A REVIEW OF THE INTELLIGENCE COMMUNITY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86B00269R000400070018-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 56
• Document Creation Date: December 14, 2016
• Document Release Date: March 28, 2003
• Sequence Number: 18
• Publication Date: March 10, 1971
• Content Type: PAPER

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MEMORANDUM FOR: Ed Proctor
Attached are:
OMB's report, "A Review of the Intelligence
Community"; and
The Agency's comments on the Review, the
original of which the Director gave to Jim
Schlesinger on 20 April.
LKW
30 April 71
(DATE)
'PC".
54 REPLACES FORM 10-101
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WHICH MAY BE USED.
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A REVIEW OF THE ?
INTELLIGENCE C01.:141.3NIT
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TABLE OF CONTENTS
Paq
I. INTRODUCTION: THE COSTS AND BENEFITS
OF INTELLIGENCE 1
II. COST TRENDS 3
III. QUESTIONS ABOUT THE PRODUCT 10a/
IV. ORGANIZATIONAL DILEMMAS 13
V. SPECIFIC ORGANIZATIONAL ISSUES 20
VI. LEADERSHIP OF THE COMMUNITY 25
VII. DEPARTMENT OF DEFENE:E,LEADERSHIP 34
VIII. CHANGING FUNCTIONAL BOUNDARIES AND COSTS 39
IX. TOWARD IMPROVEMENTS IN THE PRODUCT 44
APPENDICES
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I. INTRODUCTION: THE COSTS AND BENEFITS
OF INTELLIGENCE
The operations of the intelligence community have pro-
duced two disturbing phenomena. The first is an impressive
.rise in their size and cost. .The second is an apparent?in-
ability to achieve a commensurate improvement in' the scope
and overall quality of intelligence products.
During the past decade alone, the ccst of the intelli-
gence community has almost doubled. At the same time, spec-
tacular increases in collection activities have occurred.
Where satellite photography is concerned, the increases have
led to greatly .improved knowledge 'about the military capa-
bilities of potential enemies, But exparded collection by.
means other than photography has not brought about a similar
reduction in our uncertainty about the intentions, doctrin'es,
and political processes of foreign powers. Instead, the
growth in raw intelligence -- and here satellite photography
must be included -- has come to serve as a proxy for improved
analysis, inference, and estimation.
The following report seeks to identify the causes of
these two phenomena and the areas in which constructive change
can take place. Its principal conclusion is that while a
number of specific measures may help to bring about a closer
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relationship between cost and effectiveness, the main hope
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for doing so lies in a fundamental reform of the intelligence
CoMmunity's decisionmaking bodies and procedures.
This conclusion is advanced in full recognition that
reorganization will, at best, only create the conditions in
which wise and imaginative leadership can flourish. In the
absence of reorganization, however, the habits of intelligence
community will remain as difficult to control as was the per-
formance of the Department of Defense prior to the Defense
Reorganization Act of 1958.
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II. COST TRENDS
To understand the phenomenon of increasing costs, it
is necessary to consider briefly the organizational history
of the intelligence community. The National Security Act of
1947 and the National Security Council Intelligence Direc-
tives (NSCIDs) of the late 1940s and early 1950s established
the basic division of responsibilities among agencies and
departments. This division had its origins in traditional
distinctions between military and non-military intelligence,
between tactical and national intelligence, and between
communications (COMINT) and non-communications (or agent)
intelligence. ;Thus, CIA was directed to employ clandestine
agents to colle,t "non-military" intelligence and produce
"national" intelligence. The Department of State was made
responsible for the .overt collection of "non-military" in-
telligence. The National Security Agency (NSA) was estab-
lished to manage COMINT collection. The Military Services
were instructed to collect "military" intelligence as well
as maintain tactical intelligence capabilities for use in
wartime.
All were permitted to produce "departmental" in-
telligence to meet their separate needs. While not ideal,
this division of functions and responsibilities worked rea-
sonably well into the mid-1950s.
Since that time, these traditional distinctions and
the organizational arrangement i which accompanied them have
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become increasingly obsolescent. The line between "military"
and "non-military" has faded; scientific and technical in-
telligence with both civilian and military applications has
become a principal area of endeavor, for almost all intelli-
gence organizations Similarly, under the old distinctions,
the national leadership -- namely the President and the NSC --
concerned itself with "national" intelligence, while pre-
sumably only battlefield commanders cared about tactical in-
telligence. But a rapidly advancing technology which has
revolutionized the collection, processing, and communication
of intelligence data casts doubt on the validity of the dis-
tinctions.
Simultaneously, technojADgical-advAnces have created new
collection possi'Alities which do not fii conveniently within
a structure based on traditional distinctions and were not
covered in the original directives. Satellite photography,
telemetry intercept, electronic intelligence (ELINT), acoustic
detection, and radar have become some of the most important and
vital methods of intelligence collection not currently covered
by any uniform national policy.
The breakdown of the old distinctions and the appearance
of new collection methods has been a simultaneous process
raising a host of questions about intelligence organization.
Is ELINT related to COMINT, is it technical or military in
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nature, is it of primary interest to tactical or national
consumers? Where should the radar tracking of missile or
the acoustic surveillance of Soviet ballistic missile sub-
marines fit? Is telemetry more similar to COMINT or to
ELINT; who should analyze it Who should be responsible for
satellite photography? On the more mundane, but nonetheless
critical level, questions arise about the organizational re-
sponsibilities for such topics as Sihanoukville supply in-
filtration, VC/NVA order of battle, and missile .deployments
in the Suez Canal area. Are these military or non-military
issues? Is the intelligence about them tactical or national?
Who should be responsible for collectial and what collection
resources should be tasked?' ,
In the absence of an authoritative governing body to
resolve these issues, the community has resorted to a series
of compromise solutions that adversely 7ffect its performance
and cost. In general, these compromises have favored multiple
and diffuse collection programs and the neglect of difficult
and searching analytical approaches. .The most serious of the
resulting problems are outlined below in brief form, and dis-
cussed in more detail in the appendices.
1. The distribution of intelligence functions has become
.increasingly fragmented and disorganized.
0 The old distinctions among national, 'departmental,
and tactical intelligence are out of date. Today,
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CIA is as likely to produce intelligence relevant
to, say, NVA/VC order of battle as DIA or MACV,
just as MACV produces many reports that are of
interest to the national leadership.
0 Similarly, the relatively neat ordering of collec-
tion functions that existed after World War II has
broken down. CIA now engages in a wide range of
collection activities -- aircraft and satellite
photography, ELINT, COMINT, radar, telemetry as
well as clandestine, and overt agent collection.
NSA has added telemetry and ELINT to its COMINT
capabilities. The ,T,ervices now have a full panoply
of senscrs to perform a variety of functions --
tactical intelligence, surveillance, early warning,
and so 01.
Table I illustrates how almost all major com-
ponents of the intelligence community are in-
volved in each of its various collection and
production functions.
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tind by aircraft which compete with satellites in
the collection of ELINT.
O Collection capabilities remain in operation beyond
their useful lives. As older systems lose their
attractiveness at the national level, they are -
taken over at the command or tactical level where
they duplicate higher level activities or collect
data of little value.
O Simultaneously, comparfmentalilatiOn within various
security systems has served to hide or obscure com-
petitive capabilities from evaluation, comparison,
and tradeoff analysis
3. The community's growth is largely unplanned and un-
guided.
O Serious forward planning is often lacking as decisions
are made about the allocation of resources.
O The consumer frequently fails to specify his product
needs for the producer; the producer, uncertain about
eventual demands, encourages the collector to pro-
vide data without selectivity or priority; and the
collector emphasizes quantity rather than quality.
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4. ThO community's activities have become exceedingly ex-
pensive.
O The fragmentation of intelligence functions and the
competitive drive for improved collection technology
are important reasons why the cost of intelligence
has almost doubled during the past decade.
O A significant part of this cost growth is attributable
to the acquisition of expensive new systems without
simultaneous reductions in obsolescent collection-
programs.
o ,In the absence of planning and auidance, internally
generatE:d values pred6Minao-in the community's in-
stitutions. These values favor increasingly sophisti-
cated and expensive collection technologies at the
expense of analytical capabilities.
O Few interagency comparisons are contemplated. Po-
tential tradeoffs between PHOTINT and SIGINT, between
PHOTINT and HUMINT, and between data collection and
analysis are neglected.
While the budgetary process might be used to curb
some of the more obvious excesses, it cannot sub-
stitute for centralized management of the community.
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III. QUESTIONS ABOUT THE PRODUCT
In a world of perfect information, there would be no
uncertainties about the present and future intentions, capa-
bilities, and activities of foreign powers. Information,
however, is bound to be imperfect for the most part. Con-
sequently, the intelligence community can at best reduce the
uncertainties and construct plausible hypotheses about these
factors on the basis of what continues to be partial and
often conflicting evidence.
Despite the richness of the data made available by modern
methods of collection, and the rising co;ts of their acquisi-
tion, it is not at all clear :that our hypotheses about foreign
intentions, capabilities, and activities have improved comn-
mensurately in scope and quality. Nor can it be asserted with
confidence that the intelligence community has shown much in-
itiative in developing the full range of possible explanations
in light of available data. Among the more recent results of
this failure to acknowledge uncertainty and entertain new
ideas in the face of it, has been a propensity to overlook
such unpleasant possibilities as a large-scale exploitation
of Sihanoukville by the NVA to transship supplies, a continu-
ation of the SS-9 buildup and its possible MIRVing, or Soviet
willingness to invade Czechoslovakia and put forces into the
Middle East.
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Dif.ficulties of this kind with the intelligence produc
are all the more disturbing because the need to explore and
test a number of hypotheses will, if anything, expand as the
SoViets project their military power and come to play a more
direct global role. Yet there is no evidence that the in-
telligence community, given its present structure, will come
to grips with this class of problems..
The community's heavy emphasis on collection is itself
detrimental to correcting product probler,s. Because? each
organization sees the maintenance and expansion of its col-
lection capabilities as the principal route to survival and
strength with th:.! community, there is a :trong presumption
in today's intelligence setup.'thataddi:ional data collec-
tion rather than improved analysis, will provide the answer
to particular intelligence problems. It has become common-
place to translate product criticism intc. demands for en-
larged collection efforts. Seldom does anyone ask if a
further reduction in uncertainty, however small, is worth
its cost.
The inevitable result is that production remains the
stepchild of the community. It is a profession that lacks
strong military and civilian career incentives, even within
CIA. The analysts, with a heavy burden of responsibility,
find themselves swamped .with data. The consumers, at the
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same time, treat their product as a free good, so that demand
exceeds supply, priorities are not established, the system
becomes overloaded and the quality of the output suffers.
As if this were not enough, production, instead of guiding
collection, is itself guided by collectors and the impetus
of technology. Since the military are the principal collec-
tors, they are more likely to focus on the needs and interests
of their own Services than on the issues of concern to the
national leadership, and they continue the wasteful practice
of counterpart targeting. Under such difficult conditions,
it is not surpri.3ing that hypotheses tend to harden into
dogma, that their sensitivity to changed conditions is not
articulated, and that new data ar6 n6E-sought to test them.
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Iv. ORGANIZATIONAL DILEMMAS
Questions about cost and product might exist even if the
intelligence community possessed strong leadership. It is
noteworthy, however, that they have arisen under conditions
the most marked of which is a lack of institutions governing
the community with the authority and responsibility to re-
solve issues without excessive compromise, allocate resources
according to criteria of effectiveness, and consider the re-
lationship between cost and substantive output from a national
perspective.
This lack of governing institutions stems fundamentally
from the'failure of the NatipKial Security Act of 1947 to
anticipate the "constitutional" needs of a modern and techno-
logically complex intelligence community. . The primary intent
of the Act, understandably, was to prevent a recurrence of the
intelligence confusions and delays that occurred prior to
Pearl Harbor. These problems were seen as having resulted
from defects in the central processing, production, and dis-
semination of intelligence. The critical need, accordingly,
was to create an organization which would have access to all
intelligence and report its estimates to the national leader-
ship.
In 1947, the size and cost of Individual programs were
relatively small, and the scope and nature of the management
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problem 2 associated with today's community were not antici-
pated. Consequently the issue of how to plan and rationalize
the.collection of intelligence did not seem of groat moment,
and the Act did not explicitly provide for. a.mechanism to per-
form these functions or evaluate the scope. and quality of its
product.
There is another reason why the 1947 Act did so little
to provide strong leadership for the community: powerful in-
terests in the 14ilitary Services and elsewhere opposed (and
continue to oppose) more centralized management of intelli-
gence activities. Partly, this opposition arises from the
belief of the Services that direct control over intelligence
programs is essential if they are to conduct successful mili-
tary operations; partly, it results from bureaucratic concerns.
The Services are reluctant to accept assurance that informa-
tion from systems not controlled by them will be available as
and when they require it.
Despite such opposition, the National Security Act of
1947 did stipulate that the CIA would coordinate the "in-
telligence activities" of the Government under the direction
of the National Security Council.- However, the Act also made
clear provision for the continuation of "departmental in-
telligence". Since then, three Presidents have exhorted the
Director of Central Intelligence (DCI) to play the role of
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. community leader and coordinator, but his authority over the
community has remainee 'minimal. While the DCI has been the
catalyst in coordinating substantive intelligence production,
he has made little use of such authority as he possesses to
manage the resources of the community.
Realistically, it is clear that the DCI, as his office
is now constituted, cannot be expected to perform effectively
the community-wide leadership role becaue.:
O Asan agency head he bears a number of weighty op-
erational and advisory responsibilities which limit
the effort he can devote to community-wide management.
O He bears a particularly heavy bulden for the planning
and conduct of covert actions.
O His multiple roles as community leader, agency head,
and intelligence adviser to the President, and to
a number of sensitive executive committees, are
mutually conflicting.
O li ,,e_
is a competitor for resources within the community
'owing to his responsibilities as Director of CIA,
which has large collection programs of its own; thus
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he cannot be wholly objective in providing guidance
for community-wide collection.
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o He controls only 15 percent of the community's re-
sources and must therefore rely on persuasion to
influence his colleagues regarding the allocation
sand management of the other 85 Percent, which is
appropriated to the Department- of Defense. Since
Defense is legally responsible for these very large
resources, it feels that it cannot be bound by out-
side advice on how they should be used.
o The DCI is outranked by other departmental heads who
report directly to the President and are his immediate
supervi!:.ors on the National Security Council.
In spite of these hanclicapsi-the7DC1 has established
several institutional devices to assist him in leading the
community. They are the National Intelligence Program Evalua-
tion Staff (NIPE) and the National Intelligence Resources
Board (NIRB). However, the principal agencies have largely
ignored or resisted the efforts of management by these bodies.
As a consequence, the NIPE and the NIRB have concentrated on
developing improved data about intelligence programs and
better mechanisms for coordination. Because of their work,
both institutions could prove useful to a strong community
leader; however, their contribution to the efforts of the
currently constituted DCI is small.
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In the absence of an effective institutional framework
Within which one official could be held responsible and ac-
countable for the performance and cost of the intelligence
community, the United States Intelligence Board (USIB), origi-
nally established to advise the DCI, has become a sort of
governing body for the community. However, the USIB has proved
generally ineffective as a management mechanism for several
reasons:
o It is a committee of equals who must form coalitions
to make decisions.
O It is dn_ainated by collectors and producers who avoid
raising critical questions about the collection pro-
grams oerated by their colleagues.
O As a result, USIB's collection requirements -- which
are an aggregate of all requests, new and old -- mean
all things to all agencies, thus leaving them free
to pursue their own interests.
O Since policy-level consumers are not represented on
the Board, they are unable to give guidance as to
priority needs.
Even within the Department of Defense, there is no cen-
tralized management of intelligence resources and activities.
Although the Assistant Secretary for Administration has been
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given a responsibility in this area, together with a small
staff for resource analysis, his efforts to master the Defense
intelligence complex have proved of little avail for several
reasons. First, not all Defense programs come under his pur-
view, and this limits his ability to do cross-program analysis.
Second, he remains responsible for his functions as Assistant
Secretary for Administration.
Below the level of review provided by an Assistant
Secretary, manac,ement leadership is still absent. The
'Directors of DTA and NSA are themselves unable to control.
the activities of the components supposedly subordinate to
them but operated by the Military Servics. Because of a
history of-compomises and 4'treatie:s, the Director of the
National Reconnz,issance Office (NRO) is :imilarly unable to
control a large part of his program which is run by the Deputy
Director for Science and Technology (DD/&T) in CIA.
This lack of lower-level leadership shows up in the fol-
lowing ways:
0 The current failure of NSA adequately to direct
Service cryptologic activities, organize them into
a coherent system, or manage ELINT activities.
? Large-scale Service-controlled tactical intelli-
gence assets, inflated by the war and partly dupli-
cating both national and allied capabilities, but
programmed and operated outside of the community.
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0 A host of unresolved problems concerning. organization
and the allocation of resources within both General
Defense Intelligence Program (GDIP) and non-GDIP
activities, including: duplication in the collection
of ELINT between NPO and SAC; internally overlapping
activities among varous mapping, charting, and
geodesy agencies, and the several investigative
services; and inadec;uate supervision and control of
counterintelligence activities.
It follows from this analysis that the President's ob-
jectives Can be achieved only if reform addresses four or-
ganizational i. sues:
o The leadership of the intelligeLce community as a
whole.
o The direction and control of Defense intelligence
activities.
o The division of functions among the major intelli-
gence agencies.
O The structuring, staffing, and funding of the
processes by which our raw intelligence data are
analyzed and interpreted.
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V. SPECIFIC ORGANIZATIONAL ISSUES
The effectiveness and efficiency of the intelligence
community depend on a number of organizational variables.
Among the most important of these variables are:
The power over resources available to the leader of
the community. How much power the leader can ex-
ercise, particularly over collection programs, will
determine the size of the economies that can be
achieved within the community.
0 The size and functions of the staff provided to the
.leader of the community. The effectiveness of a
national intelligenCe. leade-wi:.1 depend not only
on his power over resources, but also on how well
informed he is about issues and options within
the community, which, in turn, is a function of his
immediate staff. Among the potential functions for
sUch a staff are:
-- The planning, programming, and budgeting of
resources.
Control over resources once allocated.
Supervision of R&D.
Inspection of ongoing programs.
Production and dissemination of national estimates.
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-- Net assessments of U.S., allied, and opposing
? capabilities and doctrines.
o The future role of the United States intelligence
Board (USIB). As matters now stand, the USIB is both
a parliament and a confederate head of the community.
If more authoritative leadership is established, the
USIB could become simply. an obstruction unless its
role is specifically redefined. Since the leader of
the community, however powerful, will need close and
continuing relationships with produacers ,Ind collectors
as well as consumers, one possibility would he to re-
constitute the USIB so as to fornalize these relation-
ships c-1 an advisory basis. In any case the future
role of USIB should be addressed as part of a com-
prehensive review of new institutional arrangements
for .the functioning of a reorgan:.zed intelligence
community.
Future Defense Department control over the resources
under its jurisdiction. Even without changes in the
community as a whole, major improvements in effective-
ness and efficiency could be achieved if Defense were
to master its own massive intelligence operations.
However, a number of. community-wide issues would still
remain, and substantially firmer Defense management
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of its intelligence resources could prejudice the
ability of a future loader of the community to ex-
ercise his own authority.
0 The jurisdiction of either a national leader or a
Defense leader over the Military services. The three
Military Services are estimated to spend about $1.2
billion a year on intelligence activities apart from
their support of the national agencies. Yet these
activities, which partly duplicate national intelli-
gence programs, are reviewed in isolation from them.
If the ;3ervices retain control ever the assets for
,
this "tactical" inUallicsence y can probably weaken
efforts to improve the efficiency of the community.
At the same time, there is little question about their
need to, have access to the output of specified assets
in both peace and war. How to combine overall re-
source management. and control with this access is an
issue that will require resolution.
0 The future functional boundaries of the major in-
telligence agencies. Collection and production
activities do not now tend to be consolidated by type
in particular functional agencies. Important econo-
mies can, probably be achieved by rationalizing these
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activities. However, it should be noted that economy
and organizational tidiness, without concomitant
strengthening of the communityleadership, might be
achieved at the cost, of creating even more powerful
vested interests and losing diverse and usefully com-
petitive approaches to collection problems.
The number and location of national analytical and
estimating centers. The National estimating machinery
no doubt will have to be preserved under the leader
of the community in order to continue production of
national estimates and inputs to the NSSM process.
The continuation of'2DI2 and_ the State Department's
Bureau of Intelligence Research (INR) as producers
is essential as well. Beyond that, improvement in
the intelligence product will probably depend to a
large extent on increasing the competition in the
interpretation of evidence and the development of
hypotheses about foreign intentions, capabilities,
and strategies. This may require not only the
strengthening of existing organizations, but perhaps
the addition of new estimating centers. In addition,
some entirely new organizational units may be needed
to perform currently neglected intelligence analysis
functions, for example, to conduct research on im-
proved intelligence analysis methods and techniques.
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The role of the in6epondent review mechanisms. Be-
cause of the secrecy surrounding the operations of
the intelligence community, the need for strong in-
dependent review mechanisms within the Executive
Branch remains particularly important. Since the
President's Foreign Intelligence Advisory Board
(PFIAB), the "40" Committee, the Office of Science
and Technology (OST), and the Office of Management
and Budget (OMB) .already exist to perform this
function, the only issues are how they can be
strengthened, to what extent they need larger and
more permanent staffs, and whether new review
boards should be created/-e'S'pecially to evaluate
the ana.J_ytical and estimating ac ivities of the
community.
Subsequent sections do not address all of these issues;
nor do they exhaust the list of organizational possibilities.
Only the most salient options are presented with respect to
the leadership of the community, the Department of Defense,
and functional reorganization. Each is described in schematic
form.
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VI. LEADERSHIP OF THE COMMUNITY
? N. The effectivenesS of a new leader of the community will
depend critically on his ability to control intelligence re-
sources and make his decisions stick. . Basically, there are
three different roles he can play in this respect, each with
different organizational implications. They are:
? As legal or direct controller of all or most intelli-
gence resources.
As de facto manager of most resources even though
they arc not appropriated to him.
0 As coodinator of resources, ,that are appropriated
elsewhere, as now.
Although each of the three basic approaches could be in-
stitutionalized in a number of different ways, the principal
options that accord with these roles are listed below.
A Director of National Intelligence (Option el), with
the bulk of the
intelligence budget appropriated
to his office. That office would control all the major col-
lection assets and research and development activities, which
are the most costly programs of the community and are most
likely to yield large long-term savings. The Director would
also operate the Government's principal production and
national estimating center and retain the CIA's present
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responsibility for covert action programs. Defense and State
would retain production groups, both to serve their own leader-
ship and to provide competing centei-s in the analysis of in-
telligence inputs to the national intelligence process. The
Defense Department would maintain budgetary and operational
control over only the selected "tactical" collection and
processing assets necessary for direct support of military
forces, although these assets should.be subject to the DNI's
review.
This option affords a number of advantages:
.? It pinpoints responsibility; the President knows who
:is in charge.
O It permits major ecOneMithrough rationalization of
the community's functions and through the elimination
of duplicative and redundant capabilities.
o. It establishes a management system which can deal com-
prehensively with the implications of evolving tech-
nology and make efficient choices between competing
collection systems.
O It brings producers and collectors closer together
and increases the probability that collectors will
become more responsive to producer needs.
It allows the Director to evaluate fully the con-
tribution each component makes to the final product,
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enabling ready identification of low performance
elements and permitting subsequent adjustments to
their mission.
It provides one responsible point in the community to
which high-level consumers can express their changing
needs.
0 It facilitates the timely selection and coordination
of the intelligence assets necessary to provide in-,
telligence support to the President in periods of
crisis.
Creation Of A DNI potential disadvan-
tages:
0
It gives still further responsibilities to the DCI.
A .major criticism of the present confederate organi-
zation is that the DCI is overloaded and cannot be
expected to perform well the many functions now
assigned to him. As noted, these include substantive
advice to the President and to several high-level
committees, day-to-day management of a large operating
program, appearing as a witness before Congress, and
running numerous sensitive collection and covert
action projects. It should be noted, however, that
with adequate staff and competent deputies, the
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Director should be able to delegate responsibilities
and ease his task. Also, under this 'option, the
DCI's power would be commensurate with his present
s responsibilities.
O This option could generate substantial resistance
from the Secretary of Defense and the Joint Chiefs
over the transfer of intelligence functions to a new
agency. It would also necessitate fundamental changes
in the National Security Act which might cause major
congressional resistance and open debate on a range
of sensjtive national security issues.
O Even if all U. S. Gavernmeht-rintelligence assets were
transfeired to the Director, there would remain the
serious and continuing problem of finding ways to
meet the intelligence needs of. Defense without, at
the same time, causing the Services to reconstitute
their own intelligence activities, even at the expense
of other programs.
O There could be adverse reaction from the news media
and the public to a consolidation of such sensitive
activities under the control of one man, even though
.so many of them already are controlled, in principle,
by the Secretary of Defense.
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0 It is possible that this option will continue the
\\
\ present dominant influence of collectors relative
to producers and consumers in the intelligence
process.
A Director of Central Intelligence (Option ?2), with a
strong Presidential mandate and a substantial staff. NSA,
NRO, and DIA would remain under present jurisdiction. The
CIA would be divided -- one part supplying the DCI staff and
intelligence production component, the other part, principally
current CIA collection organization, comprising a new agency
-under a separath director. The DCI would have senior status
within the Government and wpuld serve as principal intelli-
gence adviser ti) the NSC. He would produce all National
Intelligence Estimates and other national intelligence re-
quired by top level national decisionmakers, and would control
the necessary production assets, including NPIC. This would
include continued management of a national intelligence
process that involved the participation, and inputs from,
other intelligence production organizations.
Under Presidential directive, the DCI. would review and
make recommendations to the President on the Intelligence
plans, programs, and budgets of his own office, a reconstituted
CIA, and the Department of Defense. He would also present a
consolidated intelligence budget for review by the OMB. By
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this means the Director would be able to guide resource allo-
cation and influence ..community organization.
Although Option #1 offers the greatest promise of.
achieving the President's objectives, this option has ad-
vantages over it and over the present situation in the fol-
lowing respects:
O The DCI would be freed from the day-to-day management
tasks incumbent upon the head of a large operating
agency with major collection and covert action re-
sponsibilities. This would enable him to devote
.most of his attention to slihstantive'intelligence
'matters, the tasking of collectors, and community
resource management issues b:S-they relate to his
production activities.
o This option eliminates the present situation in
which the DCI.serves as both advocate for agency
programs and judge in community-wide matters, a
role which diminishes the community's willingness
to accept his guidance as impartial.
O The reforms could be accomplished, without major,
legislation, by a reorganization plan and Presidential
directives to the DCI, the Secretary of Defense, and
the head of CIA.
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O This option would offer improvements in efficiency
and effectiveness without the major disruptions in
the community required under option one.
O It would enhance the stature of the community leader
while, avoiding the potentially dangerous concentra-
tion of power inherent in option one.
Option *2 has several potential. disadvantages
O Responsibility for the community as a whole would
be more diffuse than under option one.
O The abis...ity of the DCI to supervise the detailed
activities of the prating.parts of the -^mm,,n44-y
would bn weaker.
O The new DCI, compared to the DNI under option one,
would have to rely on persuasion and the process of
budgetary review rather than directive authority in
order to eliminate redundant and duplicative activi-
ties, resolve trade-off issues, and reduce overhead.
O He would lack the ability to mobilize, deploy, and
target collection assets in a time of crisis, unless
given specific Presidential authority.
A Cocrdinat_S-rn of National Intelligence (Option *3), who,
under Presidential mandate, would act as White House or NSC
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overseer of the Intelligence Community, directing particular
attention to:
'3, Intelligence resource and management issues.
? Representing the concerns and needsof national
policy level consumers.
? Evaluating the suitability of intelligence output in
light of consumer demand.
Under this arrangement, CIA, Defense, and State intelli-
gence responsibilities would remain essentially unchanged.
The Coordinator would express the views and concerns of the
??
Tresident and the National Security .Council on product needs
and quality; he would provide guidance on present and future
collection priorities; he would critique and evaluate the
current performance of the community, identifying gaps and
oversights; and he would conduct studies of specific intelli-
gence community activities as required.. But he would not be
responsible for the actual production of intelligence. Nor
would he have any direct control over resources.
This option 'offers two advantages:
o The creation of this position would provide a means
for more direct representation of Presidential in-
terest in the Intelligence Community. Consumer
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representation in the intelligence process would be
enhanced.
O No legislation would be required, and the President
would be spared a number of bureaucratic battles.
The option he,..-L.c:?veral marked disadvantages:
O There is the potential for unproductive competition
between the Coordinator and the White House staff.
O Achievement of the President's management and re-
source control objectives is unlikely.
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'DEPARTMENT OF DEFENSE LEADERSHIP
'Although the President has indicated his desire to in-
stitute community-wide reform, changes within the Department
of Defense alone could improve the allocation and management
of resources and reduce the overall size of the intelligence
budget. Provided that care is taken in making them, these
reforms need not be incompatible with subsequent decisions
about the governance of the community as a whole.
Within the Department of Defense, there has never been
an individual with formal responsibility for management of
all DOD intelli9ence activities. The D.L,puty Secretary of
nrncc hag
1-1Pn charged with this task, but he
has very little staff to assist him and can devote only a
modest amount of time to the complex intelligence issues that
arise within his domain. Consequently, if the problems of
Defense intelligence are to be resolved in a fashion satis-
factory to the President, it will be necessary either to
create a Director of Defense Intelligence (DDI) with specific
responsibility for the Department's collection assets, or
Provide the Deputy Secretary with Major staff support in the
form of an Assistant Secretary of Defense for Intelligence.
Neither of these posts would be incompatible with options
two and three relating to community-wide leadership reform.
However, the DDI concept conflicts with option one, in which
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the bulk of U. S. .intelligence resources would be appropria-
ted to a Director .ol-National Intelligence.
? A Director of Defense Intelligence would have the auth-
ority and responsibility to direct and control all Defense
intelligence activities. He would allocate all the Defense
intelligence resources-, inCluding those for tactical intelli-
gence, the funds for the NRP, and budgets for other national
programs under departmental jurisdiction. He would report to
and represent the Secretary of Defense in all matters re-
lating to the management of intelligence resources; review
the need for, and conduct of, sensitive intelligence collec-
tion arid operations; review all Defense intelligence "require-
-
ments" with resource implic,atidns Lri`order to evaluate need
and determine priorities; serve as the principal Defense
representative on the USIB; and monitor other DoD programs
which have clear implications for the collection of intelli-
gence. Under this option the DDI would. be able to reorder
completely the Defense intelligence collection structure as
deemed appropriate.,
The DIA would be involved in collection management only
if so directed by the DDI, and would concentrate on the pro-
duction of finished intelligence for the Secretary of Defense
and other national consumers.
It is important that the Director of Defense Intelligence
be responsive to tasking by the community leader, who would
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be the principal substantive intelligence official of the
Government. Both the ,community leader and the DDI should re-
ceive authoritative guidance about national consumer interests.
This could be provided by a Council of Intelligence consti-
tuted within the NSC and with the Assistant to the President
for National Security Affairs, the Secretary of State i and
the Secretary of Defense as its members. The restructuring
of USIB and revision of NSCIDs can help in establishing the
appropriate DCl/DDI relationship.
The post of DDI has great prospective advantages:
O It would provide for the concentration of resource
management authority in one individual, which would
allow authoritative comparisons and decisions about
competing collection programs.
O It would provide for the centralization of direction
and control over all Defense intelligence activities,
including conduct of sensitive intelligence collec-
tion operations.
But there are possible drawbacks as well, in that the
position would:
O Concentrate great power at a single point in Defense.
This could possibly diminish the community leader!s
'access to information, as well as his ability to
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task collection systems in support of national in-
telligence production, and design balanced collec-
tion programs, in support of his production respon-
sibilities.
0 Superimpose a large staff over those of other major
intelligmanagers within Defense (the Directors
of DIA, NSA, and NRO)', although a reduction in .
various coordination staffs should be possible at
the same time.
An Assistant Secretary of Defense for Intelligence (ASD/I)
who would act as the principal staff asEistant to the Secretary
of Defense. His responsibilities would be similar to those of
the DDI, except that he would not exercise direct control over
Defense intelligence collection programs, and would not be a
member of USIB unless the Board were reconstituted to advise
the DCI on the allocation of collection resources.
This option has a number of advantages:
? It allows for effective cross-program analysis within
Defense.
0- It avoids the concentration of power inherent in the
DDI option, if that is considered a danger.
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o Compared to the DDI, an ASD/I would be more likely
to respond to the needs of the present DCI or the
community-wide leader established under either option
two or three.
The post has a number of potential weaknesses Sin that,i
compared with the DDI, it would probably:
o Lack both the strong mandate .provided to the DDI
and direct authority over Defense intelligence
activities, including those carried out by the
. program managers.
o Make the ASD/I vulnerable to "end runs" by major
components within tbeDefeAse intelligence com-
munity who might wish to appeal directly to the
Deputy Secretary of Defense.
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To achieve further economies, particulary without major
reorganization, will be difficult for several reasons.
O Savings that we foresee as immediately feasible
are likely to be counterbalanced to a considerable
degree by further pay and price increases.
O With the heavy R&D costs for proposed new sys-teths,
suOh-aS the nearly real-time photo satellite,
there already is built into the budget a strong
upward bias which may prove difficult to control,
particularly considering the intense interest in
high-technology and expensive new systems for SALT
121(1 o+-11--r- purposes.
O The U.S. withdrawal from Southeast Asia will permit
reductions in SIGINT and HUMINT resources, but they
will only partially offset the above cost increases.
O Some of the largest savings can only result from
shifting and consolidating current activities in
such a way as to redraw the functional boundaries
of the major intelligence organizations.
Despite these difficulties, it is the Case that func-
tional boundaries can be withdrawn without a major reorganiza-
tion of Defense intelligence or the community as a whole. We
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should stress, however, that actions of this character will
still leave a number of 'community-wide issues unresolved and
at the same time arouse all the opposition of the military
Services and the Joint Chiefs of Staff. Moreover,.with the
rapid evolution of technology, further changes in boundaries
and comparable upheavals -- will probably have tofollow in
the future.
With all these cautions, there are a number of specific
functional actions that can be taken at the present time.
Among the most important are the establishment of NSA as a
truly national cryptological service with authority over al
signal ,intelligence, and the consolidation of a number of
activities now operated sebaratelv,by tha Military Services.
The effect of these changes should be. to achieve economies
of scale, eliminate excessive duplication, and promote com-
petition.among like activities so as to weed out the less
productive programs'.
The following table of possible savings, while only an
estimate, indicates what economies might be feasible as a
'result of redrawing functional boundaries, consolidating
activities, and eliminating duplication:
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changes. We also believe that the economies should be ef-
fected over a period of years.. Without these two conditions,
the reductions could prove illusory or transient, and a
heavy price in disruption and lowered morale might follow.
It should be noted that the anticipated savings come
primarily from collection activities; major analytical and
estimating capabilities are not affected. .Their improvement
is the subject of the next .section.
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IX. TOWARD IMPROVEMENTS IN THE PRODUCT
25
Jointly
Much of the emphasis by the intelligence community and
the bulk of its resources go to the high technology necessary
to overcome barriers to information in the USSR and China.
Yet this stress on the technology of collection -- admittedly
important -- comes at a time when improved analysis is even
more important.
Because of the keener competition from the Soviets, and
the narrowing gap in relative resources devoted to defense,
the U. S. must refine its evaluation of foreign capabilities,
intentions, activities, and doctrines rather than assume that
it has the resources to insure against all possibilities.
The community must also improve li:S-.Current political esti-
mates and find ways of becoming more responsive to-national
consumers and their concerns.
Important improvements, in performance may be feasible
without major. reorganization But preliminary investigation
suggests that higher quality is much more likely to come
about within the framework of a coherently organized com-
munity which is focused on improving output rather than in-
put. Indeed, it seems a fair assumption that the President
would be willing to rebate some of the potential savingS from
the community if he had any hope of improved performance as
-a consequence. As of now, however, he has no such assurance
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and may reasonably argue that, for current performance, he
should at least obtain the benefit of lower costs.
Even if we knew how to measure the benefits of intelli-
,
gence, it would be difficult to relate specific changes in
programs to improvements in performance. Nonetheless, ex-
perienced observers believe that. the following steps all
of them comparatively inexpensive -- should increase the use
fulness of the product to the.national leadership:
o Major consumer representation to and within the in-
telligence community, perhaps through a restructured
USIB, a high-level consumer council, or other insti-
tutionzaized ways of'communicating consumer needs,
priorities, and evaluations to intelligence producers.
o Assessment of the intelligence product through quality
control and product evaluation sections within the
production organizations themselves.
o Upgrading existing analytical centers to increase
the competition of ideas, including a DIA with improved
? organization and staffing as a major competitor to CIA
in the area of military intelligence.
? Periodic reviews by outsiders of 'intelligence products.
of the main working hypotheses within the community,
and of analytical methods being used.
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o A net assessment group established at the national
level which along with the NSSM process, will keep
'questioning the community and challenging it to re-
fine and support its hypotheses.
O Stronger incentives to attract good analysts, better
career opportunities to hold them as analysts instead
of forcing them to.become supervisors in order to
achieve promotion, and a more effective use of per-
sonnel already trained and experienced in intelli-
gence.
O Increased resources and improved organizational ar-
within th:e..inlligence community for
research on improved methods of analysis and esti-
mation.
It is probably premature to recommend the detailed
measures necessary tO improve the quality and scope of the
intelligence product. In the near future, this issue should
be considered at greater length by the leadership of a re-
organized community. Indeed, the leadership should be
specifically charged with the task of product improvement
as a matter of the highest priority. What steps will prove
feasible will depend on the particular type of reorganization
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\\selected, and, in the present circumstances, it may be well
to be guided in the choice by considerations of economy in
the.use of resources. But it should be stressed, in con-
clusion, that improvement of the product at current budget
levels is simply another way of achieving the efficiency that
is so desperately needed within the intelligence community
as it is presently constituted.
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COMMENTS ON "A REVIEW OF THE INTELLIGENCE COMMUNITY
1. The Review raises, on behalf of the President, a valid basis fol.
examining the intelligence community, with the objectives of improving the
overall quality of intelligence products and reducing the community's size
and cost. While there may be differences of opinion as to the cause's of,
and solutions to, the problems the Review describes, it is worth our most
serious consideration to see what we can do to bring about the desired
improvements.
2. The principal thrust of the Review deals with resource control
and management, and it is here that the most significant improvements
can be made. The law, Presidentfal letters, and other directives have
been silent as to the role the Director of Central Intelligence was to play
in resource management. Lacking clear direction toward a stronger
position regarding resource requirements and allocation, the evaluation
of their effectiveness, the selection of new systems, and the phasing out
of the old, the Director has had little basis to balance his coordinating
authority over substance with a comparable authority over resources.
The Review quite properly recognizes that nearly eighty-five percent of
the total resources are funded and controlled by the Secretary of Defense,.
The Department of Defense must therefore be very heavily involved in
any changes directed toward improvement in resource management and
control.
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3. The Secretary of Defense has made a good beginning in making
the Assistant Secretary of Defense for Administration also responsible
for coordinating intelligence. In his posture statement of 9 March 1971,
the Secretary of Defense recommended the creation of a second Deputy
Secretary and two additional Assistant Secretaries of Defense to enhance
civilian supervisory management of the Department. An Assistant
Secretary devoting his full time to Department of Defense intelligence
activities and reporting to one of the two Deputy Secretaries would seem
to be a considerable improvement over the present arrangement. This
is probably enough legislation to ask for at this time. In fact, the kind
of legislation which would be required under either Option I or II of the
Review could well lead to a wrangle in the Congress which might in the
end emasculate the intelligence effort. There are other drawbacks to
Options I and II, but these alone are enough to rule them out as realistic
solutions. And the Review itself seems to recognize that Option III has
enough built-in problems to minimize its chances of being very effective.
It follows that some variant of these three Options which could be accom-
plished under existing Presidential authority and without legislation,
offers the greatest hope of accomplishing the President's objectives.
4. Given the wide deployment of resources, disparate interests,
and jurisdictional boundaries within the cornxnunity, it is very doubtful
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that tho Director of Central Intelligence can command the entire com-
munity. He should, however, under an appropriate mandate be able to
coordinate it effectively.
5. If the President desires that the DCI coordinate the resources
of the intelligence community, this could be done through a Presidential
or National Security Council directive to the DCI, the Secretary of
Defense, .and the Secretary of State. Such a directive would as a minimum
need to provide for DCI coordination of programs, budget preparation,
and final review before submission to the President. It would also need
to provide for continuous program review and coordination of budget
administration. Results would depend in large part on the cooperation of
the Secretary of Defense and the Secretary of State and, more importantly,
on strong Presidential support.
6. The product will never be as good as we would like it to be. It
should, however, be as good as we can make it. The Review deals with
the possibility of separating production units of CIA from the collectors
in order to ensure objectivity. This would be a great mistake. It is
administratively quite simple to ensure that the collector is not also the
evaluator of the information he collects. The fact that the production
components usually have collateral from other, and sometimes several,
sources also minimizes this risk. In any case, to disembody the Central
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Intelligence Agency and leave the Director of Central Intelligence with-
out command of, and intimate association with, those units upon which
he must depend to support production would take away what control he
now has of the intelligence process. The resultant deterioration of the
process and the product is predictable. It simply isn't viable.
7. Some mechanism to bring the consumer closer to the producer
Is much to be desired, and the Review's suggestion that this might be
done through a high-level consumer council has much to commend it.
8. If the President should direct that the Director of Central
Intelligence assume responsibility for coordinating the resources of the
intelligence community in line with the suggestion made herein, it would
be necessary for the Director to delegate more of his clay-to-day manage-
ment responsibilities for the Central Intelligence Agency, which is per-
fectly feasible.
,
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