_.. .  —  '•"■'  t'^'Tj-tf-'itrtMhtm 
a  review  of  the 
intelligence     coi^-iunit:  *  > 
March   10,    1971
TABLE  OF  CONTENTS 
I.   INTRODUCTION:   THE  COSTS  AND  BENEFITS 
OF  INTELLIGENCE   
Pago 
II .   COST  TRENDS    _ 
III .   QUESTIONS  ABOUT  THE  PRODUCT     10  a/ 
IV.   ORGANIZATIONAL  DILEMMAS    13 
V.   SPECIFIC  ORGANIZATIONAL  ISSUES    20 
VI .  '  LEADERSHIP  OF  THE  COMMUNITY    25 
VII.   DEPARTMENT  OF  DEFENSE  LEADERSHIP     34 
VIII.   CHANGING  FUNCTIONAL  BOUNDARIES  AND  COSTS     39 
IX.   TOWARD  IMPROVEMENTS  IN  THE . PRODUCV     44 
APPENDICES
I.   INTRODUCTION:   THE  COSTS  AND  BENEFITS 
OF  INTELLIGENCE 
The  operations  of  the  intelligence  community  have  pro- 
duced 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  decade  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 
^
-  2  - 
relationship  between  cost  and  ef fectiveness ,  the  main  hope 
for  doing  so  lies  in  a  fundamental  reforu  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  control  as  was  the  per- 
formance of  the  Department  of  Defense  prior  to  the  Defense 
Reorganization  Act  of  1958.
\ 
V.  II.   COST  TRENDS 
V  __________________ 
*.* 
\   To  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  194  0s  and  early  1950s  established 
the  basic  division  of  responsibilities  ameng  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.   Thus,  CIA  was  directed  t~  employ  clandestine 
agents  to  collect  "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  rsa- 
sonably  well  into  the  mid-1950s. 
Since  that  time,  these  traditional  distinctions  and 
the  organizational  arrangements  which  accompanied  them  have 
«  v
4  -  » 
become  increasingly  obsolescent.   The  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  commanders  careu  about  tactical  in- 
telligence.  Eut  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  breakdown  of  the  old  distinctions  and  the  appearance 
of  new  collection  methods  has  been  a  simultaneous  process 
raising  a  host  of  questions  about  intelligence  organization.
-  5  - 
On  the  more  mundane,  but  nonetheless 
critical  level,  questions  arise  about  the  organizational  re- 
sponsibilities for  such  topics  as 
VC/MVA  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 
resources  should  be  tasked? 
In  the  abi.er.ee  of  an  authoritative  governing  body  to 
resolve  these  issues,  the  community  has  resorted  to  a  series 
of  compromise  solutions  that  adversely  affect  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  appendices. 
1.    The  distribution  of  intelligent  functions  has  become 
increasingly  fragmented  and  disorganized. 
°  The  old  distinctions  among  national,  departmental, 
and  tactical  intelligence  are  out  of  date.   Today, 
<  t
CIA  is  as  likely  to  produce  intelligence  relevant 
to,  say,  NVA/VC  order  of  battle  as  DIA  or  MACV, 
just  as  MACV  produces  many  reports  that  are  of 
interest  to  the  national  leadership. 
\ 
°   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.
-  8  - 
2.    The  community's  activities  are  dominated  by  collection 
competition  and  have  become  unproductivGly_dunlicative. 
•   The  blurring  of  traditional  boundaries  has  encouraged 
community  members  to  engage  in  a  competitive  struggle 
for  survival  and  dominance,  primarily  through  new 
technology,  which  has  resulted  in  the  redundant 
acquisition  of  data  at  virtually  all  levels  — 
tactical,  theater  command,  and  national.
-  9  - 
•  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  command  or  tactical  level  where 
they'  duplicate  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.    The  community's  growth  is  largely  unplanned  and  un- 
guiued. 
°  Serious  forward  planning  is  often  lacking  as  decisions 
are  made  about  the  allocation  of  resources. 
0  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 
t 
collector  emphasizes  quantity  rather  than  quality.
-  10  - 
4 .    The  community '  s  activities  have  become  exceedingly  ex- 
pen: 
;ive , 
°  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. 
°   A  significant  part  of  this  cost  growth  is  attributable 
to  the  acquisition  of  expensive  new  systems  without 
simultaneous  reductions  in  obsolescent  collection  - 
programs. 
c   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. 
0   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.
-  10a  - 
III.   QUESTIONS  ABOUT  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  made  available  by  modern 
methods  of  collection,  and  the  rising  costs  of  their  acquisi- 
tion, it  is  not  at  all  clear  that  our  hypotheses  about  foreign 
intentions,  capabilities e  and  activities  have  improved  com-r 
mensurately  in  scope  and  quality.   Nor  can  it  be  asserted  with 
confidence  that  the  intelligence  community  has  shown  much  in- 
itiative in  developing  the  full  range  of  possible  explanations 
in  light  of  available  data.
-  11  - 
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  problems. 
The  community's  heavy  emphasis  on  collection  is  itself 
detrimental  to  correcting  product  problems.   Because  each 
organization  sees  the  maintenance  and  expansion  of  its  col- 
lection capabilities  as  the  principal  route  to  survival  and 
strength  with  the  community,  there  is  a  v-trong  presumption 
in  today's  intelligence  set-up  that  additional  data  collec- 
tion rather  than  improved  analysis,  will  provide  the  answer 
to  particular  intelligence  problems.   It  has  become  common- 
place to  translate  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  inevitable  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  themselves  swamped  with  data.   The  consumers,  at  the
-  12  - 
tine,  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. 
Lf  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  en  the  issues  of  concern  to  the 
tional  leadership,  and  they  continue  the  wasteful  practice 
counterpart  targeting.   Under  such  difficult  conditions, 
is  not  surprising  that  hypotheses  tend  to  harden  into 
>gma,  that  their  sensitivity  to  changed  conditions  is  not 
rticulated,  and  that  new  data  are  not  sought  to  test  them.
-  13  - 
IV.   ORGAN  I Z  AT  I O;  IAL  D I  LEMMAS 
Questions  about  cost  and  product  might  exist  oven  if  the 
ligence  community  possessed  strong  leadership.   It  is 
orthy,  however,  that  they  have  arisen  under  conditions 
;ost  marked  of  which  is  a  lack  of  institutions  governing 
;ommunity  with  the  authority  and  responsibility  to  re- 
i    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. 
j   This  lack  of  governing  institutions  --terns  fundamentally 
i 
!  i  the  failure  of  the  National  Security  Act  of  194  7  to 
i 
I 
j  .cipate  the  "constitutional"  needs  of  a  modern  and  techno- 
i  Lcally  complex  intelligence  community.   The  primary  intent 
the  Act,  understandably,  was  to  prevent  a  recurrence  of  the 
elligence  confusions  and  delays  that  occurred  prior  to 
rl  Karbor.   These  problems  were  seen  as  having  resulted 
>m  defects  in  the  central  processing,  production,  and  dis- 
\ination  of  intelligence.   The  critical  need,  accordingly, 
5  to  create  an  organisation  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  provide  for  a  mechanism  to  per- 
form these  functions  or  evaluate  the  scope  and  quality  of  its 
product. 
There  is  another  reason  why  the  1S-I7  Act  did  so  little 
to  provide  strong  leadership  for  the  community:   powerful  in- 
terests in  the  Military  Services  and  elsewhere  opposed  (and 
continue  to  oppose)  more  centralized  management  of  intelli- 
gence activities.   Partly,  this  opposition  arises  from  the 
belief  of  the  Services  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  Natioiicil  Security  Act  of 
194  7  did  stipulate  that  the  CIA  would  coordinate  the  "in- 
telligence activities"  of  the  Government  under  the  direction 
of  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
-  15  - 
community  leader  and  coordinator,  but  his  authority  over  the 
community  has  remainco  :r.ininal.   V7hile  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- wile  leadership  role  because: 
°  As  an  agency  head  he  bears  a  number  of  weighty  op- 
erational and  advisory  responsibilities  which  limit 
the  effort  he  can  devote  to  community- wide  management. 
o   He  bears  a  particularly  heavy  burden  for  the  planning 
and  conduct  of  covert  actions. 
o 
His  multiple  roles  as  community  leader,  agency  head, 
and  intelligence  adviser  to  the  President,  and  to 
a  number  of  sensitive  executive  committees,  are 
mutually  conflicting. 
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  - 
Ac   controls         percent  of  the  community's  re- 
sources and  must  therefore  rely  on  persuasion  to 
influence  his  colleagues  regarding  the  allocation 
and  management  of  the  other    percent,  which  is 
appropriated  to  the  Department  of  Defense.   Since 
Defense  is  legally  responsible  for  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  departmental  heads  who 
report  directly  to  the  President  and  are  his  immediate 
supervisors  on  the  National  Security  Council. 
n  spite  of  these  handicaps,  the  DCI  has  established 
1  institutional  devices  to  assist  V.im  in  leading  the 
:ity.   They  are  the  national.  Intelligence  Program  Evalua- 
Staff  (NIPE)  and  the  National  Intelligence  Resources 
(NIRB) .   However,  the  principal  agencies  have  largely 
ed  or  resisted  the  efforts  of  management  by  these  bodies, 
consequence,  the  NIPE  and  the  NIR3  have  concentrated  on 
.oping  improved  data  about  intelligence  programs  and 
ir  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 
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: 
°   It  is  a  committee  of  equals  who  must  form  coalitions 
to  make  decisions. 
°   It  is  dominated  by  collectors  and  producers  who  avoid 
raising  critical  questions  about  the  collection  pro- 
grams operated  by  their  colleagues. 
'•  As  a  result,  USIB's  collection  requirements  —  which 
are  an  c.ggregate  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  v;ithin  the  Department  of  Defense,  there  is  no  cen- 
tralized management  of  intelligence  resources  and  activities. 
Althouch  the  Assistant  Secretary  for  Administration  has  been
-  18  - 
N\  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  Administration. 
Below  the  level  of  review  provided  by  an  /vssistant 
Secretary,  management  leadership  is  still  absent.   The 
Directors  of  DIA  and  K5A  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 : 
•   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  dupli- 
cating both  national  and  allied  capabilities,  but 
programmed  and  operated  outside  of  the  community.
-   19   - 
°      A  host  of   unresolved  problems   concerning   organization 
and   the   allocation   of   resources  v;ithin  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  iddresses   four  or- 
ganizational  issues: 
°      The   leadership  of  the  intelligei.ee   community  as  a 
whole. 
•  The  direction  and  control  of  Defense  intelligence 
activities. 
•  The  division  of  functions  among  the  major  intelli- 
.  gence  agencies. 
•  The  structuring,  staffing,  and  funding  of  the 
processes  by  which  our  raw  intelligence  data  are 
analyzed  and  interpreted. 
«  v
-  20  - 
V.   SPECIFIC  OP.GANIZATIOn.-.L  ISSUES 
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, particularly  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  c. f  the  c or.-.mun i ty .   The  effectiveness  of  a 
national  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  R&D. 
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  both 
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  need  close  and 
continuing  relationships  with  producers   and  collectors 
as  well  as  consumers,  one  possibility  would  be  to  re- 
constit\  te  the  USIB  so  as  to  fornalize  these  relation- 
ships en  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  Dsfense  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  intelligence  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,  vhich  partly  duplicate  national  intelli- 
gence programs,  are  reviewed  in  isolation  from  them. 
If  the  Services  retain  control  ever  the  assets  for 
this  "tactical"  intelligence,  t  ley  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 management  and  control  with  this  access  is  an 
issue  that  will  require  resolution. 
°   The  future  functional  boundaries  of  the  major  in- 
telligence agencies.   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
-  2  3    - 
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  and  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  Department1 s 
Bureau  of  Intelligence  Research  (INR)  as  producers 
is  essential  as  well.   Beyond  that,  improvement  in 
the  intelligence  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.
°   The  role  of  the  independent  review  mechanisms.   Be- 
cause of  the  secrecy  surrounding  the  operations  of 
the  intelligence  community,  the  need  for  strong  in- 
'  dependent  review  mechanisms  within  the  Executive 
Branch  remains  particularly  important.   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  Budget  (02113)  already  exist  to  perform  this 
function,  the  only  issues  are  how  they  can  be 
strengthened,  to  what  extent  they  need  larger  and 
more  permanent  staffs,  and  whether  new  review 
boards  should  be  created,  especially  to  evaluate 
the  analytical  ar.d  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  w i th  respect  to 
the  leadership  of  the  community,  the  Department  of  Defense, 
and  functional  reorganization.   Each  is  described  in  schematic 
form.
-  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 
different  organizational  implications.   They  are: 
*   As  legal  or  direct  controller  of  all  or  most  intelli- 
gence  resources. 
°   As  de  facto  manager  of  most  resources  even  though 
they  arc  not  appropriated  to  him. 
°   As  coordinator  of  resources  that  are  appropriated 
elsewhere,  as  now. 
Although  each  of  the  three  basic  approaches  could  be  in- 
stitutionalized in  a  number  of  different  ways,  the  principal 
options  that  accord  with  these  roles  are  listed  below, 
A  Director  of  National  Intelligence  (Option  81) ,  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
.  -  26  - 
aonsibility  for  covert  action  programs.    Defense  and  State 
Id  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 
ltrol  over  only  the  selected  "tactical"  collection  and 
jcessing  assets  necessary  for  direct  support  of  military 
rces,  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. 
o 
e 
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  probability  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 
vith  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. 
°   This  option  could  generate  substantial  resistance 
from  the  Secretary  of  Defense  and  the  Joint  Chiefs 
over  the  transfer  of  intelligence  functions  to  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* 
trans fei red  to  the  Director,  there  v/ould  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  consolidation  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.
-  n  -  29  * 
.     -\ 
V      *   It  is  possible  that  this  option  will  continue  the 
present  dominant  influence  of  collectors  relative 
s.    to  producers  and  consumers  in  the  intelligence 
-  process. 
P   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  production  component,  the  other  part,  principally 
current  CIA  collection  organization,  comprising  a  new  agency 
under  a  separate  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  NPIC.  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
I 
•this  means  the  Director  would  be  able  to  guide  resource  allo- 
cation and  influence  -corumunity  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: 
*  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  collectors,  and  community 
resource  management  issues  as  they  relate  to  his 
production  activities. 
i 
0   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 
directives  to  the  DCI,  the  Secretary  of  Defense,  and 
*  the  head  of  CIA.
■    ■  •     -  31  - 
^     °   This  option  would  offer  improvements  in  efficiency 
\      and  effectiveness  without  the  major  disruptions  in 
\   the  community  required  under  option  one. 
■v . 
•   It  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. 
°   The  abiMty  of  the  DCI  to  supervise  the  detailed 
activities  Ox  ni^   v^^"-;j-c.^^.a»«3  ^w^  . — >  ->~    ~-.-   -u 
would  be  weaker. 
t  v 
•  The  new  DCI,  compared  to  the  DNI  under  option  one, 
would  hc.ve  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  Coordinator   of  National  Intelligence  (Potion  &3) ,  who, 
under  Presidential  mandate,  would  act  as  White  House  or  NSC
\ 'N  -  32  - 
\ 
overseer  of  the  Intelligence  Community,  directing  particular 
\ 
attention  to: 
o  .  intelligence  resource  and  management  issues. 
°   Representing  the  concerns  and" needs  of  national 
policy  level  consumers. 
■•   Evaluating  the  suitability  of  intelligence  output  in 
light  cf  consumer  demand. 
Under  this  arrangement,  CIA,  Defense,  and  State  intelli- 
gence responsibilities  would  remain  essentially  unchanged. 
The  Coordinator  would  express  the  views  and  concerns  of  the 
President  and  the  National  Security  Council  on  product  needs  ' 
and  quality;  he  would  provide  guidance  on  present  and  future 
collection  priorities;  he  would  critique  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  production  of  intelligence.   Nor 
would  he  have  any  direct  control  over  resources. 
This  option  offers  two  advantages: 
•   The  creation  of  this  position  would  provide  a  means 
for  more  direct  representation  of  Presidential  in- 
terest in  the  Intelligence  Community.   Consumer
v. 
\ 
-  33  - 
representation  in  the  intelligence  process  would  be 
enhanced. 
°   No  legislation  would  be  required,  and  the  President 
would  be  spared  a  number  of  bureaucratic  battles. 
» 
The  option  h ■..-.viveral  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  objectives  is  unlikely.
-  34  - 
..  YH,'  PEPART".EMT  OF  DEFENSE  LE?iDERSHIP 
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  Deputy  Secretary  of 
Defense  historical!"  has  been  charged  with  this  task,  but  he 
has  very  little  staff  to  assist  him  and  can  devote  only  a   * 
modest  amount  of  time  to  the  complex  intelligence  issues  that 
arise  within  his  domain.   Consequently,  if  the  problems  of 
Defense  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  major  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
% 
\ 
X  -  35-.       ■:         - 
the  bulk  of  U.  S.  intelligence  resources  would  be  appropria- 
ted to  a  Director  or  "National  Intelligence. 
A  Director  of  Defense  Intelligence  would  have  the  auth- 
.  ority  and  responsibility  to  direct  and  control  all  Defense 
intelligence  activities.   He  would  allocate  all  the  Defense 
intelligence  resources,  including  those  for  tactical  intelli- 
and  budgets  for  other  national 
'  programs  under  departmental  jurisdiction.   He  would  report  to 
and  represent  the  Secretary  of  Defense  in  all  matters  re- 
lating to  the  management  of  intelligence  resources;  review 
the  need  for,  and  conduct  of,  sensitive  intelligence  collec- 
tion  and  operations;  review  all  Defense  intelligence  "require- 
ments" with  resource  implications  in  order  to  evaluate  need 
and  determine  priorities;  serve  as  the  principal  Defense 
representative  on  the  USIB;  and  monitor  other  DoD  programs 
which  have  clear  implications  for  the  collection  of  intelli- 
gence.  Under  this  option  the  DDI  would  be  able  to  reorder 
completely  the  Defense  intelligence  collection  structure  as 
deemed  appropriate. 
The  DIA  would  be  involved  in  collection  management  only 
if  so  directed  by  the  DDI,  and  would  concentrate  on  the  pro- 
duction of  finished  intelligence  for  the  Secretary  of  Defense 
and  other  national  consumers. 
•It  is  important  that  the  Director  of  Defense  Intelligence 
be  rcsoonsive  to  tasking  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, 
"This  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  State,  and 
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  provide  for  the  concentration  of  resource 
management  authority  in  one  individual,  which  would 
allow  authoritative  comparisons  and  decisions  about 
competing  collection  programs. 
•  It  would  provide  for  the  centralization  of  direction 
and  control  over  all  Defense  intelligence  activities, 
including   conduct  of  sensitive  intelligence  collec- 
"tion  operations. 
'  But  there  are  possible  drawbacks  as  well,  in  that  the 
position  would:  .^ 
•  Concentrate  great  power  at  a  single  point  in  Defense. 
'This  could  possibly  diminish  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  major 
intellig^o  managers  within  Defense  (the  Directors 
of  DIA,  NSA,         '   although  a  reduction  in  . 
various  coordination  staffs  should  be  possible  at 
the  same  time. 
i 
Ln  Assistant  Secretary  of  Defense  for  Intelligence  (ASD/I), 
jould  act  as  the  principal  staff  assistant  to  th   Secretary 
ifonse.   His  responsibilities  would  be  similar  to  those  of 
)DI,  except  that  he  would  not  exercise  direct  control  over 
^se  intelligence  collection  programs,  and  would  not  be  a 
2r  of  USIB  unless  the  Board  were  reconstituted  to  advise 
DCI  on  the  allocation  of  collection  resources. 
This  option  has  a  number  of  advantages: 
•   It  allows  for  effective  cross-program  analysis  within 
Defense.  -   ■ "" 
°   It  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- vide  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 
and  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  Defense  intelligence  com- 
munity who  might  wish  to  appeal  directly  to  the 
Deputy  Secretary  of  Defense. 
«  *■
-    39   - 
viii.      changing  FUMCTior.'AL  p,our:nAi>ii:s  AND  COSTS 
During    the   past    two  years,    the   budget  of    the    Intelligence 
COiiutiUiii. Ly   liciS   be^n   i'euuceu /    iTieasureo   in  constant  anu   current 
dollars,    as    shown   in   the    following   chart: 
t    v
-  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, 
t 
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  SIGII1T  and  KUMIKT  resources,  but  they 
will  only  partially  offset  the  above  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
Bhould  stress,  however,  that  actions  of  this  character  will 
still  leave  a  number  of  ce:_rr.\mity-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  — 
and  comparable  upheavals  -r  will  probably  have  to  follow  in 
the  future.-  .••..'  ' 
With  all  these  cautions,  there  are  a  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  intelligence,   and  the  consoiicJation  of  a  number  of 
activities  now  operated  separately  by  th^  Military  Services. 
The  effect  of  these  changes  should  be  to  achieve  economies 
of  scale,  eliminate   excessive  duplication,  and  promote  com- 
petition among  like  activities  so  as  to  weed  out  the  less 
productive  programs. 
The  following  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:         .'  '  .  
"
V  -  42  - 
■v 
\ 
A  major  issue  arises  in  connection  with  changes  of  such 
scope  and  magnitude.   It  is  whether  we  should  attempt -to  make 
the  reforms  now,  or  await  more  general  reorganization  and  al- 
low the  head  of  the  community  to  exercise  his  judgment  and  . 
authority  in  instituting  them.   Our  current  judgment  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 
«  v
\      .  -43- 
changes.   We  also  believe  that  the  econcmes  should  be  ef- 
fected over  a  period  of  years.   Without  these  two  conditions, 
_the  reductions  could  prove  illusory  or  transient,  and  a 
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.
-  44  - 
\  - 
IX.   TOWARD  IMPROVEMENTS  IN  THE  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,  and  doctrines  rather  than  assume  that 
it  has  the  resources  to  insure  against  all  possibilities. 
.  The  community  must  also  improve  its  current  political  esti-  ^ 
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- 
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
-  45  - 
and  nay  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 community,  perhaps  through  a  restructured 
USIB,  a  high-level  consumer  council,  or  other  insti- 
tutionalized ways  of  communicating  consumer  needs, 
priorities,,  and  evaluations  to  intelligence  producers.' 
..°   Assessment  of  the  intelligence  product  through  quality 
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  products. 
of  the  main  working  hypotheses  within  the  community, 
and  of  analytical  methods  being  used.
°   A  net  assessment  group  established  at  the  national 
level  which,  along  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       t  ► 
research  on  improved  methods  of  analysis  and  esti- 
mation.    ' 
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  v/ith  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  - 
."V.  ' 
\  selected,  and,  in  the  present  circumstances,  it  may  be  waII 
to  be  guided  in  the  choice  by  considerations  of  economy  in 
\ 
the. use  of  resources.   But  it  should  be  stressed,  in  con- 
clusion, that  improvement  of .the  product  at  current  budget  . 
levels  is  simply  another  way  of  achieving  the  efficiency  that 
is  so  desperately  needed  within  the  intelligence  community 
as  it  is  presently  constituted.