23  i-V  £943 
IXI^T-A-'m/E!  TOj     Sidney  -»  Sccoir;,  r^eiitivo  ::ccrot:iiy 
National  :>cc*arity  vour.oil 
ttilliaa-  H©  Jackson.        ^  • 
CUBJ;-£?j  XnioriM  roper t  Ko„  25    relations  botscoa  £.*ocrot. 
Gp^riticna  o?id  i>ocrc"l>  Intolli.^r;co 
Xn  connection  rrith  cur  ottsdy  of  tbo  intolli£Oz:c3  operation 
of  12**9  Gcrorssant.}  p'^rticulsrly  tiioso  aC  C2A^  ra  havo  cooa  in* 
forced  tb?»t  a  plan  for  developing  cartsin  oihor  covert  operations. 
is  bclnr:  cubn-ittcd  to  tho  K5Ce    As  tts  uiidorstssd  it*  finch  operations 
Uould  ba  directed  psr  iicizlorly  tcsardx;  affording  ercoi&MsocfcRt/  to 
tba  i^-edoa-lovics  oltt&it&s  is  tliosa  centric 3  tfiich  bavo  b&tti 
ovcr^riia  07  Cccstsvisa  and  tevrard  e&sbatiiij  by  covert  jsoans  t&3 
cprcsd  of  CeccRidGfc  influojKOe 
T<q  understand  tbat  it  is  cu-^ested  that  a  Director  of  Special 
Studies*  to  ba  nocinatod  by  th^  Secretary  of  ^tato*  zn\  appointed    • 
by  tho  i£53,  tfith  a  oiaff  of  nino  rjKLbcrs  nscicnad  ifccai  tho  Dopartsioirfc 
e£  St&te,  the  «rcod  sarvicos  and  CJ&,  bo  given  tho  responsibility  to 
dovolop  &rd  giro  c?r»ral  direction  to  a  projrasof  covsrt  operations 
&a  indicated  chava*  ir^ludir.^  ircrl:  in  tho  covnrfc  po/cholosicsl  field, 
*rhlch  undo*  IKC  /a  kia  already  boon  initiated  in  CIA* 
Tha  question  of  policy  involved  in  iboco  Measures  lc  not  director 
within  our  ter=s  of  reference*    Hcr.73v.orp  those  projects  havo  an 
ispcrtaat  fcoarins  or*  tho  futura  of  tho  intolliccnco  operations  of  CIA, 
t)-ly 
> 
y
z&p  for  thio  reason,  rs  fcsl  justified  in  cementing  on  this  pSaso 
OT  tho  subject*  . 
k'o  £Tjj;C3t^  in  particular  *  that  further  ritt.cnti5.ori  shonlcl  h:, 
£lvon  to  tho  caasa  fcr  tho  csrryiri:*  out  of  tho  special  cpcsNrtio:u>  cor**. 
tccplated  r.:i>  the  rolatJ.cn  boL^n  theso  qporatiens  c.-d  ths  proper- 
conduct  of  r-ecrut  intolllsonca* 
A  ceoirai  planning  aiil  coordinating  ctaff,.  ac  prcposod  in  the? 
us;*  pl£n,  io  essential,  but  tho  coz&raliscd  control  of  cpsmtacnG  lo 
covall^  important.     In  this  dolicato  field,  actual  control  ;aiot  ba 
exorcisod  q/  tho  Eircctor,  rho  should  to  In  irsttsate  touch  not  only 
tilh  plan;  *.nd  policies  but  also  vrith  tho  datiiila  of  tho  operations. 
uo  do  not  b3licv3  that  these  igp23  of  cpsratic-fi  can  be  "farrajd"  ov.t 
to  furies  eaistinj  ar^neics  of  the  Government  without  jec-rcrdUia* 
their  eficctivonosc  a»i  involving  carious  security  rickOo    In  partis 
=d 
Ciilar^  it  TfcuM  i»  d3n£5rcro3  to  bavo  several  unrelated  and  tinocrrolats'. 
clandestine  operation  carried  out  in  cueh  sensitive  areas  f 
-  ^j  C23 
.     Thero  would  bo  duplication  of  effort*  cx-o5a~ 
■  in-j  or  irires  in  the  use  or  claEdstttina  a^nto^  end  earicue  risk  for 
the.  chaise  ciri  agents  used  in  tho  rscpectivo  cpcratlcnso    In  our 
opinion,  tho  director  cni  ntaff,  if  rescvod  fcos  cctval  operational 
ae  apparently  contemplated  under  tho  propoosd  KSO  £irectivo,  would  not 
be  cblo  to  control  this  situation. 
In  carrying  out  these  special  operation,  tho  Director  and  his 
ctafT  cheuld  have  iniL-rato  lcruxrlcdco  or  trJrnt  io  toin^  dona  in  tho  field 
of  secret  iatolli£oneo  and  access  to  all  the  facilities  vhich  my  bo 
•»  2  -
b'ullt  v?  through  a  prcporl/  cor:atitutcd  secret  ir.tolli^onco  r.Qt;;orfc« 
Secret  operational  particularlT"  through  support  or  resistance  croups^ 
proviso  ono  of  tha  cent  ivpertant  courcoa  of  coo  rot  intoHi^er.co* 
and  tho  innervation  -^imd  froa  cccrot  intelli^oaco  nust  iiw.'Gdiafcaly 
lx>  put -to  uso  in  ruidicg  aid  directing  cocrct  operations*     In  rauy 
cacoa  it  io  r>3cc3cary  to  cfatamina  r^hothcr  a  particular  a  sent  or 
chain  should  primarily  bo  used  for  secret  intollicencc  or  for  ccci*cst 
*     *  *  . 
operation.-*;,  becausa  tho  cttonpt  to  prcaa  both  uocn  cagr  caJan^r  tho 
eocurily  of  each©  •  . 
Tho  cpc-cial  eperatiers  contospl&ted  Trill  require  a  otaff  opo rating 
-£*     •  «& 
abroad  both  tn^ioni  cover*  aa  in  tho  caso  of 
In?  ^» 
Secret  intclllconaoo    Unless  t}>u  pareorjiol  Tor  both  operations  is 
ur.cor  oao  overall  control  in  rcahln^con,  oron  thcu,_.i  a  siaasuro  of 
insulation  is  provided  in  tho  field}  thcro  is  libolj  to  bo  overlapping ' 
"of  activities  and  functions- in  critical  areas  which  will  irpcril 
.cocuritvo 
£to  Allied  ojqiorioaco  in  tho  ear-ring  out  of  soarat  operations 
end  gocret  intelligence  during  tho  last  tsar  has  pointed  up  tte  closo 
ralnticnaiiip  or  ilia  fizo  Gotivitiai»P  for  oxac?>lo*  irho     ' 
had  separator  syutea*;  during  tho  xrjz'p  liavo  cots?  coris  around  to  tho  viow 
that  cocrct  intolliconoa  and  secrGt  cpGrationD  should  bo  carried  out 
tindsr  a  uir<£<j  operational  bztxd  nni  fcava  reorganized  their  services 
££ccrdincly« 
a    «    C- 
-3 <e>
7.0    Ihnt  a  r»iractor$  subjoct  to  appropriate  policy  ei&danco 
ca  c-'^;o!.-lcci  In  th.*  proposed  J^C  directive,  nhculd  to  srida  rcrrpciisibla 
for  ell  fcrrs  of  covert  activities,  insl^iin-;  secret,  intoll i^onca, 
cecret  epsrstiu::^  clanUostin-o  psychological  vor-r  ar-i  truch  ottor 
covert  cpsratioiu?  co  r,iy  bi  assisrr.d  to  i!:a  iiiroclcr  b/  th3  ?£C. 
2o    That  each  branch  or  tivjsa  covert  activities-  should  to  ikvIgs? 
a  chief  2roportin.3  to  Iho  I;ircctor» 
3»    That  tJr>  Lirectcr  should  to  i:.s:.-,cdlatol?  rpspoaoibl©  to  tte 
ISC  or  to  ths  Director  of  C2&  as  tho  flSC  eight  dntarr.inao 
c    &    & 
•  * 
%?ha  practical  effect  or  th-3  daeisioa  reached  vmlov  point  3  would 
bo  to  dctcrs-icg  TThsihcr  CJA  chould  conti'.rjo  to  bs  charged  with  ilia. 
colieotica  or  secret  iatelliconco*    It  rrorld,  iii  az&  cac35  continue 
to  bo  th<o  rccipiout  or  all  intelligence  collected  by  tho  rdrector  of 
Special  Studies,  zrti  ox-en.  if  secret  intolliscnco  v/ero  ro-soved  fran 
its  control*  CI;*  Ld^ht  Ixs  ucccl  as  a  Dccvcr:j  acency  for  the  nyit  opai-a-* 
tierce  -  -•  . 
It  had  bsen  cur  iistcntioa  to  rcsorvo  for  cur  final  report  oxs» 
roccwc—aticns  aa  to  v/hotlior  tho  collection,  of  socrefc  iirtollieonca 
fibould  or  chould  ret  continue  to  to  a  f  ur-atLon  of  tho  CX*,  as  raa  had 
trished  to  ccqploio  our  carver/  of  to  cistiro  intoHisenco  cet~\-«p 
bDf  oro  dealing  with  this  key  question* 
licsnsnrsx>  if  tha  K3C  should  r.oa1  determine  that  a  prosrcTi  of 
coorot  operations  io  to  ba  urdorteken^  and  desires  ajy  further  viowjj 
-4 
V
^•0-3  ua  r>3  to  hcnr'  ihia  voula  ttiYocfc  tho  harrJlin^  ot  roc rat  inU-llic.Gr-COp 
vo  obrOX  bo  clad  to.mitedt  a  ropcrt  on  Uiixj  cubj^ot.*      *  .    . 
CO 
*""  •  •  •        .0} 
CO        ^^ 
Hi 
o 
5-
(Page  1) 
13  May  1948 
MEMORANDUM  TO:  Sidney  W.  Souers,  Executive  Secretary 
National  Security  Council 
FROM:  Messrs.  Allen  W.  Dulles 
Mathias  F.  Correa 
William  M.  Jackson 
SUBJECT:        Interim  Report  No.  2:   Relations  between  Secret 
Operations  and  Secret  Intelligence 
In  connection  with  our  study  of  the  intelligence  operations 
of  the  Government,  particularly  those  of  CIA,  we  have  been  in- 
formed that  a  plan  for  developing  certain  other  covert  operations 
is  being  submitted  to  the  NSC.  As  we  understand  it,  such  operations 
would  be  directed  particularly  towards  affording  encouragement  to 
the  freedom-loving  elements  in  those  countries  which  have  been 
over-run  by  Communism  and  toward  combating  by  covert  means  the 
spread  of  Communist  influence. 
We  understand  that  it  is  suggested  that  a  Director  of  Special 
Studies,  to  be  nominated  by  the  Secretary  of  State,  and  appointed 
by  the  NSC,  with  a  staff  of  nine  members  assigned  from  the  Department 
of  State,  the  armed  services  and  CIA,  be  given  the  responsibility  to 
develop  and  give  general  direction  to  a  program  of  covert  operations 
as  indicated  above,  including  work  in  the  covert  psychological  field, 
which  under  NSC  4a  has  already  been  initiated  in  CIA. 
The  question  of  policy  involved  in  these  measures  is  not  directly 
within  our  terms  of  reference.  However,  these  projects  have  an 
important  bearing  on  the  future  of  the  intelligence  operations  of  CIA,
(Page  2) 
and,  for  this  reason,  we  feel  justified  in  commenting  on  this  phase 
of  the  subject. 
We  suggest,  in  particular,  that  further  attention  should  be 
given  to  the  means  for  the  carrying  out  of  the  special  operations  con- 
templated and  the  relation  between  these  operations  and  the  proper 
conduct  of  secret  intelligence. 
A  central  planning  and  coordinating  staff,  as  proposed  in  the 
new  plan,  is  essential,  but  the  centralized  control  of  operations  is 
equally  important.  In  this  delicate  field,  actual  control  must  be 
exercised  by  the  Director,  who  should  be  in  intimate  touch  not  only 
with  plans  and  policies  but  also  with  the  details  of  the  operations. 
We  do  not  believe  that  these  types  of  operation  can  be  "farmed"  out 
to  various  existing  agencies  of  the  Government  without  jeopardizing 
their  effectiveness  and  involving  serious  security  risks.  In  parti- 
cular, it  would  be  dangerous  to  have  several  unrelated  and  uncorrelated 
clandestine  operations  carried  out  in  such  sensitive  areas  [Excised] 
[ 
 Excised   ] There  would  be  duplication  of  effort,  cross- 
ing of  wires  in  the  use  of  clandestine  agents,  and  serious  risk  for 
the  chains  and  agents  used  in  the  respective  operations.  In  our 
opinion,  the  Director  and  staff,  if  removed  from  actual  operations, 
as  apparently  contemplated  under  the  proposed  NSC  directive,  would  not 
be  able  to  control  this  situation. 
In  carrying  out  these  special  operations,  the  Director  and  his 
staff  should  have  intimate  knowledge  of  what  is  being  done  in  the  field 
of  secret  intelligence  and  access  to  all  the  facilities  which  may  be 
-  2  -
(Page  3) 
built  up  through  a  properly  constituted  secret  intelligence  network. 
Secret  operations,  particularly  through  support  of  resistance  groups, 
provide  one  of  the  most  important  sources  of  secret  intelligence, 
and  the  information  gained  from  secret  intelligence  must  immediately 
be  put  to  use  in  guiding  and  directing  secret  operations.  In  many 
cases  it  is  necessary  to  determine  whether  a  particular  agent  or 
chain  should  be  primarily  used  for  secret  intelligence  or  for  secret 
operations,  because  the  attempt  to  press  both  uses  may  endanger  the 
security  of  each. 
The  special  operations  contemplated  will  require  a  staff  operating 
abroad  both  under  [  Excised   ] cover,  as  in  the  case  of 
secret  intelligence.  Unless  the  personnel  for  both  operations  is 
under  one  overall  control  in  Washington,  even  though  a  measure  of 
insulation  is  provided  in  the  field,  there  is  likely  to  be  overlapping 
of  activities  and  functions  in  critical  areas  which  will  imperil 
security . 
The  Allied  experience  in  the  carrying  out  of  secret  operations 
and  secret  intelligence  during  the  last  war  has  pointed  up  the  close 
relationship  of  the  two  activities.  [Excised]  for  example,  who 
had  separate  systems  during  the  war,  have  now  come  around  to  the  view 
that  secret  intelligence  and  secret  operations  should  be  carried  out 
under  a  single  operational  hand  and  have  reorganized  their  services 
accordingly. 
-  3  -
(Page  4) 
We  recommend: 
1.  That  a  Director,  subject  to  appropriate  policy  guidance 
as  suggested  in  the  proposed  NSC  directive,  should  be  made  responsible 
for  all  forms  of  covert  activities,  including  secret  intelligence, 
secret  operations,  clandestine  psychological  work  and  such  other 
covert  operations  as  may  be  assigned  to  the  Director  by  the  NSC. 
2.  That  each  branch  of  these  covert  activities  should  be  under 
a  chief  reporting  to  the  Director. 
3.  That  the  Director  should  be  immediately  responsible  to  the 
NSC  or  to  the  Director  of  CIA  as  the  NSC  might  determine. 
*    *    * 
The  practical  effect  of  the  decision  reached  under  point  3  would 
be  to  determine  whether  CIA  should  continue  to  be  charged  with  the 
collection  of  secret  intelligence.  It  would,  in  any  case,  continue 
to  be  the  recipient  of  all  intelligence  collected  by  the  Director  of 
Special  Studies,  and  even  if  secret  intelligence  were  removed  from 
its  control,  CIA  might  be  used  as  a  "cover"  agency  for  the  new  opera- 
tions. 
It  had  been  our  intention  to  reserve  for  our  final  report  our 
recommendations  as  to  whether  the  collection  of  secret  intelligence 
should  or  should  not  continue  to  be  a  function  of  the  CIA,  as  we  had 
wished  to  complete  our  survey  of  the  entire  intelligence  set-up 
before  dealing  with  this  key  question. 
However,  if  the  NSC  should  now  determine  that  a  program  of 
secret  operations  is  to  be  undertaken,  and  desires  any  further  views 
-  4  -
(Page  5) 
from  us  as  to  how  this  would  affect  the  handling  of  secret  intelligence, 
we  shall  be  glad  to  submit  a  report  on  this  subject. 
-  5  -