157-10014-10125
2025 RELEASE UNDER THE PRESIDENT JOHN F. KENNEDY ASSASSINATION RECORDS ACT OF 1992
JFK Assassination System
Date:
7/7/2015
Identification Form
Agency Information
AGENCY: SSCIA
RECORD NUMBER:
157-10014-10125
RECORD SERIES:
MISCELLANEOUS RECORDS OF THE CHURCH COMMITTTEE
AGENCY FILE NUMBER:
07-M-31
Document Information
ORIGINATOR : SSCIA
FROM:
TO:
TITLE:
DATE:
PAGES:
03/10/1976
78
SUBJECTS:
DOCUMENT TYPE :
CLASSIFICATION:
RESTRICTIONS:
CURRENT STATUS:
DATE OF LAST REVIEW:
OPENING CRITERIA:
SSCSGO, METHODOLOGY
COMMITTEE BUSINESS
TRANSCRIPT
Declassified
1B; 1C
Redact
03/22/2000
COMMENTS:
CCBOX 324
v9.1
NW 50955 DocId: 32423513 Page 1
1
JFK ASSASSINATION SYSTEM
IDENTIFICATION FORM
AGENCY INFORMATION
Date: 08/07/95
Page:
1
AGENCY : SSCIA
157-10014-10125
RECORD NUMBER
RECORDS SERIES : MISCELLANEOUS RECORDS OF THE CHURCH COMMITTTEE
AGENCY FILE NUMBER: 07-M-31
DOCUMENT INFORMATION
ORIGINATOR : SSCIA
FROM:
ΤΟ :
TITLE :
DATE: 03/10/76
PAGES : 78
SUBJECTS : SSCSGO, METHODOLOGY
COMMITTEE BUSINESS
DOCUMENT TYPE:
CLASSIFICATION:
RESTRICTIONS :
TRANSCRIPT
TOP SECRET
REFERRED
CURRENT STATUS: POSTPONED IN FULL
DATE OF LAST REVIEW:
OPENING CRITERIA :
01/05/99
COMMENTS : CCBOX 324
[R]
ITEM IS RESTRICTED
NW 50955 DocId: 32423513 Page 2
TOP SECRET
Vol. 2 OF 3
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure: Subject
to. Criminal Sanctions..
R2829
The United States Senate
Report of Proceedings
Hearing held before
Senate Select Committee to Study Governmental
Operations With Respect to Intelligence Activities
NW 50955 DocId: 32423513
Page
Wednesday, March 10, 1976
Washington, DC
(Stenotype Tape and Waste turned over
to the Committee for destruction)
WARD & PAUL
410 FIRST STREET, S.
WASHINGTON, D. C. 20003
(202) 544-6000-
TOP SECRET
WARD/smnl
1
ស
2.
ارم
3
4
5
6
7
00
8
TOP SECRET
FOREIGN AND MILITARY SUBCOMMITTEE MEETING
Wednesday, March 10, 1976
1
United States Senate,
Select Committee to Study Governmental
Operations with Respect to
Intelligence Activities,
9
10
11
Washington, D. C.
The Committee met, pursuant to notice, at 2:45 o'clock.
p.m., in Room S-407, the Capitol, the Honorable Walter D.
Huddleston presiding.
12
13
Present:
Senators Huddleston (presiding), Hart of
14
15'
Colorado and Mathias.
Staff: William G. Miller, Staff Director, and David
16
Aaron, Joseph diGenova, Lynn Davis, William Bader, Elizabeth
17
18
Culbreath, Charles Kirbow, Rick Inderfurth, Pat Shea, Elliot
Maxwell and Al Quanbeck, Professional Staff Members,
19
20
20
21
22
23
24
24
25
NW 50955 DocId: 32423513 Page 4
TAD SEODET
TOP SECRET
3
.1
2.
4
And then the question is whether or not there is a prohi-
bition on printing in the English language.
Mr. Bader. And as I heard the consensus this morning,
we would not move to that recommendation for a prohibition.
5
I did not hear whether on the distribution this would be by.
6
7
00
law, though I took it it was to be by law, though I can be
corrected on that. I don't think we addressed that this morning.
Mr. Kirbow. Mr. Chairman, on these that we considered
to be rather
9.
10
11
12
13
14
15
16
17
18
19
20
21
22
23
that we have a fairly light record on or that
we are not too sure what the future holds, one of the members
that I rode over with on the car suggested that perhaps in those
instances we could recommend fairly strongly whatever we want
the followon people to do to ensure that the recommendation
does not create havoc within the Agency or does not leave the
rights of citizens unprotected.
But that is not a cop out. It is something that you
frequently do, say, let us reserve this for the permanent
oversight committee or for whatever other group. We may have
all the information we need.
Senator Huddleston.
Let them make the determination whether
or not it should be a statute.
Mr.Kirbow.
Determine whether in the law whether it is
224
24
25
working all right under the set of regulations.
Mr. Bader.
Mr. Chairman, may I say in this instance in
the publishing trade there is no lack of record? The evidence
NW 50955 DocId: 32423513 Page 5
TOP SECRET
1
2
3
4
5
TOP SECRET
PROCEEDINGS
Senator Huddleston.
I call the Committee to order.
Mr. Aaron. I believe Bill Bader had the temerity to
summarize where we stand.
Mr. Bader. Mr. Chairman, where I think we are at the
6
moment is taking the three major issues before the Subcommittee
7
in the order they were presented, and discussed this morning,
8
the first being the academic issue, and as I heard the Subcom-
9
10
11
mittee this morning, then I will have another go at the
options, give enough options in the option paper and bring it
back before the Committee for a further look before we go on.
12
Senator Huddleston: By Friday.
13
Mr. Bader. By Friday, without question.
14
15
16
17
I think by this time we will all have we will try to
include a positive option, that is to say, to approve if not
applaud the expanded efforts of FRD to undertake these activi-
ties, or at least to endorse them.
18
19
20
21
22
Now, going to the second was the covert use of books and
publishing houses. We discussed two recommendations:
I believe here the Committee has agreed to, and that is a
prohibition on the distribution or subsidy of any books,
magazines or other publications not attributed to the CIA in-
side the United States.
23
24
25
we.
Senator Huddleston' I think we can all accept that, can't
one which
NW 50955 DocId: 32423513 Page 6
1
2
3.
4
TOP SECRET
and inquiry into it has been thorough, and I think we know this
well. There is no dispute from the Agency.
Senator Huddleston. Well, is the law inconsistent with
5
6.
the statute on the information service?
R
Mr. Bader. It is the same thing. I would recommend,
Mr. Chairman, that this would be by law, by statute.
Senator Huddleston. On the publication.
8
Mr. Bader. On the publication.
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
25
Senator Mathias. I would support that.
Senator Huddleston. I think Gary Hart would also, so I
think we will make that recommendation, that this one on the
academics is the one we are not sure of.
Mr. Bader. That's the one we would go forward with, and
I would also reiterate that in our
now we are moving to
session the other night, I took it as agreement that the
recommendation by statute the CIA should be prohibited from
making operational use of all educational and cultural
grantees of all U.S. Government sponsored programs, this was the
issue which was raised of government funded programs such as
the Fulbright program.
Senator Huddleston And that's either already a regulation
or a directive or something to that effect.
Mr. Aaron.
Certain categories.
24
Mr. Bader.
Certain categories.
25
Mr. Kirbow.
That is brand new ground.
NW 50955 DocId: 32423513 Page 7
TOP SEADET.
TOP SECRET
5.
1.
2.
3
4
5
6
7
8
19
10
11
12
13
14
15
16
17
18
19
20
Mr. diGenova. The John McCloy exceptions to that rule, they
are the only ones that are protected.
Mr. Aaron. That justifies Charles' view that there are
some similarities between Ford Foundation and Government
sponsored activities.
Mr. Bader. Where our discussion was left before lunch
was on the question of the covert use of U.S. journalists and
media institutions, and as it was laid out, it was indicated
that the CIA's intended internal prohibition on the use of the
media extended to the internal prohibitions on the use, opera-
tional use of individuals, American and foreign, who were
accredited to American media organizations.
As I heard it this morning, what we were discussing and
moving to was to extend that prohibition to cover all American
individuals and media organizations, and that the question then
was whether this would be recommended to be something done in
law or a recommendation, or an insistence, if you will, to the
Agency that it further amend its internal directives, its
50-10, to put all media personnel, American media personnel on
the prohibited list, and that is I think where we were.
21
Senator Huddleston.
21
I think that's an accurate statement.
22
That's where we were.
23.
I had expressed a thought that I thought that it ought to
24
be expanded to include all, but we should hold off
on the
25
statute business for the time being.
NW 50955
DocId: 32423513 Page 8
TOP SECRET
6
1
Senator Mathias. My role here seems to be the Devil's
2 advocate.
10
3
Senator Huddleston.
Good.
Senator Mathias.
There is no question about the writing
5
American press or the value in print domestically. Maybe the
6
role, any legitimate role that news men could, journalists,
7
writers could fulfill is available through the information
8
10
11
12
13
14
15
agencies, USIA and groups of that sort.
So does anybody know whether there is any real need
for allowing some latitude, which is not covered by situations
that can be envisioned under USIA or other programs?
.
Mr. Kirbow. Well, Senator, the one that I discussed earlier
that I probably didn't make my point well because no one
seemed to have picked it up, is we do, by the words here, if I
understand Mr. Bader, prohibit an American citizen living in
Brussels and working for a local newspaper there from having
anything to do with the CIA.
Senator Huddleston. No we don't, do we?
16
17
18
19
You mean by his extension?
20
Mr. Kirbow. Yes, sir.
21
22
23
24
Senator Huddleston. But not by
Mr. Kirbow. But wasn't that what you wanted to put in
the law, that you didn't know if you wanted
Senator Mathias. This is the point I wanted to raise
25
here.
NW 50955
DocId: 32423513 Page 9
SEAN
TOP SECRET
7
1
02
3
5
7
8
Mr. Kirbow. That kind of relationship is something that
we should stay away from because I don't see any harm in it,
nor do I think the record demonstrates any harm in it. I don't
see
I don't know how in the world this person doing that
taints the minds of the American reading public, which is
you're not trying to protect
apparently what you are trying
the newsman. You are trying to protect the reader who doesn't
know that what he's getting is being spoonfed to him from the
9
CIA, and I don't know why we would be so concerned about
protecting newsmen from working, or prohibiting them from
10
11
working, because I think they have a right to do that as
12 American citizens, just as they do to work with the Department
13
14
15
16
17
18
19
of Defense or any other agency.
Mr. Bader. You would then rescind the Agency's standing
prohibition?
law.
Mr. Kirbow. I just don't think you ever prohibit it in
Mr. diGenova. Are you talking bout an affiliated,
accredited journalist, because that's what the Agency regulation
20 deals with. It doesn't deal with an American citizen. It
22
21
22
23
deals with an accredited person, whether he is a foreign
national or an American.
Mr. Bader. To an American media organizationi.
23
24
Mr. diGenova.
25
you.
NW 50955 DocId: 32423513 Page 10.
But that's not the example Charles gave
TAN SEADET

TOP SECRET
1.
2
3
4
5
6
Mr. Kirbow.
Well, perhaps I misunderstand the extension
that you, your full recommendation.
Do you want to go beyond where the administration is in
their position?
Mr. Bader. I am recommending to go beyond where the
Administration is at this stage, to extend the operational
prohibition on the part of CIA to use American
Americans in
7
the media
8
10
11
12
13
14
15
16.
17
18
19
20
Mr. Kirbow. Wherever located.
Mr. Bader. Where they are using them undercover, at this
stage, to the extent that it is a cover proposition.
Senator Huddleston. Even if they are in foreign media?
Mr. Bader. Yes, sir.
Senator Huddleston. And even though all of their
activities are related to foreign; they are not writing for
American news services.
Mr. Bader. Alternately; they could be with American
media organizations.
Mr. Kirbow. Mr. Chairman, I don't think there is a single
shred of evidence on our record that that is in any way wrong-
doing or in any way adversely affects the rights of American
21
citizens.
22
23
24
25
Clearly it will prohibit or could prohibit in the
future the proper use of an individual that could be essential
to the intelligence collection processes of the CIA, and it
singles out a specific agency which is not doing any harm to
NW 50955 DocId: 32423513 Page 11
0
TOP SECRET
9
1
02
3
5
the American citizenry, and says no, you cannot do this because
you happen to be a secret organization.
Senator Mathias. If I wanted to do it, Charlie, I think
I could work out a scheme. I would hire a prominent American
columnist to go and live in Paris, as Art Buchwald did, for
example.
6
7
8
Mr. Kirbow.
And to pick off his columns and run them
9
10
11
12
13
14
15
16
in the New York Times.
Senator Mathias. And run them in the Paris Trib first,
and then let the domestic press pick him up...
Mr. Kirbow. But if he's in the Paris Trib, that's an
affiliated U.S.
Mr. Aaron.
Well, suppose he writes for the Financial
17
18
19
20
21
22
23
24
N N N
25
Times?
Senator Mathias. Well, you could work out an echo program
if you wanted.
Senator Huddleston. Well, the basic point, instead.
of picking instances, it seems to me, is whether or not as an
official policy of the United States Government we want an
institution such as the press with all it means and all it is
supposed to be in American with its constitutional provisions and
whatever, to be subverted to the secret, clandestine operation
Anytime we put any prohibition anywhere, we are
that it can;
eliminating somebody as a potential agent. You can't use
that as a guideline.
NW 50955
DocId: 32423513
Page 12
:
TOP SECRET
10
1
2
3
5
6
7
Mr. Kirbow. These people are not necessarily subverted.
Senator Huddleston. I'm talking about the institution of
the free press being subverted, not the individual.
Mr. Kirbow. I'll extend that one further. I don't see
how using them for cover, which has no direct effect, like the
example I guess you gave, Senator, of a vice president of a
bureau of some sort who has nothing to do with the writing or
8
9
just like any other corporation.
editing or anything; he is the business head of the operation
This thing extends to that.
10
11
12
13
14
15
16
17
18
19
20
22
21
22
23
24
25
Senator Huddleston. He may have something do with the
selection of the people who do write.
Mr. Kirbow. Well, if you could give us an abuse that we
are trying to correct, or some reason for it?
Mr. Bader. It's not a question of abuse, it's a question
of the use, the operational use of an institution such as
the press for operational purposes.
Mr. Kirbow.
Well, explain then, and perhaps I'm going
explain the sanctity of the press if it is not to protect an
uninformed reader from having his mind tainted by the relation-
.ship.
What is the sanctity of the press as an organization?
It is not sanctity like the church and state. I just don't
see the record for this.
Senator Huddleston. Well, the clergy and the press I think
are institutions.
Mr. Kirbow. Well, I think the clergy and maybe the
NW 50955
DocId: 32423513 Page 13
TA
SEANET
TOP SECRET
11
1 academic, like you say, that teaches the student directly,
2 but a businessman who happens to have elected going into the
3
business of running a newspaper or a magazine, to be singled
4
out and say you as a patriotic American are proscribed against
5
doing any business, and if you are going to do it with an agency,
6
you should do it with the whole United States Government.
I
7
8
don't see how we can single out the CIA and not single out
military or FBI.
10
11
9
Mr. Aaron. Well, I think the domestic group will have
may well have some recommendations regarding the FBI's covert
use of American media.
12.
Mr. Kirbow. Well, domestic media, obviously.
13
Mr. Aaron. I would like to say, to take Charles'
14
example of an American working for a foreign press, and what
:
15
16
17
18
19.
20
the problem is. I think the problem is that you have two
kinds of problems with the press. One is the fact, if it is
operating domestically, if it is working for American media
institutions, it is clear that they are subject to some
manipulation or at least questionable manipulation, and there
are issues in people's minds as to its integrity.
Now, the question goes beyond that to what about people
American journalists,
21
22
who might be working for some foreign
23
24
25.
1
American writers or what have you, working for foreign media
t
institutions. There you have a somewhat more extended
situation. But it seems to me that what you have is the
TAD SECDET
NW 50955 DocId: 32423513 Page 14
TOP SECRET
12
1 possibility of the American press getting discredited, having
2 problems of being able to perform its normal functions in the
3
world and performing in the United States because it is part
4'
of a clandestine intelligence organization.
Mr. Kirbow.
Don't you think that's an individual right
5
that a person has the right to exercise both ways, instead of
6
7
one way?
Mr. Aaron.
8
9
.10
11
Charles, what I think I have told the
Committee, I have a real problem with the concept of the
American people having the right to spy, somehow, and these
prohibitions don't go to what people are allowed to do on
the outset. They go to what the Government is allowed to do.
Mr. Maxwell. Well, let's take a different kind of
12
13
14
example.
15
16
17
18
19
20
21
2213
22
23
24
25
and it's not, I think,
What would happen if in some way
impossible to imagine an American citizen was writing full
time for the Communist Party paper in Italy or Portugal or
France.
Now, that obviously would be covered by the example that
Bill has provided as a prohibition.
There are two questions. One is whether the person has
any real operational use that you want to preserve, and second,
whether it goes to the question that David presents, which is
the possible contamination of the American press, which seems
a difficult extension in that example, as well as the possibility
NW 50955 DocId: 32423513 Page 15
TAR SEADET
TOP SECRET
13
of distortion, the flowback problem in America.
1
2
3
that, is that it seems to
www dang
4
5
6
7
8
9
10
11
12.
13
14
15
16
17
18
19
20
21
22
23
24
And the second problem seems to be, with an example like
there is very little stock in the
argument, because the argument about distortion of what goes
on in foreign countries and people's perceptions is at the heart
of the question of whether the CIA or any government agency
should be engaged in- propaganda, because it is quite possible
the propaganda gets picked up in the same way, and the question
is obviously of line drawing: how do you want to draw the
line.
It strikes me that there may be better ways to draw the
line than the suggested prohibition that Bill has for any
American, regardless of status, or who they write for or what
they are doing.
Mr. Kirbow. By having citizenship as an American
Mr. Bader. Well, you misunderstood me I was putting out
the various possibilities.
Let's turn to the text for just a moment and maybe that
will help.
First turn to 61. Let's try to get some idea of what the
problem is before we get to the semantics of it. All right,
just let me go through this, then we'll see what is actually.
being recommended here.
I have confused you, obviously, by giving a series of
25 possibilities, not what the recommendations are.
NW 50955
DocId: 32423513 Page 16
SEADET
2
°
TOP SECRET
14
1
3
H
"Ten U.S. news organizations and five U.S. publishing
houses provide cover for CIA agents abroad.
Four of the
organizations do not know that they provide this cover.'
Then there are some examples.
Meaning management or individual?
Management.
5
Mr. Kirbow.
6
Mr. Bader.
7
Mr. Kirbow.
At any level.
0
Mr. Bader.
At any level.
9
Mr.
Kirbow.
All right.
10
11
12
13
14
!
Mr. Bader. Then there are some examples of the kinds of
relationships that the CIA officer engages in intelligence
collection under cover as a roving international news corres-
pondent, a CIA officer under cover as a European representative
of an American company while working as a stringer for a
15 United States publication engages in intelligence collection
and covert action. In this case the company is aware of the
CIA relationship while the publication is not. Bona fide
journalists who regularly provide the CIA with intelligence,
some are paid regularly while others are not. In one case
the journalist is apparently not aware that the U.S. embassy
official to whom he is providing information is actually a
16
17
18
19
20
.21
22
CIA officer.
23
24
Now, what the recommendation here on 64, or the bracketed
and I'm sorry I created this situation
recommendations
25
by giving various options
TAD
by statute the CIA should
SE/DET
be
NW 50955 DocId: 32423513 Page 17
TOP SECRET
15
H
prohibited from using American media organizations for
2 cover. That is the extent of it.
10
3
5
6
7
8
9
10
11
12
What is the trouble, Joe?
t
Mr. diGenova. That seems to be somewhat
that seems
to be a back-off from what the Agency prohibits as well. I mean
do you want to make a recommendation saying that the Agency's
prohibition against using Americans who are accredited
Mr. Bader. No.
This is the additive. The recommendation here is to
take the Agency's prohibitions which go to the question of.
American and foreign journalists, accredited to American
media organizations, and extend it to what is not covered under
those prohibitions, which is the use of these American media
1
organizations for cover purposes.
13
14
15
16
Mr. Aaron.
17
18
19
Mr. Maxwell. Is it clear that people who are in media
organizations are not accredited to those organizations?
If they were, then they would be covered.
If they are accredited journalists, then they would not.
Mr. Maxwell. So the issue is whether individuals who
20
don't write -
21
Mr. Aaron. But may edit.
22
Mr. Maxwell.
But may edit.
}
23
Ms.
Culbreath.
Or may type it up.
24
25.
45
Mr. Aaron. Or may type it up.
Mr. Kirbow. Well, is this the same point that we're
NW 50955 DocId: 32423513
Page 18
TOP SECRET
16
1 talking about less than 25 people, where you are going to make
2
a statutory prohibition against use of all people in that
3 category because on page 61 it says, "of the 65 Americans
5
6
8
10
11
employed by the CIA in the media field, only a little over
one third are journalists; another third are CIA agents operat-
ing under media cover, and the remaining individuals are either
employed as CIA media proprietaries abroad or are propaganda
writers and consultants."
So we are really talking about making a major prohibition
against a segment of our society where at the present time there
is less than 25 people who have any direct contact with the
12 reading mind, apparently.
Senator Hart of Colordado. I think, Charlie, it's called
If it was only one person, you've still got the
problem. I don't think it is the quantity.
Ms. Davis. Bill, in your examples on 61, the first one
13
14
a principle.
15
16
17
18
19
20
21
22
23
23
24
25
at the bottom, would that now be covered under your prohibition?
CIA officer engages in intelligence collection under cover as a
roving international news correspondent?
Mr. Bader. I can't remember from the text here whether
the man is accredited or not.
If he is accredited, it would be covered.
Ms. Davis. If not, he is not additionally covered by your
prohibition.
Senator Huddleston.
This does not extend to the example
TAD SEADET
NW 50955 DocId: 32423513 Page 19
TOP SECRET
17
1
that you gave, Charlie.
2
Mr. Kirbow. No, sir, it doesn't here.
3
Mr. Bader. Only if he is affiliated with that group.
4
Mr. Kirbow. His affiliation covers anybody who is an
5
American citizen is forever and hereafter would be prohibited, if
6
it goes into the statute, from dealing.
7
Mr. diGenova.
That's only one of the possibilities.
00
8
9
10
11
Mr. Kirbow. That's one of those recommendations based
on investigation.
Mr. Bader. I wasn't recommending that.
was one of the possibilities of the whole list.
was saying that
12
Senator Huddleston.
But the recommendation at the top
13
of 64 doesn't cover an American citizen who
is using the
14
foreign media as cover.
Mr. Bader.
15
This would not cover an American citizen who
16
is, let's say, is working for Stompe,
or Le Monde, and who is
17
not accredited, and at the same time is not accredited to
.'
18
an American media organization.
19
22
20
It does not cover an American citizen who is a stringer to
a Latin American newspaper unless he is accredited to an American
media organization.
Mr.
Kirbow. Let me try one more time, then, to state the
position of not Senator Tower in this case, but another Senator,
21
22
23
24
as I indicated, spoke to me on this very "subject,and indicate
25
to you that we not do to harm or to prevent the use by the
NW 50955
DocId: 32423513
Page 20

TOP SECRET
18
1 agency of certain people unless in some way that use affects
2
3
5
6
.m
8
9
10
11
the rights and/or in some vague way affects the mental processes
to the detriment of the American citizenry, that we don't
concern ourselves with passing laws to protect the person who
reads something that these people do. If you do this, you open
that can of worms which gets you into a prohibition against any
work in the press or elsewhere in a propaganda fashion.
Now, the Committee may decide that propaganda is in fact
something that we should prohibit by law, but doing this
piecemeal like this, it does just exactly that. I see nothing
in our record that indicates that the use of certain of these
12 people overseas or for cover in any way
there is not
any evidence that it has adversely affected the rights of the
13.
14
citizens of the United States.
There is a potential for
15
abuse in practically anything secret and covert.
16
Senator Huddleston.
I don't believe the recommendation
17
at the top of page 64 violates what you have just said.
18
Mr. Maxwell.
I would not think that
19
20
20
21
22
23
Mr. Kirbow.. Well, it says, Mr. Chairman, that by statute,
by statute, which means by law, the CIA should be prohibited
from using American media organizations for cover. We apparently
have 65 people, a portion of which are being used for cover,
and apparently they consider them to be an essential asset, or
24
they wouldn't be using them.
25
Is that correct, Mr. Bader?
NW 50955 DocId: 32423513 Page 21
NW 50955
TOP SECRET
19
1
ลง
10
5
6
7.
8
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Mr. Bader. The CIA?
Mr. Kirbow. Yes.
Mr. Bader. I would assume that they would have extended
their prohibition to this, or on the other hand one could argue
I don't know what their motives were. It could have been they
felt that this, the first step they took was the one that was
dealing with what the public was demanding.
Mr. Kirbow. Well, I really don't see anything in our
record or any evidence that they have given us or anything
other than a staff position on this which we are trying to
sell the Committee that this is a harmful procedure.
Senator Huddleston. What this does is extends beyond
the practice of journalists to any other person, be it an
executive or clerk or typist or whatever, on the assumption
that you can't be a little bit pregnant. If the agency is
going to be subverted anywhere, not the agency, if the insti-
tution of the press is, that it is going to be subverted.
Mr. Bader. Mr. Chairman, the Agency has accepted the
basic principle, because it has removed from its list of
operational assets a rather larger number than this would
call for.
Mr. Kirbow, But if I hear correctly what you are saying
then, we are out to protect the American media from being made
pregnant by the CIA and not worrying at all about the reading
public or the other, but just the media.
DocId: 32423513 Page 22
)
NW 50955
TOP SECRET
20
1
2
3
5
50
6
Senator Huddleston. The assumption is if the media of
the press is subverted, that it will affect the citizens, or
they will suffer.
Senator Hart of Colorado. Mr. Chairman, in the interest
of expedition, I move the passage of these three recommendations
Senator Huddleston. All right. Let's see what the three
7
8
9
are.
Mr. Aaron. Well, let me summarize the first one. I think
we have agreed the first is that the prohibition on distribu-
tion of CIA funded, supported, subsidized and so forth, that
that be prohibited within the United States.
10
11
12
Mr. Inderfurth. Printed.
13
Mr. Kirbow.
14
15
16
17
18
19
20.
21
22
23
22
24
25
25
Excuse me.. Not printed.
Mr. Aaron. The word "printed" dropped out for the following
%
reason. One, it makes it easier to prohibit the distribution
if you don't identify where the printing is taking place, and
secondly, while there is no printing going on here, the
question really goes to distribution. I think that was the
concurrence of the Committee.
The second point is that the prohibitions of that the
Agency now has upon itself, be made law.
Mr. diGenova. On the use of media personnel and
institutions?
Mr. Aaron. On the use of media personnel and institutions,
and the third point is that it be extended to say by statute
TAR SE
DocId: 32423513 Page 23
TOP SECRET
21
the CIA should be prohibited from using American media organiza-
1
2
tions for cover.
6
7
.8
9
10
end la
11
begin lb
12
13
14
15
16
17
18
19
3
5
Senator Huddleston.
Well, the style of this ought to
be changed, it seems to me, because one of the recommendations,
instead of listed under recommendations, is the last paragraph
on 63, is that correct?
Mr. Aaron. Yes, that would be picked up as a recommenda-
tion, that is correct.
Mr. diGenova.
Plus the other one, which is not on 64.
Mr. Aaron. Well, the one on 64, the bottom one comes out.
Senator Huddleston.
Senator Mathias.
Right.
Before you leave that, as a matter of
record, I am requested to note an exception on behalf of
minority.
Mr. Aaron. The second section was the covert use of
American clergy and laity. This is on Page 64.
Senator Huddleston. Was that included in your motion?
Senator Hart of Colorado.
No.
Mr. Aaron. I think that covers the recommendation.
Mr. Maxwell.
They hadn't discussed whether it
20
21
should be made public.
Senator Huddleston. Well, if it becomes a statute, it
22
23
becomes public
Mr. Inderfurth.
But the statute will remain secret.
24
Mr.
Aaron.
No, we are ready to move on it,
to covert
25
NW 50955 DocId: 32423513
Page 24
TAD SEADET
TOP SECRET
22
1
use of American clergy and laity.
2
Senator Huddleston. Well, the covert
3
action is
with the noted exception, those recommendations go before
the Committee.
5
Senator Hart of Colorado.
Just for clarification, Mac, is
6
that the entire minority or what?
?
Senator Mathias. No, it's only one member.
8
Senator Huddleston.
Now we are ready to deal with the
9
clergy.
10
11
Mr. Aaron. The point here is, I think, the CIA takes
the position that it has no covert arrangements with American
12 clergy and laity, and that this will continue as policy, but
they have relationship of a clandestine character which don't
involve remuneration.
13
Senator Huddleston. Incidentally, is that a new policy?
14
15
16
Mr. Bader. Yes, as of February 10, 1976.
Mr. Aaron.
17
It's pretty short. This is the sum total of
18
19
20
21
22
23
our findings, and it explains it better than I can.
Mr. Bader. This has not been, obviously you can see,
Senator and members of the Committee, from the text that the
Committee has found the CIA has a total of 14 covert arrangements
involving direct operational use of 21, that should be religious
persons, and I found it very difficult in this to properly or
24 respectively address the category here, whether they are American
25 clergy, regligious persons, or what. It is a term of art I
NW 50955 DocId: 32423513 Page 25
TOP SECRET
23
1
2
3
4
5
6
8
10
11
12.
really haven't quite been able to deal with.
As of February 10th, the CIA announced that the CIA has
not secret paid or contractual relationships with an American
clergyman or missionary. This practice will be continued as a
matter of policy.
Senator Huddleston. I think we ought to clarify that
religious persons. That would include Chuck Colson..
Mr. Bader. The issue here is, we are saying in the first
instance, we welcome this policy which they intend to put into
their operational prohibitions, and the recommendation that
we bring to you is a very simple one, in addition to that is
that it be extended from contractual to all operational relation-
ships, paid and unpaid.
Senator Huddleston.
13
14
By statute.
15
Mr.
Bader.
By statute.
16
Mr. Inderfurth. May I ask a question here?
17
How does this conform to Senator Hatfield's bill
on this?
Mr. Bader. I don't know.
18
Mr. Inderfurth.
I don't know.. I'll get a copy of it,
19
20
21
22
23
24
but I think to the degree possible, if the committee
recommends by statute a prohibition, it should be made to conform
to that because he has put in a great deal of work on that, or
without knowing the facts, I might add.
Mr. Kirbow. The other thing is the Committee may want
25
to support legislation that is already pending.
TAD SEADET
NW 50955 DocId: 32423513 Page 26
NW 50955
TOP SECRET
24
1
02
3
5
6
7
8
9
10
11
12.
13
14
15
.Mr. Maxwell. What is the nature of the covert relationship
with religious persons now in effect?
Senator Mathias. A few patriotic volunteers.
Mr. Bader. Patriotic volunteers, at least one of them,
from the operational records.
I think, too, they have what is called a memorandum of
agreement which is not contractual in the sense that it
involves paid or unpaid.
Mr. Maxwell. What are they doing?
Mr. Bader. They collect intelligence information.
Mr. Kirbow. What is a religious person, Mr. Bader, as they
use it or as you use it here?
Would that mean the organ player that is a civilian who
travels with a preacher and plays the organ?
Mr. Bader. No. It is intended to be the American clergy,
although I certainly would lean on whoever can tell me what a
proper term is to define American clergy.
16
.17
18
Senator Mathias.
19
Rani?
20
21
22
What about this fellow around, Maharaja
Senator Huddleston.
I'll think on your defintion.
Mr. Bader. I think we'll have to have a footnote as to
what American clergy may be.
Mr. diGenova. American clergy or missionaries, certainly.
23
33
24
25
fuzzy.
Senator Huddleston. Well, missionary gets a little
DocId: 32423513 Page 27
TOP SECRET
25
1
2
10
3
5
6
7
00
8
9
10
11
12.
Mr. Bader. The Agency uses "American clergy or missionary.
It has to be a person whose primary
Senator Huddleston.
occupation is for a religious order or sect or something, it
seems to me.
Mr. Kirbow. How about the Mormon youth who do their things
overseas?
Would this take care of them and prevent them from getting
gobbled up?
Senator Huddleston. I think that's a good question. They
receive no pay.
Mr. Kirbow. They are not church people, per se. It
part of their religion, doing the service. You see, this gets
tobe a rather broad extension, or you leave out certain
Senator Huddleston. I think there may be somewhere in our
litany a definition.
am not sure.
13
14
things if you are not careful with your definition.
15
16
17
18
bill, a definition of what clergy
19
22
20
21
22.
23
24
25
25
Mr. Inderfurth. I would imagine that Senator Hatfield's
that would be spelled out.
There are copies coming over now.
Mr. Bader. Well, I think maybe we will get a copy of the
definition of clergy or missionary. Maybe that will clear
that up.
Senator Huddleston. Well, I think, you know, some
churches send people over for a very short period of time. They
are lay people, really, but while they are there, they are
NW 50955
DocId: 32423513 Page 28
TAR SPARET
TOP SECRET
26
1
2
3
4
5
6
7
8
there more or less under the auspices of the church group.
them.
Mr. Kirbow. At least a local church frequently sponsored
Senator Huddleston. I don't think you can prohibit all
those kinds of people. I think some kind of definition should
include the primary occupation of clergy, clergy itself.
Senator Mathias. Well, why don't we commit to staff for
the moment the question of definition?
Senator Huddleston. I think we will have to do that.
10
Okay. Are we ready to move on that?
11
12
13
14
15
16
17
18
19
20
Mr. Aaron. The recommendation is that whomever or however:
we define them and that's obviously an important question,
that they either be prohibited by statute. The other alternative
is to simply prohibit any further or recommend the prohibition
of any further CIA recruitment in this field.
Ms. Culbreath. The way this is worded, this would get
anybody who is a lay member of a church. You have got recruit-
ments of American clergy or laity.
If I am a member of the Methodist church, I am in the
laity of the church.
Mr. Miller. You have raised a question. There are people
who are not priests in the religious hierarchy in a particular
sect who may devote their entire lives to that particular
21
22
23
church.
24
Senator Mathias.
25
Well, I think the word "a religious"
NW 50955 DocId: 32423513 Page 29
TAD SEA
TOP SECRET
27
1
I'm serious here
2
3
should be considered.
Mr. Aaron. "A religious?"
Mr. Bader. We'll have to obviously work on that.
Laity
was not meant here to be a member of a church, for technical
5
terms, the technical terms Mr. Miller mentioned.
6
Mr. Miller. As distinct from the congregation, it was
7
8
meant to deal with the administrators in a religious order.
Senator Huddleston. Well, some sects have lay preachers and
9
lay clergy.
10
Mr. Kirbow.
Senator Hart, do you want each of these
11 categories like this examined in the light of the constitutional
12
13
14
15
16
17
.18
19
question that you raised earlier?
Senator Hart of Colorado. I just raised the issue where
the academics were concerned to resolve it, so I'm sure it
should be raised by somebody.
Senator Huddleston. Are you ready to go on the religious
insofar as what is the definition? Then that will be
Senator Hart of Colorado. Yes, sir.
Senator Huddleston.
20 with exceptions noted?
22
Then that will be moved up, I assume
Mr. Kirbow. I don't have any exception to that one, sir.
Mr. Inderfurth. That is by statute, right?
21
22
23
24
i
25
Senator Huddleston.
Pardon?
Mr. Inderfurth. Is that by statute?
Senator Huddleston. Right.
NW 50955
DocId: 32423513 Page 30
TA

TOP SECRET
28
1.
2
Mr.
Maxwell.
There may be a First Amendment argument
here, particularly in fundamentalist groups whose religious
3 beliefs are committed, are directed toward opposition toward
4
5
6
7
Godless atheism.
Mr. diGenova. Except that the control of religious organi-
zation has historically been subject to governmental regulation
in this sense: the Supreme Court in light of Senator Hart's
8 question last night, I did a little bit of research. The
9
10
11
12
13
example, the prime example of regulation doesn't deal so
much with prohibition of the Government dealing with someone,
although there are vast areas where the government is not
permitted to get into. The question is, for years the Supreme
Court has ruled that there are certain health regulations of
states that religious sects must comply with, and they have
to comply with it even if it conflicts with their basic religious
14
15
16
belief, that they have to comply with it, like quarantines
17
18
or things of that nature.
So there is clearly an area where the First Amendment of
religious freedom concept falls in the face of a greater good,
19
20
the need of the general public, and that has generally been
in the health area, where there is some practice of the
21
22
23
24
25
religion which conflicts with some standard which has been
set in the community at large, and that generally has dealt
with health.
Mr. Kirbow. Maybe the HEW Act can bring the CIA under one
NW 50955 DocId: 32423513 Page 31
1
2
0
TOP SECRET
29
10
3
4
5
6
7
of these health threats.
་
Mr. diGenova.
Self-immolation.
Senator Huddleston. The snake acts and innoculations.
Mr. diGenova. That's exactly right.
Mr. Maxwell. The problem is that's not quite applicable
to this, and one has to argue in the past the Court has ruled
on things that are found to be a threat to the personal liveli-
8
hood or health of the individual rather than something that
9
could be construed in a fundamentalist sense.
10.
Senator Huddleston.
This doesn't preclude a sect that
may be anti-atheist and as such anti-Communist from pursuing
11
12.
its principles, but the restriction would be pursing them through
13
a government agency, which happens to be the CIA, or any other
14
methods.
15
Ms. Culbreath.
Would this prohibit, then, somebody who was
16
17
a member of one of these sects that was in an area where they
gained information that would be helpful from them being sources?
18
Senator Huddleston. I wouldn't think so if they wanted
19
to write letters to the CIA.
20
ao
Ms. Culbreath.
Well, just in terms of the debriefing kind
21
22
22
of thing, or contact.
Ms. Davis. We are talking about operational, not coming
in to the Domestic Contact Service.
Mr. diGenova. It is not very clear on this.
23
24
25
Mr. Maxwell. The problem in part goes back to the difficult
NW 50955
DocId: 32423513 Page 32
TOP SECRET
30
1
2
3
5
6
we had with the Domestic Contact Division in trying to determine
what was operational support, if operational support would be
what did you learn about individuals there who might be
receptive to American approaches. Then the clergy would be
prohibited from providing that kind of information if that
is operational support.
7.
Senator Mathias. Well, it
seems to me if the religious
came in and said I was at a meeting of the Holy Rollers last night
9
and we all went down on the mourner's bench, and I heard the
10
11
be no prohibition against listening.
most remarkable things, and this is what I heard, there would
Now, if you say, go back.
12
to the Holy Rollers tonight
13
14
15
Mr. Kirbow. And listen again.
Senator Mathias. Then you've got a question.
Senator Huddleston. Then it is operational.
I don't think there's a need to write in that it doesn't
16
17
pertain to the voluntary furnishing of information.
I don't
know.
18
Mr. Aaron. I don't think
19
no, that's really not an
20
operational use, quite frankly.
It's very similar to the DCD
21
which takes information from lots of people, including people
22
who are and have been for some time proscribed by CIA's own
23
22
Senator Huddleston.
Well, anyway, that would be worked
out in the statute itself.
24
25
25
Mr. Aaron. We are spared the problem.
NW 50955
DocId: 32423513 Page 33
TAD CFADET
TOP SECRET
31
1
2
ان
Senator Huddleston.
We ought to move on.
Mr. Aaron. The next section is proprietaries and cover.
Senator Huddleston. I just wonder if in presenting this,
4 these three, these four, now, that we have just approved, it
5 would be of any value to assert in our report that we recognize
6
7
8
9
10
that the Agency has to find proper cover for its agents, that
restricting that cover is a matter of some importance, but there
are certain institutions that the Committee feels because of
their nature and because of their standing in the country, and
because of the need for the public to have confidence in them,
that they should be, in effect, off limits, and because of that
of that
11
12
)
13
we recommend that these four recommendations be brought. I
don't know whether you want to make it sound any better ar
14
not.
Senator Hart of Colorado.
Mr. Chairman, does the absence
15
of brackets on the next set of recommendations mean that they
16
17
are non-controversial?
Senator Huddleston.
18
On the proprietaries?
Senator Hart of Colorado.
Yes.
19
20
20
Mr.
21
22
23
33
24
25
Aaron. That is correct.
Senator Huddleston. The gentleman did such a great job
that nobody can question them..
Mr. Aaron.
I think there is only one set of brackets, and
the next section is on page 67 in which it says that
Mr. diGenova.
Oh, yes, there is something.
NW 50955 DocId: 32423513 Page 34.
TAN
CFADET
TOP SECRET
32
1
2
10
4
5
6
.7
8.
9
10
11
12.
13
14
15
16
17
18
19
20
21
22
23
22
24
55
25
Mr. Kirbow. What page are you on?
Mr. diGenova. 67.
At the bottom of page 67 is a bracketed quote about
Admiral Raborn, a former Director of Central Intelligence.
Now, if my memory serves me correctly now, first of all,
this is the first time that anyone is mentioned by name in the
findings.
Senator Huddleston. And the total findings are in that
section.
Mr. Kirbow. The findings are this foreign and military.
We referred to Helms and Laird,
Senator Huddleston.
I think we decided we could write around that.
pout
Mr. diGenova. Well, here's what happened here. This
paragraph deals with the fact that when the Agency disposes or
dissolves a proprietary, it tries to avoid conflicts of interest.
However, when noted that sometimes pressures were brought
to bear on the Agency to dispose of the entity as a favor to
someone, so that it would benefit someone else.
Now, the most glaring example of this was this activity
of the former Director, Admiral Raborn, who actually became
involved in negotiations on behalf of a client, Overseas
National Airways,' which he represented, and he wanted the sale
of Southern Air Transport, which was a CIA proprietary, large
assets and large property, to Overseas National Airways, which
of course would have acquired Southern Air Transport's lucrative
NW 50955 DocId: 32423513 Page 35
1
routes.
33
2
3
Now, the way I originally had it written was "A former
Director of the Central Intelligence Agency sought unsuccess-
4
5
fully to influence the sale." However, if it was left that way,
people would have to guess at which one of these guys did this
6.
and it would unfairly impugn all of the directors.
was inserted.
The name
Therefore, the question now becomes whether it.
8
should be left in at all since the name is inserted, and since
10
11
12
13
14
the name is mentioned in the report, and whether or not the
whole sentence--
Senator Hart of Colorado. Well, what if we just said "A
former Director"?
Mr. diGenova. Well, the problem there, Senator, is then
people say, which one was it?
Senator Hart of Colorado.
Good.
15
16
17
Mr. diGenova. Oh, all right.
Mr. Inderfurth. I think the assumption would be Richard
Helms.
18.
Mr. diGenova. McCone more than Helms.
19
Senator Hart of Colorado.
Well, we ran into this last.
20
21
summer with the Exener matter and all like that.
22
Ms. Culbreath. A former person..
Mr. diGenova.
23
The Agency itself cited this as the most
24
flagrant example of intercession on behalf of anyone.
As a
25
matter of fact, the memorandums on this refer to dozens of
NW 50955 DocId: 32423513
Page 36
TAR
SEADET
TOP SECRET
34
1
2
phone calls and overtures, and it is a former Director trying to
gain a benefit. It is an unseemly situation, and they labeled
it as a conflict of interest which they sought to avoid, and
3
5
6
7
8
9
10
.11
in fact they did, and they are praised for it in the report
because they were really under tremendous pressure.
So I have no feeling one way or the other. I think to
leave out his name unfairly impugns the other. To leave it in,
also, is only the second time in the whole findings and conclusion
that we mention anybody's name, so I don't care.
Senator Huddleston. And you've got one, Recommendation
No. 5, related to the disposal of the proprietaries, that the
12 Justice Department approve?
13
Mr. diGenova. Be consulted on the disposition.
14
Mr. Kirbow. Mr. Chairman, can I be heard on that?
15
Senator Huddleston.
Yes, sir.
16
Mr. Kirbow. Senator Hart, in this regard we have consistently
17 attempted by most every reasonable means to not use the names
of people unless they had committed something illegal.
18
19
Senator Hart of Colorado. Well, don't side with me.
I'm
20
not taking a position.
21
Mr. Kirbow.
But the Exener thing was a big example, but
22
223
23
24
24
we must have had 20 other names that we went through on that
assassination, and we wrote around them.
Senator Hart of Colorado.
But a number of people argued
25 strongly that we ought to name her and go into details, so I
TOP SECDET
NW 50955 DocId: 32423513 Page 37
1
2
3
TOP SECRET
35
suppose the same arguments could be used here on this matter.
Mr. Kirbow. But the point I raised at the staff meeting
just before the Committee came back, when the subject was
4
5
raised, was did Admiral Raborn, as a retired military officer,
currently in a civilian status, although he was former
break
6
any American law, or had they sold it to this, would it have
7
been a violation of the law, and the answer was no..
If he was involved
8
or they knew of no law that he
9
10
had violated, and none is apparently cited in the record.
Pressure was brought to bear, there is no doubt about it, by
11
Admiral Raborn. I think there's another example.
I'm not
12
13
14
15
16
17
18.
19
20
21
22
23
24
25
sure whether Joe described it to me or someone else, of a
very senior official out there dealing back with the Agency.
Now, the military, as Senator Hart knows, is prohibited
from this by regulations and I think by law. I know that as a
regular military officer, you are not allowed to do contractual
business with your agency forever, but with the other military
departments and the Department of Defense, I think you have to
have a cleansing period of five to seven years.
I don't believe there is any such provision in the Act
that applies to former Directors, and probably what the Committee
should do is consider this action without necessarily naming
him unless he was in violation of some really serious
wrongdoing, and make a prohibition, drawn similarly, with what
now applies to senior officials going back and kind of exerting
TAN
NW 50955
DocId: 32423513 Page 38
TOP SECRET
36
1
undue influence on those people.
2
Senator Huddleston.
Joe, is it accurate to say that
3.
pressures were often brought to bear?
Mr. diGenova. We changed that to say sometimes.
This is
5
a rewrite.
6
r
8
9
10
Someone else wrote this after I had submitted it,
and we had a meeting today, and we changed several things in
there.
I
So I leave it up to the Committee. This was a matter that
I wanted to flag it and leave it there. The explanation
is as clear as I can give it.
11
Mr. Inderfurth.
This is the first time he is mentioned
12
13
in the entire paper.
Mr. diGenova. That's right.
Senator Huddleston.
14
Why don't we delete that sentence and
15
keep it in our full report, our big report.
Mr. Kirbow.
16
There is a major classified report on
17
18
19
this that would contain all the facts.
Senator Huddleston. I am concerned now whether any other
instances of someone may be, of similar standing as Admiral
Raborn.
20
21
Mr.
diGenova. Yes.
There are instances in the record
22
23
24
25
45
which do not deal with proprietaries, of John McCone interceding
on behalf of Pan American directly with the Director of
Central Intelligence, and it is not mentioned in the report,
and it should be, and it is a problem that we have had, Mr.
SEA
TA
NW 50955
DocId: 32423513
Page 39
TOP SECRET
37
1 Chairman, has been that the work involving the relationship of
2
3
5
6
the Central Intelligence Agency with American business companies
was severed off from the proprietary work for the simple
reason that they are not the same thing.
That work has been done. It has not been pursued vigorous-
ly, not because the individual who was responsible for itä
7
didn't want to.
8
Senator Huddleston.
That happened after he left.
Mr. diGenova. That's right, after Mr. McCone left the
DCI, he had frequent contacts, according to the records, with
9
10
11
12
13
the Agency, with high level Agency personnel, and in one instance
instance
.
he interceded personally with the Director of Central Intelli-
gence to avoid actions which would be taken by another govern-
ment and its airline which would adversely affect Pan American
15 World Airways.
14
16
Senator Huddleston. It is hard to separate a man from his
17 past totally.
18
Mr. diGenova. It seems particularly hard with DCIs.
19
19
Mr. Kirbow. Well, not only here, this is not with the
20 Agency, but it came up in my experience with the Armed Services
Committee involving Continental Airlines.
21
22
Senator Mathias. This sentence.
23
Senator Huddleston. Just the sentence in brackets.
24
Senator Mathias. Well, I think if you've got a Raborn Case
25 a. McCone Case and whatnot, that you can't make fish of one and
TAR CEAI
NW 50955
DocId: 32423513 Page 40

1
fowl of the other.
TOP SECRET
38
2
.3
5
6
Senator Huddleston.
I think we've already said that
pressures sometimes were brought to bear and we make recommenda-
tions to correct that.
Ms. Culbreath. Mr. Chairman, could I suggest that maybe if
we do delete that, that we perhaps redo that previous sentences
7
to make it a little stronger, and perhaps in some way
indicate that these were serious pressures, and they were,
8
9
10
11
12
13
14
15
16
17
18
think, hard pressures to withstand when somebody in that kind
of position
cut.
Senator Huddleston. They were withstood, though.
Mr. Maxwell. They would get lost the way the sentence is
Mr. diGenova. I think what we will do is David and I
will get together, and Elizabeth, and we will change this
"however" sentence, the sentence that precedes the one that
has just been deleted, and we will expand that sentence to
more accurately explain that the pressures came from high sources
Some of them may have been maybe former Agency
19
sometimes.
20
directors.
21
22
23
24
Senator Huddleston. I think we should make the point that
it was former.
Senator Mathias. Well, if they were former directors,
then you may as well leave in the last sentence.
25
Mr. diGenova.
NW 50955 DocId: 32423513 Page 41
Maybe.
TAD SEADET
TOP SECRET
39
1
2
Mr. Kirbow. Mr. Chairman, may I suggest that maybe
perhaps we use this type of part of the investigation and what
3
we know from certain of the other files to prohibit this type
of conduct by law in the future in our general recommendations?
1
4
5
Senator Huddleston.
And make it similar to.
.6
8
9
10
Mr. Kirbow. Similar. I think you would have to look at
something from the staff.
Mr. diGenova. I didn't have that recommendation in there,
but I think the record indicates it ought to be there.
Mr. Kirbow. It wouldn't be proper, necessarily, to put it
right here under proprietaries, but let's put it in the
general recommendations.
Mr. diGenova. David, did you get that?
Mr. Aaron. I'm sorry.
There's a recommendation that
11
12
13
14
15
16
Mr. diGenova. That Agency personnel
17
Mr. Kirbow. Senior officials.
18
19
20
Senator Huddleston.. Similar to what applies now for
military.
Mr. Maxwell. Well, perhaps the statute, perhaps we could
recommend a statute similar to that governing the Department of
22 Defense.
21
23
24
25
25
Mr. Kirbow. Be enacted by the next Committee, similar
in effect to.
Senator Huddleston. And find a proper place to put it in
TAD SEADET
NW 50955 DocId: 32423513 Page 42
TOP SECRET
40
1
our recommendations.
ilb
begin 2a
2
5
6'
7
8.
9
10
.11
12
Mr. Aaron. Okay.
Mr. Maxwell. Well, Charlie, correct me. I think the
proprietary section would be the appropriate section because
that would be where it came up most,, unless there is another
one that you see more readily.
Mr.
•
diGenova. We can work that out. I don't think
that's terribly
Mr. Kirbow. I think there have been two or three sug-
gestions made here that will result in general recommendations
on a page that isn't necessarily supported by findings, but you
come to this overally conclusion based upon your total concept
of the Agency and its procedures and everything else in view
of the findings.
Mr. diGenova.. The only thing I want to do is David,
I know you have gone through this, but the Senators may want to
look at page 68 through 70, which deal with cover, and particu-
larly with Mr. Welch.
Ms. Culbreath. I had a point I wanted to raise on that.
13
14
15
16
17
18
19
20
Mr. diGenova. Well, Mr. Chairman, I think the Senators
21
want to read this.
22
23
24
25
Ms. Culbreath. Why don't we let them look through it.
(Pause.)
Senator Huddleston.
Mr. diGenova. I do know the Agency is going to come in
TAD CEPDET
Let's go back on the record.
NW 50955
DocId: 32423513 Page 43
TOP SECRET
41
1
tomorrow to review the cover paper from which this summary is
2
3
5
6
7
9
10
11
12
13
14
15
drawn. I know Eric has some problems with the cover paper, both
editorially, because they view it as overly simplistic and
harsh because it reflects all of the Inspector General's
judgments, but they have some problems with cover in general,
but I don't think this is going to be part of that problem.
Senator Huddleston. I have some problem with this page
70. relating to Welch because it seems the whole implication of
that is that he was murdered because his cover was blown, and
so far there has been no evidence that that is the case. It
highlights the argument, I think, correctly, but it seems to me
it leaves the impression that here is a case where a fellow's
cover or lack of cover resulted in his death.
I think the Agency people have specifically said to us
so far that they have no reason at this point yet to expect
16 that that was the reason he got killed.
17
Mr. Maxwell. In regard to the specific quote,
think
18
19
we have to be very careful as to getting involved in an argument
which would imply that anything that we possibly did had an
20
effect on it, and also, that it seems to point to Mr. Welch
21
22
23
24
25
and say, well, it is all his fault.
Senator Huddleston. He didn't protect his cover, he
didn't do what they advised him to do, and you see down here
we have another quote which says, referring to international
terrorism and incitement for these kind of people to take the
NW 50955 DocId: 32423513 Page 44
NW 50955
1
2
3
5
TOP SECRET
42
kind of action which unfortunately led to the death of Dick
Welch. There again we are ascribing something to the death of
Dick Welch which nobody knows yet, you know, what terrorists
killed him or why; at least our record doesn't show.
Mr. diGenova.
These statements here, Senator, this is a
6
7
8
9
10
11
12
13
14
15
16
direct quote from Eric Eisenstead's memo. Do you think that
we should maybe in the findings and recommendations shorten
this and maybe
Mr. Kirbow. I think the part of the record which is an
unknown fact is why Dick Welch was killed, and we should stay
away from any quotes or other pronouncements in our paper which
which
attribute his death to any particular thing unless we know
something.
Mr. Aaron. I think that is a good point. We might put
in here a statement which says the Committee has no information
as to the reasons, purposes or cause, specific cause, of his
17 death. The point is to get at the question of cover, to
18
19
20
21
22
step out to the question of cover in the report, as we do, I
think, appropriately, but not have talked about the one case
where this all came out in public, rightly or wrongly.
Mr. Kirbow. Why don't we use the cover for the gentleman
in London, then, where as the tour buses go by, of course, you
know this is the home of the CIA chief, and he hasn't been
24 killed yet or anything like that. If we want to use that
23
25
kind instead of using this death example, which, by the way,
DocId: 32423513 Page 45
TAD GEODET
TOP SECRET
43
1
2
has brought some thousands of letters from the constituency of
certain southern Senators who shall remain unnamed or near-
3 Southern Senators, because it kind of was a catalytic agent
4
5
in getting a lot of complaints on the Committee and everything
else, and this pointing out or explaining Welch's death goes
6
7
00
8
9
10
11
12
13
14
15
16
17
18
19
20
back to it.
Senator Huddleston. I'm sort of southern.
Mr. Kirbow. And you've got a lot of them.
Senator Huddleston. Of course, it was used for that
purpose by certain high officials for that.
Mr. Kirbow. The very highest, including attending the
funeral.
Mr. diGenova. Well, I think one of the things we wanted
to pinpoint here, and first of all, I think we can summarize the
Agency's testimony a little better. The Agency said, nothing
this Committee did, first of all, had anything to do with his
death, as far as they know.
Ms. Culbreath. But they don't know.
21
22
23
24
25
Mr. diGenova. As far as they know, they don't know one
way or another, but the impression that was created in the
press was, and was pandered to by the DCI and the President,
was that the general actions of exposure of Agency operations
were responsible for the death of Mr. Welch, and they pandered
that by inviting Committee members to the funeral as if they
bore some responsibility.
NW 50955 DocId: 32423513 Page 46
TAD SEADET
1
TOP SECRET
44
Now, the obvious public relations value of Mr. Welch's
2
death, the first time in history the DDO and the DCI go to
3
a funeral in public, they never did that, and there is no doubt
5
6
that they tried to make political hay out of his death. I
think it is only fair that the Committee ultimately say
Senator Huddleston. Right, but I think you've got two
7 different problems. You've got a problem with whether the
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Committee wants to present its case and exonerate itself on the
basis of everything that is known about the death of Welch,
and whether that is pertinent to the problem of cover.
Now, we make a recommendation that the CIA shall make an
make an
effort to place a greater proportion of its officer abroad !
under nonofficial cover. It seems like what we need, there's
a statement here is that official cover has not proved to be
effective, and if we mention Welsh at all, I think the point we
mention there is that his name was carried, that while he was
there supposedly under cover, his name was in fact carried in a
newspaper, the name of his newspaper had been carried in a
foreign newspaper, and he was living in a house that was known
to be the house.
Mr. Kirbow. His true identity was widely known.
Senator Huddleston. We can cite him as an example without
23 indicating why he had been killed, of here is a case that
24 everybody knows about, so-called official cover was not. in
2
25
fact very deep cover.
There may be other instances that we
TOP SEADET
NW 50955 DocId: 32423513 Page 47
TOP SECRET
45
1
want to refer to, but if we get into his death at all, I think
2
3
we have got to present the case, that blowing his cover is not
necessarily what killed him. Nobody knows that as of now, so
far as I know. Nobody knows it wasn't just a street gang or an
4
5
idiot.
.
6
Mr. Kirbow. It could have been like the Senator John
7
Stennis case, where they buttonholed him in front of his
8
house and killed him for robbery purposes.
Senator Huddleston.
We've asked them two or three times
10
here, have we not?
11
Mr. diGenova. Yes,
we have. In fact they don't know.
04 -
12.
In fact, the last time Nelson was
13
14
15
16
17
18
19-
20
22
21
22
Senator Huddleston.
here we asked him.
Mr. Aaron. Can I try a fix on this, turning to page 70,
instead of saying "the career and tragic death of the station
chief," let's just say the "situation of the station chief in
Athens illustrates the tension. As the Chief of the Cover
Staff stated, by the time a person becomes a chief of
station, there is not a great deal of cover left," leaving in
the rest of that sentence, and then add in here, as you did,
"Mr. Welch and his predecessor were both identified and named
in the local press.
Further, Mr. Welch occupied the same
23
house."
2 2 2
24
25
Senator Huddleston.
Which presumably was known to be
the house of the station chief.
NW 50955
DocId: 32423513
Page 48
TAD READET
1
2
3
4
5
6
TOP SECRET
46
Mr. diGenova. In fact, the station chief's name and
address in Athens had been presented, so when he wasiin there
the address had already been printed previously.
Mr. Aaron. Which was also known.
Senator Huddleston. Now, if we want to say something about
an added dimension to the seriousness on blowing cover or
ry
cover being diminished, is the situation in the world with
8
9
10
terrorism or the vulnerability it makes of people
Mr. Kirbow. To the unstable.
Mr. Aaron Well, the point in the testimony is that
11 this was an added danger, but because they've got a job to
do, they're not going to really do too much about it. It's
a real risk they are just going to have to bear.
12.
13
14
15
Senator Huddleston. That's an occupational hazard, but we
are talking about how to protect their cover, and our recommen-
16 dation is that they use have an official cover.
17
18
19
20
Mr. Kirbow. Well, can the staff change the language,
because we know exactly what you want to do, and without
taking further time, why don't we just change it.
Mr. Maxwell. I would just hope that the two quotes after
the one that David cited, the quote, he, Welch, was asked, the
22 last quote, we could make the point in a different way because
21
23
the impact of the first quote, I think, is this guy was stupid
24
and irresponsible, and I don't think we need to have any
25
implication like that in the report, and the second one, I
TAD SEADET
NW 50955 DocId: 32423513 Page 49
TOP SECRET
47
1
think we can make the point that terrorism may constitute a
2
greater threat now.
10
3
Senator Huddleston.
I think that quote ought to go entirely
because it does leave the implication that there was a direct
link to losing his cover and his assassination.
5
6
Now, we don't know that.
7
Mr. Aaron. So just take out the last one.
Mr. diGenova.
8
But still speak about the added danger of
9
international terrorism.
Just stop at the word "international
terrorism."
10
Senator Huddleston.
Down in the recommendations I've been
11
12
13
14
talking to Joe about defining the small business, and I think
we fairly well understand what the concern is, or do we, Joe?
Mr. diGenova. Senator, I was going to suggest, if you
look at Recommendation No. 3, while it doesn't define what a
15
16
17
18
19
20
21
22
33
23
24
25
large proprietary is, the Senator was concerned about what
was meant by "should be kept small," and I tried to indicate
really we are talking about Air America where you had 8000
employees of the CIA, both in Langley and abroad, and then
another 8000 employees of the Air America complex. That is
big.
But I think what we should say is, organizationally small,
and organizationally and numerically small, because what we are
really talking about is when they get big, whether it is in
numbers or finances, and larger in terms of people usually means
TAD SEADET
NW 50955 DocId: 32423513 Page 50

TOP SECRET
48
1
larger in terms of finances, also. Then you have both of the
2 problems we addressed in the paper, which was the risk of
3
5
6
unfair competition with private enterprise, and the risk of
blowing cover, of compromising security.
So I think that
Senator Huddleston. I was wondering if it could be
7
designed in such a way as care should be taken that it not be
8
9
any larger than necessary to achieve the objective for which
it was established.
10
Mr. Kirbow. Excuse me Senator. It would not get the
"
Air America thing because at the time they needed one twice
11
12
that size.
Senator Huddleston.
13
They needed it that big, that's
14
right.
Mr. diGenova.
15
The reason this language is in here is that
16
17
18
the Agency officials themselves who testified, all of them,
including the DDO, said they would like to have small ones,
other words, a small number of employees, small operation.
in
19
Senator Huddleston.
What about their insurance business?
20
21
22
23
whole thing, Isenstead and a couple of
24
Mr. diGenova. That's kind of an exception, although
actually that is an example of a lot of money with only a few
employees. There are only a couple of people that run that
one investor,
Istenstead, and an auditor. There are three men that run that
my and
25
$32 million complex.
So that is a different animal, really.
TAD SEADET
NW 50955 DocId:32423513 Page 51
TOP SECRET
49
1
2
3
5
6
7
8
10
11
12
1
14
15
16
17
18
19
20
21
22
23
24
24
25
Senator Huddleston. So if you are going to use the term
'small," you've got to say it from the standpoint of employees
or resources.
Ms. Culbreath. I was just going to suggest that, since
another of our recommendations suggests annual review of all
of these criteria, and since their budgets are going to have to
be included for the oversight committee with review for the
others, and we have got a proposal that the Committee also
establish guidelines for the approval of the creation of large
proprietaries, should these become necessary.
Perhaps the better thing to do, since these proprietaries
are for a specific need at a specific time, and since we have
got the review procedure, is sort of trust it to the oversight
committee to see to it that they don't get too big, whatever
that may be, and leave it to them, maybe just delete that
second sentence.
Mr. Kirbow. Well, that's certainly a workable way.
Senator Huddleston. I don't see how you are going to keep
that sentence in there without having it..
Mr. Aaron. I would also suggest that perhaps in the
`section on proprietaries, where we make a comment about how
large proprietaries run risks in blowing their cover, we might
would it be possible, do you think, to make a finding or make
an example in regard to Air America?
Mr. diGenova.
Absolutely, because they have conceded
NW 50955 DocId: 32423513 Page 52
TAD SEADET
TOP SECRET
50
1
2
Senator Huddleston.
that's the one that ran all of the problems.
You do mention that somewhere, don't
3
you?
4
5
6
7
9
10
Mr. Aaron. It's not mentioned specifically, but it might
be possible to say, you know, maybe you can put a footnote on
the first paragraph which simply said
Mr. diGenova. You mean on the findings of page 66 that
"too often large proprietaries have created unfair"
Mr. Aaron. "Unwarranted risks of unfair competition with
with private business in compromising their cover." You should
11
12
say, "for example," "Air America, for example, which had 8,000
,000
employees," and so forth, ran into both of these problems.
..
13
14
Senator Huddleston. I think that would be all right.
:
Mr. Aaron. And then you would have at least some reference
to what "large" was.
15
16
Senator Huddleston. Then you've got the review and the
17
oversight.
18
19
Mr. Inderfurth. So the idea here in the recommendation was
to take out the second sentence.
20
20
Mr. diGenova.
21
22
23
24
25
Mr. Inderfurth.
just go to Recommendation No. 2 as No. 12.
Yes.
Why not take out the first as well and
Mr. diGenova. Well, I think can I just say this
that
by indirection, approving of an activity is, I suppose, one
way of doing it. I don't see anything wrong with stepping up
TAD CFADET
NW 50955
DocId: 32423513 Page 53
51
TOP SECRET
51
1
and saying we examined proprietaries, we found them to be
2 they had problems but basically they were all right.
10
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
33
23
24
25
Mr. Inderfurth. Couldn't that be in the body as well?
Mr. Kirbow. The one thing we have failed to do on this
Committee is where we are strongly in favor of, is to speak
out in a manner supporting an agency under otherwise violent
attack from many sources, and I think
Mr. Inderfurth. I think that is not true, Charlie. I
think you will find, if you read the findings of Bill Miller
and others wrote in the first part, it says very strongly,
intelligence is necessary; we need it.
Mr. Kirbow. I'm saying up until now it has been an agency
under attack. I think this whole section on foreign and
military has been to make a balance between past wrongdoing
and current operations..
The Chairman. There can't be anything wrong with leaving
the sentence in there.
Mr. Maxwell.
May I raise a question to the second
recommendation, as to the reason why by statute there would be
an annual review rather than recommending that to Congressional
Committees.
The second part of that is, my understanding of a number
of the proprietaries is that they are not operating, and to
require GAO audit of a whole group of in a sense notional
organizations may be preempting the kind of review that the
TAD SEADET
NW 50955 DocId: 32423513 Page 54
TOP SECRET
52
1 oversight committee should be doing rather than setting it out
2 here.. It's just a question.
3
4
5
Mr. diGenova.
This is a rewrite of my original recommen-
dation, and it is a good point. It may very well be that that
is superfluous, if you are considering oversight by a committee.
The Committee cannot conduct an audit,
Senator Huddleston.
6
7
though.
8
9
10
11
Mr. diGenova. And that was the purpose for the Committee
taking on board independent GAO auditors.
Mr. Maxwell. The Committee can request GAO auditors.
Mr. Kirbow. Anything that appears to be on an audit
12
calls for an audit.
13
Senator Huddleston.
Calls for a GAO audit or gives the
14
15
Committee authority to call for one.
Mr. diGenova. I don't think we need a statute. We can
16
talk about it as part of Congressional oversight. As part of
17
18
19
20
21
22
the Congressional oversight function, the oversight committee
should review proprietaries annually and where necessary.
conduct audits with the assistance of the General Accounting
Office.
Mr. Kirbow. Here, Mr. Chairman, I think again the point we
made yesterday, that we should say at least annually, so that
23
24
they don't put you in a box if you want one every two months
because of circumstances, "at least annually.'
11
25
Senator Huddleston. You could add in Section 3, at least
TAD SEODET
NW 50955 DocId: 32423513 Page 55
.
TOP SECRET
53
1
there, giving the Committee authority to establish guidelines,
2 to establish for large proprietaries, should they become
10
3
5
6
7
00
8
9
10
11
necessary.
You could also make the statement there that the Committee
may call for a GAO audit periodically.
Mr. diGenova. So we will rewrite 2 to eliminate the statute
Senator Huddleston.
Independent GAO audit.
Mr. Aaron. No. 2 is rewritten so it is not required by
statute that there be an audit, internal audit?
Mr. Kirbow. No GAO audit.
Senator Huddleston.
The only thing I had in mind of
12
13
14
15
16
17
18
19
1292
20
21
22
23
24
25
taking out of 2 was just the independent GAO audit being
required by statute, and leave that to the discretion of
the Committee, but leave the rest of the review, right?
Mr. Maxwell. You amend it by statute that an annual
review of all proprietaries?
Senator Huddleston. An internal CIA audit.
Mr.
which.
Maxwell. Or would it recommend that, I'm not sure
Mr. diGenova. I'm wondering whether it should be done
by statute. Maybe we should recommend to the oversight
committee that there should be an annual review consisting of
internal CIA audit.
Mr. Maxwell. An annual report to the oversight committee
and such GAO audits as the Committee
NW 50955 DocId: 32423513
Page 56
TAD SEADET
TOP SECRET
54
7
8
9
10
11
12
13
14
1
02
3
5.
Mr. diGenova. May deem necessary.
Senator Huddleston.
That's all right.
Mr. diGenova. And then we could add, as part of its
annual report, the GAO should record all of its intercessions.
That should be "report." They record all of them, so change
"record" to "report".
We can rewrite that.
Senator Huddleston. Make that a little stronger.
Mr. diGenova. Must report?
Senator Huddleston. Shall be required to report.
Mr. Aaron. I'm sorry.
Could we now have a recapitulation by whomever thinks they
followed this?
Mr. diGenova. Elliot?
15
I defer.
16
Mr. Maxwell. "There should be an annual review"-
17
Mr. Aaron. There is no longer a statute. The Committee
18
recommends: that there be, right?
19
Mr. Maxwell.
"a review, at least annually, of all
20
CIA proprietaries.
21
22
23
24
25
25
Mr. Aaron. By whom?
Ms. Culbreath. By the oversight committee.
Senator Huddleston.
Mr. Maxwell.
in the next part.
By the oversight committee..
Well, you're defining what the review is
"consisting of an internal CIA audit and a
TAD SEADET
NW 50955 DocId: 32423513
Page 57
).
TOP SECRET
55
1 report to the oversight committee as well as such independent
2 GAO audits as the committee shall direct. As part of its
10
"As part of its
3
annual report to the oversight Committee"
4.
report to the oversight Committee, the CIA shall report," and
5
then the rest of the sentence, "all its intercessions on
"#
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
20
behalf of its proprietaries.
Mr.
Aaron. May I just make a quick editorial fix? "The
Committee recommends the overight Committee conduct an annual
review of all proprietaries consisting of an internal CIA
audit and report to the oversight Committee."
Mr. Kirbow. No, the Committee cannot conduct a GAO
audit. They can insist that that's part of the report that is
presented to it.
Mr. Aaron.
That's it, consisting of a report to the over-
sight Committee of an internal CIA audit, is that rigt?
:
Mr. Kirbow.. What you are trying to do is to require
the CIA to reveiw it, to conduct a CIA audit, and to report
fully all of the review entailed.
There are
Mr. diGenova. Not just the audit themselves.
certain operational details you are going to want to know about
also, not just financial security.
21
22
Mr. Kirbow.
Mr. Chairman, let us rewrite that one.
We
23
will include it.
24.
Senator Huddleston.
Well, you see, you could combine
25
1 and 2 together, since we are just going to use one sentence,
TAR SEADET
NW 50955
DocId: 32423513 Page 58
TOP SECRET
56
1
the first sentence in No. 1, and after we say the external
2
and internal controls, the oversight committee should require an
3
annual report of all proprietaries by the CIA, including an
4
internal CIA audit and all intercessions that the CIA may have
5
made on behalf of proprietaries.
6
Mr. diGenova!
That's it, that's all in one sentence. We
7
can fix that.
8
10
11
12
13
14
15
Mr. Aaron. All right. We'll take Joe's fix.
Mr. Kirbow. In three I am not sure what you mean, "In the
DCI's budget presentation." That almost has a word of art
connotation in the Senate. A budget presentation is that
thing which the Secretary of Defense and the Director of the
CIA makes to the Appropriations Committee.
Mr. diGenova.. We are talking about an authorization,
aren't we, an annual authorization here?
.16.
17
Mr. Inderfurth. Look on page 26 and you'll see the
definition of that under (b). The DCI shall have responsibility
18
19
for preparing the budget of the national intelligence program
for presentation to the President and the Congress.
This
20
20
21
22
23.
24
25
is the budget presentation that's being referred to under
this.
Mr. Kirbow. Well, now you come to the real question,
propriėtaries being listed in the DCI's budget presentation.
Most of his proprietaries neither use any money up nor make
any money or anything. They are just shelf items.
TAD CRADET
NW 50955 DocId: 32423513 Page 59
1
2
3
TOP SECRET
Ji
Here again you come to the notional.
Mr. diGenova.
No, no, Charles, because the point they
made during our review out there was that never have the
4
proprietaries appeared in the budget presentation.
They have
5
been hidden, and the object is to identify them in the budget.
6
as a line item, for example.
7
8.
9
10
11
12
13.
14
Mr. Maxwell. One suggestion might be, be listed, that
implies a list of proprietaries.
Senator Huddleston. Where does this list go?
Mr. Kirbow. What you want to do is to require them to
include a discussion of the proprietaries in his annual report
to the oversight committee is what you want to do, isn't
it, because they don't have that now. They don't report to
the Armed Services Committee. They only report to Appropriations.
Senator Huddleston. How would it be listed in the budget
15
16
under your proposition here, Joe?
17
18
Mr. diGenova. Well, I'm just assuming
assuming in terms of oversight the Committee is going to want
well, I am
to know, even though this is not going to be published,..
where
19
22
20
this money is going and what it is going to be used for,
21
22
2-
23
24
25
if they are going to authorize it.
Mr. Aaron. I think the term really should be
Mr. Kirbow. I think it ought to be more than in the
budget.
Mr. diGenova. I know that's not just what they are going
NW 50955 DocId: 32423513
Page 60
TAD CEODET

TOP SECRET
58
1
2.
3
4
10
6
r
8
9
to be asking, but the thrust of this was to make sure that
proprietaries found their way into the budget, and that Senators
knew what they were authorizing when they authorized the budget.
Now, how it gets in there, I am not a budget expert.
Mr. Kirbow. That is what I am trying to supply here because
in this process there is a procedure that when you say there shal
be authorizing legislation, where the line items are discussed.
before the authorizing committee and not before the budget
committee, which is the appropriations committee, and if you
10 require that he discuss or report the annual operation of the
proprietaries in his annual report to the oversight committee,
you will accomplish what you are trying to do, and not exclude
it only for the presentation before the Appropriations Committee.
11
12
Mr. Maxwell. Could I try a fix on this?
Mr. diGenova. You are invited.
13
14
15
16
17
18
Mr. Maxwell. The oversight committee should require that
the DCI's budget presentation to the Appropriations Committee
and the oversight committee_include a specific discussion of
19
the financial aspects of CIA proprietaries.
I mean, we are
20
21
22
trying to bring them out and see what the impact is on the
budget, where do they fit in.
Senator Huddleston. Can they do that, though, without
identifying the proprietary and where it is located and whatever.
diGenova. They have indicated they could.
23
Mr.
24
25
Mr. Aaron. Jim, Taylor, when he was here talking to the
NW 50955 DocId: 32423513 Page 61
TAD SEADET
TOP SECRET
59
1
Committee, talked about how they are beginning to
sxe xxp
drawing a
2
way to work in the proprietaries so that they can both identify
3
them and indicate their cash flow implications for the budget,
4
and in effect
5
Senator Huddleston. What would you have proprietaries
6
Mr. Aaron.
Proprietaries, income and outgo.
7
Mr. Kirbow. But that would never be published, Senator.
00
8
9
10
11
12
If you want to accomplish what you are suggesting here,
that they report the cash status or the financial status, you
add that additional sentence to this combined 1 and 2 up here
that the Senator just proposed a minute ago, and indicate that
that report should also include the financial status or the
But you do that with the audit, don't
Senator Huddleston.
you, the internal audit?
13
14
:
15
16
17
18
19
20
21
22
23
24
25
Mr. Kirbow. Well, in fact you do, in fact you do.
www cappe
Mr. Aaron. Well, I think the point maybe I'm not
captioning this properly, Joe, but I think the point here is
that proprietaries either earn money or cost money, sometimes
a little of both, and it has an impact, therefore, on the
overall CIA budget, particularly in the past when income from
the proprietaries could be placed in either the contingency
reserve or used to finance, in effect, operational purposes
of the proprietary. In other words, Air America was earning
money on its operations, and yet it was costing them more
because they were engaged in certain risky operations.
In
NW 50955 DocId: 32423513 Page 62
TA
TOP SECRET
60
1
02
3
In effect, the proprietary was earning money which was
financing the proprietary organization.
Mr. Kirbow. But they can no longer do that. What they
earn now must go into the general Treasury.
5
Mr.
6
Treasury.
7
8
9
10
11
12
13
14
15
16
17
18
Aaron.
No, gross earnings do not go into the general
Their net, and part of the cost of doing business
would include the cost of some of their operational purposes.
I think the point of this inclusion here was to see if
one could require in connection with the budget, not just in
general, with an audit of what it does specifically, but in
terms of the entire activity of the CIA, to get a spelling out
of its sort of macrobudget implications in terms of up or down,
and secondly, its budget implications for the certain categories
of operations which were involved, such as, if you are talking
about the conduct of the support for the activities in Laos.
Mr. diGenova. Paramilitary operations.
19
20
2 2 2
21
22
23
24.
Mr. Kirbow. Well, leave it like it is if that is what you
are trying to do, because they will be sure to report it-to
the Appropriations Committee in excruciating detail, but they
won't report it to the authorization committee unless they
require it to get money.
So if you want to leave it a detailed budget, their
presentation to the budget committee, this language will get
that done.
35
25
Senator Huddleston.
Well, what if you said something like
NW 50955
DocId: 32423513 Page 63
CEARET
)
TOP SECRET
H
2
3
4
6
7
this, furthermore, or adding to that, the fiscal impact or
the budgetary impact of the proprietaries should be included
or defined in the DCI's budget presentation.
:
Mr. Maxwell.
Specifically discussed?
Mr. diGenova. That language would mean it's included in
his presentation in some way because the allusion that David
made to Jim Taylor is that they are beginning to put it into
their budget presentation.
I know that is a term of art.
Senator Huddleston. That eliminates any idea of listing
Mr. diGenova.
Elliot's point also about the authorization
committee should be added in there.
9
10
them.
11
12
13
14
15
16
17
Senator Huddleston. We've got so much money invested,
and 33 money made money and 40 made money for a net gain of
so and so.
Mr. Maxwell. And you should have some notion of that
and the problem was that you weren't able to get ahold of it.
And we sold two or three of them for
18
Senator Huddleston.
19
this amount.
20
21
Mr. diGenova. That is the whole issue of their visibility.
in the budget, the whole question.
22
Senator Huddleston.
Well, where does that visibility
23
disappear?
24
Mr.
diGenova.
Well, before they never showed up.
:
25
Mr. Maxwell.
Before you had the covert action.
TAD SEADET
NW 50955 DocId: 32423513 Page 64
TOP SECRET
62
1
Senator Huddleston.
Well, where will it disappear:
Now? It won't come to the authorization committee and the
3
appropriations committee.
I mean, it won't be a line item.
10
6
8
9
10
11
12
Mr. Aaron. Proprietaries as a category?:
Mr. Maxwell. I would assume it is going to be a subsection
of operational support in covert action.
Mr. Aaron. Not necessarily.
I think they are struggling
with that at this point trying to define it properly and how
it should be presented. I mean, I really don't think we know.
They have an intention to do it because they recognize that
potentially it is a source of real question as to how much
money is being spent on clandestinc activities that is self-
generated by the Agency because of its proprietary
The impact, Senator, was also to show that
the Committee had looked at this broadly, was aware of possible
13
14
activities.
15
Mr. diGenova.
16
17
18
19
about that.
22 2
20
21
22
budget and authorization implications of various entities,
including proprietaries, and that it wanted to say something
It was not necessarily anything dramatic.
Senator Huddleston.
Well, I will agree with that.
I am
just worried about if you say you expose proprietaries too much,
you are exposing cover.
2 2 2
Mr. Aaron.
Well, this is internal.
This is classified.
23
Mr. diGenova.
24
This is not public.
Mr. Maxwell.
25
Well, I think the language the Senator
TAN SEADET
NW 50955 DocId: 32423513
Page 65
TOP SECRET
63
1
suggested got to that.
2
3
5
6
8
10
11
12
13
14
15
16
Mr. Aaron. Well, let me see if I can read out what I would
propose along the lines I think we discussed.
The oversight committee should require that the fiscal
impact of proprietaries be made clear in the DCI's budget
presentation to the oversight committee.
If you want to add
the appropriations committee, you can, but I think the point is
that that happens.
Mr. Kirbow. If you'll listen just one minute, Mr. Miller
knows and I believe the Senator knows that "in the Senate there
is a formal budget presentation
"
made to the Appropriations
Reports are made
Committees. They are not made elsewyere.
to oversight committees on the status and all of these other
things, and if they request any money for those proprietaries,
they would request that before the authorizing committee.
If
you are just trying to accomplish getting it made known to the
17 oversight committee, drop the word "budget presentation" and
adopt the common usage of the annual report of the Agency or
18
19
20
21
22
23
24
25
of the DCI.
But that is kind of a word of art. Those are words of
art in the Senate, and they will seize on it because today
they don't do it for anybody else but the Appropriations
Committee.
Senator Huddleston. I think that's reasonable enough.
It ought to be clear.
NW 50955 DocId: 32423513
Page 66
TAD SEADET
TOP SECRET
Mr.
Aaron.
Let me try another fix here because I'm
H
not too sure.
2
64
3
4
5
6
7
8
9
The oversight committee shall require the fiscal impact of
proprietaries in the CIA's budget be made clear in the Director's
authorization presentation, or what phrase is that? In the
Director's what?
Mr. Kirbow. The DCI's annual report to the appropriate
oversight committee.
Senator Huddleston.
The DCI's annual report.
(
10
11
12
13
14
15
Mr. Kirbow. The Agency would not report separately. They
should make their presentation a part of the DCI's report
to the appropriate oversight committee.
Mr. Maxwell. While we are on that, could I, on No. 6, we
have already, I thought, by statute prevented any covert action
being funded other than by (a) appropriation to a covert action
budget, or (b) the contingency reserve.
Mr. diGenova. That's right.
16
17
Mr. Maxwell. Does that make No. 6 redundant?
18
Mr. Kirbow. Yes.
19
Senator Huddleston.
The only comment I would make is.
20
21
22
23
that the other is not an accomplished fact yet. This might
be accepted and that might not.
Mr. Maxwell. Well, the reason I say that is that the
:
way this reads, I would have or would be opposed to it because
24
25
it provides an exception with the approval of the versight
NW 50955 DocId: 32423513
Page 67
TAR SEADET
TOP SECRET
65
1 committees, when we want, I think, to be able to go to the
2
3
Congress and say, we recommend most strenuously that only these
two methods be used for funding, rather than providing a third
5
6
7
8
10
її
12
13
14
15
16
method and someone says, well, maybe we should have a fourth
method, and I would like to go with the strongest possible
recommendation in regard to the earlier statutory requirement
that it only be by specific appropriation to covert action and
the contingency reserve fund.
Mr. Kirbow.
Otherwise, Mr. Chairman, we will stand a
chance of getting the other amended, to allow the oversight.
committee to allow it.
Mr. diGenova. Why don't we say this by statute, and then
have the rest of the sentence an addendum which would just
allude to the fact that funding is to be accomplished to the
method we set out if you want to eliminate it.
Well, this was the problem that was raised, or an issue
that was raised during the study, and this is set in here
It can easily be removed if it is inconsistent
with another recommendation of the Committee.
17
18
for that reason.
19
20
21
22
23
24
Mr. Aaron. Well, we have two or three different earlier
provisions that relate to this. The first is that re-
programming authority, defining reprogramming authority, the
possibility that something used for a program covert action X
: .
:
which involves a proprietary that generates a certain amount
25
of money, can be used for program Y.
NW 50955
DocId: 32423513 Page 68
TOP SECRET
66
10
11
12
.13
14
15.
of limitations
16
1
.00
2
10
3
4.
5
6
7
8
The second issue is we have proposed that covert actions
be funded either by line item or by the contingency reserve.
The third thing we proposed is that the contingency reserve
be replenished, if I am correct, only by appropriation, concur-
rence of the oversight Committee.
Now, what this in effect does, I think the question that is
he's driving at is, what do you do with the profits of a.
Can you put it in the contingency
proprietary organization?
reserve?
If so, our other recommendation would pick up the notion
that it can only be done with the concurrence of the Committee.
Is there some other purpose, direct transfer?
presumably one of the limitations on reprogramming
Well,
and this
would be a fair point to make here, as part of its definition
on reprogramming, it is recommended that the
oversight committee proscribe the allocation of profits from
.17
any proprietary to a covert operation without their
express
18
consent. And this is really kind of if it doesn't go through
any ***p
..
19
the contingency reserve, it really goes to the question of
12. 2.
20
21
reprogramming.
Now, I realize that we have said that our other recommen-
22 dation by implication would prohibit this, but it is only by
implication, I would think.
Mr. Maxwell. My sense is that by providing this
23
24
25
Mr. Aaron.
You kind of create a channel.
NW 50955 DocId: 32423513 Page 69
TAD SEADET
TOP SECRET
67
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22/
Mr. Maxwell. It's not that you create a channel, but you
aid the, increase the temptation for the proprietaries to try
to generate funds, and secondly, I think it is the easiest way
for the oversight committee to have a handle on covert action,
and particularly its funding, is to say there are two ways you
can do it. You can do it either by the regular appropriation
process, or you can do it through the contingency reserve fund.
But if you start to build in the ways that the contingency
reserve fund can be replenished, I think people I think there
may be a loss of control.
Mr. Aaron. Well, this is a way it can be replenished,
and this is not prohibited by anything we have recommended
yet.
Mr. Maxwell.. I understand that, but I guess I was trying
to clean up the organizational structure.
Mr. Kirbow. I think this is the problem with recommending
the legislation piecemeal, is that the insurance company out
there is a covert operation. It is a secret operation at the
agency conducted in that manner, and if you allow only
covert operation to be funded only from the contingency
reserve, whatever monies they generate will have to go back into
the general treasury because they cannot be used to either
replenish the contingency reserve or to operate a covert or
22
23
24
to perform a covert function or operation.
25
So they are not even
they can't not only use the profits
NW 50955
DocId: 32423513 Page 70
TAN SEADET

TOP SECRET
68
1
to do that, they cannot use the general monies that they
2
generate from that to conduct. They will have to fund that
3
insurance program in the contingency reserve.
Mr. diGenova.
NO
not at all, because it is not a covert
5
6'
7
8
operation.
That is not being use to fund a covert operation.
It has been used to pay pensions and annuities to foreign
agents. It's not a covert operation.
Senator Huddleston.
Agents are covert. If you restrict
it to use of funds, if it is not already done, no funds
9
10
derived from the operations of proprietaries shall be used for
11
12
any
13
any other purpose except the operation of the proprietary and
profits shall be returned to the general treasury.
It precludes it, doesn't it?
Mr. Aaron. That would solve the problem, yes.
14
15
Mr. Kirbow.
And that's what they are doing today by
16
regulation.
17
18
19
Senator Huddleston. Can we say that?
:
Mr. Aaron. I don't see why not.
Mr. diGenova..Well, we say that in our recommendation No.
Mr. Aaron. Well, this says
Mr. diGenova. That deals with terminations and liqui-
N N N N
21
22
dations.
23
Mr. Aaron. This is liquidations, and terminations.
This
24
is not just operations.
25
Mr. Maxwell.
There is one problem, a slight problem.
That
TA
SEADET
NW 50955 DocId: 32423513 Page 71
1
2
3
4
ག
TOP SECRET
69
is that some of the profits are reinvested. It is not that they
take everything over or break even.
Senator Huddleston. Well, I didn't say that. I said all
funds not needed in the operation.
5
6
Mr. Bader.
Perhaps, Mr. Chairman, you could amend No. 4
to all returns of funds or profits not needed for the operation.
Mr. diGenova.
7
terminations or
8
There you go, whether from liquidations,
profits exceed for the needs of the operation
of the individual proprietaries should be remitted to the U.S.
9
10.
Treasury.
11
Senator Huddleston.
You can work that out so that it would
be understood that there is a need to keep a certain reserve
12
back.
13
14
15
16
17
18
19
20
21
22
22
23
23
24
25
Mr. diGenova. We will unite 4 and 6.
Senator Huddleston.
That's all but 5.
Mr. diGenova. 5 is only about the Department of Justice
being notified as to the disposition.
Mr. Aaron. Now, we have two recommendations with respect
to cover. The first is just to recommend that the Department of
State stop publishing data which makes it possible to identify
people under cover.
Mr. Kirbow. Well, just a minute. On No. 5 I do have
a question here.
The Agency doesn't sign off on any other disposal of
United States properties and military bases or major edifices or
NW 50955 DocId: 32423513 Page 72
(
TOP SECKEi
70
1 anything like that..
2
Mr. diGenova.
And the reason for that is every other
3 government agency is subject to the rules and statutes of the
<+
LO
5
6
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Federal Disposal of Property Act, and the CIA isn't.
Mr. Kirbow. Do you see this could be an abuse area?
Mr. diGenova. I could see the Attorney
General, if he
knew that Admiral Raborn or some other Director is putting
pressure on the CIA to dispose of a piece of property, would
want to know about that, since they are not subject to the
Federal Disposal of Property Act like every other government
agency is.
I don't think I think the record clearly shows, and
the General Counsel indicated that he was not opposed to having
outside review of their disposals, provided it was classified
or done in a classified way since they have never had any
problem.
Mr. Kirbow. What you are doing here, approving the final
disposition of disposal, if you are intending that he review
the disposal process or participate in it, he wouldn't have known
about Raborn. He wouldn't have known about Raborn at all
because he didn't dispose of it to his client, and this would
*.
not pick up that kind of abuse that you have discussed here.
Mr. diGenova.
Suppose it had been disposed of to Admiral
Raborn, and they knew about it, and the AG said, why is this
being done? It would raise a red flag which would not otherwise
NW 50955 DocId: 32423513 Page 73
TAD SEADET
TOP SECRET
71
1
be raised since the Federal Disposal of Property Act would not
2
3
4
5
have applied which would have flagged that legally to any other:
agency.
Mr. Aaron. It would also strengthen the Agency's hand to
resist those purposes, to just simply say, hey, this has to be
6
signed out by the Attorney General.
00
8
This isn't going to work.
It seems to me that what we do need here --
Mr. Kirbow. If what we are trying to do is get his
participation, just having him approve it doesn't get his
10 participation, I think we ought to put that in if that's what
we want to do.
Mr. diGenova. I think the word "approve" is wrong. It
The sale or disposition of any CIA
11
12
13
should be "participate."
14
proprietary
15
Senator Huddleston.
How are you going to make it "partici-
16
pate?"
17
Mr. diGenova.
Senator Huddleston.
I think the word we want is "consultation.'
I think what we are trying to do is
"
18
19 replace what other agencies have to do in an overt way and
20
under a specific law, which this agency is not under, so it will
21 have some assurance that it is being done in a proper way.
22
22
23
24
25
Mr. Kirbow.
I don't disagree with the AG being in on the
act, but this one gets you participation on disposition.
Senator Huddleston. Well, figure a way to get it done.
Mr. Aaron. Well, what I wanted to say was I would like to
NW 50955. DocId: 32423513
Page 74
TAD SECRET
TOP SECRET
72
10
11
12
1b
14
1
note that back on page 67 where we have struck out the reference
2
to Mr. Raborn and intend to expand on the pressures having
been brought to bear, part of that expansion should include
a statement that there is no or that the Federal Disposal
3
4
5 of Property Act does not apply to the CIA, which is a crucial
7
تی
0
aspect.
Mr. Kirbow.
They are exempt, and then bring in the
requirement for CIA, or for the AG participation.
Mr.
Aaron. And that includes that.
Mr. diGenova. So we will rewrite 5 to make it consultation.
Ms. Culbreath. David, on cover, may I just say, didn't
we decide to delete the opening paragraph?
Mr. Aaron. You're right, you're right.
1 Ms. Culbreath. We were just going to list the recommen-
15
dations.
Mr. diGenova..
16
Yeah, we already said that.
17
18
19
Mr. Aaron. Now, we have a recommendation that the
CIA should make an effort to place a greater proportion of its
officers abroad under nonofficial cover, and that recommendation
20
is in brackets.
Recommendation (a), that the CIA make a
21
22
23
24
25
greater effort to place a greater proportion of its officers
abroad, "under nonofficial cover" is in brackets.
Senator Huddleston. That relates to the Welch discussion.
Mr.
Aaron. It relates to the Welch discussion and it
relates to the difficulties and problems of official cover.
TOD SEADET
NW 50955 DocId: 32423513 Page 75
TOP SECRET
73
1
Mr.
Bader.
2
10
3
5
6
7
8
10
How do you feel about this, Joe?
Mr. diGenova.
This is a problem because just like the man
says, cover is a relative thing. I don't think there is
anything wrong with saying that the CIA, that they should make
an effort to put really not much of a recommendation
should
make an effort to place a greater proportion of its officers
abroad under nonofficial cover, and the Agency does not see
that in this form, wouldn't view that as a bad thing.
They thin
cover is, if it is deep and effective, is okay. They just say
well, their answer this way, well, you know, you don't do
11
12.
much work under deep, nonofficial cover, and one of the prices
you pay is you don't have a lot of operational freedom.
You
13
have to work hard at your regular job and you don't do a whole
14
15
16
17
18
19
20
21
22
23
24
25
heck of a lot.
The recommendation, the way it is phrased, is sort of a
push to them to see if they can find better ways. It also
probably tells them that maybe they should use proprietaries
abroad a little more, which are very, very efficient, according
to Eric, according to both things, operations and cover.
Mr. Aaron. I think we have got to be careful on this
point. I mean, we ought to wait until the staff director
returns because I think he has a particular interest in this
suggestion, but we are talking about moving more people into
unofficial cover. I would like to express my own persional
reservations about that in terms of its relationship to a
TOP SECDET
NW 50955 DocId: 32423513
Page 76
1
2
TOP SECRET
74
number of things that the Committee has already decided to do.
Senator Huddleston.
We are eliminating a lot of cover.
10
3
་
5
6
Mr. Aaron. That's the first thing.
Now, the second thing
categories.
and these are nonoffocial cover
The second thing that we are doing is trying to
place somewhat greater authority in the hands of the ambassador
7
and the missions overseas to know what is going on. That is
8
10
11
12
13
14.
15
16
17
something that they can do when it is in their house. It is
something that's extremely difficult for them to do when it is
off in the forest someplace.
So it is
and as Joe just said, it looks like a recommen-
dation to use more proprietaries, in part because it is in the
same section, but in reality because that is one of the ways
they might do it, and I just wonder how much we have thought
through for ourselves where the balance of our recommendations
lie, particularly since most of the stuff is derived basically
from operational experience anyway.
18
19
20
21
There was a period, toward the end of Mr. Bissell's
career in the Agency, or maybe shortly thereafter, when they
began to try to put more people in unofficial cover, and it
wasn't a very good experience for them.
22
23
24
Mr. Kirbow. David, how does the ambassador lose control,
whether it is official or unofficial, except that he has got
them in his compound? It is an official government function
over which he has absolute control.
25
NW 50955 DocId: 32423513 Page 77
TAN SEAK
1
2
3
TOP SECRET
75
Senator Huddleston.
But if they keep coming to the
embassy to check with him, they blow their cover, unless they do
it by telephone.
Mr. Kirbow.
Well, I don't think they should go to the
5
6
r
8
10
11
12
13
14
embassy at all. I think their contact should become covert.
Mr. diGenova. Well, we're sort of caught between a rock
and a hard place because we know the official cover is we cover
it best .
Senator Huddleston. Well, maybe we could approach in
that one way is to improve official covert
Mr. Aaron. That is the one recommendation we make here,
but the limits on that are very they are just structural
like..
Senator Huddleston. It seems to me like we are in an
area that we know a lot less about than the people who are
15
16
in the business.
17
18
Mr. Aaron. That is sort of my feeling.
Mr. Kirbow. We are asking them to proscribe against
19 anything that they can convince an oversight committee in the
20
20
future is essential in the trend of that time.
21
Senator Huddleston.
Shouldn't we say that the time has
22
.23
come for a whole review of cover to see whether or not they
can find some better ways?
*24
Mr. Maxwell. We might say that the first large scale
25
study in 48 and 49 of the
TAD
Agency, done by Mr. Dulles, among
SEADET
NW 50955
DocId: 32423513 Page 78
TOP SECRET
76
1
2
လ
3
others; recommended very strongly that there be more unofficial
cover.
4
I think the Agency has been under considerable pressure
throughout its existence to do that, and as Joe pointed out
5
7
8
9
10
11
12.
13
14
15
16
17
18
19
there are certain limits to what it has been able to do.
Senator Huddleston.
Well, I think rather than suggest
what ought to be more or less official or unofficial cover, the
whole matter ought to be studied immediately by the Agency, and
see if they can find some new ways consistent with all the
restraints and prohibitions that the Committee has placed upon
them.
(General laughter.)
Senator Huddleston. All right, where does that leave us
here today as we close out today's session?
Mr. Kirbow. Mr. Chairman, might I suggest that in keeping
with an earlier discussion today, that because it is a summary
of findings as well as an introduction, that perhaps while
we are nice and fresh, tomorrow we might take up the intro-
ductory section prepared by the Staff Director, so that if we
change it much, we either make the rest of our
20
21
Senator Huddleston.
Have any of the other members seen it
22
at all,
Bill?
23
Mr. Miller. Just Senator Mathias.
24
Senator Huddleston.
All right, do you want to meet at
25
10:00 o'clock in the morning?
NW 50955 DocId: 32423513 Page 79
TAD SEADET
1
2
3
5
6.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
TOP SECRET
77
Mr. Aaron. Are we going to terminate now?
Senator Huddleston. They've got a vote going and it's 5:10.
I think we'd better.
(Whereupon, at 5:10 o'clock p.m., the Subcommittee
recessed subject to the call of the Chair.)
TAN CEFDET
NW 50955
DocId: 32423513
Page 80