assets
Centralized mechanisms exist for the guidance
of major technical collection operations at the national
level, under the DCI. There is no comparable mechanism
for tasking human source collection for a variety of
reasons--a large and varied array of human source
collectors which provide major foreign reporting are
outside intelligence entities, and there is resistance
within the intelligence entities to the kind of sharing
of detailed information on source capabilities which
permits reasonably smooth technical collection
interaction.
While the centralized mechanisms for guidance of
SIGINT and imagery collection are generally regarded -
as satisfactory in peacetime,. there are valid concerns
about how the system can properly be tasked by SECDEF
in discharging his National Command Authority
responsibilities in time of crisis or war. In essence,
the issue is a matter of priority, rather than authority.
Tasking has been complicated because intelligence
collection systems have become increasingly capable of
serving the broad interests of policy-makers and defense
planners, the more specific technical interests of weapons
developers, and the combat intelligence requirements of
field coins?ande rs. Communications intelligence provides
political and economic data, as well as information on
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.military capabilities and operations. Agents are asked
to collect information on Soviet weapon technology,
political intentions, grain harvests etc. Satellites
produce pictures which are critical both to the SALT
policy .maker and the Army Commander on the East German
border.
One issue is how to provide the tactical commander the
appropriate product from nationally controlled intelligence.,
assets and to enable that commander to task assets,
national and tactical, which can be directly responsive
to his needs. There is a related issue involved in ensuring
that the appropriate product of -"tactical" intelligence
collection is made available to national policy-makers.
Whether or not there needs to bea central mechanism to
prioritize the tasking of national systems is a key question.
Bearing in mind that wars tend to be fought with organizations
which existed in peacetime, the organization adopted for
intelligence management should be designed to be as effective
in wartime as in peacetime.
In general, the predominate view is that the existing
collegial tasking mechanism is adequate and should be retained.
There is a dissenting view, however, which notes that the
committee system is at times slow and bureaucratic, and
doubts that it can be sufficiently responsive to time-
sensitive requirements.
Finally, the community lacks a sat is }Factory mechanism
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for to ng col ecL.ion requirements, on an 111-source bay, i.s .
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Such competence does exist in the collection management,
analytical and operational elements of the community.
When one moves beyond the very general and broad guidance
contained in such instruments as the Key Intelligence
Questions and
current requirements management
and tasking is inevitably done via separate collection
systems against separate problems.
C. Line Authority over Intelligence Elements
By the term "line authority" is meant day-to-day
management and operation of an activity... what has been
called "command, without command control" in the Defense
Department. There appears to be general agreement that
systems and organizations which are substantially tactical
in nature should remain under line authority of DOD, although
there is a significant grey area in defining what is "tactical".
The principal questions relate to national intelligence
collection systems. One issue is, what line authority
arrangements best facilitate transition from peace to crisis
to war? The interface between national intelligence collection
systems and the non-NFIP military facilities essential to
support them -- such as missile ranges, shipyards, base
operations, etc -- also must be considered in assigning line
authority.
There are perceived problems in the DCI serving dual
roles as leader of the Intelligence Community and as head
of the Central Intelligence Agency. The final report of the
CHURCH Committee observed that "the Committee hh C~
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concern that the function of the DCI in his roles as
intelligence community leader and principal intelligence
adviser to the President is inconsistent with his
responsibility to manage one of the intelligence community
agencies--the CIA. Potential problems exist in a number
of areas. Because the DCI as head of the CIA is
responsible for human clandestine collection overseas,
interception of signals communication overseas, the develop-
ment and interception of technical collection systems,
there is concern that the DCI as community leader is in "a
conflict of interest" situation when ruling on the
activities of the overall intelligence. community.
The Committee is also concerned that the DCI's new span
of control--both the entire intelligence community and the
entire CIA-- may be too great for him to exercise effective
detailed supervision of clandestine activities".
A counter view set forth by CIA personnel in arguing for
the status quo, suggests that removing DCI organizationally
from the CIA would deprive him of his substantive base of
support, thus adversely affecting his ability to function
as the substantive intelligence advisor to the President.
They consider the DCI tie with CIA absolutely inseparable,
given the direct access that provides to the President, and
they hold the view that to be a strong Community leader, the
DCI needs riot less authority over CIA. but rather greater
authority over other principal elements of the community.
One body of opinion holds that the capability of the
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DCI to produce high quality and responsive National
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.Intelligence can be substantially enhanced if he is
given line authority over the major National Collection
assets (NSA, and Air Force and Navy Special Programs).
The counter body of opinion holds that such shift of
line authority is notnccessary, since the DCI can obtain
full support through his existing prioritization and tasking
responsibilities and access to all their products, and
that such shift would be disruptive to support for the
conduct of operations in crisis and war. These programs
depend in large part on DOD assets and expertise worldwide
for effective operations, and are effective and responsive
to national intelligence needs as presently operated.
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PROGRAM/BUDGET DEVELOPMENT AND RESOURCE ALLOCATION
E.O. 11905 created a collegial forum--the CFI (now the PRC/I)--
for intelligence program and budget decisions and charged it
with control'.-nu budget preparation and resource allocation
for the NFIP, establishing production and collection priorities
and management policies, and providing guidance on the re-
lationship between tactical and national intelligence. The
Intelligence Community Staff (ICS) was charged with supporting
the CFI as well as serving the DCI in the development of
national intelligence requirements and priorities.
Current and future intelligence resource needs and their al-
ict .st .on ~.T one intelligence fundions are heavily dependent
on foreign and defense policies, priorities with respect to
intelligence production and collection emphasis, requirements
in the sense of information needed to be collected now or in
the future, and the scope of intelligence (is it intended to
serve a selected few or a broad range of users). Foreign and
defense policies and alternatives are primarily an exogenous
factor, though the interaction between policy and intelligence
is complex and, at times, influences resource allocation. The
remaining factors--intelligence community priorities, col-
lection requirements, and clarity with respect to the extent
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of the intelligence community's scope--are, however, primarily
factors internal to the intelligence community that directly
shape its resource needs and allocations.
There is g,Zeral agreement that, during its'first and embryonic
year, the CFI did not focus on the above factors:
-- The CFI established no priorities for intelligence
collection or framework for determining them outside
of the generally implicit priority determined by
resource issues (e.g., it determined that a DIA
building would be more valuable in 1984 that a
follow-on SIGINT satellite program).
-- The CFI provided no nuidance on production priorities.
-- Neither the CFI nor the DCI established,a reasonably
definable set of production and collection require-
ments, either in total or by individual collection
technique, that was relatable to resource needs and
allocations.
-- The CFI established no guidance for clarifying the
scope of intelligence in order to establish an inter-
relationship between intelligence needed at the
Washington policy level and that needed at the field
operating level.
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There is also general agreement on what the CFI and the ICS
did during their first year of operation. Their dominant
focus was on development j;: review procedures and review
of the FY 1978 programs and budgets submitted by the indi-
vidual intelligence components of the NFIP.` The consensus
of the participants in this development was:
-- The committee, ICS, and DoD had significant problems
in developing procedures, and they spent considerable
time ironing out these procedures.
v Defense attempted to focus committee attention
on a set of extremely difficult, albeit real,
management problems that have historically
been resistant to central management authorities;
it resisted committee involvement in the details
of Defense activities on the basis that the com-
mittee should not "micro-manage" activities
best left, in its view, to lower decision levels.
The ICS, in turn, attempted to focus committee
attention on a discrete set of precise dollar
issues in the context of an individual program;
resisted committee involvement in either
complex cross-program issues or longer range
resource management alternatives.
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-- These differences in resource management philosophies
resulted in a review that:
C. braised committee attention on a discrete set
of precise dollar issues almost completely within an individual prograri.as identified
primarily by the program manager.
? Submerged minor dollar issues, whether or
not relevant to cross-program or longer range
resource objectives, in the belief that
neither the committee nor the President could
effectively deal with them.
? Deemphasized major intelligence management
problems that would _ focus attention on
cross-program issues or longer range problems.
The CFI processes have been given a very short time to operate,
and the experience base for making judgments on their efficacy
is extremely limited. Nonetheless, the broad outlines of the
characteristics of a collegial CFI-type resource review process
are, we believe, reasonably definable:
-- There will continue to be considerable disagreement
about processes/procedures, including access to finan-
cial information, programmatic detail, and justifica-
tion data, which will detract from substantive review.
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-- With a PRC/I charter limited to resources, but ex-
cluding requirements, a necessary bridge between the
two, essential to effective intelligence community
resource management, will continue to be lacking;
the relationship between intelligence requirements
and resources will continue to be obscured as long
as separate processes and procedures for development
of each are continued.
-- Longer range intelligence management problems will
continue to be resistant to review as long as the
resource development and review processes are
structured primarily along present sensor-oriented
programs.
The resource issues amenable to CFI review will con-
tinue to be a narrow set of precise dollar issues
largely integral to an individual program because
that is the way resource development and review are
structured and because the methods to crosswalk
priorities, requirements, and other programs are
lacking.
-- The problems of relating so-called national and
tactical intelligence resources and capabilities
will continue to grow; the potential for substantial
duplication will remain, and, at worst, two separate
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streams of intelligence (national and tactical)
will evolve.
-- Performance evaluations extending beyond the scope
of an individual program will continue to be
extremely rare and exceedingly difficult to perform.
Many of the characteristics of intelligence resource manage-
ment today are tied to a set of individual programs largely
structured along single or semi-unique sensor lines and would
be present whether or not a collegial resource review process
were in place at the top. CIA specializes in human source
collection, imagery satellite collection, and production.
for the Washington area policymakers; NSA is tied almost
exclusively to signals intelligence collection; NRO to space
collection. This specialization combines with institutional
cultures, reinforced by security concerns, to impede open
and frank discussions of concerns across these specialized
lines.
There is, thus, some validity to the charge--widely levied
at the program managers, the CFI, OMB, and the Congress--
that they are micro-managing at a level of review and detail
unbecoming their status. Since there is almost no coherent
way to reasonably aggregate resources outside the individual
programs, reviewers at all levels tend to address the same
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issues. Should 2 or 3 satellites be bought? Should an
aircraft have X or Y equipment? Is human source collection
in X country satisfactory? There is a substantial degree of
frustration on the part of both increasingly higher levels
of program managers and outside reviewers--the former with
the repeated reviews of their decisions and the latter with
the inability to review decisions in a different or broader
context. On the other hand, the broader questions--Is the
resource balance among collection, processing, and production
about right? Is the allocation of resources among human
source, imagery, and signals intelligence appropriate?
there proper resource emphasis on the USSR versus Western
Europe, on political versus military questions?--are rarely
raised and almost never answered because of the community's
and the reviewers' inability to come to grips with them.
ISSUES
1. Should the community develop a systematic means of de-
termining consumer needs and priorities and relating these
to resources? If so, 'how?
Consumer needs at present do not have a major impact
on the allocation of current intelligence resources, but
rather serve to retask or retarget extant capabilities to
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changing concerns. In the longer term, however, consumer
needs should be a significant driving force behind the al-
location of = s u ses to acquire new intelligenc;c capabili-
ties--for SALT cr MBFR verification, for example. For a
variety of reasons, the consumer is presently ill-ecuipped.
to perform this function. What appears to be needed is a
reasonable means of conveying to the consumer alternatives
on both information needs and on the related collection
and production options/costs. It appears that two steps
are needed:
A means of relating production and analytical
resources to a set of given or assumed consumer
needs.
-- A means of relating collection alternatives to
consumer needs.
Organizational Implications: A group or set of
groups that can consciously translate among con-
sumer needs, production capabilities and resources,
and collection capabilities and resources is needed.
No such group is in existence today.
2. Should the community develop a capability of relating
producer information needs and collection needed (i.e.,
requirements) and resources? If so, how?
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The current link between producer information needs and
collection requirements/resources is almost completely in-
tuitive and highly judgmental. With the notable exception
of imagery requirements, the community's requirements pro-
cesses are dominated by collectors, not producers, and are
generally devoid of any explicit consideration of resource
implications. As a result, the relationship between product
needs and collection requirements/resources is systematically
lacking. Indeed, the requirements process is today generally
described as open-ended such that collectors are reasonably
free to search for and can find a requirement to justify
any collection activity they wish to undertake.
One option, rarely used in the community, is to have a
conscious tie between collection requirements and resources
that forces an explicit consideration of the value of the
information to be collected to the resources required for
that collection. The community's individual programs have
historically resisted this conscious interrelationship of
requirements and resources, either for pre-budget justifica-
tion or in a post-facto evaluation sense.
Organizational Implications: Past and current
management arrangements deliberately divorce
consideration of collection requirements from
resources. A collection requirement should have
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a price tag such that value and cost can be simul-
taneously weighed. In addition, producers, not
Just collectors, should be important contributors
to this process. Splitting DCI requirement
responsibilities-.from CFI resource considerations
has exacerbated this historic problem.
3. Should the community develop an explicit means of identi-
fying cross-program issues and analyzing them? If so, how?
The vast bulk of community resources should be more
competitive across present program lines and less competitive
within an individual program, except in the sense that they
compete for dollars within a given program ceiling. The
community's current and east specialization both in terms
of collection approaches and production tends to mute these
cross-program comparisons such that trade-offs are rarely.
considered, either implicitly or explicitly. SIGINT,
imagery, and HUMINT requirements are seldom compared either
in terms of competitive potential collectiom against a given
target or in terms of actual past accomplishments. Similarly,
production resources are rarely compared either to consciously
prevent undesirable over-lap or to consciously promote com-
petitive analysis.
The current structure of the community's consumer liaison,
production, requirements, and collection elements severely
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inhibits any attempt to crosswalk among its various components.
Yet these seem to be the most fruitful areas for impacting
on the overall size and allocation of intelligence resources.
An explicit consideration of cross- progra;a issues appears
to be required.
Organizational Implications: It is doubtful given
the current specialization of the community's com-
ponents that they can be made to explicitly consider
cross-program issues effectively. Cross-cutting
mechanisms are required. These could take a variety
of forms--topical as opposed to sensor-oriented
requirements panels, directorate conglomerates for
collection and production, or deliberate manage-
ment approaches. Current organizational arrangements
which flow through departments to departmental
components inhibit this desirable development.
4. Should the community develop a coherent approach to longer
range management problems? If so, how?
The potential competitiveness of community resources ex-
tends beyond the current and future allocation of resources
to encompass alternative management arrangements for many
community functions. These would include such community-wide
functions and services of common concern as ADP, communica-
tions, security, and liaison arrangements. Current community
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structure and resource review mechanisms fragment these ac-
tivities among many components that make it impossible to
- cus management attention on these issues, which have both
extensive resource and organizational implications.
These appear to be fruitful areas where explicit manage-
ment attention is required. While cross-program by definition,
they are unlikely to be resolved by a straight-forward cross-
program resource approach without consideration of basic
organizational and structural issues. The community appears
to need an explicit means of dealing with them.
Organizational Implications: The current structure
that splits resource management and organizational
management is poorly equipped. to come to grips with
these issues. Resource management should imply at
least some degree of organizational management for
areas of major concern.
5. Should the community develop an explicit approach to
consideration of the relationship between national and
tactical intelligence needs and resources? If so,how?
The current dichotomy. between national and tactical in-
telligence is becoming increasingly articicial with the
development of technologies--both in collection and in com-
munications--that knit the two together. There is general
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agreement that a tie is needed whereby the resources and needs
of each can be wedded to the other. Current national and
departmental management structures and approaches are not
conducive to this interaction and are unlikely to confront
the relationship directly.
Organizational-Implications: The community needs an
explicit mechanism either outside the NFIP or within
it to force.consideration of the relationship between
national and tactical intelligence needs and re-
sources. Since this largely affects Defense, it
appears DoD should take the lead in making this
relationship explicit, possibly through assignment
this responsibility to an OSD-level component.
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COUNTERINTELLIGENCE
Counterintelligence has become a subject of special concern to and
scrutiny by both the Executive and Legislative Branches. The
Rockefeller Commission, the Church Committee, the Senate Select
Committee and the President's Foreign Intelligence Advisory Board
have all pointed out the weaknesses in the U. S. counterintelligence
effort, and each has made strong recommendations for improvement.
Foreign counterintelligence is the only major intelligence discipline
for which no national level interagency coordinating committee and
policy structure exists. As a result there is literally no national
counterintelligence policy. Five separate agencies engage in foreign
counterintelligence activities, each on its own and in only limited
mutual consultation.
The unique nature of the counterintelligence problem further complicates
its resolution. This is because espionage and covert action programs
directed against the U. S. are activities which:
o depending on, circumstances, may or may not be illegal;
o vary in their importance from benign to critical;
o are pervasive, but their extent impossible to measure with
precision;
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o are demonstrably serious, but the damage difficult to' assess;
o systematically organized and directed, but the evidence
fragmentary and isolated;
o seldom touch us as individuals, but impact significantly
on our collective defense and welfare;
o thrive on human weakness, affect our international
relationships, and touch the responsibilities (often
conflicting) of a number of departments and agencies;
o reflect political judgments in the assessment of their
significance and severity;
o traditionally, almost by default, have been regarded as
more important to contain and operationally counter than
to prosecute.
There are several ways to assess the threat of foreign espionage,
each of which has a bearing on the nature of the counterintelligence
response.
-- The traditional assessment of the espionage threat has been
an attempt to describe the enemy force structure. Such
assessments have been based on a combination of hard facts,
extrapolated data, and logical conjectures. In every case,
they present a picture of forces so overwhelming, diverse,
complex, and secretive that efforts to arrive at a coordinated
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n;;ttional response are effectively paralyzed. Further,
this kind of quantitative assessment has in the past tended
to deflect counterintelligence efforts to more accessible
targets -- the identification and cataloging of "subversives"
as potential espionage threats.
A second equally imperfect, but more useful, assessment
of the threat is the damage assessment: an effort to assess
the impact on national defense and on the national welfare of
the flow of classified and proprietary information abroad.
This kind of threat assessment is used, for example, to
describe the impact on our military preparedness of the
compromise of a weapons guidance system or the affect on
a diplomatic negotiation of a spy in the foreign office.
However, such events are dealt with in isolation, seldom
sustained national interest, and there is a bureaucratic
premium on limiting the damage assessment because the
cost and pragmatic implications of a full assessment could
be catastrophic. Recently, continuing documentary evidence
has become available which shows that the Soviets (in particular)
are systematically collecting information on virtually every
aspect of American life. In addition to the Federal Government
(White House to Equal Employment Opportunity Commission)
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and defense contractors, the Soviets are methodically
collecting information on oil companies, basic industries,
commodity brokers, banking activities, computer and high-
technology industry, etc. That the information is used
against us has been demonstrated by Soviet efforts to
exacerbate the 1973 oil embargo, the manipulation of
international money markets, and the catastrophic increase
in the price of sugar two years ago.
A third important element of the threat, and one which is
also inadequately understood, is. the twofold impact on the
rights, privacy, and freedom of United States citizens. To
what extent is the rightful expectation of these Constitutional
guarantees invaded by foreign espionage? To what extent can
or may these individual rights be infringed upon for the
collective good by U. S. counterintelligence efforts to deal
with the problem of espionage? Criminal statutes do not
provide an adequate legal base for the investigation of potential
acts of espionage and terrorism.
Responsibility for various aspects of counterintelligence is vested in
the FBI, the CIA, the Army, the Navy, and the Air Force. The
jealously guarded prerogatives of each and the need for the utmost
discretion in handling counterintelligence cases have prevented the
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implementation of effective coordination. Equally important is
the fact that each case of foreign espionage requires the responsible
agency or agencies to deal with other elements of the government
which have different kinds of responsibilities, inadequate guidelines
and authority for dealing with counterintelligence issues and, in many
cases, policy considerations which run counter to the practice of
effective counterintelligence. Thus, for instance, the complex visa
regulations which establish who and for what purpose a foreigner
reaches our shores are administered by the Department of State.
Determination as to whether or not a foreigner (even with a visa)
is actually admitted is wholly the prerogative of the Immigration
and Naturalization Service. In both case.s,. policy considerations
permit the granting of a visa and admission to the U. S. of identified
foreign espionage agents, notwithstanding that with the exception of
some Communist bloc officials, a foreign visitor, once in the United
States, is unrestricted as to what he does and where he goes and is
accorded the same legal protection as a U. S. citizen in the conduct
of counterintelligence investigations.
Once an espionage, or, more often, a likely espionage, activity has
been tentatively identified, the investigation must be conducted in
accordance with criminal procedure, yet there may be no satisfactory
legal evidence that a crime has been committed. In fact, the activity,
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in spite of, a perception of damage to the nation, may not be technically
illegal. After apprehension, the prosecution of a case is equally
difficult. Policy considerations and rules of evidence hamper
prosecution and, with rare exceptions, the disposition of a case
rarely reflects the damage to the national interest and welfare.
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Public Trust and Confidence
The Intelligence Community has inadequate public acceptance; partly
because public and Congressional attitudes have changed, partly because its
own secrecy has prevented it from educating the public to the need for intelli-
gence and to the cost--monetary as well as moral--of obtaining it. This problem
is also a direct result of Congressional investigations and the resulting public
perception of widespread abuses and other "failures", sensationalist reporting
in the media, and a persistent belief in some quarters that U.S. foreign intelli-
gence activities have still not been brought under adequate oversight control.
It is a fundamental problem because the Intelligence Community must gain wider
acceptance of its legitimacy and role within our democratic form of government
if a viable U.S. foreign intelligence effort is to be sustained over the longer
term.
Intelligence had
as its original political base only a small group of senior congressmen, who
protected it from and blocked its exposure to their colleagues. Over a quarter
of a century, however, age and the electoral process took their toll of this
group of elders and the position of those that remained was weakened, partly
because the national attitudes of the 1940-45 period changed and the consensus
they reflected was eroded by the Vietnam War and Watergate. Intelligence has
thus been exposed in recent years to a rapidly growing new generation of
political leadership that neither shares its traditions nor its view of the world.
To complicate matters, the oversight of intelligence has become a testing ground
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both for the generational struggle within Congress and for the overall balance
of power between Congress and the Executive Branch.
The national turmoil of recent years had two other related effects:
security has been seriously damaged and the public, with little background
knowledge, has been presented with a distorted image of intelligence. The
intense political emotion generated by the Vietnam War led to leaks by supporters
and opponents for advantage in partisan debate and this atmosphere started the
process of breaking down security discipline.- When subjected to the investigative
reporting in vogue since Watergate, some intelligence activities were exposed
for the sake of exposure, or on the basis of "higher morality". Many skeletons--
some all too real, others imagined--were dragged from the intelligence closet.
Disclosure of some activities that were illegal and others that were injudicious
gave ammunition to those hostile to intelligence itself. Further, those disillusioned
persons who have come to believe the worst of their government in general have
tended to accept at face value some exaggerated imputations of impropriety to
legitimate activities.
Reorganization in and of itself will not create the indispensable base
of public confidence and acceptance which the Intelligence Community lacks
today. Structwmal improvements in the name of efficacy must be accompanied
by provisions for-adequate controls and internal checks and balances--even at
the cost of efficiency--in order to develop and sustain public confidence.
Congress and the public must not only be satisfied that U.S. foreign intelligence
activities pose no current domestic threat but that such a threat cannot be created
by another Administration in the future.
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There are two other aspects to the question of public confidence:
effective Executive and Legislative oversight; and reconciliation of the need
for secrecy with greater public pressure for disclosure and accountability.
Over the last year the need for effective oversight has been widely accepted
within both branches of government and the challenge here is to institutionalize
the oversight functions.
The secrecy problem is much more complex. The need for secrecy is
critical to the continued effectiveness of U.S. intelligence. Intelligence operations
require a certain indispensable measure of secrecy and simply cannot be conducted
unless Congress and the public accept this basic fact. This should not be
impossible given the fact that the public already understands the need for
secrecy in a wide range of other private and public matters from the lawyer-client
relationship to the Federal Reserve's intervention in the nation's monetary system.
However, resolving the issues secrecy raises. in our open society will also
require fresh analysis of what aspects of intelligence actually require protection,
review of the concepts involved, and careful examination of the kind of legislation
ILLEGIB
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sr~ f`* - pPl9M00095A000300030008-1
 Approved For elease 2007/0"/06: CIA-*DP l9M00094000300030008-1
Projecting, a positive image and promoting better public understanding
is a difficult business. It must be rooted in the facts of performance
yet circumscribed by the dictates of security. As the Intelligence
Community, and especially CIA, engages in increasingly sophisticated
analysis on a wide variety of nationally important topics it will inevitably
be exposed to partisan criticism. For example, National Estimates on
strategic issues will, if they are of any value at all, inevitably become
part of the policy debate on SALT and U.S. military force structure.
CIA's recent world energy supply analysis is another example. While
intelligence analysis should be able to stand up to vigorous challenge
by non-intelligence experts, care must be taken to insulate it from
partisan debate to the extent possible. Intelligence cannot become
an open-ended information service and still retain its special quality
of providing discreet, no-holds-barred analysis for highest level decision-
making.
Approved For Releag:10* /R6 . rDP79MOOO95AOOO3OOO3OOO8-1
 Approved For Release 2007/03/06 : CIA-RDP79M00095AO00300030008-1
Approved For Release 2007/03/06 : CIA-RDP79M00095AO00300030008-1