£Z£-J3& 
•_  -tccer  l^co 
N'.£MC2L^DU.U  FOR:    I^puty  to  the  .Director  for  .Nhiiocal 
Intelligence-  .Programs  Zvalnation 
5U3JHCT: 
^ency  and  Comrarjrdty  Or g ?■  **, yvaiiogmU. 
Survey 
1.  You  have  requested  our  co  omenta  or*  the  statutory 
authorities  and  general  ie^al  hackgrcnand  o£  the  Agency.     I  h^v<* 
reviewed  the-  legislative  history  of  all  statuses  pertaining  to  th* 
Agency  a-od  the  vaxiocLa  points  which.  ^er«  debated  let  arriving  at 
the  present  statutory  laj^-u-age. 
2.  The  basic  charts*   ex  the  Agency  is  contained  in. 
section  1C2  of  tha  Rational  Sec-arity  Act  of  1947*  as  amended. 
This  charter  haa  orovr=d' to~oo  excellent  for  the  purpose  for 
which  it  rzra.a  desz-^n^cL 
:■«•  - 
•ats  no  the  outlines  o£  3  cerebral 
inteliig<incd  structure,   bnt  permita  ^reat  flexibility  in  ho*v  it 
can  be  organized  or  reorgAni.xed  aa  needed,     it  assigned 
specific  function **,   but  agairt  provides  ^ide  inedibility  aa  to 
how  they  should  be-  enrria-d  out-     It  aleo  provides  ~lder  general 
fur,cl£oo~al  authorities,   and  tha  ixachinery  of  the  National  Security 
Council  directrve-a  pcta  them  into  effect. 
3.      In  the  early  dajs  of  the  Agency  there,  ^ss  concern, 
that  the  staruto  did  not  provido  adequate  aothority  to  ih-a  larsctor 
in  his  capacity  aa  over-all  coordinator  o£  U.    S.    in  tell  13  end  e. 
Vario^i^  de-riccs  vera  considered,    particularly  the  idea  of  having 
him  cosistituted  oj  the  e^ecntive  agent  of  the  National  Sccnrity 
Council  for  all  intriiigenco  activities     An/  such  command 
authority,   however,   involves  a  complex  and  eventually  in^oiu- 
bl2  problem  of  command  channels,   and  I  think  the  concept  Tvas 
.jroperl/  abandoaeti.     Tha  fact  rnat  he  is  termed  in  tha  act  an  the 
Director  of  Central  Intelligence  as  -^7  ell  au  the  head  ci  the  A3  secy 
;oiiaotea  congressional  intent  a3  to  his  role,    and  tha  specific 
duty  olaced  on  the  A-'sncy  to  advice  and  make  r.^commenaation-s  to 
£
v 
i* 
»—  ~Ja.^     .""> «     *^i"j     f 
ir.tcllijftcc*  q£Ic*t  ci  &«  Government. 
ha  h*4  JcM*v»4  &•  politics  c£  pre-eminence  in  the  intelligence 
cacatSttflSSy  «>&€&  «£*£.!**  hiss  to  carry  out  his  proper  function. 
4*     Plftdaj  &•  Agency  under  the  National  Sacurit/  Council 
fct*0  f«»oIv*d  AOOthar  d«bate  between  those  who  wished  to  have  the 
Director  report  to  tfca  President  and  those  who  wished  to  have  him 
report  to  aa  lotar&sency  grotto-     Since  the  National  Security  Council 
ifi  advisory  to  thd  President,    the  Director  ha_s  a  clear-cut  responsi- 
bility to  th«  President  and  yet  the  members  of  the  Council  can  play 
their  prop*?  roles  as  the  President  may  decide. 
5.      The  act  permits  not  only  complete  freedom  in  the 
internal  organization  of  the  Agency,   but  also  great  leeway  in  the 
general  organization  of  the  intelligence  community.      Thus,   we  have 
the  history  of  th&  development  of  the  old  Interdepartmental  Coordinating 
and  Planning  Staff,   the  Intelligence  Advisory  Committee  and  the 
United  States  Communications  Intelligence  Board,   to  the  pres  mt 
United  States  Intelligence  Board  and  its  subcommittee  structure. 
It  also  permits  special  ajcjran3emen£s_fQr_.suc 
munications  intelligence 
and  the  recently  created  National  Inteliig 
QCn  the  covert  operations  side  of  the  Agency,   the  act  permitted 
broad  National.  Security  Council  directives  and  their  implementa- 
tion through  such  organizations  as  the  Operations  Coordinating 
Board,    the  Psychological  Strategy  Board,    and  subsequent  develoo- 
rr.ents  uo  to  the  oresent  303  Committee.      Thus,   while  the  Agency 
b.2.3  a  specific  mandate  to  carry  out  its  estimative  function  in 
section  102(g)(3)  of  the  act,    it  can  be  expanded  or  contracted  in 
accordance  with  what  is  determined  necessary  in  the  light  of  the 
international  situation.  / 
6.  There  is  one  administrative  provision  in  section  .102(c) 
which  authorize  a  the  Director  to  terminate  employees  when  he 
deems  it  necessary  or  advisable  in  the  interests  of  the  united 
States.     This  has  been  an  invaluable  personnel  tool  and  essential 
to  protection  of  Agency  security. 
7.  The  one  significant  amendment  to  this  charter  was  tha  one 
in  1953  which,  provided  for  the  appointment  of  a  Deputy  Director  of 
Central  Intelligence.      This  not  only  gave  the  Deputy  standing  in  the 
intelligence  community,    but  enabled  the  Director  to  delegate  to  him 
many  of  his  legal  authorities   in  connection  with  running  th^  Agency.
7^6 & 
Bo 
c.     An  obvious  shortcoming  ci  the  act  is  that  the  Director 
ha^-o- authority  to  carry  cut  the  rrspcn^ibiliry  in  a  third  ^rovlio 
in  section  102(d)(3)'  Tor  protecting  jrt,.-*17igance  sourcis  and  methods 
from  iir-aumorized  disclosure.     This  £3  a.  mo>5i  ccmplex  problem 
c/hich  ha3  been  under  dose-  study  i'cr  raany  years,   and  ao  saiia- 
iactory  solution  haa  "been  lorthcoming. 
,  9-     AcmlnUiraiiv-e  authorities  ox  the  Agency  are  contained 
in  the  Central  Intelligence  Agency  Act  oi  1?4?,  as  amended.     Thi_3 
has  provided  us.  xwiih  all  the  authorities  and  exemptions  needed  to 
carry  out  ma  -wide  variety  ox  fnnv-rion^  o-ssigned  to  the  Ag-sncy  during 
the  pa_at  20  years,     It  en-able*  as  to  have  an  effective  and  flexible 
personnel  program,   ranging  from  the  normal  desk  officer  in  head- 
Quarters  to  oeracms  ina  relaiac-csbio  so  remote  that  they  do  not  kno<=* 
they  are  nvorking  for  the  Agency.     It  enables  us  to  exercise  all  the 
technicues  required  for  clandestine  activities,   from  traditional  a-*eut 
operations  through  proprietary  and  other  more  sophisticated  types 
of  machinery.     It  haa  enabled  us  to  undertake  major  unforeseen 
projects,   such  as  the  U-2  operation. 
10.     Two  provisions-  ox  the  act  are  particularly  important. 
The  uniqua  authoriry  in  section  5  to  transfer  to  and  receive  from 
other  Government  agencies  such  sum  a  as  may  he  approved  hy  the 
Bureau  of  the  Budget.     This  haa  given  ua  great  flexibility  and  security 
in  our  funding.     The  oth<sr  is  section  3  with  its  "wide  authority  for 
utilisation  ox  suma  mace  available  to  the  Agency,   and  particularly 
subsection  (b)  thereof  which  allocs  ua  to  make  any  expenditure* 
required  for  confidential,    extraordinary,    or  emergency  purpc-aes, 
and  lhe«3-e  ^^.pendiircjrea  will  be  accounted  for  solely  on  the  certificate 
of  the  Director.      Tbis  has  betin  essential  to  the  flexibility  and  security 
of  our  covert  aciivitias.. 
11.     Another  important  provision  ha3  been  the  authority  Ln 
miction  7  to  brmg  altera  into  the  United  States  771th  thta  concurrence 
o£  the  Attorney  General  and  tha  Commissioner  of  Immigration  when 
it  13  in  the  interest  of  national  security  or  essential  to  the  further- 
ance ox  the  national  Intellisrenca  mission.      This  orovided  for  tho 
solution  oi  problems  involving  defectors  and  other  aliens  of  imel- 
li-ance  interest  ^bich  were  c^er^iscr-well-ni^h  insoluble. 
Z3 
12. 
Tbe'rho^t  important  :i«  -legislation  is  tha  CIA  Retirement 
A.';  cf  1364.      IX  3Z\  up  on  .-.larly  retirement  3yjtem  for  a  portion  ox 
the  Agency's  employ ees,    mainly  "hoa<s  with  extensive  ov-zY-3-tA.z 
CS
3  °
r.  ••  *•  -  r+  — 
:St  ;OOi,    *v-nca 
-r\LL  crccablr  reoaire  ccat~Lia:*  a-azeidzaeals  G3  Gov^rna-ier:!  oclicy 
Li  j*^3C  paaaea 
ca  rerirerr.eat  benefiia  c:a^uea.     j\-j  2-a  Lastaac.*,   a  >*;":*  *"*•*  -■ 
*vhich  e^uaisd  the  coac—  ^z-lhnag  ^oraiuia  for  retirees  wcsr  this  act 
to  ccher  r<etireaieai  373teraa  which  had  forged  ahead  ia  thi3  rype  o£ 
benefit.      There  liavy  b<ea  a  sumc^r  of  other  aaactraeaia  of  one  oort 
or  azoth<;r  v^hich  havrr  had  e££eci  on  the  A3eacy,   bat  by  aad  iarge  v/- 
h^ve  c-aea  able  to  r?jiin»a»r>  tha  basic  authorities  see  forsh  above  aad 
thereby  preserve  the  freedorrTot  aciica  ae-ce-ssary  to  carry  oq  the 
i:aaay  faaciiao-*  ox  ih*  A^eacy.     My  ccaclujioa,    therefore,   is  that 
for  tha  £ore3eeable  fa  Sir  e  vre  eLo  not  aee-d  to  seek  any  subsiaaclv^ 
i.2gi*laxioa.  hsar  rr.ua t  2>a  roost  caxefal  to  preserve  vhe  bajsic  authorities 
cc  -^hica  the  Agency  zk>w  dep-ea-da. 
13.     I  b-eiiev^  I  should  ^dd  my  persoaal  opinion^  7?hjch  is 
shared  by  others,   thai  despite  the  sviccessfui  passages-  oX  the  co.i-t- 
c£-Iivin?»  bill  aoted  above,    any  atz.ac-ir>i  to  m^"^  any  raajor  charge 
in  the  Tuhstanti-re  legislation  might  well  3tir  trp  a.  re*ciica  in  the 
Ccsgrcsa  -=?hich  could  result  ia  ie^islaiioa  iiraitiag  the  Agescy's  ' 
powers  or  the  flejxibility  r*ow  available  to  the  axscjiive  hraacb.  ia 
the  iatellig'ftncg  coraraunirr. 
sf 
LJ&fRI^iCZ:  2..   HOUSTON 
G.±r_eral  Couajel 
re 
^ 
itivei  Gcraasei
(Page  1) 
OGC  [??]-19[?]9 
9  October  1968 
MEMORANDUM  FOR:      Deputy  to  the  Director  for  National 
Intelligence  Programs  Evaluation 
SUBJECT:  Agency  and  Community  Organizational 
Survey 
1.  You  have  requested  our  comments  on  the  statutory 
authorities  and  general  legal  background  of  the  Agency.  I  have 
reviewed  the  legislative  history  of  all  statutes  pertaining  to  the 
Agency  and  the  various  points  which  were  debated  in  arriving  at 
the  present  statutory  language. 
2.  The  basic  charter  of  the  Agency  is  contained  in 
section  102  of  the  National  Security  Act  of  1947,  as  amended. 
This  charter  has  proved  to  be  excellent  for  the  purpose  for 
which  it  was  designed.  It  sets  up  the  outlines  of  a  central 
intelligence  structure,  but  permits  great  flexibility  in  how  it 
can  be  organized  or  reorganized  as  needed.  It  assigned 
specific  functions,  but  again  provides  wide  flexibility  as  to 
how  they  should  be  carried  out.  It  also  provides  wide,  general 
functional  authorities,  and  the  machinery  of  the  National  Security 
Council  directives  puts  them  into  effect. 
3.  In  the  early  days  of  the  Agency  there  was  concern 
that  the  statute  did  not  provide  adequate  authority  to  the  Director 
in  his  capacity  as  over-all  coordinator  of  U.  S.  intelligence. 
Various  devices  were  considered,  particularly  the  idea  of  having 
him  constituted  as  the  executive  agent  of  the  National  Security 
Council  for  all  intelligence  activities.  Any  such  command 
authority,  however,  involves  a  complex  and  eventually  insolu- 
ble problem  of  command  channels,  and  I  think  the  concept  was 
properly  abandoned.  The  fact  that  he  is  termed  in  the  act  as  the 
Director  of  Central  Intelligence  as  well  as  the  head  of  the  Agency 
connotes  congressional  intent  as  to  his  role,  and  the  specific 
duty  placed  on  the  Agency  to  advise  and  make  recommendations  to
(Page  2) 
the  National  Security  Council  assured  that  he  would  be  the  chief 
intelligence  officer  of  the  Government.  Based  on  these  concepts, 
he  has  achieved  the  position  of  pre-eminence  in  the  intelligence 
community  which  enables  him  to  carry  out  his  proper  function. 
4.  Placing  the  Agency  under  the  National  Security  Council 
also  resolved  another  debate  between  those  who  wished  to  have  the 
Director  report  to  the  President  and  those  who  wished  to  have  him 
report  to  an  interagency  group.  Since  the  National  Security  Council 
is  advisory  to  the  President,  the  Director  has  a  clear-cut  responsi- 
bility to  the  President  and  yet  the  members  of  the  Council  can  play 
their  proper  roles  as  the  President  may  decide. 
5.  The  act  permits  not  only  complete  freedom  in  the 
internal  organization  of  the  Agency,  but  also  great  leeway  in  the 
general  organization  of  the  intelligence  community.  Thus,  we  have 
the  history  of  the  development  of  the  old  Interdepartmental  Coordinating 
and  Planning  Staff,  the  Intelligence  Advisory  Committee  and  the 
United  States  Communications  Intelligence  Board,  to  the  present 
United  States  Intelligence  Board  and  its  subcommittee  structure. 
It  also  permits  special  arrangements  for  such  functions  as  com- 
munications intelligence    [ 
 Excised   ] 
and  the  recently  created  National  Intelligence  Resources  Board. 
On  the  covert  operations  side  of  the  Agency,  the  act  permitted 
broad  National  Security  Council  directives  and  their  implementa- 
tion through  such  organizations  as  the  Operations  Coordinating 
Board,  The  Psychological  Strategy  Board,  and  subsequent  develop- 
ments up  to  the  present  303  Committee.  Thus,  while  the  Agency 
has  a  specific  mandate  to  carry  out  its  estimative  function  in 
section  102(d)(3)  of  the  act,  it  can  be  expanded  or  contracted  in 
accordance  with  what  is  determined  necessary  in  the  light  of  the 
international  situation. 
6.  There  is  one  administrative  provision  in  section  102(c) 
which  authorizes  the  Director  to  terminate  employees  when  he 
deems  it  necessary  or  advisable  in  the  interests  of  the  United 
States.  This  has  been  an  invaluable  personnel  tool  and  essential 
to  protection  of  Agency  security. 
7.  The  one  significant  amendment  to  this  charter  was  the  one 
in  1953  which  provided  for  the  appointment  of  a  Deputy  Director  of 
Central  Intelligence.  This  not  only  gave  the  Deputy  standing  in  the 
intelligence  community,  but  enabled  the  Director  to  delegate  to  him 
many  of  his  legal  authorities  in  connection  with  running  the  Agency.
(Page  3) 
8.  An  obvious  shortcoming  of  the  act  is  that  the  Director 
has  no  authority  to  carry  out  the  responsibility  in  a  third  proviso 
in  section  102(d)(3)  for  protecting  intelligence  sources  and  methods 
from  unauthorized  disclosure.  This  is  a  most  complex  problem 
which  has  been  under  close  study  for  many  years,  and  no  satis- 
factory solution  has  been  forthcoming. 
9.  Administrative  authorities  of  the  Agency  are  contained 
in  the  Central  Intelligence  Agency  Act  of  1949,  as  amended.  This 
has  provided  us  with  all  the  authorities  and  exemptions  needed  to 
carry  out  the  wide  variety  of  functions  assigned  to  the  Agency  during 
the  past  20  years.  It  enables  us  to  have  an  effective  and  flexible 
personnel  program,  ranging  from  the  normal  desk  officer  in  head- 
quarters to  persons  in  a  relationship  so  remote  that  they  do  not  know 
they  are  working  for  the  Agency.  It  enables  us  to  exercise  all  the 
techniques  required  for  clandestine  activities,  from  traditional  agent 
operations  through  proprietary  and  other  more  sophisticated  types 
of  machinery.  It  has  enabled  us  to  undertake  major  unforeseen 
projects,  such  as  the  U-2  operation. 
10.  Two  provisions  of  the  act  are  particularly  important. 
The  unique  authority  in  section  5  to  transfer  and  receive  from 
other  Government  agencies  such  sums  as  may  be  approved  by  the 
Bureau  of  the  Budget.  This  has  given  us  great  flexibility  and  security 
in  our  funding.  The  other  is  section  8  with  its  wide  authority  for 
utilization  of  sums  made  available  to  the  Agency,  and  particularly 
subsection  (b)  thereof  which  allows  us  to  make  any  expenditures 
required  for  confidential,  extraordinary,  or  emergency  purposes, 
and  these  expenditures  will  be  accounted  for  soley  on  the  certificate 
of  the  Director.  This  has  been  essential  to  the  flexibility  and  securit 
of  our  covert  activities. 
11.  Another  important  provision  has  been  the  authority  in 
section  7  to  bring  aliens  into  the  United  States  with  the  concurrence 
of  the  Attorney  General  and  the  Commissioner  of  Immigration  when 
it  is  in  the  interest  of  national  security  or  essential  to  the  further- 
ance of  the  national  intelligence  mission.  This  provided  for  the 
solution  of  problems  involving  defectors  and  other  aliens  of  intel- 
ligence interest  which  were  otherwise  well-nigh  insoluble. 
12.  The  most  important  new  legislation  is  the  CIA  Retirement 
Act  of  1964.  It  set  up  an  early  retirement  system  for  a  portion  of 
the  Agency's  employees,  mainly  those  with  extensive  overseas
(Page  4) 
service.  This  is  a  most  useful  personnel  management  tool,  which 
will  probably  require  continuing  amendments  as  Government  policy 
on  retirement  benefits  changes.  As  an  instance,  a  bill  just  passed 
which  equated  the  cost-of-living  formula  for  retirees  under  this  act 
to  other  retirement  systems  which  had  forged  ahead  in  this  type  of 
benefit.  There  have  been  a  number  of  other  enactments  of  one  sort 
or  another  which  have  had  effect  on  the  Agency,  but  by  and  large  we 
have  been  able  to  maintain  the  basic  authorities  set  forth  above  and 
thereby  preserve  the  freedom  of  action  necessary  to  carry  on  the 
many  functions  of  the  Agency.  My  conclusion,  therefore,  is  that 
for  the  foreseeable  future  we  do  not  need  to  seek  any  substantive 
legislation  but  must  be  most  careful  to  preserve  the  basic  authorities 
on  which  the  Agency  now  depends. 
13.   I  believe  I  should  add  my  personal  opinion,  which  is 
shared  by  others,  that  despite  the  successful  passage  of  the  cost- 
of-living  bill  noted  above,  any  attempt  to  make  any  major  change 
in  the  substantive  legislation  might  well  stir  up  a  reaction  in  the 
Congress  which  could  result  in  legislation  limiting  the  Agency's 
powers  or  the  flexibility  now  available  to  the  executive  branch  in 
the  intelligence  community. 
s/ 
LAWRENCE  R.  HOUSTON 
General  Counsel 
cc:   [Excised] 
Legislative 
[Excised] 
Counsel