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• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00901R000600390003-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 9
• Document Creation Date: December 20, 2016
• Document Release Date: June 15, 2006
• Sequence Number: 3
• Publication Date: May 29, 1987
• Content Type: TRANS

Approved For Release 200%/ '6%1 ~ :EUA-`RE5Fb1-t# 504,8000&0{33 03-0
&ZI JOT AZIWA:;
TV
CLIPS
DATE
TIME
NETWORK
PROGRAM
75 EAST' NORTHFIELD ROAD 1 LIVINOSTON ~ NEW JFRSFr 0x039
[phone] i Ee00) 631-1160
May 29, 1987
8:00-9:00 PM
CNN
Prime News
Mnry Alice Williams, co-anchor:
ACCOUNT NUMBER N/A
NIELSEN AUDIENCE N/A
Standing tall and talking tough, President Reagan tolls all that the oil will
get through the Persian Gulf. Here's CNN's Charles Ricrhauer with us now on
what the president had to say.
Charles Bicrhauer reporting:
President Reagan fund economic justification for sending more U.S. warships
to the Persian (lulf area, He revived 1970's images of demoralizing gas lines
and said that won't happen again while he's president,
Aierhauer: National security advisor Frank Carlucci says this does not end
U.S. neutrality in the Iran-Iraq war and is not meant to be provocative,
Former officials who have been in similar positions urge caution.
Stansfield Turner (17=ormcr CIA Director): Presidents and their advisers have a
tendency to take the first military stop in the hopes that that will be the
last.
Bierbauer: The president will ask for help from his allies at the coming
Venice economic suminit and after hearing considerable congressional criticism
security adviser Carlucci says the administration has no problem with
reporting to Congress but does have problems with Congress imposing
conditions on such operations. Charles Bierbauer, CNN, the White House.
185 Words
15 Clips
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~~ ~? LOS ANGELES TIMES
8 February 1987
An Aspirin for the CIA,
but Major Surgery Needed
J By James Bamford
offer assistance for future NSC arms-
for-hostages operations. Such actions led
CAMBRMIL
MAK one congressman on the House Foreign
its
last week William J. . Casey, following Affairs Committee to declare, "There are
resign director,
Like who
brain surgery for a malignant tn- clearly elements who believe they are a
government unto themselves." And Adm.
rOor, the Central Intelligence Agency is A Stanfield Casey's pr rtes-' eor a
seriously ill and the prognosis is for a slow , sal , "If I'd have found out that
recovery.
Chosen by President Reagan to nurse
the agency back to health is Robert M.
dates a 43-year-old Soviet ana ys 'w o
served as Casey's deputy since April,
1986. Although the choice of Gates has
drawn support on both ends of the
political spectrum, his selection repre-
sents little more than an aspirin where
major surgery is called for.
Among the most striking revelations to
emerge from the recently released Senate
Intelligence Committee report is the pic-
ture it paints of a weak and confused
Casey attempting to run an agency in
search of a purpose. For decades pure
espionage-the collection of intelli-
gence-has shifted to the more cost-ef-
fective technospies: The sensitive ears of
the National Security Agency and the
telephoto eyes of the National Reconnais-
sance Office. To fill the void, the CIA
turned more and more toward covert
operations, an area that Casey, a former
Office of Strategic Services operative, was
familiar with.
But, as the intelligence committee re-
port vividly shows, Casey was too weak a
director even to maintain the agency's
control over covert operations. Thus it
was not an experienced CIA official who
played a key role in arranging the early
arms-for-hostages transfers, but MIc ae1
A. Ledeen, a neophyte part-time em'mTp oy
'ice" tsf Wie' National Security Council who
acted more like a lobbyist for Israel than a
U.S. representative, and Lt. Col. Oliver L.
North, a monomaniacal Marine also on the
NSC staff. Ledeen was later replaced with
various arms dealers.
An even more disturbing revelation to
emerge from the Senate report was the
agency's lack of control over its own
covert-action specialists. For example, it
was not Casey but John N. McMahon, the
agency's deputy director ac ng as ec-
tor while Casey was in China), who
ordered that no further CIA activity in
support of the NSC operation be conduct-
ed without a presidential finding author-
izing covert actions.
Nonetheless, despite the fact that a
finding was not issued until Jan. 17,1986,
nearly two months later, the agency's
Covert Action Unit secretly continued to
there was an intelligence operation run
without my knowing it, I'd have quit the
next day."
Finally, the CIA under Casey may have
severely damaged one of the agency's
most important intelligence sources: close
liaison activities with friendly govern-
ments. It is far easier, for example, for the
West German government to infiltrate
the East German intelligence network-
and then share the result with the
CIA-than it is for the CIA to spend years
attempting to train Americans to do the
very same thing.
But developing such assets often takes
years of patience and, especially trust.
Lose of that trust may result in a cutoff of
key intelligence for a long time. Unfortu-
nately, it is just such trust that the CIA
under Casey and Gates has been rapidly
squandering. How can any foreign gov-
ernment, for example, trust its secrete to
an agency that warns them against selling
arms to terrorist nations while at the same
time is secretly doing precisely that, or
allows highly sensitive covert operations
to be conducted by a group of inexperi-
enced comic-book characters; or misplac-
es tens of millions of dollars in secret
funds; or supplies doctored intelligence to
one side in a war while secretly sending
arms to the other? The argument that
senior agency officials had no idea that
any or all of the above was taking place
would only compound, not lessen, the
mistrust of friendly intelligence services.
These are just a few of the problems the
new director must overcome if the CIA is
to regain its credibility. Unfortunately,
Gates does not measure up to the job. His
main virtues appear to be a strong
ambition and an ability to follow orders
unquestionably. He also appears to have
been heavily involved with Casey-not in
trying to get to the bottom of the illegal
diversion of funds from the Iran deal to
the contras, but in trying to cover it up.
Gates, for example, was. first informed
by a CIA analyst of the possible diversion
of funds as far back as Oct. 1, 1986. During
their discussion, however, there was
never any mention of potential illegality,
only talk about the inappropriate com-
mingling of separate accounts and the risk
of the operation's discovery. Not until Oct.
7 did dates and the other official brief
Casey on the likely diversion.
Adding to the worry was the fact that
earlier that same day Casey had met with
Roy M. Furmark, an old friend, who
warned him that two Canadian business-
men, who had put up money for the arms
deal, had not been repaid-and they were
threatening to go public. Soon after the
meeting, Casey and Gates informed Vice
Adm. John M. Poindexter, then Reagan's
national security adviser, of the possible
diversion of funds to the contras and the
possibility that the operation might be
blown.
What Casey and Gates were obligated
to do at this point was inform the
congressional Intelligence Committee and
also the President's Intelligence Over-
sight Board, a small White House body
charged with looking into possible illegal
intelligence activities. What they did
instead was to try to turn a blind eye to
the whole operation. According to one
report, Gates told the Intelligence Com-
mittee that it was CIA policy "to not even
want to know about funds being diverted
to the contras." "If we even knew," Gates
said, "we would be blamed for it."
Thus, even though North, over lunch
with Casey and Gates on Oct. 9, made
reference to the Swiss bank account and
money for the contras, neither CIA official
were interested in hearing any more
about it. All they wanted to know was
whether the CIA was "clear}." Assured by
North that it was, Casey and Gates
pressed no further and again made no
mention to any oversight body. The most
they did was to ask the agency's in-house
general counsel to review all aspects of
the Iran project to ensure that the CIA
was not involved. The general counsel,
without questioning North or, apparently,
anyone else with any potential knowl-
edge, quickly came up with a clean bill of
health for the CIA.
Over the next six weeks, growing
evidence of the funds diversion continued
to flow into the offices of Casey and Gates.
Yet the cover-up continued. On Nov. 21,
Casey testified before the Senate Intelli-
gence Committee and made no reference
to the contra diversion. Later, Gates
weakly defended the deception, saying
that they (Casey and Gates) didn't have
enough information to go on. Yet, Gates
added, "It was enough to raise our
concerns to the point where we expressed
them to the White House."
There is no doubt, as many have
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indicated, that Gates represents a vast
improvement over his former boss. He is
bright, articulate and capable. He also
appears to be more comfortable with
congressional oversight than Casey, who
viewed the intelligence committees with
disdain and suspicion. But, his actions
during the Iran-contra affair leave a great
deal to be desired. Unlike his predecessor,
McMahon-who protested loudly over
such improper activities as the lack of the
presidential finding and then resigned,
apparently at least in part as protest to the
agency's continued involvement in the
arms-for-hostages deal-Gates shows no
such inclination toward moral courage. In
choosing someone to head up the entire
U.S. intelligence community, such a qual-
ity must be a principal requirement.
In its confirmation hearings next week
the Senate Intelligence Committee should
send the nomination of Gates back to the
White House with the clear message that
what the: agency needs is candor, not
cover-up. The most effective cure for the
CIA's ills is a new director from outside
the agency with stature, broad foreign-
policy, defense and intelligence back-
ground and a free hand to make all the
necessary changes. Such an appointment
may be the only way to get the agency off
the critical list and into the recovery
room. 0
James Bamford is author of "The Pumle
Palace," an examination of the NationaL
Security Agency.
11,
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A
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X C
8 February 1987
fo `4
A growing black bud e k /1, r :. ,1'V' A'&
~ ~
pays for secret wea ns covert wars
Quietly, the Pentagon's
secret "black budget" is
growing faster than any
other part of government.
It consumes more federal
dollars than education or
environment. It has tripled
in the Reagan years. It
pays for complex new
weapons systems and
dolphins trained as
saboteurs, conventional
intelligence gathering and
plans for World War IV.
Yes, Four.
ne
By Tim Wei
Ingei . m nfe
Two years ago, a startling item appeared
in President Reagan's budget. It was a
military project code-named Aurora, and
no further description or explanation was
given. But Aurora caught people's atten-
tion anyway. That's because the projected
budget showed its cost soaring from $80
million in 1986 to $2.3 billion in 1987.
What sort of project grows like that?
Not one the Pentagon wants to talk about.
In the administration's defense budget
this year, there is no mention of Aurora.
The project and its billions have "gone
black" - vanished into the vast cache of
secret accounts that the Pentagon calls its
''1fI 'tbudget."
Since President Reagan took office in 1981,
his administration has more than tripled the
black budget. This secret spending for classi-
fied programs now totals at least $35 billion a
year, according to an Inquirer investigation of
Defense Department records, corroborated by
Pentagon and congressional sources, It now
accounts for 11 percent of the Pentagon's
current $312 billion spending request, and
that number is bound to swell, for the black
budget is growing faster than any other major
sector of the federal government.
The Pentagon says nothing publicly about
the black budget, and most members of Con-
gress have no access to details about it.
Under the cloak of Slack-budget secrecy,
the Reagan administration is spending bil-
lions on nuclear bombers and millions to
train dolphins as underwater saboteurs. It
has developed elaborate plans for winning
a months-long nuclear war - World War
III - and preparing for World War IV. The
plans include robots stalking radioactive
battPegrounds, satellites orchestrating nu-
clear attacks and generals speeding along
interstates in lead-lined trucks, ordering
warheads fired from faraway silos.
The black budget also funds a host of
secret weapons. covert military units, one-
quarter of all military research and devel-
opment and at least three-quarters of the
U.S. intelligence community's espionage
and covert activities.
The black budget is split about evenly
between funds for secret weapons and funds
for intelligence agencies. The military's por-
tion alone has grown eightfold, to at least
$17 billion, since Reagan took office.
The portion of the U.S. intelligence
budget hidden away in the' Pentagon's se-
cret accounts has doubled to at least S18
billion under the Reagan administration.
And no part of the intelligence budget has
grown faster than funds for covert opera-
tions-currently more than $600 million a
year, according to intelligence analysts.
The controversy swirling in Washington
over the covert sale of weapons to [ran and
the diversion of millions of dollars in profit to
contra forces in Nicaragua shows how the
secret use of secret funds can undermine
trust in government, warp foreign policy and
damage a presidency - when it is detected.
The spending of those millions to fi-
nance secret wars has now raised congres-
sional hackles, but the spending of billions
to finance secret weapons continues to
grow largely unchecked.
The black budget now is nearly as big as
the entire federal budget for health care. It
is far bigger than the federal budget for
education or transportation or agriculture
or the environme~tt,.
The black budgetk fastest-growing com-
ponent is secret spending on military re-
search and development. Now approaching
$11 billion, it has increased 1,357 percent
under Reagan. It is three times bigger than,
the entire budget for the State Department.
And no end is in sight.
This is growth that foreshadows huge
future increases in the overall black
bud,4ct, for research and development is the
acorn from which the defense oak grows. So
the secret spending will only accelerate as
such projects as Aurora - which was a code
name for the $60 billion Stealth bomber
project - go from the drawing board to the
assembly line.
National-security laws forbid any public de-
bate in Congress that would reveal specific
weapons or specific dollars or, for that matter,
specific foul-ups in the black budget.
Thomas Amlie, a Pentagon missile expert
with security clearances high enough to know
about some black programs, says the military
has "three basic reasons for having them. One.
you're doing something that should genuinely
be secret. There's only a couple of those, and
Stealth ain't one of them.
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"Two, you're doing something so damn
stupid you don't want anybody to know
about it.
"And three, you want to rip the moneybag
open and get out a shovel, because there is
no accountability whatsoever."
As a consequence, critics say, the black
budget is far more vulnerable than the rest
o1 the defense budget to shoddy work, inflat-
ed bills and outright fraud by contractors
and subcontractors. Rep. John D. Dingell
(D., Mich), whose House Energy and Com-
merce Committee is trying to penetrate the
secrecy surrounding Pentagon spending,
said flatly that the black budget "conceals
outright illegal activities." ?
"The Pentagon keeps these programs of
almost unbelievable size secret from Con-
gress, from the General Accounting Office,
from its own auditing agencies," Dingell
said. "And every time they have kept secrets
from us, the facts, when they come out, have
been surrounded by a bodyguard of lies."
Although the few members of Congress
who are briefed on the black budget, and the
larger number who are not, are growing
increasingly unhappy with the system, they
have been unable to pierce the Pentagon's
shield of secrecy.
In the U.S. House of Representatives, the
chairmen and ranking minority members of
committees dealing with military matters
receive briefings on black projects. In all,
about 30 House members are given limited
information about some black programs, ac-
cording to congressional staff members. Sen-
ators overseeing military and intelligence
affairs have greater access.
Two of those in the know, House Armed
Services Committee Chairman Les Aspin (D.,
Wis.) and ranking minority member Wil-
liam Dickinson (R., Ala.), think the Penta-
gon's secrecy is unjustified. They have said
70 percent of the black budget could be
declassified at no risk to national security.
Black budget is the Pentagon's own term
for projects it hides from public view by
classifying their titles, their costs or their
objectives. (It does not include the Strategic
Defense Initiative. or "Star Wars." which has
been kept out of the black budget so that it
can be promoted openly in the political
marketplace.)
Black projects are concealed in several
ways. In many cases, their costs simply are
deleted from the unclassified budget. Some
are given code names, such as Bernie, Tacit
Rainbow and Elegant Lady, or hidden under
innocuous headings such as "special activi-
ties" and "advanced concepts."
For example, the fiscal 1988 Air Force
procurement budget includes a line item of
$4.7 billion for "selected activities," $3.1 bil-
lion for "other production charges" and $2.3
billion for "special programs." That is all
that Congress as a whole knows about these
three black programs and the $10.1 billion
they will consume.
All told, more than S25 billion nearly
one-fifth of all Pentagon spending for devel-
oping and producing weapons and materiel
- is hidden in the black budgets for re-
search, development and procurement.
These secret programs are financing air-
craft, weaponry and military satellites
whose final cost will far exceed $100 billion.
"A fair question would be: What the hell's
going on here? This is a tremendous amount
of money to be spending with no oversight,"
said John Steinbruner, an expert on nuclear-
war strategy who directs foreign-policy stud-
ies at the Brookings Institution in Washing-
ton. "Somebody's got to say: 'Hey, are we
running a democracy or not? Is the fetish for
secrecy undermining the political proc-
ess?' "
"This is a problem that Congress persist-
ently refuses to face, and the consequences
could be very, very serious," said William W.
Kauffman, a top defense-budget adviser to
Presidents Kennedy, Johnson, Nixon, Ford
and Carter. "I think people in Congress don't
realize that with the black budget increas-
ing as it is, they've really got an explosive
situation on their hands. Either the Penta-
gon is going to have to give some of these
projects up or we're going to see an explo-
sion in budget authority and outlays."
But few members of Congress have the
time or energy to fight the Pentagon for
information on black projects. Several spent
more than a year trying to obtain accurate
budget data on the Stealth bomber. The
Pentagon finally released five-year-old clas-
sified cost figures that many in Congress
suspected were misleading.
"They control what the Congress gets and
sees," said Rep. Denny Smith (R., Ore.), who
calls himself a "cheap hawk," a cost-con-
scious conservative, on defense issues. "As a
congressman, I can't get information. ...
They don't want to have us mucking around
in their budget.
"There's a real question here," Smith said.
"Will the military accept civilian leadership
when it comes to choosing weapons?"
A senior staff member of the House Gov-
ernment Operations Committee said that
even what little congressional oversight ex-
ists has been weakened by the Pentagon's
budgetary sleight-of-hand. He said the Penta-
go!Ws a double-ledger system of account-
ing,Nr black projects in which "brooms
bec a computers" and computers become
bombs.
"The Pentagon gets tremendous benefits
from misleading Congress, and very few
risks," he said. "As more and more money
disappears into these ultrasecret programs,
the checks and balances are basically being
eroded. ... Congress has become less and
less alert to this. It is abdicating power."
The black budget, Defense Secretary Cas-
par W. Weinberger said at a Jan. 6 news
conference, is made up of "funding which
we believe it is better for us not to publicize,
on the very sound premise that we don't see
the purpose of giving additional information
to the enemy."
Weinberger, of course, was referring to
the Soviet Union. However, many members
of Congress believe he had another adver-
sary in mind.
"The attitude of this administration is that
Congress is the enemy." said Rep. William H.
Gray 3d (D., Pa.), chairman of the House
Budget Committee. "So we simply do not get
nearly enough information to keep track of
these secret accounts. The administration
has run wild in this area. They are trying to
end-run Congress as if there were no checks
and balances in the Constitution. It is a very
dangerous policy."
And even the staunchest supporters of
national security now are questioning the
black budget's growth.
"I know quite a lot of black programs, and
many of them are well-managed," said Rich-
ard Garwin, a longtime defense consultant
and presidential adviser who helped develop
the hydrogen bomb. "But the proliferation
of these programs is very bad. It is primarily
to avert criticism and evaluation. It is part of
a general trend of this administration to
block information on its programs, whether
they be classified or unclassified. And that is
profoundly anti-democratic."
Increasingly, the Pentagon is pushing pre-
viously unclassified programs into the black
budget. About $4.5 billion in once-public
Pentagon spending, such as funds for the
Milstar space satellites designed to help
fight nuclear wars, has vanished into the
black budget in the past two years.
"Huge areas have been removed from pub-
lic debate," said Jeffrey Richelson, a profes-
sor at American University in Washington
who has written several acclaimed studies
on U.S. and Soviet intelligence. "Whole pro-
grams have gone black without Questions
being asked, such as: Do we need these
weapons? Will they be destabilizing?"
Richelson said, "The secrecy once re-
served for extraordinary programs" - such
as the Manhattan Project to build an atomic
bomb during World War II - "now has
become an everyday, every-time affair."
Why are more and more projects becom-
ing black? The foremost reason is the Rea-
gan administration's desire for secrecy. That
has driven the black budget upward more
forcefully than any weapon in the Penta-
gon's plans.
In 1982, President Reagan signed an execu-
tive order revising the procedures for keep-
ing secrets. The order said, in effect, that in
balancing the public's right to know against
the government's power to keep secrets, se-
crecy would carry more weight.
The order allows bureaucrats to "reclassi-
fy information previously declassified" and
forbids them to consider the public's inter-
est in access to government information
when deciding to classify a document. Since
then, the government has been classifying
more documents and declassifying fewer
than in previous administrations, according
to the federal Information Security Over-
sight Organization, which monitors classifi-
cation orders.
But there may be reasons other than se-
crecy that are driving the black budget
higher.
A recent report by a presidential commis-
sion on.defense-security practices warned
that black programs "could be established
... to avoid competitive procurement pro-
cesses, normal inspections and oversight."
And a senior House Armed Services Commit-
tee staffer, Anthony Battista, noted in a 1985
briefing that a multimillion-dollar radar-
jamming system was classified to hide the
Pentagon's violation of competitive bidding
rules in awarding the contract.
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security clearances necessary to audit black Battista told the Armed Services subcom- documents show. Sophisticated Army and
programs, which usually are classified as mittee on research and development that Air Force electronic?warfare systems; Navy
"sensitive compartmented information," a the Pentagon "is putting more and more into programs aimed at disguising U S. subma
classification above top secret. There are e . . the black programs, not because of na- rines' movements and detecting enemy subs
more than 10,000 such security "compact- tional security, but simply to skirt the nor- with underwater sensors, and advanced
menss," and it is illegal for anyone without mal acquisition process." computer, radar, communications and jam-
that specific clearance to possess knowledge Very few federal investigators have the ming systems are among the projects driv-
of the program. The most costly by far is the Stealth bomb' ing up the black budget.
That raises the question whether the fiscal er, which is becoming the most expensive All are cloaked in the secrecy that tradi-
abuses revealed in unclassified Pentagon weapon in American history. The Air Force tionally has been reserved for the nation's
procurement programs - the $7,000 coffee wants 132 of the planes delivered by thle espionage agencies,
pots and $600 screws - also are occurring in early 1990s. Most military experts place the The in rell+Qen cecolzim1Aniit._.L~cves
secret. bomber's ultimate price at about $450 mil- more than 75 percent of its funds from the
"In a black project, people don't worry lion apiece. If that estimate is accurate, th?e Penisgon s ac u et. The intelligence
about money," says a systems engineer who Stealth bombers' total cost will be 560 billion commune y s s are 05 e -mrc-R-uff-geT
has on proj space, s four black ckheeeed d at the - a sum equal to the combined annudl funds the CIA. the National curity Agency
and ce m division of Lock Missile
a Space e Co. in Sunnyvale, Calif. budgets of New York, New Jersey and PenA? and the National econnaissance ice, e as
we as t e mi i ary
"a you you money, you got it. If you screw syStealthlvania. Stealth-bomber spending may be spread Their u gets appear in o is ocu-
en need
asked more, thayou t got it," said the out over several programs to hide its iti}- went.
engineer, you
published. who pouring his name not .be mense size. Now that Aurora has vanished, ___T le'CIA's budget, an estimated $2.3 billion,
tlthing. "You're you ojust it rig money into, analysts say Stealth money is cached in has more an doubled under the Reagan
the thing until d get ii right the The insme; two Air Force line items: "other productioxi administration. n no part o it has grown
five isn't there to it right the first time. charges - $3.1 billion" and "special pro- faster than funds or covert operations, now
Who's going to question it?" rams - $2.3 billion." Some say it is hiddei million o ore a year,
Questioning the black budget is difficult for g
within the Department of Energy's $8 billion But the ms's budget remains the smallest of
a Congress lacking lacking information. But Bud by limits i th in budget for military programs. those o the three major intelligence agencies.
future d spending required The Pentagon refuses to disclose the price is dwarfed by e National uri gen-
Gramm-Rudman budget-cutting law may! tag on Stealth technology, saying the Soviets cy s, which has n placed at billion.
force the issue. The law, which is designed to could deduce the status of the projects by vacuum cle~kier of
phase out the federal deficit by 1991, says SQ tracking the spending. Top Pentagon offi- The intelligence. NSA e. is a Its glolistening bal obal vacuum include
percent of the budget cuts should come from cials decline to respond to reports that theound stations around the oand KH 11
defense spending. And the federal deficit tl~is Stealth aircraft's heralded radar-evading ground stations around world . The s l1
year will be $174.5 billion, according to U ability already has been outstripped by ad- spy nd and satellites agrouor stations orbiting the earth. l-
telexes, ntarh. The s intercept microwave
from ground
nonpartian Congressional Budget Office. - ' vances in radar technology. They have de- lites
Those seeking more bang for the defensk nied in a public hearing before a congres- tion transmitters, iot dho and amicrowave NSA
buck are concerned that the growing black rosional oversight committee that Stealth can missiles
pick out specific late satellites. NSA
budget will crowd out defense spending for aircraft exist. computers P
mundane but crucial things such as boot9 The hearings stemmed from a series of tions from the babble of international tele-
and bullets security lapses and frauds on Stealth proj- communications traffic.
"What we see in three to four years s a ects. The Stealth-related criminal cases are The NSA also conducts surveillance within
train wreck coming," said Gordon Adams of 'r the United States. A secret court of federal
the Defense Budget Project, a Washingtotl only "the tip of the iceberg" of illegal con- judges, which meets periodically in a secure
research organization that analyzes Penta? duct on black projects, said Robert C. Bon- chamber within the Justice Department,
gon spending. The crash he envisions: rush; ner, the U.S. Attorney in Los Angeles, a hub grants the NSA license for domestic opera-
ing headlong in one direction, tens of bilk of secret military contracting. Corp., the tions. Under a secret directive signed by
lions of dollars in immovable black weapons One engineer hired by Northrop President Reagan, the NSA has access to the
projects; coming the other way on the same. lead contractor on the Stealth bomber, was a computer systems of the IRS, the Social Secu-
track, tens of billions in unstoppable budget Florida chain-gang alumnus named William rity Administration and every other civilian
government
cuts mandated by the Gramm-Rudman law. Reinke. He was convicted of defrauding the overnm nt agency.
No law establishes or limits the powers
"The consequences of that train wreck for company of more than $600,000 by channel-
national security are enormous," Adams-ing Stealth subcontracts to a company he and responsibilities of the NSA, which was
said. "What piece of flesh do we cut? Do we secretly owned. In another case, a Northrop created by a secret, seven-page order signed
mothball part of the Navy? Cut personnel?' purchasing agent, Ronald Brousseau, was by President Harry S, Truman in 1952. The
We will have to make those choices, and all, convicted of rigging contracts in exchange NSA regularly spied on American citizens
for a black budget we know nothing about. for kickbacks from subcontractors. He de- until 1973, when revelations in the Water.
But something can be learned about th4 :scribed the ease of defrauding black pro- gate affair ended that practice. The only
black budget. The Inquirer reviewed mor ;grams to a government informant wearing a known mention of the agency in the public
than 10,000 pages of Defense Departmen ..' oncealed tape recorder: "We don't have any laws of the United States is a 1959 statute that
budget documents, studied the congress i'heads, we don't have any supervisory people.
lineal testimony of Pentagon officials and Nobody questions dollars or anything
interviewed military and intelligence ex,'4ike that."
perts inside and outside of the Pentagon fo>; 1 Few in Congress nc Snead h tatelquestion ueor
this series. ~dollars Within the military's black budget, no"expect satisfactory answers about Stealth's
subject is more controversial or costly tha4 capabilities, said Rep. Mike Synar (D., Okla,),
Stealth technology, which is designed to.hecause of "the absolutely adamant refusal
Synar called informtion
enable aircraft and missiles to elude enem} Stey the alth," a refusal to release
"an insulto
radarr. I
radar. to
Although the technology is a relatively Congress."
open book - an informative volume on the Synar said his experience in trying to
subject can be bought in the Pentagon book obtain accurate cost figures on the bomber
store and accurate models of Stealth fighters taught him this lesson: "It's obvious that
can be purchased in toy stores - its true Defense (Department officials) will not be
cost remains a state secret. Defense analysts truthful with Congress and the American
place the combined costs of Stealth projects public when they think it's in their inter-
for Air Force fighters and bombers, nuclear est."
cruise missiles, pilotless drones and Navy Stealth the biggest of the military planes at $100 billion. grams, but other secret ~OANf?
absorb billions of defense dollars, Pentagon
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 qq~~gqrove~ Forelease~ 20061,~,,:,1~gRQP-0901 R00060390003-0
states: "hing in his ac or any o her a
bt
. shall
research satellites.
l be construed to require the disclo- ilItslsbudtsed et as is weather estimated and at $4 billion.
sure of the organization or any function of g
the National Security Agency."
Employing at least 60,000 civilians, and
working closely with the Pentagon from its
Fort Meade, Md., headquarters midway be-
tween Washington and Baltimore, the NSA
also controls the nation's cryptography pro.
gram, making the codes for U.S. forces and
breaking the codes of foreign nations.
The third major espionage agency is the
National Reconnaissance Office. Its existence
never has been openly acknowledged by the
United States. It is an agency so secret that its
letterhead is classified. It is known to operate
satellite reconnaissance systems under the
direction of the Air Force, and it provides
photographic data to the intelligence commu-
lap with the Pentagon in their missions. For
example, the Army provides cover and per.
sonnel for CIA operations, such as the train-
ing of the Nicaraguan counterrevolutionar.
ies, the contras. The Pentagon controls a
variety of intelligence programs, including
the entire National Reconnaissance Office,
the NSA's spy satellites and code-breaking,
research and development of espionage
equipment, and submarine surveillance of
the Soviet Union.
Most congressional critics of the black
budget make a practical distinction between
the rapid. growth of secret military spend-
ing, which they see as largely unjustified,
and the black budget for espionage. Few
have argued that intelligence programs
should suffer public scrutiny.
But even this consensus has been strained
by revelations that the CIA has kept Con-
gress in the dark about covert operations of
questionable legality, ranging from the min-
ing of Nicaragua's harbors to the arms-for-
Iran and cash-for-the-contras deals.
"I'm not against black programs," said
Stansfield Turner, who served as CIA direc-
tor from 1977 to 1981. "But is Congress will-
ing to let these programs go through with-
out knowing what's in them? It's clearly
become much more difficult for Congress to
get information, and it's clear that congres-
sional oversight has been narrowed. I don't
know whether that's a good thing."
One concept of the Stealth bomber .
Four modified
F 101 engines
The super -secret Stealth bomber now in prodvcbnn looks somerhirq like Ihis acc'rd~n, rn
educated guesses by aviation experts Stealth rises special J-o,,s ind materials to avoid
defection Its flat shape. lets enemy radar skim river .i r91he, rhr^ h .'ring back to enemy
locations and revealing the bomber s position to ;k -n Ibsorhs rather ?hn i roflnets radar signals Is
engines have mufflers that work like a silencer nn ,i gun ireduce hear Inrl nrhaiist chieirling the
plane from infrared heat sensors It carries elecr cmc iyevices to lam Inn Iii enemy duterrors
Rotary launcher Advanced
(eight cruise missiles or 883 cruise missiles
thermonuclear gravity weapons)
Vecloring/reversino nozzles
Absorbent baffles
Auxiliary inlets
Auxiliary nlels absorbent baffles
and veitOrinq 'eversinq nobles
disguise entice heat and exhaust
to avoid detection by infrared
sensors
I
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 Approved For Release 2006/06/15: CIA-RDP91-00901 R000600390003-0
Anatomy of a black budget
This page taken from the Pentagon's fiscal 1988 budget request for Air Force research and development
programs shows how black protects are hidden from public view,
Unclassified programs have clearly stated functions and costs.
Black programs such as Lea do not.
O"C LA SS 1 11EO
Oe0artment Of r
fv 1966/1989 a On1 a E
Forc?
Program
E.nrolt a-1
3600 F eessarcn Osvel0oment last 6 Eva1 ?P
Oats: 05.,A._1967
rnowsand$ of Ool tars
LIna
Program
Element
no
r.umoar
3
2.576
25.699 37 151
]8.064 u
89
12622$
'-LEO
3
90
3 3 1 3 1 f m m lss snt~al Ems rgencr Cans.,^c4l ions
3
'7.802
60.227 55.5988
34.731
91
011.or0 1 w8ECs1
33152$ wgrld-SIda .111 10" Command and Control
4.338
7.59] 5.'07
5.319
92
Satama. tntormat ton SySItm
33154F wWMCCS Information Sr'tom Joint ere9r am
3
56.422
94.930 8.1 089
91.425
93
uaneOsmant OfIics
33601E r Ii star Lis 11 ire Communlcstlons 5rstem (Af
3
117,734
271.966 229.229
310.353 u
94
naltl
33403$ w, let-1 Sa uillta Commun4cats ons Srs 14
3
3
331.317
470.316 1
95
35124$ Spec:.' toolicat. ons Program
98
35155$ Tnaat sr mwcl oar weapon Storage L Sec.,r1l,
3
S yetem
e7
39172$ slFMll
96
35692Fet Spac 4.I Analyela ACtlvttiea--n
Black projects such as this one,
code-named Bernie, have
classified titles to disguise their
purposes. Their costs are deleted
from the public Pentagon budget.
This black program's title
suggests something to do with
intelligence. Its purpose and cost
are secret.
The Milstar satellites went black
in this year's budget. Funds for
Milstar exceeded $800 million in
fiscal years 1986 and 1987.
Growth of
Air Ford
22
Pentagons 9.t
Federat s d!
by category
as
bl&* WdgM
secret research and
35
Fiscal year 1986
development 6
519
In billions
.
spending
Toa Aa Force
budget for 18664/on.
In billions
28
development and
iFaral 3535
26
prdcuremalt:51 i b_?1ar
1981081
25
1.296
511hub0n
0.626 ^
L
'98! 1983 1985 1987 1988
14
Total of brbled:9 for wnlcn no cost
g?res are OiODSneo m the
?xlass f ed budget. An add1BOnal
$1.7 blllOn n OrbleC'?s wCh 1i
0 olsrad coals-out wn clasoil ed
code names-bangs 1013196
esearch ono oevelopment 10
y
0
c
u
a
w
U---ii
-
_
v
=
Air Force black budget
for research,
development
and proct3rarnent
5
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 A proved For Release 2006/06/15: CIA-RDP91-00901 R000600390003-0
ART!CLE APPEAE
ON PAGE -kA USA TODAY
17 February 1987
CIA choice
has tough
tasks ahead
By Sam Meddis
USA TODAY
The Senate could confirm
7 Robert cZates-today as youn-
~ver .CIA director.
But, at 43, the 21-year CIA
veteran faces two larger tests:
^ First, defending the CIA's
role in the Iran-contra scandal
at confirmation hearings - to-
day on CNN at 10 a.m. EST.
^ And, over the next two
years, establishing his indepen-
dence from the Reagan admin-
istration so he can retain the
post under a new president. uPi
"I flatly predict - I have no GATES: Married father of two
question in my mind - he called a very private person
should be confirmed," said
Sen. 1?atk Leah D-Vt. "oil drilling equipment."
toes has era putation for Some senators may try to ex-
hard work, a flair for analysis tract a pledge that Gates will
and a scholar's savvy about the tell the panel of all future se-
Soviet Union. He joined the cret CIA operations or resign.
CIA in 1966, remaining in the Ex-CIA Deputy Director
analysis unit - never in clan--4 Bobby Inman Gates has a
destine activities. He become s Ong c ance of staying on af-
deputy director in April. ter Reagan: "His reputation
But the Senate Intelligence (as) a non-partisan, competent
Committee hearings will raise professional is already there."
sticky questions about Gates'4 Says ex-CIA Director Stans-
role in the Iran affair. field Turner: "It's a good move
"I expect some fairly tough to start with a new generation."
questions on ... what he knew./ Roy Godson, a Georgetown
and when he knew it," says Jim Umvversi government profes-
Dykstra, a committee staffer. sor, says Gates will have to
If Gates knew anything, the fend off congressional efforts
questions are likely to turn to at new restrictions on the CIA
why he didn't tell Congress. while improving counter-intel-
While committee Chairman ligence in the wake of embar-
Sen. David Boren, D-Okla., says rassing big spy cases.
the hearing won't become a "It would be hard enough to
full-blown arms scandal probe, do either one of those," Godson
Gates is certain to be asked said. "And he's got to do both."
about reports of a cover-up. Contributing: William Ringle
News reports claim a cover-
up story was drafted for ex-CIA
director William Casey - now
recovering from brain surgery
- to be presented before the
Senate, saying the CIA believed
missile shipments to Iran were
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