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HANDLE VIA Y\..I~ 

BYEMAN 

CONTROL SYSTEM 

~NATIONAL RECONNAISSANCE OFFICE 

WASHINGTON, D.C. 

THE NRO STAFF April 17, 1969 

MEMORANDUM FOR DR. McLUCAS 

SUBJECT: ASD / A Memorandum, "Intelligence Resources Management" 

Attached on the right is an ASD/ A memorandum for the Secretary 

of Defense and the Dep Sec Def on the subject of "Intelligence Resources 

Management. 11 This memorandum was forwarded to us by a member of 

the OASD / A staff per an informal agreement with that staff that we will 

be provided copies of all OASD/ A papers concerning the NRP. 

The essence of Mr. Froehlke's memorandum is the four alternative 

methods he suggests to improve intelligence resources management 

within the DOD: 

1. Creation of an ASD (I); 

2. Creation of a special assistant to the Sec Def for intelligence; 

3. Centralizing the resource allocation function in OASD / SA 

or ODDR&E; 

4. Centralizing the resource allocation function in an office of 

an ASD who is not a user of intelligence. 

You will recall that options one, two and three are familiar 

friends. Option four appears to be a soft approach to recommending 

that OASD / A be assigned the resource allocation function within the 

DOD. 

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BYEMAN 

CONTROL SYSTEM 

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- TOP SECRET EXCLUDED FROM AUTOMATIC REGRADING 

DOD DIRECTIVE 5200.10 DOES NOT APPLY 

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' ASSISTANT SECRETARY OF DEFENSE 

WASHINGTON, 0. C. 20301 

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,. ·:· , ~· . . . ~ -· .. AOMINISTRAT!ON 

11 APR 1969 ,_, .c . 

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MEMORANDUM FOR Secretary o! Defense .. ;- ,_ / . . ·• 

~" · · · :_ : , : , · ·~ Deputy Secretary of De!ens e 

, ; ;· . •:. ·.) 

SUBJECT: Intelligence Resources Management . ;, . . . . . ,. . ' 

In the ac~ompanying attachment I have ·set forth my views 

on alternative solutions to the problems o! management of DoD 

intelligence resources. · . . 

. . . ' . . ... ·, .,·,_..\ . · I suggest that this proposal be referred to the Blue Ribbon 

panel as an item o! special interest. or, if the problem has 

sufficient urgency,. and the solution is su!fidently obvious, you 

may wish to implement it in the very near future. I ~- • 

. .. ··SIGNED 

- ... ·, . -. . . . · · : -:-··aobert F.~ Froehlke 

Attachment 

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It has c:ome to' my attention that ~e National Security .Agency is 

budgeting $375. SM,through FY 1974 !<tr _new computers; these are 

apparently to be 3ssociated with new space··sensQrs;1iandied by the 

National Reconnai,ssance Office. .The a.mount, th0ough, does not bother 

me as much as does the whole p:roce~s by which we arriv~ at the amount. 

;Frankly, we don't know whether or not we get ou:r money's worth in 

the intelHgence budget. We don't know whether or not_ we could get 

· - · the same value for less C:=0st by photo-reconnaissance or human intelligence or by some 0th.er collection sy151t~m other' than space sensors • 

.And I am concerned, as I mentioned to you earll~r., ~that top management's lack of precise control may res~lt in'NS.A's venturing beyond 

its chartered bounds. - , .. •· ri 

._ We can't make the cost ~omparisons required bee a use intelligence 

resou:rces manageme:it within Do? is fragme_nted.1 The reason for the 

fragmentation is that we haven't kept up with technology and its implications. .At the end o! World War II., the nation's total intelligence 

budget was $100M; in 1_969 it is abo_u~~~-~[most of which goes to 

collectio11 by comple.'1: and expensive systems stich as satellites. B.ec:aus-e 

we didn't stay abreast o! the changes, our intelligence resource manage• 

· ment system grew up in an ad hoc, off'-hand way with no planned 

organizational management. : 1 

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For FY 1969 the intellig-~nce ~~ograms ·look lik·e this: 

i .. 

1· 

Principal 

J>rogram, Function . 

- Executive ,. 

£g_ .Agency 

Primary Decision 

Act. Off'ic er Maker 

Decision 

Time 

NRP 

-CCP 

CIP 

MOL 

SR--71 

Services 

Collection 

Collection 

Collection 

· Pl'oc:essing_ 

Production 

Dissemination 

Cotlec::tion 

Collection 

.All 

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DDR&i:E -

Dir ·DIA .. '-<- -.... ~'!-,i;_. ·~ · .••• 

DDR&E_ 

.ASD(S.A) 

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DepSec:De! 

.DepSecDef 

D_epSecDef 

DepSec.De! 

Sec:De! 

SecDef 

. Late Fall 

Late Spring 

Late Summer 

... 

Summer 

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_.,. . _ From this, you can see the variety of Primary Action Officers 

-~ - _.·.,,and the spread o! time· involved; it is evtdence of £.ragmentation. 

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I nave co~cluded fli:~t our .intelligence ·o::rgatiizatlon requires 

overhaul. You are thoroughly familiar with the findings o! the House 

.AppropriaHons Committee Investigati~g Team (HACIT) in 1968; I 

•.• 1 -will touch on some other things which make overhaul necessary, and . . . ' . 

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_ (1) · One :reason that our effort is fragmented is because we 

don't have a coherent structure: !or instance, USIE states requirements 

without regard tq resources available;. as a re!;!ult., SecDef determines 

priorities by default in bis budget decisions. Matching requirements 

against resources is apasmodic, and depends entirely on which intelligence program is being considered at the tiine, since they are 

·considered at different times of th.e year by different :review groups. 

. (2) .As the House Appropr!atiqns Committee pointed out, 

in Report No. 1735, 1! ... certain intelligence operations are ove:rstaff' ed, 

duplicate activities are being carried out, and· there is a general 

inadequacy 0£ management." I mentioned one such case to you on 

3 April: NSA' s edging into the intelligence pi-oduction function although 

its mission is to produc·e COMINT,.and ELINT information (which forms 

one input to finished intelligence). _ The DINS report of its inspection 

of NS.A in November 1968, mentions one such caa e, on page 74: 

-.. ·. "SUBJECT: 

FACTS:. 

National Se_curity Agency Use of Collection 

Information in the Preparation of SIGL"l\fT 

Reports 

I. Natio~al Security ·council Intelligence Directive 

(NSCID) No. 6. IS September 1958, ,

81 <'.::ommunkatlon 

Intelligence and Electronic: Intelligence. 11 states that the 

mission of NSA is to produce CQMlNT and ELINT 

information in accordip.ce with objectives, requirements, . . . . \,. _· . -~~: . . . . - . . ' ~ . . . . 

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and priorities 'established by the USIB, and that NSA -

b not to engage in the production· and .dissemination of 

finished lntelllgenc~,. as disti.n'guish.ed fr0:m _iμ.~elligence 

· information. · . · ·" .· · . •· · ' · •. :·:.· · ·~ . :· ... ~ . ~ . . 

,, . 2. National Security .Agency Technical Instruction 

-:(TECHINS) No. 4058, 21 May 1965. "Use o! Collateral in 

SIG~NT' Produc;:t,;" prescribes th·e conditions which must 

be met before collateral is us.ed in_SIGI~T reports. It 

further states-that c:o1lateral will never be tlsed as the 

sole basis. for SIGINT reporting and emphasizes that 

collateral is properly used to clarify, explain or supplement SIGU~T evidence in order to produce a more 

meaning!ul product. Collateral {or collateral information) 

is defined as. buormation derived from any ·source other ·,., • . ,I ' 

than a SIGINT source. · · · · · 

DISCUSSION AND .ANALYSIS: 

' 3. Prior to the DINS inspection o! the NSA, the 

Services indicated that there is in NS.A current :reporting 

an excessive dependence on collateral_sources of 

information rather than an· analysis of SIGINT. Sampling 

by the DL'l'S Inspection Team verified that there are 

instances o! excessive use o! collateral sources, both 

· 'identified and non-identified, in SIGINT reports, particularly 

·· -those on the USSR, and th'e European and .Asian Commtmist 

countries' naval operations. In other c::as·es the use of 

collateral sources intelligellce dist_inc~ly e~anced the 

value of_ the SIGINT reports. ?'...,:,: .. ;~ -.;.,.;..~ • : "'"~:: ' -: 

• · 4'. .An example 0£ complete dependence on collateral . 

,, ·, -sources can be !ound in NS.A COMINT .Report 2/0/FRGN/R74-68, 

. · 23 September 1_968, "A Pe.riocHc French Missile Operations 

Summary." E?camples of exces~ive use of collateral sources 

of informatio~1 is fount in the NSA Soviet-European Communist 

Situation.Report series'and in two :reports, Z/0/RUN/R229-67 

and 3/0/P/R31.A-68, on the 19.67 Atlantic: .. Subma:rine Support •' 

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. Gr~up oper~tions~ .A' similar example can be found in the NS.A 

monthly report 2/0/RUN-AW/R107-6B, 15 May 1968, "Soviet 

Pacific Ocean .Fleet Summary."· More collaJeral information 

appears in these :reports than !s neces-sary to dari!y _or 

supple~ent SIG~~T ~~cts.. _ _ . r , ' 

. , , 5. Groups A .and B o{ Production are as signed 

respon:3ibllities for proCessing and reporting SIGINT through 

:analysis and e..~ploitation of intercepted c:;ommunications 

o! the USSR, European Communist, . and Asian Communist ' ' - ' --~ .J countrl.es.' The present procedures f.or reviewing and 

monitoring the use of collateral in SIG~T reporting do 

not prevent an overdependence or e..-s;:cessive use or collateral 

sources in a finished SIGINT report. rr 

The NS.A Production Group ,is quite properly, primarily engaged 

in processing SIGINT information to be used by other agencies for 

production oi intelligence. However, about,10, 000 of NSJ:'s 20,000 

personnel are assigned to its Production Group; This number, plus 

the use of collateral in SIGINT information reporfs leads me to wonder 

if eome substantial number of personnel is engaged in production or 

ln.tellige:o.c:::e, vice pr.ocessing o! information. 

' ·, ... ' '( . 

~ (3} Additionally, we seem to have an imbalance between 

collection and production of intelligence: about 75o/a o! the DoD National 

Intelligence budget is spent on collection or support o! collection. This 

la because of the expensive technical systems we use in collection. I 

·- am not sure ·just what the ratio o! collection resources to production 

resources sho·uld be, but I am concerned that there has been no 

aystematic investigation :0! that ratio in ·each o! ~e major programs .. 

In-other words,· we may be collecting for ~e ~ake o! collecting. 

i·,.;, .:· 

. (4) There ls no real comparison of alternate collection 

· systems because they are budgeted in dl!!ereru: programs with no 

·single local point to compare them. Further, the programs are · 

highly compartmented !or security reas.ons so that only a few people -

in OSD can even begin to make any cost comparisons. , . ' -~. - ,_,, ' 

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(5) We have no mid~range or long-range intelligence 

planning;' we plan intelligence budget allo.cations on a near-term_ basis. 

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.... (6) Intelligence programs ~~e impo:rtant, because threat 

projectio~s for~ the basis o! our weapons systems planning and force 

. ,planning. Needless·to· say, everyone involved wants ~o be sure that 

the projections substantiate his requests £or weapogs systems and 

force levels. In these dr~u.mstances, not many- people really desire 

a coherent intelligence planning e!f-ort;-they prefer the advantages 

Inherent in putting forth their own substantiating evidence. I believe 

1 • that this attitude is the basis for the continued divie ion of intelligence 

.requirements ,and intelligence ~esources.. . · - ' ~· -•. ,:...._, ':. :.) • - i, , \ 

Th-~- poi~ts i h·ave made--~ 'not .a complet~, list by any means .. are 

indicative of the unhealthy situation I perceive.·., _I am not the only person 

who dislikes the .situation: The Bureau of the ~udget has floated a 

proposal to create an ASD (InteUigence) to serve as a focal point !or· 

.. intelligence resource management; ASD(S.A) has a proposal to take over 

_resource management, using, as a bask tool, an Intelligence Five-Year 

Plan, implemented by Force Planning Memoranda; and the Joint Chiefs 

of Staff have set up a study group to report on Defense intelligence 

organization. As you know, Dave Packard js also looking at intelligence 

reorganization. · · · 

I believe that we should act soon to bring coherence to lntelligenee resources allocated. We should create a focal point !or it in 

OSD. This focal point should prpv:ide disinte~ested review o! allocations, 

seeking to eliminate duplication and to bring a better balance between 

collection and the other intelligence !unctions. 

· _c; .,.,. ·•'·Them~~ in charge o!.tlle _focal point should not attempt to be. 

· :· either an intelligence producer or intelligence us er but to remain 

disinterested: This sho~ld eliminate th~ old problem 0£ using intel..: 

U.gence to justify his own programs,, and would provide minimum change 

to~the existing organization. · ·· 

.-f '.' . , Although the intelligence budget is not large by comparison 

:with other budgets, the importance o! intelligence comes from its use, 

• "not its cost. There!o:re the location o! the !oc:al point within the OSD 

· organization la relevant. There are three courses o! action: ·\ ~' \,:·-~ 

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_:_. ~:,-.<''this course would set up __ an au~oritatlve resources 

management. highly visible. It would, however~. e.~pose SecDef to · 

charges of managing intelli'gence for his own purp.oses, would bring 

him into some conflict with the DCI _{because or DoD' s preponderant 

/ 1hare o! the resources), and might make the intelligence !unction too 

.''(is lb le. . . . . ' , • . . .• • . . . , . • l . , 

(2) Creation of a sp'ecia1 as·sistant to 'the Sec Def for 

. Intelligence. This· post actually existed (as Assistant to SecDef !or 

Special Operation,s) before the creatio~ o! DIA, ~lthough it did not have 

authority over resource allocations, because the intelligence budget 

was not very large, because the office was too small to provide sta:ff 

support, and because more concern was felt for planning to avoid 

mutual interference .in intelligent:_e operations_ than for managing a 

... 

small budget. ·. •. · 1 '' 

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(3) Centralizing the :r.esource allocation function in an 

.existing o!fice o! OSD~ such as ASD(SA). This course bas several 

att:ractions; its principal disadvantage is ~at it m~kes a principal 

us er o! intelligence· (in his force level analysis function:) into the 

principal manager o! intelligence (as its resources allocator). The 

·•ai:ne disadvantage would pertain· to· DDR&:E, 'except that it would apply 

in his weapons system planning function. A third approach ls to 

assign to an ASD who is not a user. of' intelligence, and doesn't engage 

-~- planning !or weapons systems or force levels. Whoever gets the 

. .->assignment would become the Primary ~ction Officer !or the CIP, 

CCP. and. eventually. the NRP. He should also: 

• · ."_ · (aJ B~lance collection requirements r_eceived from 

the USIB aga~st collection :resources. i 

•. (b) Determine th;most efficient mix o! collection 

·:resonrces. 

(c:) Achieve· a better balance in the collection, 

processing. production, and dissemination functions of intelligence. ·'- \. 

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• I . 

- (df Bring DIA., .NS.A, 

focal point within Dori.·_· -- · · 

and NRO under one management 

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(~) Sit on.the recently-establish,ed National Intelligence 

Resources Board as the DoD member. · 

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·' farn ready to discuss this proposal at_ yo~ convenience. 

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