La eee A REVIEW OF THE COMAUNTT ? March 10, 1971
TABLE OF CONTENTS “2. j%QINTRODUCTICN: THE COSTS AND BENEFITS | OF INTELLIGENCE ..... sc eeeeens ccc ncaee cece ewes 1 II. COST TRENDS 2... cece cece cece eee enee - III. QUESTIONS ABOUT THE PRODUCT ....-....-- wen eeees 102 IV. ORGANIZATIONAL DILEMMAS 2... cee eee eee reer ere ne 13 V. SPECIFIC ORGANIZSTIONAL ISSUES woceesseseseces 20 VI. LEADERSHIP OF THE COMMUNITY 2622+ cece ccs ecceee 25 VII. DEPARTING ST OF DEFENSE LESDIERSHIP 2... ee eee 34 VIII. CHANGING FUNCTIONAL BOUNDARIES ANO COSTS ..... 39 ‘ IX. TOWARD IMPROVEMENTS IN THE. PRODUCT ..-..ececeee 44 APPENDICES
I. INTRODUCTION: THE COSTS AND BENEFITS OF INTELLIGENCE The operations of the intelligence community have pro- Guced two disturbing phenomena. The first is an impressive ‘rise in their size and cost. .The second is an apparent in- ability to achieve a commensurate improvement in the scope and overall quality of intelligence products. During the past cecade alone, the cost of the intelli- gence community has The following report seeks to identify the causes of these two phenomena and the areas in which constructive change can take place. Its principal conclusion is that while a number of specific measures may help to bring about a closer
relationship between cost and effectiveness, the main hope “for Going so lies in a fundamental reform of the intelligence community's decisionmaking bodies and procedures. ‘This conclusion is advanced in full recognition that reorganization will, at best, only create the conditions in which wise and imaginative leadership can flourish. In the absence of reorganization, however, the habits of intelligence community will remain as difficult to comcrol as was the per- formance of the Deoartment of Defense prior to the Defense Reorganization Act of 1958.
Il. Cost TRENDS ‘\. fo understand the phenomenon of increasing costs, it is necessary to consider briefly the organizational history of the intelligence community. The National Security Act of 1947 and the National Security Council Intelligence Direc- tives (NSCIDs) of the late 1940s and early 1950s established the basic division of responsibilities amcng agencies and departments. This division had its origins in traditional distinctions between military and non-military intelligence, between tactical and national intelligence, and between _ communications (COMINT) and non-communications (or agent) intelligence. ‘hus, CIA was directed t7* employ clandestine agents to collezt "non-military" intelligence and produce "national" intelligence. ‘The Department of State was made responsible for the overt collection of "non-military" in- telligence. The National Security Agency (NSA) was estab- lished to manage COMINT collection. The Military Services were instructed to collect "military" intelligence as well as maintain tactical intelligence capabilities for use in wartime. All were permitted to produce “departmental” in- telligence to meet their separate needs. While not ideal, this division of functions and responsibilities worked rea- sonably well into the mid-1950s. Since that time, these traditional distinctions and the organizational arrangements which accompanied them have
become increasingly obsolescent. ‘he line between “military" and “non-military" has faded; scientific and technical in- telligence with both civilian and military applications has become a principal area of endeavor for almost all intelli- gence organizations Similarly, under the old distinctions, the national leadership -- namely the President and the NSC -- concerned itself with "national" intelligence, while pre- sumably only battlefield commancers careu about tactical in- telligence. But a rapidly advancing technology which has revolutionized the collection, processing, and communication of intelligence data casts doubt on the validity of the dis- tinctions. Simultaneously, technological advances have created new collection possibilities which do not fit conveniently within a structure based on traditional distinctions and were not covered in the original directives. The breakdovm of the old distinctions and the appearance of new collection methods has been a simultaneous process raising a host of questions about intelligence organization.
On the more mundane, but nonetheless critical level, questions arise about the organizational re~ sponsibilities for such topics as VC/NVA order of battle, Are these military or non-military ‘ issues? Is the intelligence about them tactical or national? Who should be responsible for collection and what collection In the absence of an authoritative governing body to resolve these issues, the community has resorted to a series of compromise solutions that adversely uffect its performance and cost. In general, these compromises have favored multiple and diffuse collection programs and the neglect of difficult and searching analytical approaches. The most serious of the resulting problems are outlined below in brief form, and dis- cussed in more detail in the aprendices. | 1. The distribution of intelligence functions has become increasinciy fragmented and disorcanized. i ° The ol@ Gistinctions among national, departmental, . and tactical intelliaence are out of date. Today,
CIA is as likely to produce intelligence relevant to, say, NVA/VC orcGer of battle as DIA or MACV, just as MACV produces many reports that are of “interest to the national leadership. aN . Similarly, the relatively neat ordering of collec- tion functions that existed after World War II has broken down. Table I illustrates how almost all major com- ponents of the intelligence community are in- volved in each of its various collection and production functions.
The community's activities are dominated by collection competition and have become unvroductively duplicative. ° The blurring of traditional bouncaries has encouraged community members to engage in a competitive struggle for survival and dominance, primarily through new technolocy, which has resulted in the redundant acquisition of data at virtually all levels -- tactical, theater command, and national.
Collection capabilities remain in operation beyond their useful lives. As older systems lose their attractiveness at the national level, they are taken over at the cormand or tactical level where they dupiicate higher level activities or collect data of little value. e Simultaneously, compartmentalization within various security systems has served to hide or obscure com-~ petitive capabilities from evaluation, comparison, and tradeoff analysis. 3. fhe communitv's growth is larsely urplanned and un- guiced. ° Serious forward planning is ofter. lacking as decisions are made about the allocation of resources. The consumer frequently fails to specify his product needs for the producer; the producer, uncertain about eventual demands, encourages the collector to pro- vide data without selectivity or priority; and the collector emphasizes quantity rather than quality.
- 10 - The community's activities have beccme exceedingly ex- pensive. ° The fragmentation of intelligence functions and the competitive drive for improved collection technology are important reasons why the cost of intelligence has almost doubled during the past decade. to the acquisition of expensive new systems without simultaneous reductions in obsolescent collection . programs. in the absence of planning and guidance, internally generated values predominate in the community's in- stitutions. These values favor increasingly sophisti- cated and expensive collection technologies at the expense of analytical capabilities. Few interagency ‘comparisons are contemplated... Po- tential tradeoffs between PHOTINT and SIGINT, between PHOTINT and HUMINT, and between data collection and analysis are neglected. While the budgetary process might be used to curb some of the more obvious excesses, it cannot sub- stitute for centralized management of the community. A significant part of this cost growth is attributable
- 10a - Til. QUESTIONS AROUT THE PRODUCT In a world of perfect information, there would be no uncertainties about the present and future intentions, capa- bilities, and activities of foreign powers. Information, however, is bound to be imperfect for the most part. Con- sequently, the intelligence community can at best reduce the uncertainties and construct plausible hypotheses about these factors on the basis of what continues to be partial and often conflicting evidence. Despite the richness of the data mace available by medern _ methods of collection, and the rising costs of their acquisi- tion, it is not at all clear that our hyrotheses about foreign intentions, canz>oilities, and activities have improved com- mensurately in scope and quality. Nor can it be asserted with confidence that she intelligence community has shown much in- itiative in developing the full range of possible explanations in light of available Gata.
a -ll- Difficulties of this kind with the intelligence product are all the more disturbing because the need to explore and test a number of hypotheses will, if anything, expand as the Soviets project their military power and come to play a more direct global role. Yet there is no evidence that the in- telligence community, given its present structure, will come to grips with this class of probiens. The community's heavy emphasis on collection is itself detrimental to correcting product problems. Because each organization sees the maintenance and exvansion of its col- lection capabilities as the principal route to survival and strength with the community, there is a streng presumption in today's intelligence set-up that additional data collec- tion rather ther improved analysis, will provide the answer to particular intelligence problems. It has become common~ place to translete product criticism into demands for en- larged collection efforts. Seldom does anyone ask if a further reduction in uncertainty, however small, is worth its cost. The inevitavle result is that production remains the stepchild of the community. It is a profession that lacks strong military and civilian career incentives, even within CIA. The analysts, with a heavy burden of responsibility, find themseives stamped with data. The consumers, at the
- 12 - time, treat their product as a free good, so that demand eds supply, priorities are not established, the system mes overloaded and the quality of the output suffers. if this were not enough, production, instead of guiding lection, is itself guided by collectors and the impetus technology. Since the military are the principal collec- S, they are more likely to focus on the needs and interests their own Services than cn the issues of concern to the tional leadership, and they continue the wasteful practice counterpart targeting. Under such difficult conditions, .is not Surcrising that hypotheses tend to harden into gma, that their sensitivity to changed conditions is not ‘ticulated, and that new data are not sought to test them.
- 13- IV. ORGANIZATIONAL DILEMMAS Questions about cost and product Micht exist even if the ligence community possessed strong leadership. It is orthy, however, that they have arisen under conditions xoSt marked of which is a lack of institutions governing community with the authority and responsibility to re- issues without excessive compromise, allocate resources > rding to criteria of effectiveness, and consider the re- -onship between cost and substantive output from a national pective,. ‘ This lack of governing institutions tems fundamentally : the falivre of the National Security Act of 1947 to -Cipate the "constitutional" needs of a modern and techno- The primary intent 1 - ically complex intelligence community. the Act, un@erstandably, was to prevent a recurrence of the elligence confusions and delays that cccurred prior to rl Harbor. These problems were seen as having resulted m defects in the central processing, production, and dis- xination of intelligence. The critical need, accordingly, to create an organization which would have access to all > telligence and report its estimates to the national leader- ip. In 1947, the size and cost of individual programs were -latively small, and the scope and nature of the management
-~ 14 & problems associated with today's community were not antici-~ “pated. Consequently the issue of how to plan and rationalize the collection of intelligence did not seem of great moment, and the Act did not explicitly prcevide for a mechanism to per- form these Functions or evaluate the scope and quality of its product. | | There is another reason why the 15847 Act did so little to provide strong leadership for the community: powerful in- terests in the iiilitary Services and elsewhere opposed (and continue ta oppose) more centralized management of intelli- gence activities. Partly, this opposition arises from the belief of the Siurvices that direct control over intelligence programs is essential if they are to conduct successful mili- tary operations: partly, it results from bureaucratic concerns. The Services are reluctant to accept assurance that informa- tion from systems not controlled by them will be available as and when they require it. Despite such opposition, the National Security Act of 1947 did stipulate that the CIA would cocerdinate the “in- telligence activities" of the Government under the direction ef the National Security Council. However, the Act also made Clear provision for the continuation of "departmental in- telligence". Since then, three Presidents have exhorted the Director of Central Intelligence (DCI) to play the role of
| a - 15 - cormunity leader and coordinator, but his authority over the community has remaineu ‘minimal. While the DCI has been the - catalyst in coordinating substantive intelligence production, he has made little use of such authority as he possesses to manage the resources of the community. Realistically, it is clear that the DCI, as his office is now constituted, cannot be expected to perform effectively the community-wide leadership role because: ® AS an agency head he bears a numter of weighty op- erational and advisory responsibilities which limit the effort he can CGevote to community-wide management. e He bears a particularly heavy burden for the planning and conduct of covert actions. His multiple roles as community leader, agency head, and intelligence adviser to the President, and to a number of sensitive executive committces, are mutually ccnfilicting. He is a competitor for resources within the community “owing to his responsibilities as Director of CIA, which has large collection programs of its own; thus he cannot be wholly objective in providing guidance for community-wide collection.
- 16 - de contrels percent of the community's re- sources and must therefore rely on parsuasion to influence his colleagues regarding the allocation and management of the other pexcent, which is appropriated to the Department of Defense. Since Defense is legally responsible fcr these very large resources, it feels that it cannot be bound by out- Side advice on how they should be used. The DCI is outranked by other Gevartmental heads who report directly to the President end are his immediate supervisors on the National Security Council. n spite or these handicaps, the DC} has established 1 institutional devices to assist hin in leading the :ity. They are the National. Intelligence Program Evalua- staff (NIPL) and the National Intelligence Resources (HIRE). However, the principal agencies have largely ed or resisted the efforts of management by these bodies. consequence, the NIPE and the NIRB have concentrated on oping improved data about intelligence programs and 2x mechanisms for coordination. Because of their work, institutions could prove useful to a strong community er; however, their contribution to the efforts of the ently constituted DCI is small. °
-17- In the absence of an effective institutional framework ‘a N within which one official could be held responsible and ac countable for the performance and cost of the intelligence community, the United States Intelligence Board (USIB), origi- nally established to advise the DCI, has become a sort of governing body for the community. However, the USIB has proved generally ineffective aS a Management mechanism for several reasons: ° Tt is a committee of equals who must form coalitions to make decisions. © Jt is gominated by collectors and producers who avoid raising critical questions about the collection pro- grams overated by their colleagues. © as a result, USIB's collection requirements ~~ which are an cggregate of all requests, new and old -- mean all things to all agencies, thus leaving them free to pursue their own interests. ° Since policy-level consumers are not represented on the Board, they are unable to give guidance as to priority needs. Even within the Department of Defense, there is no cen- tralized management of intelligence resources and activities. Although the Assistant Secretary for Administration has been
- 18 - ‘. given a responsibility in this area, together with a small staff for resource analysis, his efforts to master the Defense intelligence complex have proved of little avail for several reasons. First, not all Defense programs come under his pur= view, and this limits his ability to do cross-program analysis. Second, he remains responsible for his functions as Assistant Secretary for Adininistration. Below the level of review provided by an Assistant Secretary, Manaz,ement leadership is still absent. The Directors of DIA and NSA are themselves unable to control the activities of the components supposedly subordinate to them but operated by the Military Services. This lack of lower-level leadership shows up in the fol~ lowing ways: e° The current failure of NSA adequately to direct Service cryptologic activities, organize them into - a coherent system, or manage ELINT activities. Large-scale Service-controlled tactical intelli- gence assets, inflated by the war and partly aupli- cating both national and allied capabilities, but programmed and operated outside of the community.
-~ 319 - © BA host of unresolved probiems concerning organization and the allocation of resources within both General Defense Intelligence Program (GDIP) and non-GDIP activities, including: duplication in the collection of ELINT internally overlapping activities among various mapping, charting, and geodesy agencies, and the several investigative services; and inadequate supervision and control of counterintelligence activities. It follows from this analysis that the President's ob- jectives can be achieved only if reform idéresses four or- ganizational i:sues: © he leadership of the intellige:.ce community as a whole. © fhe direction and control of Defense intelligence activities. © The division of functions among the major intelli- - gence agencies. “ ° fhe structuring, staffing, and funding of the processes by which our raw intelligence data are analyzed and interpreted.
Vv. SPECIFIC ORCANTZATIOUNAL ISSUE The effectiveness and efficiency of the intelligence community depend on a number of organizational variables. -Among the most important of these variables are: ° The power over resources available to the leader of the community. How much power the leader can ex~ ercise, varticularly over collection programs, will determine the size of the economies that can be achieved within the community. The size and functions of ‘the staff provided to the leader cf the community. The effectiveness of a nationar intelligence leader wi.1 depend not only on his power over resources, but also on how well informed he is about issues and options within the community, which, in turn, is a function of his immediate staff. Among the potential functions for such a staff are: -~ The planning, programming, and budgeting of resources. . —~- Control over resources once allocated. -- Supervision of RéD. -~ Inspection of ongoing programs. . -=- Production and dissemination of national estimates.
- 21 - -- Net assessments of U.S., allied, and opposing capabilities and doctrines. The future role of the United States Intelligence Board (USIB). As matters now stand, the USIB is koth a parliament and a confederate head of the community. If more authoritative leadership is established, the USIB could become simply an obstruction unless its role is specifically redefined. Since the leader of the community, however powerful, will nced close and continuing relationships with producers and collectors as well as consumers, one possibility would be to re- constiti te the USIB so as to fornalize these relation- Ships cn an advisory basis. In any case the future role of USIB should be addressed as part of a com- prehensive review of new institutional arrangements for the functioning of a reorganized intelligence community. Future D2fense Department control over the resources under its jurisdiction. Even without changes in the community as a whole, major improvements in effective- ness and efficiency could be achieved if Defense were to master its own massive intelligence operations. However, a number of community-wide issues would still remain, and substantially firmer Defense management
- 22 - of its intellisence resources could prejudice the ability of a future leader of the community to ex- ercise his own authority. The jurisdiction of either a national leader or a Defense leader over the Military Services. The three Military Services are estimated to spend about a year on intelligence activities apart from their support of the national agencies. Yet these activities, which partly duplicate national intelli- gence programs, are reviewed in isolation from them. I£ the Sezvices retain control sver the assets for this "tactical" intelliccnce, trey can probably weaken efforts to improve the efficiency of the community. At the same time, there is little question about their need to have access to the output of specified assets in both peace and war. How to combine overall re- source manacement and control with this access is an issue that will require resolution. The future functional boundaries of the major in- tellicence acancies. Collection and production . activities do not now tend to be consolidated by type in particular functional agencies. Important econo~ mies can probably be achieved by rationalizing these
activities. However, it should be noted that economy and organizational tidiness, without concomitant strengthening of the community Leadership, might be achieved at the cost.of creating even more powerful vested interests and losing diverse and usefully com- petitive approaches to collection problems. The number my nd location of natic..al analytical and estimating centers. The National estimating machinery no doubt will have to be preserved under the leader of the community in order to continue production of national estimates and inputs to the NSSM process. The continuation of DIA and the “tate Department's Bureax of Intelligence Research (INR) as producers is essential as well. Beyond that, improvement in the inteliigence product will probably depend to a large extent on increasing the competition in the interpretation of evidence and the development of hypotheses about foreign intentions, capabilities, and strategies. This may require not only the strengthening of existing organizations, but perhaps the addition of new estimating centers. In addition, some entirely new organizational units may be needed to perform currently neglected intelligence analysis functions, for example, to conduct research on im- proved intelligence analysis methods and techniques.
~ 24 - . ° The rele of tha indevendent review mechanisms. Be- p) if \ cause of the secrecy surrounding the operations of oe the intclligence community, the need for strong in- | dependent review mechanisms within the Executive Branch remains particularly impertant. Since the President's Foreign Intelligence Advisory Board (PFIAB) , the "40" Committee, the Office of Science and Technology (OST), and the Office of Management and Budyet (OMB) already exist to perform this function, the cnly issues are hew they can be strengthenca, to what extent they need larger and more pe::manent staifs, and whether new review boards should be created, espacialiy to evaluate the anauytical and estimating activities of the community. Subsequent sections do not address all of these issues; nor do they exhaust the list of organizational possibilities. Only the most salient options are presented with respect to the leadership of the community, the Department of Defense, and functional recrganization. Each is described in schematic form.
i - 25 - -~ VI. LEADERSHIP OF THE COMMUNITY \. The effectiveness of a new leader of the community will depend critically on his ability to control intelligence re- sources and make his decisions stick. . Basically, there are three different roles he can play in this respect, each with aifferent organizational implications. They are: ° As legal or direct controller of all or most inteili- gence resources. ° As de facto manager of most resources even though they are not appropriated to him. © As coordinator of resources that are appropriated elsewhere, aS now. o Although each of the three basic approaches could be in- stitutionalizead in a number of different ways, the principal eptions that accord with these roles are listed below, A Director of National Intelligence (Option #1), with ‘the bulk of the intelligence budget appropriated to his office. That office would control all the major col- “lection assets and research and development activities, which are the most costly programs of the community and are most likely to yield large long-term savings. The Director would also operate the Government's principal production and national estimating center and retain the CIA's present
- 7 26- - sonsibility for covert action programs. Defense and State ld retain production groups, both to serve their own leader- p and to provide competing centers in the analysis of in- ligence inputs to the national intelligence process. The ‘ense Department would maintain budgetary and operational itrol over only the selected "tactical" collection and »cesSing assets necessary for direct support of military cces, although these assets should be subject to the DNI's view. This option affords a number of advantages: * It pinpoints responsibility; the President knows who is in charge. It permits major economies through rationalization of . % the community's functions and through the elimination of duplicative and redundant capabilities. ©. It establishes a management system which can deal com- , prehensively with the implications of evolving tech- nology and make efficient choices between competing collection systems. .° It brings producers and collectors closer together and increases the prebability that collectors will become more responsive to producer needs. ° It allows the Director to evaluate fully the con- tribution each component makes to the final product,
- 27 - enabling ready identification of low performance elements and permitting subsequent adjustments to their mission. It provides one responsible point in the community to which high-level consumers can express their changing “needs. It facilitates the timely selection and coordination of the intelligence assets necessary to provide in- telligence support to the President in periods of crisis. - Creation of a DNI has at least five potential disadvan- tages: ‘ It gives still further responsibilities to the DCI. A major criticism of the present confederate organi- zation is that the DCI is overloaded and cannot be expected to perform well the many functions now assigned to him. As noted, these include substantive advice to the President and to several high-level committees, day-to-day management of a large operating program, appearing as a witness before Congress, and running numerous sensitive collection and covert action projects. It should be noted, however, that with adequate staff and competent deputies, the
- 28 ~- Director should be able to delegate responsibilities and ease his task. Also, under this option, the DCI's power would be commensurate with his present ‘. responsibilities. ‘N This option could generate substantial resistance from the Secretary of Defense and the Joint Chiefs over the transfer of intelligence functions cto a new agency. It would also necessitate fundamental changes in the National Security Act which might cause major congressional resistance and open debate on a range of sensitive national security issues. Even if all U. S. Government intelligence assets were- transfeired to the Director, there would remain the serious and continuing problem of finding ways to meet the intelligence needs of Defense without, at the same time, causing the Services to reconstitute their own intelligence activities, even at the expense of other programs. There could be adverse reaction from the news media and the public to a consclidation of such sensitive activities under the control of one man, even though so many of them already are controlled, in principle, by the Secretary of Defense.
It is possible that this option will continue the present dominant influence of collectors relative ‘. to producers and consumers in the intelligence —_— ~N 4 . * . process. 2 Director of Central Intelligence (Option #2), with a strong Presidential mandate and a substantial staff. NSA, and DIA would remain under present jurisdiction. The CIA would be divided -- one part supplying the DCI staff and intelligence preduction component, the other part, principally current CIA coliection organization, comorising a new agency under a separat:: director. The DCI would have senior status within the Government and would serve as principal intelli- gence adviser t» the NSC. He would produce all National Intelligence Estimates and other national intelligence re- ‘ quired by top level national decisionmakers, and would control the necessary production assets, including nNpic. This would include continued management of a national intelligence | process that involved the participation, and inputs from, other intelligence production organizations. Under Presidential directive, the DCI would review and Make recommendations to the President on the Intelligence plans, programs, and budgets of his own office, a reconstituted CIA, and the Department of Defense. He would also present a consolidated intelligence budget for review by the OMB. By
. - oyu - this means the Director would be able to guide resource allo- cation and influence tconmunity organization. Although Option #1 offers the greatest promise of. achieving the President's objectives, this option has ad- vantages over it and over the present situation in the fol- lowing respects: 2 The DCI would be freed from the day-to-day management tasks incumbent upon the head of a large operating agency with major collection and covert action re- | sponsibilities. This would enable him to devote most of his attention to substantive intelligence matters, the tasking of collecters, and community resource management issues as they relate to his production activities. . This option eliminates the present situation in which the DCI serves as both advocate for agency programs and judge in community-wide Matters, a role which diminishes the community's willingness to accept his guidance as impartial. - The reforms could be accomplished, without major legislation, by a reorganization plan and Presidential Girectives to the DCI, the Secretary of Defense, and the head of CIA. .
-31- \. © his option would offer improvements in efficiency ae \ and effectiveness without the major disruptions in * the community required under option one. NX We ' © ft would enhance the stature of the community leader while avoiding the potentially dangerous concentra- tion of power inherent in option one. Option #2 has several potential disadvantages: -« ° Responsibility for the community as a whole would be more diffuse than under option one. activivies of The ability of the DCI to supervise the detailed Lb ead ) Fo Rha nammuinity -_ © Ore, ~ cy would be weaker. : ; 4 ° The new DCI, compared to the DNI under option one, would have to rely on persuasion and the process of budgetary review rather than directive authority in order to eliminate redundant and duplicative activi- ties, resolve trade-off issues, and reduce overhead. - He would lack the ability to mobilize, deploy, and target collection assets in a time of crisis, unless given specific Presidential authority. A Coordinacer of National Intelligence (Ootion #3), who, under Presidential ma n date, would act as White House or NSC
\ - LN \ . . . . \ overseer of the Intelligence Community, directing particular aN “attention to: . - 32 - . . °. Intelligence resource and management issues. . N © Representing the concerns and needs of national policy level consumers. Evaluating the suitability of intelligence cutput in . light cf consumer demand. Under this arrangement, CIA, befense, and State intelli- gence responsiscilities would remain essentially unchanged. The Coordinater woule@ express the views end concerns of the President and the National Security Council on product needs and quality; he would provice guicance on present and guture collection priorities; he would critigue and evaluate the current performance of the community, identifying gaps and oversights; and he would conduct studies of specific intelli- gence community activities as required. But he would not be responsible for the actual preduction of intelligence. Nor would he have any direct control over resources. . This option offers two acvantayes: ° The creation of this positien would provide a means for more direct representation of Presidential in- terest in the Intellicence Community. Consumer Po
- 33 - representation in the intelligence process would be enhanced. No legislation would Le required, and the President would be spared a number of bureaucratic battles. ; \ ; The option h.:.y2veral marked disadvantages: There is the potential for unproductive competition between the Coordinator and the White House staff. Achievement of the President's management and re- source control cbjectives is unlikely.
~ 34 - we. _YII. DEPARTMENT OF DEFENSE LEADERSHIP ‘Although the President has indicated his desire to in- * stitute community-wide reform, changes within the Department of Defense alone could improve the allocation and Management of resources and reduce the overall size of the intelligence budget. Provided that care is taken in making them, these ‘reforms need not be incompatible with subsequent decisions about the governance of the community as a whole. Within the Department of Defense, there has never been an individual with formal responsibility for management of all DoD intelligence activities. The D2puty Secretary of Defense historically has heen charged with this task, but he ra 3 has very little staff to assist him and can devote only a s modest amount of time to the complex intelligence issues that arise within his domain. Consequently, if the problems of péefense intelligence are to be resolved in a fashion satis- factory to the President, it will be necessary either: to create a Director of Defense Intelligence (DDI) with specific responsibility for the Department's collection assets, or. provide the Deputy Secretary with majoz staff support in the form of an Assistant Secretary of Defense for Intelligence. Neither of these posts would be incompatible with options two and three relating to community-wide leadership reform. However, the DDI concept conflicts with option one, in which PY .
- -35- the bulk of U. S. intelligence resources would be appropria- ted . orit inte inte to a Director of National Intelligence. ‘A Director of Defense Intellicence would have the auth- y and responsibility to direct and control all Defense lligence activities. He would allocate all the Defense Lligence resources, including those for tactical intelli- ‘gence, and budgets for other national " prog and lati the tion rams under departmental jurisdiction. He would report to represent the Secretary of Defense in all matters re- ng to the management of intelligence resources; review need for, and conduct of, sensitive intelligence collec- and operations; review all Defense intelligence "reguire- ments" with resource imolications in order to evaluate need -and repr whic genc comp Getermine priorities; sexzve as the principal Defense esentative on the USIB; and monitor other DoD programs h have clear implications for the collection of intelli- e. Under this option the DDI would he able to reorder letely the Defense intelligence collection structure as Geemed appropriate. - if s The DIA would be involved in collection management only o directed by the DDI, and would concentrate on the pro- duction of finished intelligence for the Secretary of Defense and be xr ” other national consumers. a oe . ‘tt is important that the Director of Defense Intelligence esponsive to asking by the community leader, who would
\ _— be the principal substantive intelligence official of the Government. Both the community leader and the DDI should re- ‘ceive authoritative guidance about national consumer interests. -“fhis could be provided by a Council of Intelligence consti-~ tuted within the NSC and with the Assistant to the President . for National Security Affairs, the Secretary of St tate, and e- the Secretary of Defense as its members. The restructuring ‘of USIB and revision of NSCIDs can ‘help in establishing the appropriate DCI/DDI relationship. . The post of DDI has great prospective advantages: ° It would provice for the concentration or resource “management authority in one individual, which would allow authoritative comparisons ana Gecisions about competing collection programs. It would provice for the centralization of direction and control over all Defense intelligence activities, including conduct of sensitive intelligence collec- ‘tion operations. . : ~ But ‘hex are possible ‘@raxbacks as well, in that the position would: - © Concentrate great power at a single point in Defense. ‘This could possibly Giminish the community leader!s ‘access to information, as well as his ability to
- 37 - task collection systems in support of national in- telligence production, and design balanced collec- tion programs, in support of his production respon- sibilities. . ' Superimpose a large staff over those of other majorz “fntelligece managers within Defense (the Directors cf DIA, NSA, although a reduction in various coordination staffs should be possible at the same time. i ' i i i iAn Assistant Secretary of Defense for Intelligence (ASD/T) i fould act as the principal state assistant to th Secretary bfense. His responsibilities would be similar to those of bor, except that he would not exercise direct control over se intelligence collection programs, and would not be a xr cf USIB unless the Board were reconstituted to advise pcr on the allocaticn of collection resources. | This option has a number of advantages: ° {It allows for effective cross-program analysis within Defense. - a © Jt avoids the concentration of power inherent in the DDI option, if that is considered a danger.
~ 38 - ° Compared to the DDI, an ASD/I would be more likely to respond to the needs of the present DCI or the community-wide leader established under either option two or three. The post has a number of potential weaknesses in that, compared with the DDI, it would probably: . "©. Lack both the strong mandate provided to the DDI ana direct authority over Defense intelligence . activities, including those carried out by the program managers. _Make the ASD/I vulnerable to “end runs" by major components within the tefense intellicence com- munity who might wish to apse 1 iirectly to the _& Deputy Secretary of Defense.
- 39 - VIII. CHANGING FUNCTIOUAL ROURDARIES AND COSTS During the past two years, the budget of the Intelligence er ae ee oe eo es ee ee weer OF _— Pe oa eo Fe eee n a. LOL MITES Be LY 225 Dewi! LEuUUCSU, MTEASOULTCU Ali VNMNSlaMNL alia LULicie dollars, as Shown in the following chart:
- 40 - ‘To achieve further economies, particulary without major reorganization, will be difficult for several reasons. | ° Savings that we foresee as immediately feasible are likely to be counterbalanced to a considerable degree by further pay and price increases. With the heavy R&D costs for proposed new systems, there already is built into the budget a strong upward bias which may prove difficult to control, ° The U.S. withdrawal from Southeast Asia will permit reductions in SIGINT and HUMINT resources, but they will only partially offset the a»sove cost increases. © Some of the largest savings can only result from shifting and consolidating current activities in such a way as to redraw the functional boundaries of ‘the major intelligence organizations. Despite these difficulties, it is the case that func- tional boundaries can be withdrawn without a major reorganiza- tion of Defense intelligence or the community as a whole. We
a . - ghould stress, however, that actions of this character will - still leave a number of comminity-wide issues unresolved and at the same time arouse all the opposition of the military Services and the Joint Chiefs-of Staff. Moreover, with the rapid evolution of technology, further changes in boundaries -- e - and comparable upheavals -+ will probably have to follow in the future: 7 OO . ) With all these cautions, there are 2 number of specific functional actions that can be taken at the present time. Among the most important are the establishment of NSA as a truly national cryptological service with authority over all Signal i 1 i i g intelligence, 3594 the consolidation of a number of activities now operated separately by the Military Services. The effect of these changes should be to achieve economies of scale, eliminate excessive Cuplication, and promote com- petition among like activities so as to weed out the less _ productive programs. - The followings table of possible savings, while only an estimate, indicates what economies might be feasible as a 'result of redrawing functional boundaries, consolidating - activities, and eliminating duplication:
authority in instituting then. - 42 - A major issue arises in connection with changes of such scope and magnitude. It is whether we should attempt tc make the reforms now, or await more general reorganization and al~ . s low the head of the community to exercise his judgment and ad Our current judarment is that ~ reductions of this magnitude should be attempted only after .a reorganization has significantly improved the capabilities of the community to direct, control, and monitor program
age changes. We also believe that the econcmies should be ef- fected over a period of years. Without these two conditions, the reductions could prove illusory or transient, anda heavy price in disruption and lowered morale might follow. It should be noted that the anticipated savings come primarily from collection activities; major analytical and estimating capabilities are not affected. Their improvement is the subject of the next section.
BN . | ~ 44 - I™. TOWARD IMPROVEMENTS IN TYE PRODUCT Yet this stress on the technology of collection -- admittedly important -- comes at a time when improved analysis is even more important. Because of the keener competition from the Soviets, and the. narrowing gap in relative resources devoted to defense, the U. S. must refine its evaluation of foreign capabilities, intentions, activities, ana doctrines rather than assume that it has the resources to insure against all possibilities. The community must also improve jts current political esti- : 4s mates and find ways of becoming more responsive to national “consumers and their concerns. ; -Important improvements in performance may be feasible without major. reorganization. But preliminary investigation suggests that higher quality is much more likely to come ‘ about within the framework of a coherently organized com- pe munity which is focused on improving output rather tnan in- put. Indeed, it seems a fair assumption that the President would be willing to rebate some of the potential savings from the community if he had any hope of improved performance as ‘a consequence. As of now, however, he has no such assurance . . . --- .* 4
~ 45 - and may reasonably argue that, for current performance, he should at least obtain the benefit of lower costs. Even if we knew how to measure the benefits of intelli- gence, it would be difficult to relate specific changes in programs to improvements in performance. Nonetheless, ex- perienced observers believe that the following steps -- all of them comparatively inexpensive ~- should increase the use- fulness of the product to the. national leadership: Major consumer representation to and within the in- telligence comnurity, perhaps through a restructured _USIB, a high-level consumer council, or other insti- tutionulized ways of communicating consumer needs, priorities, and evaluations to intelligence producers.‘ ” Assessment of the intelligence product through guality control and product evaluation sections within the _ production organizations themselves. Upgrading existing analytical centers to increase the competition of ideas, including a DIA with improved organization and staffing as a Major competitor to CIA in the area of military intelligence. Periodic reviews by outsiders of intelligence procucts. of the main working hypotheses within the community, and of analytical metheds being used.
oN . = 46 "? -° BA net assessment group established at the national level which, 2long with the NSSM process, will keep ‘questioning the community and challenging it to re- fine and support its hypotheses. * ° Stronger incentives to attract good analysts, better career opportunities to hold them as analysts instead of forcing them to become supervisors in order to achieve promotion, and a more effective use of per- . sonnel already trained and experienced in intelli- gence. | | Increased resources and improved organizational ar- rangements within the intelligence community for . - : . $ research on improved methods of analysis and esti- mation. so oO . . . . It is probably premature to recommend the detailed measures necessary to improve the quality and scope of the intelligence product. In the near future, this issue should be considered at greater length by the leadership of a re- organized community. Indeed, the. leadership should be specifically charged with the task of product improvement aS a matter of the highest priority. What steps will prove feasible will depend on the particular type of reorganization
- 47 - “A selected, and, in the present circumstances, it may be well Neo be guided in the choice by considerations of economy in ‘the use of resources. But it should be stressed, in con- * oiusion, that improvement of the product at current budget levels is simply another way of achieving the efficiency that is so Gesperately needed within the intelligence community as it is presently constituted. - ‘\