A REPORT TO THE NATIONAL SECURITY COUNCIL
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1 January 1949
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THE CENTRAL INTELLIGENCE AGENCY
and
NATIONAL ORGANIZATION FOR INTELLIGENCE
A REPORT TO THE NATIONAL SECURITY COUNCIL
by
Allen W. Dulles, Chairman
William H. Jackson
Mathias F. Correa
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CHAPTER V
THE RESPONSIBILITY OF THE CENTRAL INTELLIGENCE
AGENCY FOR NATIONAL INTELLIGENCE ESTIMATES
To MM M UNUNR TM NATIONAL SECURITY ACT Al TIM DIRKCTIM
One of the principal duties assigned to the Central Intelligence Agency
"for the purpose of coordinating the intelligence activities of the several
Gover=snt departments and agencies in the interest of national security" is
"to correlate and evaluate intelligence relating to the national security, and
provide for It] appropriate dissemination." The Central Intelligence Agency
is thus given the responsibility of seeing to it that the United States has
adequate central machinery for the examination and interpretation of intelli-
gence so that the national security vill not be jeopardize& by failure to co-
ordinate the best intelligence opinion in the country, based on all available
information.
In our opinion, this responsibility has not been adequately discharged,
and remedial measures are necessary. There is confusion as to the proper role
of the Central Intelligence Agency in the preparation of intelligence reports
and estimates. This confusion has resulted from incorrect interpretation and
lack of proper inplementation of the statute and the directives. The reasons
for this go to the heart of the national intelligence problem and need to be
ezaained. In soma detail in order to discover how the necessary improvement can
be made.
Althasg tML pr idss that "the departments and other agencies at the
Government shall continue to col act, evaluate, oorrel4te, and disseminate de-
partmental intelligence," the statute does not limit the duties of the Central
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Intelligenoe Agency to correlate and evaluate intelligence, except'by the
standard of "national security." Inter'retation of these statutory provisions
was made by the National Security Council in Intelligence Directives No. 1 and
No. 3.
Intelligence Directive No. 1 (See Annex No. 7) provides that the Director
of Central, Intelligence shall
produce Intelligence relating to the national
ssaurity, called national Intelligence.. and that "in so far as practicable, he
shall not duplicate the intelligence activities and research of the various
Departs and Agencies but .hall ma]oe use of existing into
11igq=e facilities
and shall utilize departmental intelligence for such production
"
purposes.
The directive also
Cwtr+w-1 stipulates that national into
lligmne disseminated by the
gene Agencies or shall carr an
agreed statement of substantial dissent."
These provisions are to some extent clarified In Intelligence Directive
No. 3 (See Annex No. 9) Which defines national intelligence as "integrated do-
partmental intelligence that covers the broad aspects of national policy and
national security, is of concern to Mrs
transcends the exclusive than one Department or Agenc7~ and
cmpeteaoe of a single Depar'tmsat or Agency or the
Jt. itar7 Bstablishmnat,"
Directive No. 3 then places on the Central Intelligence Agency the re-
spansibilit7 for the production and
dissemination of national
intelligene.
Such iatell3genos is to be developed and assembled in coordination with other
departmInts and agencies in order to obtain intelligence developed within the
~emDt?"s~oduce," used here, means the preparation and i
intelliga reports and estimates. ssuanoe of as-
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scope of their respective missions which will assist in the production'or cam-
plament the assembly of national intelligence. The directive also instructs
all agencies to maintain sufficient research facilities to meet their individ-
ual needs and to assist in satisfying the requirements of other agencies.
Areas of "daminsat interest," a term which is not specifioally defined,
are allocated by the directive to the various departments as follows: political,
cultural and sociological intelligence to the Department of State; military
intelligence to the Army, naval Intelligence to the Navy, air intelligence to
the Air Force; and so=='o. scientific and technological intelligence to "each
agency in acoordanoe with its respective needs." Upon this framework is built
the formal program of intelligence production by the departmental agencies and
the Central Intelligence Agency.
The significant provision of Directive No. 3 for the Central Intelligence
Agency is the definition of national intelligence, for which the Agency is
given exclusive responsibility, although it is recognized as having rights and
responsibilities with respect to other forms of intelligence as veil. In ef-
fect the directive interprets the vague provision of the National Security Act
on "intelligence relating to the national security" to cover a particular type
of intelligence reasonably distinct from departmental intelligence and con-
forming to admittedly broad but generally camprehenaiblre specifications.
The purport of the National Security Act as supplemented by the directive
in regard to the production of national intelligence can be understood and
justified in the light of the history and general objectives of the Act. Be-
himl the concept of -a Central Intelligence Agency lay the necessity not only
for the ooordination of diversified. intelligence activities (See Chapter Iv),
and for the performance by the central agency itself of certain services of
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common. usefulness (See Chapters TI-II), but also for the oooraihtion of in-.
telligence opinion in the form of reports or estimates affecting generally the
national security as a whole.
Although the Act and the Intelligence Directives give the Central Intel-
ligence Agency the perMdsnt right d producing national intelligence, Direc-
tive No. 1 stipulates that such intelligence shall be officially concurred in
by the intelligence agencies or shall carry statement of substantial dissent.
As a practical matter, such estimates can be written only with the collabora-
tion of experts in many fields of intelligence and with the cooperation of
several departments and agencies of Government. A national intelligence
report or estimate as assembled and produced by the Central Intelligence
Agency Should reflect the coordination of the best intelligence opinion,,
based on all available information. It should deal with topics of wide
scope relevant to the determination of basic policy, such as the assessment
of a country's war potential, its preparedness for war, its strategic capabil-
ities and intentions, its vulnerability to various forms of direct attack or
indirect pressures. An intelligence estimate of such scope inevitably "tran-
scends the exclusive competence of a single Department or Agency or the Mili-
tary Establishment." A major objective, then, in establishing the Central In-
telligence Agency was to provide the administrative machinery for the coordi-
nation of intelligence opinion, for its assembly and review, objectively and
impartially, and for its expression. in the form of estimates of national scope
and importance.
THE COMM OF NATIONAL INTELL CE ESTD1ATA S
The concept of. national intelligence estimates underlying the statute and
the directives Is that of an authoritative interpretation and appraisal that
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will serve as a fira guide to policy-makers and p].aunmv. A national .Intel-
ligence estimate should reflect the coordination of the best intelligence
opinion. 'It should be based on all available information and be prepared with
full knowledge of our own plans and in the light of our ova policy requirements.
The estimate should be compiled and assembled centrally by an agency whose
objectivity and disinterestedness are not open to question. Its ultimate
approval should rest upon the collective responsibility of the highest officials
in the various intelligence agencies. Finally, it should command recognition
and respect throughout the Government as the beat available and presumably the
most authoritative intelligence estimate.
The production of national intelligence estimates by the Central Intelli-
gence Agency falls far short of such a.concept, in part for reasons which the
Central Intelligence Agency does not control. The principle of the authori-
tative national intelligence estimate does not yet have established acceptance
in the Government. Each department still depends more or less on its own intel-
ligence estimates and establishes its plans and policies-accordingly. In the
Military Establishment there is sons coordination through the Joint Chiefs of
Staff who-rely upon the advice of the Joint Intelligence CosmLittee which, in
turn, rests primaries upon the contribution of the three Service departments.
Neither the Central Intelligence Agency nor the State Department participates
directly in these procedures in the Military Establishment, and the estimates
of the Joint Intelligence Committee are in most cases more restricted in scope
than a national intelligence estimate. Within the State Department the policy-
makers are, for the most part, their own intelligence advisors .. Finally, there
is no systematic way of tapping that dam-estic intelligence information, which
should be chiefly in the hands of the Federal Bureau of Investigation, having
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a bearing on broader intelligence issues. At the National Security Council
level the intelligence estimate which is applied to policy papers is brought
to bear through the individual departmental representativee and the independ-
ently produced contributions of the Central Intelligence Agency.
Although the task is made more difficult by a lack of general acceptance
of the concept of national intelligence estimates in the Government, it is,
nevertheless, the clear duty of the Central Intelligence Agency under the
statute and the directives to assemble and produce such coordinated and authori-
tative estimates.
THE ORGANIZATION AND ACTIVITIES CQ+ THE CF111TRAL fl T 1LI(2 CE AGECTCY FOR THE
PRODUCTION OF NATIONAL nr==mr
Unfortunately-, the attention of the Central Intelligence Agency has been
largely diverted from the objective of producing national intelligence. We
find in examining its organization and activities, that mayor emphasis is not
placed on the unique national intelligence function of the Central Intelligence
Agency but that this function is largely diffused and dispersed in an organiza-
tion which concerns itself with a variety of intelligence-producing activities.
These include summaries of current developments, political reports, background
studies on countries and areas, economic reports, etc. (See Chapter VI).
In the original .Central Intelligence Group it was conceived that there
would boa small organization of highly qualified individuals which would limit
itself strictly to national intelligence problems and base its work primarily
on the. specialized reports and estimates produced by the departments rather
than employ a large research and analysis organization of its own. However,
IN
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the character of the organization changed, and the Office of Reports and Eati-
sates, which now carries out the responsibility of - the Central Intelligencb
Agency for intelligence reporting, discharges a large maber of intelligence-
producing functions. These include, to a limited extent, the production and
coordination of national intelligence but also other functions, to be describ-
ed in Chapter VI. Some of the latter functions duplicate those carried, on in
other departments, and same are more in the nature of common services on be-
half of the other agencies, although they are not always recognized as such.
Under the Assistant Director for Reports and Estimates and his deputy is
a large organization comprising persons. There is a broad base of
six regional or geographic Branches, each a research and estimate-producing
unit with responsibility for one area of the world. In addition, a Map Branch
does map research and publishes map and geographic data and a Scientific
Branch is concerned with studies in the field of scientific intelligence.
Studies and estimates are also produced by five "Consultants Panels"
dealing with economics, transportation and con=ications, military affairs,
international organizations and "global survey," respectively. The product of
these Branches and Panels is issued through one of two "Groups," the Current
Intelligence Group and Staff Intelligence Group which have editorial and de-
partmental liaison responsibilities. A third Group, the Basic Intelligence
Group, performs supervisory and editorial functions with respect to the fulfil-
ment of the National Intelligence Survey (basic intelligence) program by the
Central Intelligence Agency and the departmental agencies. Finally, a Plans
and Policies Staff develops programs, priorities and policies for the Office
and includes a small unit which handles information from caecmTioatione intel-
ligence sources.
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The intelligence output of this organization 'which can be properly termed
"national intelligence" is not impressive. The subjects are normally selected
on the initiative of the staff itself or as the result of discussions in the
National Security Council staff, 'where a member of the staff of the Office of
Reports and Estimates generally participates. In producing these reports the
Office usually employs the research of its own staff instead of drawing to-
gether and coordinating contributions from departmental agencies. Such depart-
mental contributions are available to the Office of Reports and Estimates under
the terms of National Security Council Intelligence Directive No. 3 as inter-
preted in No. 3/1 ("Standard Operating Procedure for the Production of Staff
Intelligence") but in fact only a small number of the reports are actually
derived from departmental contributions. The customary procedure has been for
the Office of Reports and Estimates to prepare a basic draft which is then
circulated to the Departments of State, Array, Navy and Air Force for their
comments and concurrence or dissent. This procedure has proved to be ineffec-
tive as a means of producing coordinated national intelligence. The depart-
ments participate more as outsiders reviewing the material of another agency
than as collaborators sharing responsibility in an enterprise of equal concern
to all.
In spite.of the use of the system of concurrences for certain types of
reports, the position today of the Central Intelligence Agency is that of an
independent producer of national intelligence, the quality of 'whose product is
variable and the-influence of which is questionable. The tendency within the
Central Intelligence Agency has been to emphasize the independent production
of intelligence and this emphasis has led to two results.
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In the first place, the intelligence produced by the Central Intelligence
Agency has not always been relevant to policy requirements and bas lacked effec-
tiveness. In the second place, there has been a failure to develop coordinated
national intelligence which would supersede independent departmental efforts
to produce over-all intelligence.
It is perhaps true that the efforts of the Central Intelligence Agency,
have been criticised partly because the opinions expressed by the Agency were
occasionally at variance with the opinions held in the departments; but there
have been other reasons. The independent intelligence estimate is felt to be
useful but never decisive inasmuch as the Central Intelligence Agency cannot
and does not by itself have all the specialised qualifications needed to pro-
duce national intelligence, and is not, as an independent agency, in constant
and intimate association with the policy-makers and planners, a knowledge of
whose work and intentions is indiepensible to sound intelligence.
There is also criticism that the product of the Central Intelligence Agency,
regardless of its quality or importance, gets formal circulation at the highest
levels in the Government even though its content may not Coincide with the
views of departmental officials whose own information may be more reliable and
complete. There is in fact a serious danger that the product of the Central
Intelligence Agency may be looked upon as coordinated national intelligence,
which it usually is not.
What has happened is that the creation in the Central Intelligence Agency
of a large Office of Reports and Estimates performing, as will be emphasized
in the next chapter, a variety of functions that are not truly related to the
coordination of national intelligence estimates, necessarily means that concern
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the area of competition
with national intelligence problems is diminished, that
'with the departmental agencies is enlarged and that the Central Intelligence
Agency concentrates more on the independent production of intelligence than on
its coordination.
Administrative arrangements within the Central Intelligence Agency and
between the Agency and the other departments and agencies have contributed to
this situation. Personnel in the Office of Reports and Estimates who are
responsible for national intelligence (and this includes almost everybody in
part, inasmuch as national intelligence functions are scattered throughout all
parts of the Office) receive little guidance as to what they should report on.
To a large extent they select their own subjects and establish their own priori-
ties, and this practice only increases the criticism from which much of the
product suffers. Fin-11 , the liaison relationships with outside agencies are
unsatisfactory although this situation is largely the-result of the lack of a
clear conception of the proper mission of the Central Intelligence Agency in
the coordination of intelligence opinion in the form of national estimates.
The most significant exception to a rather general failure to coordinate
intelligence opinion in national estimates was a series of reports on Soviet
capabilities and intentions, beginning in March, 1948, by an ad hoc committee
of representatives of the Departments of State, Army, Naq and Air Force under
the chairmanship of the Central Intelligence Agency. This case illustrated
that, when properly used., the existing interdepartmental arrangements can,
under the leadership of the Central Intelligence Agency, provide the President
and top policy-makers with an authoritative intelligence estimate.
After some initial delay following the receipt by the Army of a disturbing
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message from General Cley, the President an March 16, 1948 received from Central
of the situation and establishes their collective responsibility for the esti-
it insures that all the interested agencies have contributed to consideration
cedure,particularly in an emergency situation, is difficult to overemphasize;
been reconciled and a unanimous estimate drafted. The importance of this pro-
discussed and concurred in by all the interested agencies. Divergent views had
Intelligence Agency a brief short-range estimate as to the likelihood of war,
mate. If divergences cannot be reconciled, at least the opposing points of
view can be identified.* The possibility of any one service arriving at a
false or completely contradictory estimate and of independent actions being
taken as a result is thereby reduced.
The procedure of consultation followed in March was in this particular
case largely fortuitous. There was at the time no regularly established pro-
cedure for such consultation. It was not nor has it since become normal prac-
tice either for "ordinary" or "crisis" estimates as we believe it should.
* The first message from General Clay was received on March 4th, but there
does not appear to have been interdepartmental consultation before March
13th. Although views were at first divergent, the estimate of March 16,
1948, submitted to the President, was unanimously concurred in by the Central
Intelligence Agency and the intelligence agencies of the 'Departments of
State, Army, Navy and Air Force. It estimated .the likelihood of war during
the ensuing 60-day period. Bowever,?the next estimate in the series, dated
April 2, 1948, which sought to extend the estimate beyond the 60-day period,
was accompanied by an Air Force dissent on the grounds that the international
situation was so delicate that it -would be unwise to speculate beyond the
short term.
The circumstances leading to the March 16th estimate received wide publicity
as a result of the reference to it in Vol. Is p. 17 of the Report of the
Committee on the National Security Organization (Eberstadt Committee), in
the following terms: "Testimony was presented to the Committee that in the
spring of 1948, a mistaken intelligence estimate, prepared by a departmental
intelligence agency, stimulated recommendations -- which if followed -- might
well have had serious consequences. Fortunately, in this Instance, the Cen-
tral Intelligence Agency and other intelligence groups correctly evaluated
the available information in good time."
TOP 75
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is
In fact, one of the most important recommendations of this report is that.
a reconstituted Intelligence Advisory Committee should perform this function.
In. at least one other situation requiring inme&iate intelligence inter-
pretation there vas once again only fortuitous coordination. This case was the
result of intelligence received by the Federal Bureau of Investigation and
distributed by it. The Central Intelligence Agency performed only a secondary
role and there was no formal intelligence estimate. This further illustrated
the fact that, tinder present arrangements, recognised and prompt procedures
are lacking for the authoritative .coordination of intelligence views in an
emergency situation. In addition, it vas seen that there is no regular and
agreed arrangement for participation by the Federal Bureau of Investigation
and for the use of intelligence from domestic sources in a national estimate.
PROPOSALS FOR DEMVfl G THE PRODUCTION OF NATIONAL F.STDWW
In order to remedy the present unsatisfactory arrangements for the pro-
duction of national intelligence estimates and provide for the coordination--of
intelligence opinion at time of crisis and for long term planning, as contem-
plated in the National Security Act, there needs-to be a revision of the pres-
ent arrangements. Insofar as the Central Intelligence Agency is concerned it
is necessary, in the first place, to make a clear distinction between the
function of correlating national intelligence opinion to assist plans and
policy form lation on the highest level and those intelligence reporting
activities which mss be assigned to the Central Intelligence Agency as a con-
tral service of cc?on concern.
The mission with respect to the productionot national intelligence cannot
be fulfilled solely through a large staff such ad the present Office of Reports
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and Estimates whose work to directed more .to the production of miscellaneous
reports than to the ooo.ination of national intelligence opinion. In our
opinion the present Office of Reports and Estimates should be replaced and for
it substituted two offices one of which, to be described in the next chapter,
will not be involved with the production of national intelligence but will
perform intelligence research and reporting services of gammon concern. The
other office, an "Estimates Division," would ocmrtprise a sma11 group of highly
selected individuals whose task it would be to draw upon and review the
-specialized intelligence product of the departmental agencies in oiler to pre-
pars, for final discussion and approval by the Intelligence Advisory Cam' ttee,
a finished national intelligence estimate. This small group would rely pri-
marily upon the intelligence reports of the individual agencies but it would
have access to such souroe material as it requires in order to review depart-
mental contributions and prepare consolidated estimates for final action by
the Intelligence Advisory Oo ittee.
National intelligence estimates, in order to be authoritative, must be
fully participated in by all of the principal intelligence agencies in order
that the best advice may be tapped and responsibility shpred for those major
estimates on which high policy decisions depend. Therefore, the Intelligence
Advisory Committee, under. the ]readership of the Director of Central Intel-
ligence,. should actively assist in establishing and supervising the national
intelligence production program as veil as discuss and review the proposed
estimateB submitted to it for approval. The Coaaaittee would, at the same
time, concern itself more actively than at present with the coordination
of the other intelligence activities of the various deparimsemta and agencies,
in Chapter IT.
In fact, by assuming an active responsibility for
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the reconciliation of intelligence estimates the Committee would almost auto-
matically be able to assist the Director more effectively in coordinating in-
telligence requirements and, developing sound arrangements for the coordination
of intelligence generally.
The membership of the Intelligence Advisory Committee, as we have pointed
out in Chapter IV, would include the Director of Central Intelligence as chair-
man, and representatives from the Departments of State,* Army, Navy and Air
Force and the Federal Bureau of Investigation.
Ad hoc membership should be
given to other Agencies, such as the Atomic Energy Commission, Joint Staff and
Research and Development Board, whenever appropriate.
These revised arrangements should make adequate provision fbr the handling
of major emergency situations so that there is automatic consultation and
collective responsibility when quick estimates are required. We have seen that
in the past such consultation has been largely fortuitous and could not be
relied upon to operate promptly.
This proposal vould not affect the responsibility of the Joint Intelligence
Committee to prepare strictly military estimates for the Joint Chiefs of
Staff and perform such other military duties as the Joint Chiefs of Staff might
assign. Through the membership of the Service intelligence chiefs on the In-
telligence Advisory Committee and through close liaison between the Joint
Intelligence Group and the new Estimates Division in the Central Intelligence
Agency, every effort should be made to insure the consistency of the Joint
* See below, page 159, for a discussion of the status of the State Department
representative.
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Intelligence Co.ittee'a military appraisals nndtbo broader national eatimtes
of the Central Intelligence Agency and the Intelligence Mvisory Committee.
lar situation are left out of the picture entirely. It is therefore neces-
sary that intelligence estimates be made in full light of our own policies and
operations. The preparation of such estimates should not be impeded by any
barriers arising from security considerations or otherwise, which may jeop-
ardize the soundness of the intelligence product.
Finery, any discussion of the preparation of national estimates would be in-
adequate without two caveats. The first applies to those who prepare the estimates j
the second to those who may use them. Prejudice in the form of stubborn adher-
ence to preconceived ideas is likely tobe the gravest danger to sound intelli-
gence. Estimates are subject to the risk of being colored. and twisted to reflect
the prejudices of those who prepare them. This can best be countered. by providing
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Whatever arrangement is decided upon, there are certain general condi-
tiona which moat be observed, if intelligence estimates are to be sound and
timely. All information, whether it originates from intelligence -solaces or
whether it cadmes from other sources including operations, waist be available
to the intelligence people who by putting together and studying all of the
bits of information must provide the overall interpretation. There is always
a dangerous tendency, particularly in time of crisis, when it can be most
serious, for vital information to be withheld on the grounds that the intel-
ligence personnel should not see it because it concerns operations or for
alleged security reasons. In other instances the disseminatign of vital but
sensitive material is restricted to a very few people at the top levels with
the result that those individuals who are most competent to analyze a particu-
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reasonable checks and balances as we have endeavored to do in the composition
and responsibilities of the Intelligence Advisory Committee. If, for example,
the State Department., which may be wedded to a particular policy, presents the
facts distorted by faulty preconceptions, the final product, as reflected in
an intelligence estimate, will be defective. It is hoped that in such a case
the new Estimates Group of the Central Intelligence Agency will supply an ini-
tial corrective and that the non-State Department members of the Intelligence
Advisory Committee will have sufficient breadth of 1nowledge to challenge the
State Department estimate. Likewise, military estimates should be submitted
to scrutiny so that they are compatible with each other and avoid the error,
however unconscious, of men nifying the needs of their own branch of the Service.
The Intelligence Advisory Committee, if it functions properly, and is as-
sisted by the disinterested work of the Central Intelligence Agency is the body
where such distortions should be caught and corrected and the prejudices of
one mind challenged by the thinking of a mind which at least does not suffer
from'the same prejudices.
In turn, prejudice on the part of the policy-makers may render them blind
even to brilliant achievements of an intelligence service. They may just re-
fuse to listen to what they do not like. Hence, nothing would be more dan-
gerous than to believe that if we once had an effective intelligence service
and an efficient intelligence estimating body, we would be i1me to a disaster
like Pearl Harbor. _
This does not lead to the conclusion that intelligence is futile. it
merely shows its limitations. If the intelligence appraiser can keep from
twisting and coloring the data he receives and if the policy-maker.can keep a
so
a1
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relatively open mind and be prepared for continual re-evaluation of the assump-
tions on which he is relying, then sound intelligence estimates can be a
pillar of strength for our national security.
CONCLUSIONS AND RECD[ LATIONS
(1) In the Central Intelligence Agency there has been confusion between
the responsibility of producing coordinated national intelligence estimates
and responsibility for miscellaneous research and reporting activities.
(2) The provisions of the National Security Act for the production of
national intelligence estimates, as interpreted by the National Security
Council Intelligence Directives, are sound but have not been effectively
carried out.
(3) There should be created in the Central Intelligence Agency a all
Estimates Division which would draw upon and review the specialized intelli-
gence product of the departmental agencies in order to prepare coordinated
national intelligence estimates.
(1+) Under the leadership of the Director of Central Intelligence, these
estimates should be submitted for discussion and approval by the reconstituted ?;'
Intelligence Advisory Committee whose members should assume collective respon- `
sibility for them.
(5) Provision should be made in these arrangements for the handling of
crisis situations wham coordinated estimates are required without delay.
(6) Coordinated intelligence estimates produced in this way must, in
order to be effective, be recognized as the most authoritative estimates avail-
able to the policy makers.
Declassified in Part - Sanitized Copy Approved for Release 2012/04/26: CIA-RDP93T01132R000100010008-5