PRESS CONFERENCE CHICAGO COUNCIL ON FOREIGN RELATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01554R002700290001-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 74
• Document Creation Date: December 12, 2016
• Document Release Date: August 7, 2001
• Sequence Number: 1
• Publication Date: November 14, 1977
• Content Type: PREL

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PRESS CONFERENCE
CHICAGO COUNCIL ON FOREIGN RELATIONS
14 NOVEMBER 1977
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Q. Why wasn't CIA able to predict with any certainty the failure
of the Russian crops?
A. CIA missed the crop failure by some 10%--if Mr. Brezhnev either
is telling us the truth or in fact has good estimates of his
own. We don't like to miss by 10%, but we are pleased that in
the last four or five years since the country was sort of taken
by the great train robbery of 1932 we have developed a reasonably
good prediction. We were off more this year than before. But
it is a difficult technique when you are dealing against a closed
society which is not sharing its information with you. It is
fortunate that we have a capability to keep abreast of things
like this which do affect our own economy. But I'd like to say
we don't think the country was taken this time by the Soviets
because we were predicting on the first of July onward much larger
Soviet grain purchases than they were acknowledging. And we think
the market understood that.
Q. I would like to ask about the stories of the microwave radiation at
the American Embassy in Moscow and I suppose what I should ask you
to tell us what causes it? What can.be done to stop it? Just how
serious is it vis-a-vis our own intelligence in Moscow?
A. What causes it is a different set of morals and standards by the
Soviet Union in the way they behave and standards that they'll go
to to collect intelligence information. There has been radiation
against our Embassy there for a number of years. I'm happy to say
that the power levels of it are low enough that we don't believe its
an endangerment to human life. It happens that the Soviet standards
of what radiation people can accept is about a 1,000 times smaller
than ours. They have not exceeded their standards so we don't think
it's injurious but it is infideous. It is obviously designed to
try to interfere with our activities or to obtain information from
our activities.
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Q. Can you, with whatever mechanical means you have at your disposal,
stop this radiation?
A. That is very, very difficult to do from a purely mechanical point
of view. They have the territory around us--they could beam from
all kinds of directions at us. Technically we have great difficulty
in actually stopping that kind of thing. It has to be done by
persuasion rather than by brute force.
Q. A report states that some of that microwave radiation is caused
by one of our own antennas on top of the Embassy and that we waited
a year and a half or so before we took that antenna off because we
didn't want the Russians to state that we were causing all the
interference.
A. You have better intelligence than I do. I've been away for a couple
of days and I don't know anything about that particular report.
Q. Is there any indication that the Soviet intelligence operation in
this country is using anything like that?
A. We know that the Soviets in this country are intercepting our
commercial microwave transmissions. We don't have any evidence
of radiation against us like they have in Moscow.
Q. What is that, sir?
A. It's done from their embassy in Washington, D.C. and its a danger
to us. It's something that we've taken precautions on and on which
national policy is being formulated and I think will be enunciated
before too long. I'm not free to go much further until that is
available to us.
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Q. How much could they pick up by interception of commercial
microwave here, in this country?
A. Did you all read the interesting report in the press--that
during the Lufthansa hijacking a man in Israel sat in his
apartment with an antenna and he listened to the German
commandos chase plane go into Mogadiscio. He turned that
information over and it was broadcasted on Israeli radio
before the raid took place, before the commandos operated.
Fortunately they managed to get it stopped before it went on
Israeli television. The information did not apparently get
to the hijackers. And then that man sat there and listened
to commando operations and how they were progressing. In
short, this problem is much more widespread in the world than
in our country, than just the Soviet Embassy in Washington, D.C.
Whatever goes onto unclassified telephone links that go on the
microwave and a lot of it does go on the microwave today. In
Washington, D.C. you can make telephone calls from one side of
the city to the other and that call will go 22,000 miles up to
a satellite and back down again to go 10 miles across the city.
But if it is on a microwave link, hijackers, gangsters, foreign
intelligence operators, industrial spies and all work to get
that information. And it is a problem that the whole country
has and much more than in the intelligence sphere.
Q. Is that the same category that is interfered with in Moscow?
Just how serious is their interference, with normal and/or intelli-
gence operations in Moscow? Is it just what goes out over telephone
lines by microwave? Are we able to circumvent this?
A. In Moscow we don't have any microwaves. We are not positively clear
what they are interfering with. They help themselves in ways that
are very technical and I can't answer that for you--I really can't.
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Q. (Was unintelligible, but had to do with DDO cutbacks.)
A. I came to this job in February and found that my two predecessors
and the incumbent professionals in the Central Intelligence Agency
had been planning a major reduction in force in order to get back
down from the large buildup in Vietnam. In August I made my
decision to go ahead with that reduction. I cut it back slightly
and I compressed the time frame to two years to avoid having a
prolonged period of uncertainty within the Agency. When I
announced that decision nobody objected to it. There is almost
unanimity of feeling within the organization that we are over-
staffed. I promised at that time that the first half of the cut
would be announced by the first of November and the second half
by the first of June. We announced those on the first of November
and now you, get a lot of complaints, I'm sorry---it's never easy
to tell people that their services are no longer required. I
would like not to have done that. But as a taxpayer I cannot
condone keeping people on the payroll whom the government doesn't
need and as a man I'm very concerned with both the effectiveness
and morale of the Agency. (next few sentences unintelligible)
We made these announcements, we made these cuts, I think, in the
long-term interest of the Agency. We did not make them because I
think technical intelligence is going to replace human intelligence.
That's not the case. It's a false conclusion of the press to jump
to because I am not reducing anybody in the overseas components of
the Directorate of Operations which does our overseas human intelli-
gence collection efforts. I'm cutting overhead in the Headquarters
and it's been well announced--everybody has known this--that we've
tried to do it in as fair and humane a way as we can. I would only
say in conclusion that I'm so delighted that the media of this
country, after three or four years of intense criticism of the
Central Intelligence Agency, is now coming to its defense and
worried that it's going to be too small.
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Q.
With regard to the pirated microwave messages you said that
hijackers and other people have access to.
this? What can be done about it?
How serious is
A.
A number of things can be done about it.
The most simple one
is to encrypt it all. Another is to be careful that you don't
discuss material that you don't want shared with the general
public on unsecure telephone lines. Another is to take as
much of your important transmissions as possible and take it
off the microwave and onto a cable. We are working in all
kinds of those directions.
Q. (Unintelligible but relates to WASHINGTON POST article on drug
testing.)
A. I stated publicly before the Congress to the extent that the
CIA at any time in its history did testing of drugs unwittingly
on human beings is abhorrent to me. We do not do it now. Any
research in that category that we sponsor is worked through
the Department of Health, Education and Welfare for its approval.
Let me also put into perspective two things: The program really
ended in the 1960s--there were little tail-offs that did not
involve human beings at a later period; and secondly, there's a
historical matter. The attitudes and standards of our country
were different then and we're judging now against today's outlook
and I think we've got to put it into some perspective like that.
Secondly, let me say, overall ARTICHOKE, MKULTRA,that whole
series of problems are almost entirely something that you and
I would still stand for today--very good research--very well
motivated and properly done. There were a few excesses that I
say I abhorred but the bulk of it was not.
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Q. Is the CIA working with SAVAK here or in Amman, and if so
what is the purpose?
A. We lived on arrangements with many intelligence organizations
around the world where we share information; we're helping
each other in collecting foreign intelligence against third
parties within the Communist Bloc. We do not have any
arrangements with SAVAK, KCIA or anyone else that permits
them to do things in this country in exchange for our doing
anything else anywhere. That is not part of our arrangement
and we would not tolerate anything of that nature.
Q. There have been reports of links between the CIA and the Shah
of Iran. What relationships exist now between the Shah of
Iran's country and ours?
A. I think I just answered that question as best and as fully as
Q?
I can. We do have liaison relationships with numerous foreign
intelligence organizations and they are of mutual benefit to
us and in no way compromise the American standards and values
and privacy.
The Japanese news agency a couple of days ago confirmed that the
Soviet Union has been working on a satellite destroyer. What
information do you have with regard to the Soviet program in
that area?
A. No question the Soviets have been testing an anti-satellite device
and the question of how operational it is at this time is difficult
to define or to disclose. But they have been conducting tests
over a number of years. The tests have intensified somewhat in
the last year and a half. So they are clearly moving to achieve
that capability.
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Q. Are the COSMOS satellites that they seem to launch every
month at least--are they being used to target these programs?
A. I'm not sure which satellites are being used for the targets
by name. Yes, they put up a target satellite and they put up
a killer satellite and they simulate destruction.
Q. Can you confirm that Japanese news agency report? Have they
killed another satellite?
A. I can only confirm what I told you. The Secretary of Defense
made a similar statement about two or three weeks ago on that.
It also said that they had been conducting this test. Some
of the tests are successful; some of them are not--as in any
test program. I don't think you can wave from that.
Q. Will we develop a similar program?
A. Will we? That's the Defense Department's problem and they have
made a statement on that which I think does indicate they are
developing an anti-satellite. But I really don't want to get
into that because I'm only here to talk about foreign intelli-
gence, not U.S. programs.
Q. Admiral, why did you decide to hold a news conference here in
Chicago?
A. Because I believe that the Intelligence Community must be more
open, more forthright with the American public today and therefore
I'm here to make a speech, several speeches. I'm trying to do
that as my time permits around the country, and when you come to
a major center of media operations like this, I think it is
only desirable from your point of view and mine that I try to
share with you what I can within the limits of our secrecy. But
I think today there is more that we can do to share with the
American public. We have produced a lot of unclassified studies
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in the last six months on Soviet economy, world energy situation,
world steel market situation and we're doing this with deliberate
intent to try to help the American public be better informed
and to benefit by the taxes that they put into our operations.
At the same time I hope it will keep us in closer touch with
the American public and its value and standards because if we
do not operate intelligence in this country in ways that conform
with those ethical values and standards we're not doing our job.
Q. Is this new openness a directive from the President?
A. Yes. Part of the overall policy that Carter announced before
he became President even.
Q. What is the main thrust of your speech?
A. You just heard it--just part of it. It's to talk about the new
model of American intelligence which is different, in my opinion,
than the old traditional model of intelligence. The old model
said that intelligence agencies should preserve maximum secrecy--
we should operate with minimum supervision. The new model, which
I think conforms to the standards, outlook and culture of America,
has more openness as our society is open. And it has more super-
vision as we have checks and balances built into our governmental
process. Now don't let me overstate this--we must have secrecy.
You cannot conduct intelligence without secrecy. But were trying
in these studies we've produced publicly to review what we do and
say, can it be made public without doing harm to the country's
interests and when it can we'll publish and when we can we'll tell
you about the process of intelligence. But there are some things
we can't tell you--the names of agents, exact techniques of various
collection devices, but we can tell you, for instance, that a very
large part of intelligence is not a clandestine spying-type operation.
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It is what you would term at any normal university or any
major corporation as research. We have lots of analysts who
research and take the pieces of intelligence and pull them
together into a picture puzzle and try to evaluate it and
give our decisionmakers in this country a better basis for
making their decisions.
Q. (Unintelligible.)
A. I don't think we can change the American standards and jeopardize
the values for which we stand to accommodate lesser standards
of other people. I don't believe that it is necessary in this
new openness and morality-to get to a level of ineffectiveness
that will endanger the country. It is always a very difficult
judgmental decision to be made here and part of what the
President has sought and directed in a recent reorganization of
the Intelligence Community is a proper balance between more
oversight and yet preservation of secrecy. It is a difficult
balance that has to be worked out carefully. We are doing that
and I'm confident that it is going to come out well but I'll tell
you very sincerely I think it will take several years to do it.
It will take several years to work out these procedures. For
instance, with the new intelligence oversight committees in the
Congress. Senator Stevenson of our state is a member of the
Senate Committee and Representative McClory of Lake Forest is a
member of the House Committee. We work very closely with those
people today in establishing the rules that will govern our
judgments on what the country's willing to do--what risks we're
willing to take to get information that is not available to open
sources.
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Q. In relation to that, the amount of work that is going to be done
with the members of the intelligence staff. Obviously when
they make an approach to Capitol Hill many people become involved
in an information process; the staff assistants, the secretaries,
etc. That information could go through different facilities; how
are you going to keep it limited?
A. We've not had major problems thus far. We make a judgment on each
piece of information we pass. Sometimes we have to narrow it
down and have one or two staff members only to the council to the
committee. Sometimes we have no staff members. We have to 'treat
it in accordance with the delicacy of the information. We have
to feel our way into this relationship so that they are comfortable
with what we're giving them and we're comfortable that it isn't
going to leak out. There are two risks in this whole operation
of being more open and being under more supervisory control. The
first is the risk of timidity. That we make at least common
denominator intelligence that we may be unwilling to take risks.
The second is the risk you pointed out of leaks from the number
of people involved. I believe that we have and are developing
an adequate balance between the risk-taking of timidity or leaks
and that level of oversight that will give us assurance against
abuse, assurances in performing in the way the country wants.
I'm pleased and confident at the direction we're moving and I
think they will let us keep the secrecy we need and at the same
time perform only in ways that will strengthen our society rather
than weaken it.
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ADDRESS BY ADMIRAL STANSFIELD TURNER, USN
DIRECTOR OF CENTRAL INTELLIGENCE
CHICAGO COUNCIL ON FOREIGN RELATIONS
14 NOVEMBER 1977
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It is really a great treat to be here and I most appreciate
your asking me to be with you to talk about what we are doing in the
world of intelligence to serve you and to serve the country better.
We're reshaping the intelligence structure of your country. President
Carter directed a major effort in this direction in February and after
six months of scrutiny and close study, in August the President issued
directives to make changes in the way we are organized. And as a
result of this, we are starting an evolution today toward what I
would call a new model of intelligence--an American model. This
model contrasts with the old or traditional model in which intelligence
organizations always operated in a cloak of maximum secrecy while
attempting to operate with minimum of supervision. We hope today to
develop a new model which is built to conform with American standards
and culture. On the one hand it will be more open as our society is;
on the other hand it will be more controlled with a system of checks
and balances which characterize our governmental process. So I thought
it might be of interest to you today if I discussed some of the actions
we're taking to move toward this new model.
The President's directive of last August had two fundamental
tenets in it. The first was to strengthen control over the entire
intelligence apparatus of our country, thereby hoping to promote. greater
effectiveness. The second tenet was to assure stringent oversight
control thereby increasing accountability.
Now, let me point out that I am the Director of the Central
Intelligence Agency, but this is only one of the many intelligence
agencies of the government. There are intelligence activities, of
course, resident in. the Department of Defense, Department of State,
Treasury, FBI, and even the new Department of Energy. But I am also
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the Director of Central Intelligence. And in that capacity my task
is to coordinate, bring together into one effective, harmonious
operation the activities of all of these intelligence organizations.
The reorganization the President directed in August strengthens
my hand in that regard in two very specific ways. It gave me full
authority over the budgets of all of these intelligence activities
I've enumerated and secondly, it gave me full authority to direct
the tasking--the day-to-day operations of these organizations. This
should enable me to better control, to coordinate this total effort
of collecting intelligence, analyzing and producing it. And this is
really what was intended, in my opinion, in the National Security Act
of 1947 which first established the Central Intelligence Agency.
Some of the media have portrayed this as a creation of a dangerous
and potential intelligence czar and I think this represents a misunder-
standing of the intelligence process as such. Let me explain that
intelligence is divided into two separate functions. The first is
collecting information and that is the costliest and riskiest of our
operations. Here you want good control. Here you want to be sure
there is a minimum of overlap because it's very costly and to be sure
there is a minimum of possibility of a gap in what you are collecting--
because that can be very costly in a different manner. And only
centralized control, in my opinion, will ensure this collection effort
is well coordinated. The second half of intelligence--on college campuses
it would be called research--is analysis, estimating, pulling all the
little pieces of information that are obtained by the collectors into
a puzzle and trying to make a picture of it. Trying to give the decion-
makers, the policyma.kers of our country a better basis upon which to
make those decisions.
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Now let me make it clear that I do not, under this new
reorganizations, control the people who do all this analysis. I
control those in the CIA but there is a strong analytic capability
in the Department of Defense and again in the Department of State
and our quest is to see to it that there is competitive, overlapping
analyses. The Department of State specializes in political inter-
pretation with a second suit in economics. The Department of Defense
specializes in military with a second suit in political. The CIA
covers the waterfront. So we have assurance that there will be
divergent views come forward if they are warranted. And we encourage
that and we want to be sure that the decisionmakers don't get just
one point of view when several are justified.
Just let me remind you that should I try to be a czar, should I
try to shortchange the dissenting and minority views, there is a
Cabinet officer in the Department of Defense and a Cabinet officer
in the Department of State who manage those intelligence analytic
operations and if I try to run roughshod over them, I'm sure those
Cabinet officers are not going to fail to take advantage of the
access they have to get their amendments forward. So we are not
trying to setup a centralized control over the important interpretive
process, but over the collecting process. And I sincerely believe
that this new organizational arrangement is going to assure better
performance in both collecting and interpreting our intelligence for
this country.
The fact that the President, Vice President and many other top
officials spent so much time in working on this new reorganization,
I believe is indicative of a keen awareness throughout the top
echelons of our government that good intelligence is perhaps more
important to our country today than in any time since the creation
of the Central Intelligence Agency thirty years ago.
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You remember thirty years ago we, of course, had absolute
military superiority. Since then the failure of the Soviets to
make their system grow adequately in other areas of the military
has led them to accent that particular competition. They have, I
believe, achieved a position of reasonable parity in most areas
of the military. That makes the value of our intelligence product
much more important. When you know your enemy's potential and
something of his intentions, you can use your forces to much greater
advantage. Now, he doesn't give that information away but we can
pick up pieces here and pieces there and over a long period of time
you can bring that together. It gives your military commanders a
sense of leverage for their somewhat equal forces.
Now, let's look past the military scene. Thirty years ago
we were also a very dominant and independent economic power. Today
we are in an era of economic interdependence, a growing inter-
dependence, and the impact on our economy of events of other economies
is more and more apparent. And here, too, I believe we desperately
need good intelligence in order to make sure that we don't lost our
shirt in the international economic arena.
Also, on the political side, thirty years ago we were the
dominant political influence in the world. Today even some of the
most pipsqueak nations insist on a totally, independent course of
action. They go their own way and they don't want to be dictated to
by Soviets or ourselves. Here again we must be smart, we must under-
stand the attitudes, the cultures, the outlooks, the policies of these
countries so that we are not outmaneuvered in this process.
Now at the same time that we are trying to produce better intelli-
gence in all three of these fields we must, of course, be very careful
that we do not undermine the principles, the standards of our country in
the process of so doing. Thus, the second leg of the President's
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new policy--which is better oversight. Some of the mechanisms to
conduct that oversight are, first, the keen and regular participation
by both the President and the Vice President in the intelligence
process. I can assure you they are both very much on top of it. But
beyond that, we have a formalized procedure now in the intelligence
oversight committees in the Congress. We have a committee called
the Senate Select Committee on Intelligence and we are working very
well with it. Our own Senator, Adlai Stevenson, is a member of that
Committee and I really enjoy working with him. But we have the
relationship here of closeness but yet aloofness. Closeness in that
I feel very free in going to them for help and advice, particularly
when I'm involved with other committees of the Congress and there may
be boundaries that are being encroached upon. But aloofness in that
I very definitely report to them when they call and want to know what
we are doing and how we're doing it and why. It is a good oversight
procedure.
The House of Representatives last August set up a corresponding
committee. Representative McClory from Lake Forest is a member of
that and a very fine and active one. And we hope and are sure that
that relationship will develop as has the one with the Senate.
Beyond this we have oversight in what is known as the Intelligence
Oversight Board, comprised of three distinguished Americans; ex-Senator
Gore, Ex-Governor Scranton, and Mr. Tom Farmer, a lawyer from Washington.
They are appointed by the President. Their only task is to oversee
the legality and the propriety of our intelligence operations. They
report only to the President. Anyone may go to them, bypassing me,
saying, look, that fellow Turner is doing something dastardly or
somebody else in the Intelligence Community is doing something he
shouldn't be doing. The Board will look into it and let the President
know whether they think he should do something in response.
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Now let me be perfectly clear and perfectly honest with you.
There are risks to the oversight process. The first is that of
timidity, I would say. Timidity in that it's easy when you're
overseeing something to decide not to take a risk, not to take a
chance and we could fail to do things that may be very important
to the long-term benefit of our country. It may put avoidance
of current risk over gaining of long-term benefits. And secondly
the risk of security leaks. The more you proliferate the number of
people involved in sensitive secret intelligence operations, the
more danger there is of some inadvertent leak of release. I am
confident at this time that we are moving to establish that
right balance between the amount of oversight and the amount of
danger that it entails. But it will be two or three years before
we shake this process out--before we establish just how those
relationships are going to exist. And in that time, in that process,
we are going to need the understanding and support of the Congress
and that, of course, means the support and understanding of the
American people.
Accordingly, we are now reappraising the traditional outlook
toward secrecy, toward relationships with the public and we are
adopting a policy of more openness, more forthrightness in the hope
that we can do this at the same time as we ensure preservation of
that secrecy which is absolutely fundamental. As a first step we've
tried to be more accessible to the American media. We have appeared
on GOOD MORNING AMERICA, 60 MINUTES, TIME magazine and also we
respond more readily now to inquiries from the media. We try to
give substantive, meaningful answers whenever we can within the limits
of our necessary secrecy.
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But perhaps more interesting to you who are so concerned
with international affairs of this country, we are also today
trying to share more of the product of our intelligence efforts--
more of the analyses, the estimates, the studies that we do.
In fact, we have a policy that when we do a study and it comes
out secret, top secret, or destroy before reading or whatever we
may label it, we try to reduce it down to an unclassified form
and ask ourselves the question, "Will this product still be useful
to the American public?" If it is, we feel we have an obligation
to print it and publish it. We are doing that to the maximum extent
we can.
You have heard of our study last March on the world energy
outlook. We've recently done one on the world steel prospects,
whether there is over-capacity and what the expected demand is.
We've done studies and published them on the Chinese and Soviet
energy prospects. And under the aegis of the Joint Economic
Committee of Congress last July we published one on the outlook
for the Soviet economy itself.
Let me describe that just very briefly to give you the flavor
of what we think we can put out in unclassified form what we hope to
be of value to you and other Americans and perhaps help improve the
general quality and tenor of American debate of major issues affecting
our country. Previously, CIA has looked at the Soviet economy and
felt that generally it had a capability to achieve three things; to
sustain the level of military growth that they were trying to do to
catch up with us generally; to make improvements if not spectacular
improvements, in the quality of life inside the Soviet'Union; and to
sustain enough investment to carry on a generally growing economy..
Our most recent study reexamines these premises and comes to the
conclusion that the outlook for the Soviets is perhaps more bleak
today in the economic sphere than at any time since the death of Stalin.
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This is based on our belief that the Soviets have maintained
their levels of productivity over these many years primarily
by infusing large quantities of labor and capital and we think
they are coming to a dead end here. For instance, in the 1960s
they had a very big drop in their birth rate. In the 1980s the
rate of growth of their labor force is going to drop markedly from
about 1.5 percent to about .5 percent. They are not going to be
able to find the additional labor to go into increases, keep up
their productivity. A lot of the growth of their labor force
also today is coming from the central Asian areas of the Soviet
Union where they just don't like to go on into the big cities.
Secondly, as far as investment is concerned--capital--their
resources are becoming more scarce and more difficult to obtain.
They're having to reach for minerals further into the Siberian
wasteland which is costly. They can't bring in as much as they
have before, particularly in the area of petroleum where we have
made this forecast that their emphasis in recent years on current
production has been at the expense of developing reserves and new
supplies.
Now if you look carefully at the Soviet's five-year development
plan you'll see that they are the ones who predict they are not going
to be able to make the same infusions of capital and labor as they
have in the past. They, however, do come to the conclusion that
somehow and nonetheless they are going to increase productivity.
We don't think that is in the cards. We see no sign of increasing
efficiency, no sign of any willingness to become less shackled to
their economic doctrines which are harnessing them back. Instead,
we think the Soviets in the years ahead between now and the early
1980s are going to be faced with some difficult pragmatic choices.
One may be a debate over the size, the amount of investment in their
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-9-
armed forces. Clearly, this is one avenue to find labor and
capital. Another may be over whether they will continue to
fulfill their promises for the delivery of oil to the Eastern
European satellites. Will they be able to afford doing this
when it becomes more and more difficult for them to obtain hard
currency. And the third may be, what are they going to do to
obtain the necessary foreign exchange to sustain the rate of
infusion of American and Western technology and equipment which
they are currently depending upon to increase and improve their
economic position. Interestingly, when they face these and other
decisions there is a high probability that they are going to be in
the midst of a major leadership change. It could be a very difficult
time and situation for them. It may go very smoothly--we just can't
tell.
One of the important points that comes out of all this is
that we believe as they make these policy decisions it's not going
to be remote from you and me--it's going to be important to us.
What they do with their armed forces obviously impacts on what we
do with ours. What they do with their oil inputs to the Eastern
European countries and.whether that area remains politically stable
is going to have a major impact on the events throughout the European
scene. If there is too much competition for energy because they
don't produce what they need, what is that. going to do to the overall
world prices of petroleum? If they enter the money markets in an
attempt to borrow more from us and others in the West, what is going
to be our response? What is going to be our policy in that regard?
Now let me say that when we produce a study like this we are not
so confident that we don't want to have a good debate with the others
in the American public as to the quality of what we've done. And
therefore we find that publishing these studies is also helping us to
maintain a good dialogue with the American public. When we did the
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oil study last March, for instance, and it received criticism
from the press, we wrote to professors, to oil companies, to think
tanks who had come out with criticisms and we said, "Detail those
for us--we'd like to have them." When they did we invited them to
come into the Agency and discuss them with us and we had some very
interesting and stimulating dialogues of the results. It's very
beneficial to us to publish these studies as well, I hope, as to
the American public. We hope as more of them come off the press
we will have more dialogue with the business community and with
academia.
Let me assure you, however, while we're on this subject of
openness, that we cannot and we will not open up everything. There
clearly must be a degree of intelligence that remains secret.
Some of the information behind the Soviet oil and economic studies
clearly was derived from very sensitive sources. They would dry up
if we made them known. Thus, we can't forget that while we're
moving ahead with this dialogue with the public and trying to build
up more public understanding and respect for what we do in defense
of our country, we must also obtain the public understanding for
preserving that level of secrecy which is essential for these
activities. In short, we're moving in two directions at once today.
On the one hand, we're opening up more, but in that process we expect
to obtain greater secrecy for what remains classified. When too much
is classified it is not respected and not well treated. The other
direction we're moving.is simply to tighten the noose of security
around those things which must be kept secret.
What I'm really saying in summary is that we're trying to
develop a model of intelligence uniquely tailored to this country,
which on the one hand balances an increased emphasis on openness with
a preservation of that necessary secrecy where it truly is necessary.
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-11-
And the model which also combines an emphasis on continued
effectiveness in getting the job done and obtaining that informa-
tion which our policymakers require while on the other hand
exercising effective control. I am confident that while this
model is still evolving it is moving in a direction in which we
can preserve the necessary secrecy while at the same time conducting
our necessary intelligence operations only in a way which will in
the long run strengthen our open and free society.
Thank you very much.
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 Approved For RJase 2001/11/08 : CIA-RDP80B01554W270042a(y er 1977
Council on Foreign Relations
Chicago, I linois
1100-1300, 14 November 1977
Talk - what doing reshape - retain effectiveness - meet standards
AN AT1RICAN 140DEL OF INTELLIGENCE
A. Culminating 6 months of intensive effort, the President, in early
August, announced a major reorganization of the intelligence
apparatus of this country.
The long term effect. of this move will be to force the
evol~u--tio of an intelligence organization quite different from
any that has existed before. In effect creating a distinctly
American model of intelligence.
Old model - max secrecy/independence
New - 1) open; 2) checks and balances
Today I thought it might be of interest to you, if I
discussed how President going about moving us to this new model.
R. The President's decision on organization has achieved
two things:
1. strengthened control over thejahole intelligence
a ara - thereby 14trov+zg fectiveness;
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2. ensured stringent oversight - thereby
tightening accountability.
As Director of the Central Intelligence Agency I run
one of many agencies in the U.S. Government involved
in producing intelligence. Others include the
Defense Intelligence Agency in DOD, the Bureau of
Intelligence and Research in the State Department,
the FBI, Treasury, and the new Energy Department.
I am also the Director of Central Intelligec
As such I have the broad charter of pulling-together
the efforts of all these various agencies and offices.
In the reorganization the President has strengthened
my hand to do this by giving my office:
1. full authority over the budgets of all
intelligence agencies, and
2. full authority for setting their tasks.
This should enable me-to coordinate and control our total
collection efforts to a degree hoped for but not
realized in the National Security Act of 1947. Claims
aired by some journalists that this creates an intel-
ligence czar reflect a lack of understanding of the
intelligence process. You see there are two sides
to the coin of providing good
intelligence to out
top decision-makers:
1. Collecting
- most expensive/riskiest
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 Approved For RJ ase 2001/11/08 : CIA-RDP80B01554W2700290001-5
want good control; want minimum
overlap; want no coverage gaps
- only centralized control ensures this.
2. Research, anavrs_i;s, jterpretation_
- mountains of info collected
- want plenty of overlap to ensure
o divergent/independent views
o full range of interpretation
- I do not control analysis except at
the CIA
continued redundancy assured because
in fact 3 organizations do competitive
analysis of intelligence:
o State - Political/Eton
o DOD - Military/Political
o CIA - Political/Mil/Econ
I believe that this new organizational arrangement
will ensure better performance in both collecting
and interpreting intelligence. I am confident. also
that the President and many other of our top executives
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gave a great ea o attention to this new plan
because of a recognition that good intelligence
is perhaps more important to our country today
than ever since the creation of a Central Intelligence
organization 30 years ago.
Thirty years ago we had vast militar su eriority.
The Soviets having recognized the failure of thr>ir_
system to grow in other ways,, have become a world
power based on their ~ilitarv might. L rg
j 'frontze_-s-_-in "-
p e an
In this
condition of rough ruilita.ry parity, the value of
intelligence today is great. Real advantages can
accrue from acurately knowing what your ptentinl_
adversary's s,rengtl,is and what he intends to do
with it. He seldom tells you this, but he does
give it away in many small ways, which, when watched
over a long period of time, and Pieced togetheL,
can give you real advantages. It is the kind of
leverage that can turn the tide of battle.
If you look past the military scene, there are
other similar situations:
Economics - 30 years ago - economically
independent - today ;~nt den_ pden~e energy situation -
lose shirt if not smart - power blocks - raw materials/
trade leverage.
Politics - world different - from U.S. domina inn
to situation today, even smallest evolving' nations
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 -5-
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are of own ~. and do not want to be dictated
to either by the U.S. or Soviet Russia. We must
be smart, understand pol/econ/cultural attitudes
or we will be out-maneuvered.
At same time we must achieve this necessary
intell in manner will not undermiri
and sancarrlc of niir ~n~;~ty, Thus a _se_____
major
effect of the President's has been to make the
oversight process more comprehensive.
Oversight
(1) Personal interest of President/VP
(2) Senate Select Committee
relations with IC are clo
and excellent
(3) New House Committee
- benefits of 1 committee in House
and 1 in Senate
(4) Legal requirement for approval for
covert operations
(5) IOB
- Risk in all of this:
(1) Timidity - least common denominator
(2) Security leaks
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C. Next several years critical - I'm confident, but alert.
Need understanding and support of Congress - which
rrrrs public. Hence, we are carefully reappraising
our policies regarding secrecy and openness, looking
for ways in which we can be more forthright with
the public and at the same time ensure adequate
secrecy to carry out our operations.
1. As a first step, we have tried to be more
accessible tophe media.
- Time
- Good Morning America - 60 Minutes
- Interviews
2. We are also attempting to make more of our
product accessible to the public. The publication
of unclassified studies is one of our most important,
substantative initiatives. It stems from a conviction
that the Intelligence Community is working for the
American people and that they deserve to share our
results whenever that is possible. We intend to
publish in unclassified form the maximum amount of
intelligence analysis that we can.
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 - 7-
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To date we have published several major studies
which I believe make an important contribution to
public debate:
- World Steel Outlook
- World Energy Situation
- Soviet/Chinese Energy Prospects
g on these studies we have been looking at
This has led to a recently completed study for the
Joint Economic Committee of Congress on Soviet Economic
Problems and Prospects. Let me describe - flavor what can share -
From the mid-1960's until very recently, CIA
viewed Soviet economic performance as adequate to allow
the simultaneous achievement of the Soviet government's
most important objectives - i.e.,
o to catch up militarily with the US;
o to provide rular, if unspectacu r
improvements in living conditions; and
o to Lust investment needed for fairly
rapid economic growth.
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 -B-
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This study thoroughly re-examines these
assumptions and comes to the conclusion that Soviet
prospects are moreeJ L than at any time since Stale
death.
The Problem:
1. Dead end on productivity policy of increasing
inputs of labor and capital.
a. Decreasing rate_of growth of
manpo- what there will be
from traditionally rural areas;
precipitous labor shortage - 1960
birth rates;
b. Rapid depletion of cheap, conveniently
located mineral reserves;
c. Oil shortage caused by policy of increased
outp1t vice d yetn, t of new sources.
- 5 year plan acknowledges - but predicts productivity up
- Don't believe can do - no sign prod/effic improvip_g
econ doctrine diff to change
- Instead difficult pragmatic choice.
1. intense debate over military- expenditures -
manpower and investment
2. reduce it exports to E. Europe, worsening
already diff economic situation and threatening
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 Approved For lpeole 00all1/08t:aCbAiR$P' P!3015540902700290001-5
3. reduced hard currency earning capability and
hence imports technology - alternative -
borrow more .
Decisions likely - period lei r hi-D change
One of the most important points which comes out of
all this, I believe, is that these policy decisions
which the Soviets must make in the near future, seem
on the surface remote to ouri es. Yet, they will
impact on us in fundamental ways:
1. If the size of the Soviet Armed Forces should be
affected, what does that mean in terms of our Armed
Forces and the expenditures on the weapons of the 1980's
which we are now funding?
2. If there is increased competition for finite ener
reserves, what will that do to price? To the availability
of fuel? How should that influence our energy decisions?
3. If economies of E. Europe are in for trouble
is there greater potential for tension in Eu-roje.?
'~( -ZL9/P~- ~- "-~ 'C-46r-~
One of the side benefits of publishing this type
of study is the exchan-g,,s it leads to with our critics.
In the of our first oil study, I replied to
serious critic and invited them to detail their
criticisms. Those who did, were invited to spend a day
with the authors of our study. It was an excellent
exchange and of a type which I hope will occ
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-l-
As we continue to make public more studies, I want to encourage
future dialogues with both the academic and business comet pities.
Same time, let me assure you, however, that we cannot and will
not open everything up. An essential ingredient of intelligence
operations is the ability to_preserve secrets. Some of the
information behind both the Soviet oil and economic forecasts
was derived from secret sources which would be jeopardized in the
future were we to reveal than.
Thus, we cannot forget that while we move to improve the
dialogue with the public and build public understanding and
support for what we do in the defense of our country, we must
ask and obtain the public's understanding in preserving that
level of secrecy which is essential to these activities.
In short, we are working in two directions at once.
By declassifying information that need not be classified we
are attempting to promote greater respect for genuinely
secret information.
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-1t-
On the other side of the coin, we are drawing a tighter
protective circle around that information or those activities
which are truly secret.
1 del combines openness/secrecy.
P?4odel combines effectiveness/control.
Confident, evolving model under which is preserved secrecy necessary.
Perform in ways which strengthen our open and free society.
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 Approved For Rvikase 2001/11/08 : CIA-RDP80B01554W2700296)OCNc&ember 1977
Council on Foreign Relations
Chicago, Illinois
1100-1300, 14 November 1977
AN AMERICAN MODEL OF INTELLIGENCE
A. Culminating 6 months of intensive effort, the
President, in early August, announced a major
reorganization of the intelligence apparatus of
this country.
The long term effect of this move will be
to force the evolution of an intelligence
organization quite different from any that has
existed before. In effect creating a distinctly
American model of intelligence. .
Today I thought it might be of interest
to you, if I discussed the fundamental character
of that model.
B. The President's decision on organization has
achieved two things:
1. strengthened control over the whole
intelligence apparatus - thereby
improving effectiveness;
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 Approved For F*ase 2001/11/08 : CIA-RDP80B01554RR2700290001-5
2. ensured stringent oversight - thereby
tightening accountability.
As Director of the Central Intelligence Agency.I run
one of many agencies in the U.S. Government involved
in producing intelligence. Others include the
Defense Intelligence Agency in DOD, the Bureau of
Intelligence and Research in the State Department,
the FBI, Treasury, and the new Energy Department.
I am also the Director of Central Intelligence.
As such I have the broad charter of pulling-together
the efforts of all these various agencies and offices.
In the reorganization the President has strengthened
my hand to do this by giving my office:
1. full authority over the budgets of all.
intelligence agencies, and
2. full authority for setting their tasks.
This should enable me.to coordinate.and control our total
collection efforts to a degree hoped for but not
realized in the National Security Act of 1947. Claims
aired by some journalists that this creates an intel-
ligence czar reflect a lack of understanding of the
intelligence process. You see there are two sides
to the coin of providing good intelligence to our
top decision-makers:
1. Collecting
- most expensive/riskiest
Approved For Release 2001/11/08 : CIA-RDP80BO1554R002700290001-5
 -3-
Approved For Rase 2001/11/08 : CIA-RDP80B01554RO2700290001-5
- want good control; want minimum
overlap; want no coverage gaps
- only centralized control ensures this.
2. Research, analysis, interpretation
- mountains of info collected
- want plenty of overlap to ensure
o divergent/independent views
o full range of interpretation
- I do not control analysis except at
the CIA
- continued redundancy assured because
in fact 3 organizations do competitive
analysis of intelligence:
o State - Political/Econ
o DOD - Military/Political
o CIA - Political/Mil/Econ
I believe that this new organizational arrangement
will ensure better performance in both collecting
and interpreting intelligence. I am confident also
that the President and many other of our top executives
Approved For Release 2001/11/08 : CIA-RDP80B01554R002700290001-5
 Approved For ft (ease 2001/11/08 : CIA-RDP80B015541iA02700290001-5
gave a great deal of attention to this new plan
because of a recognition that good intelligence
is perhaps more important to our country today
than ever since the creation of a Central Intelligence
organization 30 years ago.
Thirty years ago we had vast military superiority.
The Soviets having recognized the failure of their
system to grow in other ways, have become a world
power based on their military might. Large amounts
of this power are posed on NATO's frontiers in
Europe and range the high seas. In this
condition of rough military parity, the value of
intelligence today is great. Real advantages can
accrue from acurately knowing what your potential
adversary's strength is and what he intends to do
with it. He seldom tells you this, but he does
give it away in many small ways, which, when watched
over a long period of time, and pieced together,
can give you real advantages. It is the kind of
leverage that can turn the tide of battle.
If you look past the military scene, there are
other similar situations:
Economics - 30 years ago - economically
independent - today interdependence - energy situation -
lose shirt if not smart - power blocks - raw materials/
trade leverage.
Politics - world different - from U.S. domination
to situation today, even smallest evolving nations
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 -5-
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are going own way and do not want to be dictated
to either by the U.S. or Soviet Russia. We must
be smart, understand pol/econ/cultural attitudes
or we will be out-maneuvered.
At same time we must achieve this necessary
intell in manner will not undermine principles
and standards of our society. Thus a second major
effect of the President's has been to make the
oversight process more comprehensive.
Oversight
(1) Personal interest of President/VP
(2) Senate Select Committee
- relations with IC are close
and excellent
(3) New House Committee
- benefits of 1 committee in House
and 1 in Senate
(4) Legal requirement for approval for
covert operations
(5) IOB
- Risk in all of this:
(1) Timidity - least common denominator
(2) Security leaks
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 Approved Fc elease 2001/1108: CIA-RDP80BO1: 8002700290001-5
Next several years critical - I'm confident, but alert.
Need understanding and support of Congress - which
means public. Hence, we are carefully reappraising
our policies regarding secrecy and openness, looking
for ways in which we can be more forthright with
the public and at the same time ensure adequate
secrecy to carry out our operations.
1. As a first step, we have tried to be more
accessible to the media.
Time
- Good Morning America - 60 Minutes
Interviews
2. We are also attempting to make more of our
product accessible to the public. The publication
of unclassified studies is one of our most important,
substantative initiatives. It stems from a conviction
that the Intelligence Community is working for the
American people and that they deserve to share our
results whenever that is possible. We intend to
publish in unclassified form the maximum amount of
intelligence analysis that we can.
Approved For Release 2001/11/08 : CIA-RDP80BO1554R002700290001-5
 Approved For (ease 2001/11/08: CIA-RDP80B0153W(002700290001-5
To date we have published several major studies
which I believe make an important contribution to
public debate:
- World Steel Outlook
- World Energy Situation
- Soviet/Chinese Energy Prospects
Building on these studies we have been looking at
other aspects of the Soviet economy like:
o demographic factors,
o influence of oil output decline, etc.
This has led to a recently completed study for the
Joint Economic Committee of Congress on Soviet Economic
Problems and Prospects. Let me describe - flavor what can share
From the mid-1960's until very recently, CIA
viewed Soviet economic performance as adequate to allow
the simultaneous achievement of the Soviet government's
most important objectives - i.e.,
o to catch up militarily with the US;
o to provide regular, if unspectacular
improvements in living conditions; and
o to sustain investment needed for fairly
rapid economic growth.
Approved For Release 2001/11/08 : CIA-RDP80B01554R002700290001-5
 Approved Fo Iease 2001/11/08 : CfA-RDP80B015911 002700290001-5
This study thoroughly re-examines these
assumptions and comes to the conclusion that Soviet
prospects are more bleak than at any time since Stalin's
death.
The Problem:
1. Dead end on productivity policy of increasing
inputs of labor and capital.
a. Decreasing rate of growth of
manpower - what there will be
from traditionally rural areas;
precipitous labor shortage - 1960
birth rates;
b. Rapid depletion of cheap, conveniently
located mineral reserves;
c. Oil shortage caused by policy of increased
output vice development of new sources.
5 year plan acknowledges - but predicts productivity up
Don't believe can do - no sign prod/effic improving
econ doctrine diff to change
- Instead difficult pragmatic choices
1. intense debate over military ex enditures -
manpower and investment
2. reduce oil exports to E. Europe, worsening
already diff economic situation and threatening
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 Approved Fcelease 2001/11/08 : CIA-RDP80B015002700290001-5
political stability.
3. reduced hard currency earning capability and
hence imports technology - alternative -
borrow more
Decisions likely - period leadership change
One of the most important points which comes out of
all this, I believe, is that these policy decisions
which the Soviets must make in the near future, seem
on the surface remote to our lives. Yet, they will.
impact on us in fundamental ways:
1. If the size of the Soviet Armed Forces should be
affected, what does that mean in terms of our Armed
Forces and the expenditures on the weapons of the 1980's
which we are now funding?
2. If there is increased competition for finite energy
reserves, what will that do to prices? To the availability
of fuel? How should that influence our energy decisions?
3. If economies of E. Europe are in for trouble
is there greater potential for tension in Europe?
One of the side benefits of publishing this type
of study is the exchanges it leads to with our critics.
In the case of our first oil study, I replied to
all serious critics and invited them to detail their
criticisms. Those who did, were invited to spend a day
with the authors of our study. It was an excellent
exchange and of a type which I hope will occur
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 Approved For Re lease 2001/1'16: CIA-RDP80B01554R002700290001-5
VA iwr
as a result of this new study on the Soviet economy.
In the case of :a recent study of the Chinese grain
prospects, it was reported in the New York Times (31 Oct 77)
that, while this CIA source of information is "a welcome
development for an industry that lives and breathes on
intelligence", some commodity specialists questioned
whether the study reflected the facts, or whether they
were planted for some purpose other than to inform the
trade.
My answer is twofold:
First) Our unclassified studies, like the economic
study of China, contain exactly the same facts, analysis,
and conclusions which we present to the President and
other senior decisionmakers. The only difference being
that to declassify the study, it is often necessary to
omit details which reveal sensitive sources in order to
protect those sources. These omissions do not vitiate
or change either the facts on which the study is based,
or its conclusions. If would; don't publish
Second) The value of the Intelligence Community or
any of its products is directly related to the accuracy
and freedom from bias of its work. We have no policy
function. I have no direct or implicit responsibility
to support any Administration position. I am asked only
to collect information, then to interpret and analyze it
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thoroughly and honestly. Neither myself, nor any of
the hundreds of serious analyst - scholars who produce
these studies would tolerate any less a standard.
As we continue to make public more studies, I
want to encourage future dialogues with both the academic
and business communities - first to ensure any suspicions
such as I have described with the China study are addressed
directly and, more importantly, so that we both can benefit
from the rigors of an intellectual exchange.
D. Let me assure you, however, that we cannot and will
not open everything up. An essential ingredient of intel-
ligence operations is the ability to preserve secrets.
Some of the information behind both the Soviet oil and
economic forecasts was derived from secret sources which
would be jeopardized in the future were we to reveal them.
Thus, we cannot forget that while we move to improve
the dialogue with the public and build public understanding
and support for what we do in the defense of our country,
we must ask and obtain the public's Understanding in
preserving that level of secrecy which is essential to
these activities.
In short, we are working in two directions at once.
By declassifying information that need not be classified
we are attempting to promote greater respect for genuinely
secret information.
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On the other side of the coin, we are drawing a
tighter protective circle around that information or
those activities which are truly secret.
E. In conclusion, let me make three points:
1. The Intelligence Community is a unique
national resource without which our country could
not operate as well as it does in this complicated
world. This resource must be preserved.
2. You will be hearing from the Intelligence
Community more. As we continue to mold our more
open American model of intelligence, I intend to make
the public one of the direct beneficiaries of our
efforts to a degree which has never been attempted before.
3. Because of the intense interest in Congress in
overseeing intelligence activities; because of the personal
interest of the President and Vice President; because of
the sensitivity within the Intelligence Community itself
to the issues of legality, morality and ethics, heightened
over the past few years of investigation and criticism;
you can be assured that the Intelligence Community is doing
the job it was created to do, doing it very competently,
and doing nothing else.
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 26 October 1977
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National Council of World Affairs
CIA Hea quarters Bldg.
1600, Tuesday, 8 November 1977
Council on Foreign Relatioi
Chicago, Illinois
1100-1300, 14 November 1977
AN AMERICAN MODEL OF INTELLIGENCE
A. Culminating 6 months of intensive effort, the
President, in late August, announced a major
reorganization of the intelligence apparatus of
this country.
The long term effect of this move will be
to force the evolution of an intelligence
organization quite different from any that has
existed before. In effect creating a distinctly
American model of intelligence.
Today I thought it might be of interest to
you if I discussed the fundamental aspects of
these changes as I see them, as well as touching
on some of the other actions being initiated by
your intelligence community.
B. The President's decision on reorganization has
achieved two things:
1. strengthened control over the whole
intelligence apparatus - thereby
improving effectiveness;
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2. ensured stringent oversight - thereby
tightening accountability.
As Director of the Central Intelligence Agency I run
one of many agencies in the U.S. Government involved
in collecting intelligence. Others include the
Defense Intelligence Agency in DOD, the Bureau of
Intelligence and Research in the State Department,
the FBI, Treasury, and the new Energy Department.
I am also the Director of Central Intelligence.
As such I have the broad charter of pulling.togethe.r
the efforts of all these various agencies and offices.
In the reorganization the President has strengthened.
my hand to do this by giving my office:
1. full authority over the budgets of all.
intelligence agencies, and
2. full authority for setting their tasks.
This enables me to coordinate and control our total
collection efforts to a degree hoped for but not
realized in the National Security Act of 1947. Claims
aired by some journalists that this creates an intel-
ligence czar reflect a lack of understanding of the
intelligence process. You see there are two sides
to the coin of providing good intelligence to our
top decision-makers:
1. Collecting
- most expensive/riskiest
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- want good control; want minimum
overlap; want no coverage gaps
- only centralized control ensures this.
2. Research, analysis, interpretation
- mountains of info collected
- want plenty of overlap to ensure
o divergent/independent views
o full range of interpretation
- I do not control analysis except at
the CIA
- continued redundancy assured because
in fact 3 organizations do competitive
analysis of intelligence:
o State - Political/Econ
o DOD - Military/Political
o CIA - Political/Mil/Econ
I believe that this new organizational arrangement
will ensure better performance in both collecting
and interpreting intelligence. I am confident also
that the President and many other of our top executives
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gave a great deal of attention to this new p an
because of a recognition that good intelligence
is perhaps more important to our country today
than ever since the creation of a Central Intelligence
organization 30 years ago.
Thirty years ago we had vast military superiority.
The Soviets having recognized the failure of their
system to grow in other ways, have become a world
power based on their military might. Large amounts
of this power are posed on NATO's frontiers in
Europe and range the high seas. In this
condition of rough military parity, the value of
intelligence today is great. Real advantages can
accrue from acurately knowing what your potential
adversary's strength is and what he intends to do
with it. He seldom tells you this, but he does
give it away in many small ways, which, when watched
over a long period of time, and pieced together,
can give you real advantages.- It is the kind of
leverage that can turn the tide of battle.
If you look past the military scene, there are
other similar situations:
Economics - 30 years ago - economically
independent - today interdependence - energy situation -
lose shirt if not smart - power blocks - raw materials/
trade leverage.
Politics - world different - from U.S. domination
to situation today, even smallest evolving nations
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are going own way and do not want to be dictated
to either by the U.S. or Soviet Russia. We must
be smart, understand pol/econ/cultural attitudes
or we will be'out-maneuvered. At same time we
must achieve this necessary intell in manner will
not undermine principles and standards of our
society. Thus a second major effect of the
President's has been to make the oversight
process more comprehensive.
- Oversight
(1) Personal interest of President/VP
(2) Senate Select Committee
(3)
- relations with IC are close
and excellent
New House Committee
- benefits of 1 committee in House
and 1 in Senate
(4) Legal requirement for approval for
covert operations
(5) IOB.
- Risk in all of this:
(1) Timidity - least common denominator
(2) Security leaks
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C. Next several years critical - I'm confident, but alert.
Need understanding and support of Congress - which
means public. Hence, we are carefully reappraising
our policies regarding secrecy and openness, looking
for ways in which we can be more forthright with
the public and at the same time ensure adequate
secrecy to carry out our operations.
1. As a first step, we have tried to be more
accessible to the media.
- Time
- Good Morning America - 60 Minutes
- Interviews
2. We are also attempting to make more of our
product accessible to the public. The publication
of unclassified studies is one of our most important,
substantative initiatives. It stems. from a conviction
that the Intelligence Community is working for the
American people and that they deserve to share our
results whenever that is possible. We intend to
publish in unclassified form the maximum amount of
intelligence analysis that we can.
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To date we have published several major studies
which I believe make an important contribution to
public debate:
- World Energy Situation
- Soviet/Chinese Energy Prospects
Building on these studies we have been looking at
other aspects of the Soviet economy like:
o demographic factors,
o growth of the labor force,
o influence of oil output decline, etc.
This has led to a recently completed study for the
Joint Economic Committee of Congress on Soviet Economic
Problems and Prospects.
From the mid-1960's until very recently, CIA
viewed Soviet economic performance as adequate to allow
the simultaneous achievement of the Soviet government's
most important objectives - i.e.,
o to catch up militarily with the US;
o to provide regular, if unspectacular
improvements in living conditions; and
o to sustain investment needed for fairly
rapid economic growth.
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This study thoroughly re-examines these
assumptions and comes to the conclusion that Soviet
prospects are more bleak than at any time since Stalin's
death.
The Problem:
1. Dead end on productivity policy of increasing
inputs of labor and capital.
a. Decreasing rate of growth of
manpower - what there will be
from traditionally rural areas;
precipitous labor shortage - 1960
birth rates;
b. Rapid depletion of cheap, conveniently
located mineral reserves;
c. Oil shortage caused by policy of increased
output vice development.of new sources.
- 5 year plan acknowledges - but predicts productivity up
- Don't believe can do - no sign prod/effic improving
econ doctrine diff to change
- Instead difficult pragmatic choices
1. intense debate over military expenditures -
manpower and investment
2. reduce oil exports to E. Europe, worsening
already diff economic situation and threatening
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3. reduced hard currency earning capability and
hence imports technology - alternative -
borrow more
Decisions likely - period leadership change
One of the most important points which comes out of
all of this, I believe, is that these policy decisions
which the Soviets must make in the near future, seem
on the surface remote to our lives. Yet, they will
impact on us in fundamental ways:
1. The size of the Soviet Armed Forces should be
affected. What does that mean in terms of our Armed
Forces and the expenditures on the weapons of the 1980's
which we are now funding?
2. The increased competition for finite energy
reserves. What will that do to prices? To the
availability of fuel? How should that influence our
energy decisions?
3. The possible economic destabilization of
E. Europe. Greater potential for conflict in Europe?
Potential for greater Western influence?
One of the side benefits of publishing this type
of study is the exchanges it leads to with our critics.
In the case of our first oil study, I replied to
all serious critics and invited them to detail their
criticisms. Those who did, were invited to spend a day
with the authors of our study. It was an excellent
exchange and of a type which I hope will occur
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as a result of this new study on the Soviet economy.
As we continue to make public more studies I want
to encourage future dialogues with both the academic
and business communities.
D. Let me assure you, however, that we cannot and will
not open everything up. An essential ingredient of.intel-
ligence operations is the ability to preserve secrets.
Some of the information behind both the Soviet oil and
economic forecasts was derived from secret sources
which would be jeopardized in the future were we to
reveal them.
Thus, we cannot forget that while we move to improve
the dialogue with the public and build public understanding
and support for what we do in the defense of our country,
we must ask and obtain the public's cooperation in
preserving that level of secrecy which is essential to
these activities.
In short, we are working in two directions at once.
By declassifying information that need not be classified
we are attempting to promote greater respect for genuinely
secret information.
On the other side of the coin, we are drawing a
tighter protective circle around that information or those
activities which .are truly secret.
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B. In conclusion, let me make three points:
1. The Intelligence Community is a
unique national resource without which our country
could not operate as well as it does in this
complicated world. This resource must be preserved.
2. You will be hearing from the Intelligence
Community more. As we continue to mold our more
open American model of Intelligence, I intend to make
the public one of the direct beneficiaries of our
efforts to a degree which has never been attempted
before.
3. Because of the intense interest in Congress
in overseeing intelligence activities; because of the
personal interest of the President and Vice President
because of the sensitivity within the Intelligence
Community itself to the issues of legality, morality
and ethics, heightened over the past few years of
investigation and criticism; you can be assured
that the Intelligence Community is doing the job
it was created to do, doing it very competently, and
doing nothing else.
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 CF/Z
1 T'hcember 77
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An American Model of Intelligence
I appreciate your asking me to be with you to
talk about what we are doing in the world of intelligence
to serve you and to serve the country. President
Carter directed a major effort to reshape the intel-
ligence structure of this country back in February.
After six months of scrunity, close study, and consideration
of many alternatives, in August, the President issued
several directives to change the way the Intelligence
Community is organized. As a result of this, we are
starting to evolve today toward a new model of
intelligence - an American model.
This American model contrasts with the old,
traditional model where intelligence organizations operated
under a cloak of maximum secrecy and with a minimun of
supervision. We hope today to develop a model which
will conform to American standards of ethics and propriety
and at the same time continue to provide senior decision
makers in government with the facts on which they can
base sound decisions. On the one hand it will be more
open as our society is more open; on the other hand
it will be more-controlled, with checks and balances much
like those which characterize the rest of our governmental
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process. I thought itmight be of interest to you
today if I discussed some of the actions we're taking
to move toward this new model.
The President's directive of last August
had two fundamental objectives. The first was to
strengthen control over our entire intelligence
apparatus thereby encouraging greater effectiveness.
The second objective was to assure control through
stringent oversight, thereby increasing accountability,
Now let me point out that I am the Director
of the Central Intelligence Agency, but this is only
one of many intelligence agencies of the government.
Intelligence activities also reside in the Department
of Defense, in the Department of State, Treasury, the
FBI, and even the new Department of Energy. But I am
also the Director of Central Intelligence. In that
capacity my task is to coordinate, to bring together
into one effective, harmonious operation, the activities
of all of those intelligence organizations. The
President's reorganization strengthens my hand in that
regard in two very specific ways. As the Director
of Central Intelligence it gave me full authority over
the budgets of all of the intelligence activities I've
enumerated; and secondly, it gave me full authority to
direct their tasking, that is, the day to day operations
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control the total effort of collecting, analyzing,
and producing intelligence. This is really what
was intended, in my opinion, in the National Security
Act of 1947 which first established the Central Intel-
ligence Agency.
Now some of the media have portrayed this
as the potential creation of a intelligence czar. That
interpretation could only come from a misunderstanding
of the intelligence process itself. Let me explain.
Intelligence
and separate
information.
activities can be divided into two basic
functions. The first is collecting
This is the costliest and the riskiest
of our operations. It involves, among other things,
reading foreign newspapers, intercepting broadcasts,
trying to break codes, and recruiting individual in
other countries to spy for us. Here you want good
control. You want to be sure there is a minimum of
overlap because each of these activities are time
consuming and very costly; and you want to be sure
there is a minimum possibility of a gap in what
your collecting because that could be responsible
for another Pearl Harbor, Only centralized control
can ensure the intelligence collection effort is
well coordinated. The second major activity of intelligence
organization is analysis. It is exactly the same as
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what would be called research on a college campus. It
is the analyzing, the estimating, the pulling together
all the little pieces of information that are obtained
by the collectors and trying to put them together to
produce a coherent picture of what another country
is doing, or thinking, or planning. Hopefully this
picture, or analysis, provides the decision-makers,
the policy-makers of our country, a better basis
upon which to make those decisions.
Now let me make it clear, that under this
new reorganization I do not control all the people
who do these analyses. I do control those in the
CIA; however, there is a strong analytic capability
in the Department of Defense and another in the
Department of State. The Department of State specializes
in political analysis with second suit in economics.
The Department of Defense specializes in military analysis
with a second suit in political. The CIA covers the
waterfront. So we have assurance that divergent views
will come forward if they exist. We encourage that.
It is in the interest of each of us in the Intelligence
analysis business to be sure that the decision-makers
don't get just one point of view when several are justified.
Our quest is to see to it that there is competitive,
overlapping analyses. But, should I try to be a
czar; should I try to short-change thedescenting or
minority views, there is a Cabinet officer in the
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Department, of Defense, and another in the Department
of State who manage those intelligence analytic operations.
If I were to try to run roughshod over their views
of events, I am sure those Cabinet officers would
not fail to take advantage of the access they have
to the President to ensure their views are brought
forward. So we are not trying to set up a centralized
control over the important interpretive process
but over the collecting process. And, I sincerely
believe that this new organizational arrangement is
going to assure better performance in both collecting
and interpreting intelligence for this country.
The President, the Vice President, and
many other of our top officials have spent much time
working out this new reorganization. I believe
this evidences the keen awareness throughout the top
echelons of our government that good intelligence
is perhaps more important to our country today
than in any time since the creation of the Central
Intelligence Agency thirty years ago.
Thirty years ago we enjoyed absolute military
superiority. Since that time the failure of the Soviets
to make their system grow adequately in areas other than
the military has led them to accent, that particular
competition. They have, I believe, achieved a
position of reasonable parity in most areas of the
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military. That parity places greater value on
our intelligence product as an important adjunct
of our military. When you know your enemies potential
and something of his intentions, you can use your
forces to much greater advantage. He doesn't normally
reveal that information outright, but if we can
pick up pieces of information here and there, over
time you can bring those pieces together to tell you
important things about your enemy. This gives your
military commanders greater leverage in the use of their
forces and the upper hand in any confrontation of
their otherwise equal forces.
Let's look past the military scene. Thirty
years ago we were also a dominant and independent economic
power. Today we are dependent on other countries in an
economically interdependent world. This growing
interdependence and the impact on our and other national
economies on each other is more and more apparent. Here
too, I believe, we desperately need good intelligence
to make sure that we don't lose our shirt in the
international economic arena.
Politically, thirty years ago we were the
dominant influence in the world, Today even some of
the most underdeveloped, emerging nations insist on
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a totally independent course of action. They go their
own way and refuse to be directed to by the Soviets
or ourselves. Here again, we must be smart. We must
understand other nation's attitudes, cultural imperatives,
and outlooks so that we will not be outmaneuvered in
the process.
At the same time that we are trying to produce
better intelligence in all three of these fields, we
must be careful not to,undermine the principles on
which our country was founded or the standards by which
we live in the process of so doing. Thus, the second
leg of the President's new policy is better oversight.
The cornerstone of all oversight is the keen and regular
participation of both the President and the Vice President
in the intelligence process. I can assure you they are
both very much active participants.
Beyond that there are two intelligence
oversight committees in the Congress. The Senate
Select Committee on Intelligence was formed a year
and a half ago and has been working closely with the Intelligence
Community. We have a relationship here of closeness
but yet aloofness. Closeness in that I feel very free
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in going to them for help and advice particularly
when I'm involved with other committees of the Congress
and there may be boundaries that are being encroached
upon. But aloofness in that I very definitely report
to them. When they call and want to know what we are
doing and how we're doing it and why, I am answerable
to them. It is a good oversight procedure and it is
working well.
The House of Representatives, last August, set up
a corresponding committee. We are sure that that
relationship will develop as has the one with the Senate.
Beyond this the Intellligence Oversight Board
oversees our activities. Three distinguished Americans,
former Senator Gore, former Governor Scranton, and
Mr. Thomas Farmer, a lawyer from Washington,-are appointed
by the President, with their only task to oversee the
legality and the propriety of our intelligence operations.
They report only to the President. Anyone may go to
them, bypassing me, and say look, that fellow Turner,
or somebody else in the Intelligence Community is doing
something he shouldn't be doing. The Board will look
into it and let the President know whether they think
corrective action is necessary,
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Now let me be perfectly honest with you.
There are risks to this or any oversight process. The
first: risk is that timidity may reduce the intelligence
effort. It is easy when acting as overseer not to
take a risk, not take a chance. But in so doing, we
could fail to do things that could be very important
to the long term benefit of our country. It might
place the avoidance of current risk over the gaining
of long term benefits.
The second risk is the risk of security
leaks. The more you proliferate the number of people
privy to secret or sensitive intelligence operations,
the more danger there is of some inadvertent leak. I
am confident at this time that we are moving to establish
a healthy balance.between the degree of oversight which
will. ensure proper intelligence activity and the degree
of secrecy by which permit necessary intelligence
operations to be protected. But it will. be two or
three years. before we shake this process out and
establish. just how those relationships are going to
function best. During that time, we are going to
need the understanding and support of the Congress
and that of course means the support and understanding
of the American people.
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Accordingly, we are now reappraising the
traditional outlook toward secrecy, toward relationships
with the public. We are adopting a policy of more
openness, in the hope that we can be more forthright
at the same time as we ensure preservation of that
secrecy which is absolutely fundamental. As a
first step we've tried to be more accessible to the
media. We have appeared on Good Morning America, 60 Minutes,
Time magazine. Also we are trying to respond more
candidly to inquiries from the media. We try to give
substantive, meaningful answers whenever we can, within
the limits of necessary secrecy.
But perhaps of more interest to those of
you who are concerned with international affairs, we
are trying today to share more of the product of the
intelligence effort. More of the analyses, the estimates,
the studies that we do. It is our policy to carefully
examine every study we do, whether it is secret,
top secret, or destroy before reading to determine if
it can be reduced to unclassified form and still be
useful to the public. If it can be done., we feel we
have an obligation to print it and publish it. We
are doing that to the maximum extent we can. We hope
they will be of value and perhaps help improve the
general quality and tenor of debate on major issues
effecting our country.
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You may have heard last March of our study
on the world energy outlook. We have recently done
another one on the world steel prospects whether
there is over-capacity; what the expected demand may
be. We have published studies on the Chinese and
Soviet energy prospects. And, under the egis of
the Joint Economic Committee of Congress, last July
we published one on the outlook for the Soviet economy
itself. Let me describe that very briefly to give
you the flavor of what we think we can put out in
unclassified form.
Previously, the CIA has looked at the Soviet
economy and felt that generally it had the capability
to achieve three things:
1) to sustain the level of military
growth that would permit them to
catch up with us generally;
2) to make improvements, if not
spectacular improvements, in the
quality of life inside the Soviet
Union,; and
3) to sustain enough investment to
carry on a generally growing economy.
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Our most recent study reexamines these premises and
comes to the conclusion that the outlook for the Soviet
economy is bleaker today than at any time since the
death of Stalin. This is based on our belief that the
Soviets have maintained their levels of productivity
over these many years primarily by infusing large quantities
of labor and capitol. We believe they are coming to
.a dead end here. For example, in the 1960's they had a
very big drop in their birth rate. In the 1980's the
rate of growth of their labor force will drop correspondingly
from about 1.5% to about 0.50. They will not be able to
find the additional labor to keep up their productivity.
Also, a lot of the growth of their labor force today
is coming from the central Asian areas of the Soviet
Union where there is serious resistance to the idea of
migration to the big cities.
Secondly, their resources are becoming more
scarce. They must reach further into the Siberian wasteland
for minerals. This is more difficult and more costly.
Less petroleum can be brought in than before because
their emphasis in recent years has been on current
production at the expense of developing reserves and
new supplies.
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Now if you look carefully at the Soviet's own
five year development plan, you will see that they themselves
predict they will not be able to infuse the same amount
of capitol or labor as they have in the past. However, they
do conclude that somehow and nonetheless they will increase
productivity. We don't think that is in the cards. We see
no sign of increasing efficiency, nor any sign of a willingness
to become less shackled to the economic doctrines which are
fundamental to their growth problem. Instead, we think
that between now and the early 1980's the Soviets are
going to be faced with some difficult pragmatic choices:
(1) There may be a debate over the size
or the amount of investment in their
armed forces. Clearly, this is one
avenue to find labor and capitol.
(2) Another may be over whether they will
continue to fulfill their promises
for the delivery of oil to their
Eastern European satellites. From
exports of 1.6 Mbbl to E. Europe,
they may have to reduce to something
like 800,000 bbl. That would mean an
incfeased oil bill for E. Europe of
$6-7B/yr in probable 1983 prices.
Will they be able to afford to do
this when it becomes more and more
difficult for them to obtain hard currency?
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(3) And third, how will they obtain the
necessary foreign exchange to sustain
the rate of infusion of American and
Western technology which they are
currently depending upon to increase
& improve their economic position?
The Soviet hard currency debt is
$16B and E. Europe's is $24B. Both
are rising rapidly - an annual rate of
$54B/yr. since 1973.
Interestingly, when they face these and other
decisions, there is a high probability that they will
be in the midst of a major leadership change. It could be a
very difficult time for them. It may go very smoothly if they
made the right decisions and are willing to sacrifice other
things; we just can't tell.
One of the important points that comes out of
all this is that we believe as they make these policy decisions,
it will not be remote from you and me, it will be important
to us both. What they do with their armed forces obviously
impacts on what we do with ours. What they do with their oil
inputs to the Eastern European countries and whether that area
remains politically stable is going to have major impact on the
events throughout the European scene. If there is too much
competition for energy because they don't produce what they need
will affect the world supply and price of petroleum. If they
enter the money markets in an attempt to borrow more from us and
others Avom in the westele~ahsa OwllJll/0$eCOur r es ponse 02 0a, Owili be our policy?
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Now let me say that when we produce a study
like this we are not so confident that we present it
as the future revealed. We are merely providing our
best reading of the clues we see. We expect others may
disagree with us. But this too is productive. A good
debate generates a good dialogue on important issues.
When we did the oil study last March, for instance, it was
criticized in the press. We then wrote to the professors,
the oil companies, to think-tanks which had critized
our conclusions and we asked them to detail their
criticisms for us. Those who did we invited to come
into the Agency for a day of discussions with the
authors of the study. A very interesting and stimulating
dialogue resulted from which both sides benefited. We
hope that as more of our studies come off the press.,
we will increase our dialogue with the public.
However, let me assure you, while we're on
this subject of openness that we cannot and we will not
open up everything. There clearly must be some secrets
which remain. Some of the information behind the Soviet
oil and economic studies clearly was derived from very
sensitive sources which would dry up if they were revealed.
Thus, it is important to remember that while we move
ahead, increasing a public dialogue and trying to build
public understanding and respect for what we are doing,
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we must also obtain the public's understanding that
a level of secrecy must be preserved.
In short, we're moving in two directions at
once today. On one hand we are opening up more. But,
in that process we expect to protect those secrets which
remain better classified. When too much is classified
it is not respected. The other direction we are moving
is to tighten the barriers of security around what
must be kept secret.
And in so doing, we are trying to develop a
model of intelligence uniquely tailored to this country,
which balances an increased emphasis on openness with a
firmer tesolves to preserve that which is truly secret.
The model emphasizes the continued necessity of providing
good information to our policy-makers while at the same time
responding to effective control.
I am confident, that although this model is
still evolving, it will guarantee that necessary intel-
ligence operations are carried out only in ways which
will in the long run strengthen our open and free society.
Thank you very much.
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EDITED VERSION did editing
WPmaPe is ribution through-
out Agency)
copies to: OST, GWT, LLE
13 DEC 1977
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