SITUATION REPORT A QUARTERLY REPORT OF THE SECURITY AND INTELLIGENCE FUND

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88-01315R000400420006-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 8
• Document Creation Date: December 16, 2016
• Document Release Date: November 12, 2004
• Sequence Number: 6
• Publication Date: January 1, 1978
• Content Type: REPORT

Situation Report
A Quarterly Publication of the Security and Intelligence Fund
Volume 1, Number 2
The Security and Intelligence Fund
convened a conference on July 27 of national
intelligence and counterintelligence authorities
for the purpose of canvasing their opinions and
drawing upon their counsel. The problems
confronting the intelligence community were
examined in all their aspects. Expert views were
forthcoming for strengthening the national
intelligence forces activities and for rallying
public and political opinion in their support.
The principal conclusions are set forth in this
Situation Report.
We agreed that our main target is the
omnibus bill now under Congressional
consideration -- the some 230 page "National
Intelligence Reorganization and Reform Act of
1978." Here our aim is to gain a new charter
which will restore for the intelligence
community the necessary degree of
professional flexibility in its operations and
inject a sense of realism in the controlling
legislation. The list of attendees at this
conference and further information will be
provided by separate letter.
THE SITUATION:
There has been no letup, no pause in the
campaign, now in its fourth year, to harass.,
intimidate and deform the national intelligence
services. It is important that we take the measure
of the people engaged in the mischief. They
form a familiar company of wreckers: the arch-
liberal politicians who have emerged as prime
movers within the Carter Administration (most
conspicuously Vice-President Mondale and
Senators Frank Church of Idaho, Edward)
Kennedy of Massachusetts, Adlai Stevenson of
Illinois and Birch Bayh of Indiana); the political
activists on the leftist fringes of government
(among them the notorious Morton Halperin of
the "Pentagon Papers"); the new breed of
muckrakers who call themselves "investigative
reporters" (among them Seymour Hersh of the
New York Times is perhaps the most ruthless
example); and, of course, that tireless, issue-
seeking advocate of liberal causes, the American
Civil Liberties Union.
The Department of justice, also swept up
into the pack, is out-baying Bayh in the lust for
quarry. In a move tarred by politics, Attorney
General Bell brought about the indictment, in
April, of three former high-ranking FBI officials-
Mr. L. Patrick Gray, formerly the acting Director,
and two of his senior executives, Mr. Mark Felt
and Mr. Edward Miller. He was driven to that
action by a tardy realization that the American
people would not stand for his earlier tactic of
making scapegoats of FBI agent John Kearney
and other middle-rank "Indians" in the Federal
service. So Mr. Bell elected to drop the
indictments of Kearney and others of like nature
who were in tentative preparation and,
reversing himself, went after the scalps of the
four-feather "Chiefs."And for good measure he
fired out of hand on July 6 an officer of 27 years
loyal service, Mr. J. Wallace LaPrade, an Assistant
Director and Kearney's former chief.
Kearney's and LaPrade's careers have been
broken and Gray, Felt and Miller are now to be
put in the dock, all. for having defended the
nation, as their oaths required them to do, from
the bomb-planting Weathermen terrorists
during the turmoil let loose in the late 1960's
with the object of shattering the state.
The prosecution and punishment of these
officers constitutes only the iceberg tip of the
continuing assault on the intelligence
The Situation Report is published quarterly by the Security and Intelligence fund for its members,
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community. Even more destructive in the long
run, in terms of their potential for incalculable
damage, are the constraints being fastened on
the Central Intelligence Agency and the Federal
Bureau of Investigation in regard to their future
capabilities for collecting information in
support of the conduct of foreign policy,
protecting the nation against hostile actions and
otherwise defending the general interest. For
example, an Executive Order signed by
President Carter on January 25 and amplified by
a Fact Sheet issued by the White House three
weeks later has greatly curtailed, among other
things, the professional necessity to resort to
electronic surveillance of foreign powers, or
their agents where there is suspicion of
espionage, or need for intelligence. Worse still,
a mass of bills now floating between the two
Houses of Congress will, if consolidated and
enacted, further restrict the authority of these
institutions to use this essential investigative
instrumentality and, indeed, all but strike it from
their hands.
What is behind all this? The pretext given by
the promoters of these "reforms" is that the
charters of the intelligence agencies need to be
purified, in order to prevent a recurrence of
alleged past abuses, and to protect the privacy of
American citizens, as well as the rights of a
multitude of aliens in permanent and legal
residence in our country. But the practical
consequences of these actions, pursued on the
additional pretext of improving the intelligence
services, is further to intimidate what remains of
their leadership, deaden the esprit de corps
which is the vital force needed to sustain a high
order of professionalism, and to make the
institutions themselves more pliable for the
whims and vagaries of the politics of the day.
All the while, the penetration of American
society by KGB agents and their bloc
confederates has been deepening in scope and
reach. Indeed, so bold has the influx from
abroad become that FBI officials were
compelled only a few weeks ago to warn both
the Senate and House Intelligence Committees
of the expanding threat and to ask for sufficient
funds to pay for an additional 125
counterintelligence officers merely to maintain
a prudent watch on them. By any reasonable
standards, the figure was unrealistically modest.
Even so, the two committees, rejected the
request.
Senator Patrick Moynihan, D-NY, a member
of the Senate Select Intelligence Committee, is
one of the handful of concerned politicians in
the liberal ranks who has the courage tosaywhat
long has needed saying. Shocked by the
irresponsible mindset of his colleagues, he was
moved in an eloquent warning, to shatter the
pretext they were fostering:
"The fact is that under the pretense of
reorganizing CIA, we are making it impossible
for it to carry forward the policies associated
with it in the first three decades, and for which it
was created, which is to say, a forward anti-
Soviet position in this world.... The effort to
change that policy of being aggressively anti-
Soviet in the world has taken the form of
declaring the ' CIA to be a danger to the
American people.... It is now the case that on
balance we indict more intelligence officers
The Situation Report is published quarterly by the Security and Intelligence Fund, Inc., Suite
1000, 1101-17th Street, N.W., Washington, D.C. 20036. Phone [phone].
Chairman ................... James Angleton
President ..... Ambassador Elbridge Durbrow
The Situation' Report is available by subscription or through Security and Intelligence Fund
membership.. Annual subscription rates: United States, U.S. possessions and Canada, $5 per year.
Additional copies are available at $ .25 each postpaid.
Copyright @) 1978 by the Security and Intelligence Fund, Inc. All. rights reserved, however, any
material herein may be reproduced if context is preserved and if attributed to the Security and
Intelligence Fund. Printed in U.S.A.
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 than we ao spies.... I ne fourth Amendment
rights of an American not to have his telephone
listened to, do not extend to the KGB. The KGB
is given the courtesy of the port, as it were, to do
anything it wants. As a liberal, I tell you that the
day will come when it will be looked back and
asked, 'For what purposes did the men of this
political generation make it impossible to resist
Soviet espionage in this country, and why did
they do it?' And, God, we will have a lot to
explain."
A HEMORRHAGING OF SECRETS
The main assault began in December, 1974,
with the publication in the New York Times of a
series of articles by Seymour Hersh purporting
to expose the alleged misdeeds of the CIA
against American citizens. In the aftermath, the
shabbiest of the misdeeds associated with the
expose was Mr. Hersh's own refusal to
acknowledge that the few blunders, the
occasional ineptitudes, which he uncovered
had been terminated and were peripheral to the
Agency's principal line of responsibility and that
the Agency by and large, had done its work well
and there was not urgent need for drastic
reform. This was a truth which Senator Church
and Representative Otis Pike, chairmen
respectively of the two committees which the
Senate and House set up in parallel to look into
the revelations, also brutally ignored. The few
whiffs of genuine scandal that Hersh uncovered
brought on the hurricane of disclosure
generated largely by the leaks from the
"mountains" of documents which the then
Director of the CIA, Mr. William E. Colby, on his
own authority turned over to the Church and
Pike Committees.
It was an ill wind, whipped up in part by the
mood of remorse and repentance that seized
the nation in the aftermath of the failure in
South East Asia and Nixon's disgrace. A foreign
diplomat, appalled by what has been described
as a "hemorrhaging" of state secrets, exclaimed
in disbelief, "You Americans don't have a
country. You have a church." - meaning of
course, a politician named Church, obsessed
with an ambition to be President. Colby's self-
serving action in throwing open the CIA's most
secret toes to the Congress, and" his daily
briefings of the media, in addition to dismaying
friendly foreign intelligence services with which
the Agency had worked in fruitful collaboration
since its founding, breached the constitutional
doctrine of the separation of powers. That act
dealt a blow to the President's previously unique
power to act separately in the gathering of
foreign intelligence and.the breach may never
be repaired.
Another casualty of this folly was an earlier
Director of the CIA, Mr. Richard Helms. He has
been made to suffer because he had the courage
and abiding sense of duty to live up to his
statutory responsibility to protect his agency's
sources and methods - the elementary rule in
such an institution.
Today, four years later, the bitter harvest
reaped by the manufacturers of the whirlwind is
before the Congress in the shape of a corpus of
legislation so drastic in its language, so summary
in its authority, that it will, if adopted in anything
like the proposed form, leave the CIA and the
FBI all but impotent, so far as coping successfully
with subversion, espionage, and terrorism is
concerned.
Most of us as e agreed that some changes are
in order. As a nation, our experience in the
techniques of defending our society from
enemies abroad and within on anything like the
scale the Cold War called for, covers only three
decades. No one can properly quarrel with the
idea of having the metes and bounds of such
operations carefully drawn on the basis of what
that experience has taught us. But here the
sensible end should be to make the intelligence
services more effective, more responsive to the
President's needs in the role of Chief Executive
in the conduct of foreign policy and thenational
defense - and not, as the restrictive legislation
under consideration would do, throw the
services into a goldfish bowl where their
countervailing actions may be known and
frustrated by our enemies.
THE HIGH PRICE OF OPENNESS
Our first Situation Report warned that the
pending legislation is so elaborate and complex,
so obsessed with achieving the . "openness"
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approving this Rube Goldberg apparatus,
politics, as to thwart the primary requirements the majority members noted with satisfaction
of a mature and effective intelligence that in the course of its hearings "no intelligence
community. These rest on the elementary ability community personnel in either open or closed
to move rapidly and discreetly in the gathering session, [stated or implied] that a warrant
of information for the purpose of supporting the requirement would pose serious threats to the
nation's foreign objectives and supplying timely two most important elements in effective
warning of foreign enterprises calculated to do intelligence gathering (1) speed and
us harm. Among the impedimenta which the (2) security." And the majority went on to
proposed legislation would raise against that conclude:
essential capability, we cited the small army of ."One unassailable point emerges from the
officials and aides who would be injected into Committee's consideration of HR-7308: every
the oversight process. No less than 4,500 intelligence community witness that has
individuals by our estimates could become privy testified before this committee supports passage
to a contemplated surveillance of a suspected of the committee's reported bill."
foreign power or agent days, perhaps weeks, But these statements were half-truths. The
before it could be put into operation. silence of the witnesses, the apparent absence of
That first judgment stands. The continuing a general opposition to the bill from the
erosion of the secrecy and reticence which professional services, was in fact a melancholy
necessarily hedge the intelligence function has reflection of the caution and fear which the
already made a number of friendly services continuing campaign of harassment and
chary of working too closely with ours. Trust in intimidation has laid upon them. The minority
this realm is a precious and hard-bought thing. members were more observant as they
At home, the drying up of previously discerned what lay behind the mask. Their
dependable sources of information about dissent arrived at a contrary conclusion: "As
hostile individuals is so far advanced that the time went on some Administration officials
Director of the Secret- Service, Mr. H. Stuart broke ranks. Some highly knowledgeable
Knight recently warned a Senate Judiciary operating intelligence personnel conceded that
subcommittee for the second time in the span of warrant requirements by mandatory prior
a year that he is concerned about his ability to disclosures to judges of the most sensitive
protect the President and other persons from intelligence information, would pose serious
attempted assassination. threats to the two most important elements in
How low the government's esteem for effective intelligence gathering: (1) speed and
secrecy has sunk was unwittingly revealed ina (2) security!"
recent report of the House Permanent Select Another section in the committee report
Committee on Intelligence favoring the explains why more officials did not speak out
adoption of the House Bill (HR-7308) dealing against the bill. One of the features stressed by
with electronic surveillance. its promoters in their sales pitch to the
That report sets forth the history of the intelligence community was that its very
pending legislation and goes on to praise the restrictions would operate to "protect
incredibly elaborate procedures which are intelligence agents in the conduct of their
thereby prescribed. These include a legitimate activities." In other words, whatever
requirement for a judicial warrant for any and' the outcome of an operation, whether it
every wiretap on a foreign power or foreign succeeds or fails, the shackles inhibiting agent's
agent, the laying of evidence before a certain accustomed freedom of maneuver against our
number of special judges in justification of the enemies would also save them from the risk of a
authorization, and the eventual disclosures of belated punitive action of the kind now being
the pertinent reasons for the surveillance to the aimed at FBI officials who moved against the
intelligence committees in both Houses. Weathermen nine years ago.
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 There is aAlpmmggr,FgrtlRfklVRtiVMgs1413
committee has plainly missed. The intelligence
services, and their counterintelligence divisions
in particular, have undergone a Pearl Harbor.
Caution, timidity, even fear have dulled and
stultified them. To read the language of HR-7308
and the collateral bills is to conclude that the
principal objective of the Congress is to make
sure that the FBI and the CIA do not hurt
anyone, that they be rendered incapable of
countervailing action, and that the intelligence
officer who abides by the laws now in the
making will be rendered safe in his person but
utterly ineffectual in the discharge of his duty.
In a word, the enemies of these two
institutions are moving in for the kill.
OUT OF THE BLUE
Two adroit parliamentary moves foreshadow
the enemy strategy.
In one move the Senate version of an
electronic surveillance bill (S-1566) was whisked
through the chamber in a flash. As with the
counterpart in the House, the Senate Select
Committee held hearings in the spring; and, as
in that other chamber, the intelligence
community held its tongue. All the same, a
number of influential Senators had serious
misgivings about the bill, and were preparing to
challenge it. Unfortunately for them and the rest
of us, they fell asleep on the watch. In a surprise
move, some three weeks ahead of schedule,
Senator Birch Bayh, Chairman of the Select
Intelligence Committee, took advantage of a lull
in the Senate calendar and the letdown of
vigilance two days after the dramatic final vote
on the Panama Canal Treaty. He suddenly called
for a vote on the 5-1566. It passed 95-1.
That bill now awaits conference with
whatever bill eventually emerges from the
House. HR-7308, the most restrictive, and thus
far, the worst of the bills in the legislative
hopper, has already been approved by the
overwhelmingly liberal House Select
Intelligence Committee. During the hearings,
however, a number of fundamental questions
were raised and amendments proposed by
skeptics, some successfully, others lost by close
votes. Representative Robert McClory (R-I11.)
Cl4 P8 8ai9i1 r1MR9 RPNP$0oMs. He drove
home an amendment exempting highly
technical and secret surveillance activities from
a prior requirement for a judicial warrant. He
succeeded only by persuading his liberal
brethren that the relatively vast company of
bureaucrats and clerks whom the measure
would otherwise make privy to the surveillance
would open up a critical operation to an
unacceptably high risk of exposure.
THE CONSTITUTIONAL ISSUE
McClory, backed by several other
committee members, also raised serious,
questions concerning the constitutional
separation of powers. Article li of the
Constitution provides that the President, in his
role of Commander-in-Chief shall "preserve,
protect, and defend,the Constitution." He has
therefore the prime responsibility for the
conduct of foreign affairs, for maintaining the
national security and, by reason of the nature of
the modern world, the power to authorize the
use of the intelligence mechanisms to forewarn
and to protect the nation from possible hostile
actions by foreign governments or their agents.
Under that broad sanction, every President
since Franklin Roosevelt has exercised the right
to order the surveillance of American citizens
under suspicion, as well as foreign nationals,
without a court order. The Senate and House
bills both seek to undermine this vested power
by lodging the final authority for such
surveillance in a small group of judges drawn
from the benches of Federal circuit courts.
McClory and his allies in the House are fighting
to strike this provision down. They hold that it is
grossly contrary to the principle of the
separation of powers to attempt to inject the
judiciary into the realm of secret intelligence
and foreign affairs, where it has been absent
until now and where it is barren of experience.
McClory's position finds strong support
among constitutional experts. Robert H. Bork, a
Yale professor of law and a former Solicitor
General, derides the claim that providing a
judicial warrant for electronic surveillance
would guarantee that U.S. intelligence will
hereafter be brought under "the ruleof law." In
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powerful critique published in the Wall Street surveillance, last summer quietly brought off
Journal on March 9, he wrote:
"...The bill pretends to create a real set of
courts that will bring `law' to an area of
discretion. In reality, it would set apart a group
of judges who must operate largely in the dark
and create rules known only to themselves.
Whatever that may be called, it debases an
important idea to term it the rule of law; it is
more like the uniformed, unknown and
uncontrolled exercise of discretion."
On its constitutional aspects alone, the bill
deserved to be given the most careful
consideration of the House Judiciary
Committee. It was in fact originally sent to that
body and the members, after a desultory start,
were about to grasp that constitutional nettle
when by a slick parliamentary trick the
document was snatched out from under their
cognizance, and sent up before its
constitutionality could be challenged to the
House for a vote on the floor.
Representative Robert W. Kastenmeier,
Chairman of the House Judiciary
Subcommittee, brought off the coup similiar to
Bayh's move in the Senate by the simple device
of calling on the majority members to vote to
table the bill. They did, 4 to 3. The move left the
main committee facing an empty stall - its horse
had been stolen. The House Select Intelligence
Committee is now free to introduce a bill on the
floor at a time of its choosing. Mr. Kastenmeier
was nothing if not cynical about his motives.
Almost no one, he acknowledged in an
interview with the Washington Post, liked the
measure as it stood; it would have been stifled
by amendments from both sides - from the
liberals, who think the constraints are not severe
enough and from the conservatives who find it
far too restrictive - and so he ruled that in
case it was better than nothing.
THE TWO FACES OF JUSTICE
One reason for the confusion prevailing in
the Congress, let alone in the minds of
Americans, is the ambivalence in the attitude of
the Carter Administration. President Carter
himself, while pushing with his left hand for the
passage of legislation restricting electronic
with his right a warrantless electronic and
physical surveillance in the Humphrey-Truong
case involving espionage in the service of Hanoi.
Both men have been found guilty. Furthermore,
Attorney General Griffin Bell himself defended
in court the President's constitutional power in
the Humphrey-Truong case to order warrantless
wiretaps. Moreover, Mr. Bell in yet another
situation has been held in contempt of court for
refusing to obey the judge's order to reveal the
names of 18 FBI informers. These were sensible
decisions by the Administration in these
situations.
The confusion compounds. As if oblivious of
the powerful considerations that had compelled
him to act without judicial sanction in the
Humphrey-Truong case - only ,a few months
before, President Carter in January issued
Executive Order 12036 laying down new rules
and guidelines for the entire U.S. intelligence
community. Unaccountably that order calls for
judicial warrants in almost all domestic
intelligence or counterintelligence operations
against foreign powers or their agents, as do the
two major surveillance bills before Congress.
There still remains time for a last-ditch fight
in the House to rework HR-7308 into a law that
will not tie the President's hands too painfully.
Our objectives should be two. First, the
responsibility and accountability of the
President in matters of national security must be
sustained. Second, the measure must be made as
broad and flexible as possible, because its
present provisions, unfortunately are to be
incorporated in the huge omnibus draft bill
(some 230 odd pages) entitled the "National
Intelligence Reorganization and Reform Act of
1978" (5-2525) now before the Senate Select
Intelligence Committee.
Hearings are taking place on S-2525 but
because of its vast bulk and the complexities of
the subject, not to mention the reluctance of
politicians to commit themselves to so prickly an
issue in an election year, the bill will probably
not come under serious consideration until late
this year.
Eventually S-2525 must be met head-on. it
must be thoroughly recast. In our last Situation
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 Report, we rep~rtec~ ondtfie segRelease o steps : Cl s -- $ 8f1P ~~ ~R~ c~v~P a ted by the
which must be taken by the President, Attorney constitution.
General and many others before a judicial We and other concerned groups are gearing
warrant can be issued for every use of electronic up to do all we can to restore reasonableness
surveillance. But that was only part of the and reality to the legislation.
burden which the bill, if enacted, would impose As we reported in our first Situation Report,
on intelligence operations. It also requires that: by conservative estimates the number of Soviet
? More than sixty different kinds of reports be
sent to Congress on intelligence matters,
thereby enlarging enormously the risk of
exposure.
? The director of the CIA must advise both
Select intelligence committees before he can
enter into any agreement with friendly
foreign intelligence services.
? The General Accounting Office shall have
power to conduct financial audits and review
all national intelligence activities requested
by either Select Committee.
? Other committees of the Congress will have
the right to request financial and program
management audits or review by the,
Comptroller General of any national
intelligence activities over which the
committees have legislative jurisdiction.
? The Comptroller General also will be allowed)
to conduct audits or review of national
intelligence activities even without being
asked by Congress.
? The President will be required to establish
"standards, procedures, and criteria" for
identifying which categories of covert foreign
intelligence activities require his personal
approval.
? Both Select
notified in
Committees will have to be
advance of all requests for
agents operating~n our country has increased by
fifty percent since the start of detente, six years
ago.
An unnamed official was quoted in the New
York Times of June 15, as saying that "Soviet
espionage activity here had `got out of hand.' in
the sense that Soviet intelligence officers were
undertaking injudicious operations that were
virtually `provocation."' The FBI in its
counterintelligence role is certainly more
circumspect nowadays. It is also increasingly
timid. The KGB activities verge on
effrontery.This is the price the nation is paying
for the ambitions of Senator Church and his
lieutenant, Mondale.
The increasing boldness of KGB operations
inside the U.S., the "bugging" of the American
Embassy in Moscow, as well as ,the growing
threat of terrorism as. exemplified by the Red
Brigade murder of Aldo Moro, point up a
danger that is all too plain. In West Germany and
Italy, troubled Parliaments have passed new laws
or enforced existing ones to the end of giving
their law enforcement and counterintelligence
officials more effective means for countering
and apprehending elements bent on
undermining the state. The hour maybetoo late
for them, but let our Congress take heed.
Never has it been so important for an
American President and the intelligence
community supporting him to know what is
going on at home and abroad to know what
sinister enterprises are being prepared against
us, and to know what schemes are afoot to
penetrate our society, pilfer our secrets, and
unhinge our institutions through clandestine
political action.
These are the threats, the risks, and the
dangers which the bills of Congress fail to
address.
Presidential approval of clandestine and
"special activities," including counterintel-
ligence projects.
Such standards, procedures, and criteria as
may be set by the President and any proposed
changes in these standards will have to be
submitted to both Select Committees 60 days
before they can become effective.
These unrealistic and stifling provisions are
quite enough to bring our intelligence
operations to a virtual halt. They are a blatant
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A Quarterly Publication of the Security and Intelligence Fund
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