Intelligence Community Reorganization: Potential Effects on DOD Intelligence Agencies
Released: 2005-02-11T00:00:00

Summary:
Although the Central Intelligence Agency (CIA) is the best known member of the Intelligence Community, the bulk of the nation's intelligence effort is undertaken by the intelligence agencies ofthe Department of Defense (DOD). In particular, the National Security Agency (NSA), the NationalReconnaissance Office (NRO), and the National Geospatial-Intelligence Agency (NGA) (formerlyknown as the National Imagery and Mapping Agency (NIMA)) are major collectors of informationfor DOD and non-DOD consumers and absorb a large percentage of the annual intelligence budget. (The Defense Intelligence Agency (DIA), albeit a large and important component of the IntelligenceCommunity, is more directly focused on DOD requirements.)
Some Members of Congress and independent commissions, most recently the National Commission on Terrorist Attacks Upon the United States, the 9/11 Commission, have argued thata lack of coordination among intelligence agencies contributed to the failure to provide warning ofthe terrorist attacks of September 2001. In response, in December 2004 Congress passed intelligencereform legislation ( P.L. 108-458 ) that modifies the existing organization of the IntelligenceCommunity and establishes more centralized leadership under a newly created Director of NationalIntelligence (DNI).
As the legislation was being debated in the fall of 2004, attention focused on the extent of the budgetary and administrative authorities to be assigned to the DNI. Significant concerns wereexpressed by DOD officials, some Members of Congress, and various outside observers thatproviding the DNI with greater authority and control of intelligence agencies in DOD couldjeopardize the increasingly close relationship between these agencies and the operating militaryforces.
The conference committee on intelligence reform legislation ( S. 2845 ) addressed these concerns with language that gave the DNI substantial authorities over intelligence budgets, butnot operational control over their activities. The final version of the legislation also provided thatthe details of budgetary authorities to be exercised by the DNI and other cabinet officers be workedout in accordance with guidelines to be issued by the President after the DNI is appointed.
This report will be updated as circumstances warrant.

subsections: section_title: Intelligence Agencies of the Department of Defense
subsections: section_title: Defense Intelligence Agency
paragraphs: Established in 1961, DIA manages the Defense Attache System and other human intelligence (humint) collection efforts. In addition, DIA is responsible for the analysis of information from allsources in response to requirements established by the DNI, by the Office of the Secretary of Defense(OSD), and other DOD officials. DIA provides analytical support to senior defense officials, to theJoint Chiefs of Staff, combatant commanders, and joint task forces worldwide.
section_title: The National Reconnaissance Office
paragraphs: Established in 1960, the NRO designs, builds, and operates the reconnaissance satellites that collect images of the earth's surface and signals information. While the NRO is a DOD agency, itis staffed by both DOD and CIA personnel.
section_title: The National Security Agency
paragraphs: Established in 1952, NSA has two primary missions -- developing codes to protect the security of official U.S. communications and providing signals intelligence (sigint). NSA collects, processes,and analyzes foreign signals in order to support national policymakers and the operational forces.
section_title: The National Geospatial-Intelligence Agency
paragraphs: The NGA, established in 1996 and originally known as the National Imagery and Mapping Agency (NIMA), provides geospatial intelligence -- imagery, imagery intelligence, and geospatialdata and information to DOD users and other officials responsible for national security. Geospatialinformation includes topographic, hydrographic, and other data referenced to precise locations onthe earth's surface.
section_title: Intelligence Elements of the Military Services
paragraphs: The Army, Navy, Air Force, and Marine Corps have their own intelligence components that are, in general, not intelligence collection agencies, but process and analyze data, and disseminateintelligence to their respective operating forces.
section_title: National Intelligence Missions of Defense Agencies: The Role of the DCI
paragraphs: Three of these agencies -- the NRO, NSA, and the NGA -- have significant responsibilitiesfor collecting intelligence of concern to agencies outside DOD. These three agencies more directlysupport national-level decisionmakers than do the intelligence organizations of the four militaryservices and even DIA. Their efforts are described as "national," as opposed to departmental ortactical. Senior policymakers often have significantly different intelligence needs than militaryconsumers, although there is considerable overlap. For instance, national policymakers are directlyconcerned with implications of nuclear test programs in countries that are of no immediate concernto military commanders, whereas the latter could be focused on tactical threats to operations longunderway that are not the focus of high-level policymakers.
"National intelligence" is the term used for intelligence that is of concern to more than one department or agency and provides the basis for national security policymaking. Beginning in the1960's, a generation of arms control agreements between the U.S. and the Soviet Union was basedon satellite imagery that allowed U.S. policymakers to be confident of their estimates of Sovietmilitary capabilities. More recently, national systems have permitted policymakers to monitor suchcrucial developments as transfers of WMDs, ethnic cleansing in various countries, and indicationsof narcotics traffic. 
Inasmuch as national systems are expensive, and therefore not available in unlimited quantities, procedures have been developed to sort out priorities for coverage. The DCI had statutory authorityto develop collection and analysis priorities in response to National Security Council (NSC)guidance. Generally, priorities have been sorted out by inter-agency committees working throughthe DCI's Community Management Staff of the Intelligence Community and the Assistant DCI forCollection, to be implemented by national-level agencies, including NSA, the NRO, and the NGA. (2)
The efforts of NSA, the NRO, and the NGA have been funded as parts of the National Foreign Intelligence Program (NFIP) (3) the annual budget forwhich the DCI annually develops and presentsto the President. (4) The DCI also has had authorityto transfer funds and (for periods up to a year)personnel among NFIP programs with the approval of the Director of the Office of Management andBudget and affected agency heads. The Secretary of Defense was required to obtain the concurrenceof the DCI before recommending individuals for appointment as head of the NRO, NSA, and theNGA. If the DCI did not concur, the Secretary of Defense might still recommend an individual tothe President, but he had to include in the recommendation a statement that the DCI did not concur. (5)
The 2004 Intelligence Reform Act provides that the DNI will be responsible for developing and determining the NIP budget and gives him/her authority to manage appropriations by directing theallotment or allocation of such funds with prior notice to agency heads. The DNI also has authorityto reprogram funds under certain conditions and if the transfer out of any one department or agencyis less than $150 million in a single year and is less than 5 percent of the amounts available to theagency or department. The DNI will also have certain limited authorities to transfer intelligencepersonnel from one agency to another.
section_title: National Intelligence Missions of Defense Agencies: The Role of the Secretary of Defense
paragraphs: In addition to responding to tasking in support of national policymakers, all defense agenciesare closely involved in directly supporting operating military forces. The Secretary of Defense hasstatutory responsibilities for the effective functioning of national intelligence agencies in DOD. (6) Inaddition, statutes require that the agencies be prepared to participate in joint training exercises, andestablish uniform reporting systems to strengthen their readiness to support operating forces withrespect to a war or threat to national security. (7)
The Defense Department's view of the central role of intelligence is evident in its most recent planning document, Joint Vision 2020 : 
The evolution of information technology will increasingly permit us to integrate the traditional forms of information operations with sophisticatedall-source intelligence, surveillance, and reconnaissance in a fully synchronized informationcampaign. The development of a concept labeled the global information grid will provide thenetwork-centric environment required to achieve this goal. The grid will be the globallyinterconnected, end-to-end set of information capabilities, associated processes, and people tomanage and provide information on demand to warfighters, policy makers, and supportpersonnel. (8)
National intelligence is now an essential part of DOD's planning and operational capabilities and, since the Persian Gulf War, has become thoroughly integrated into combat operations. One mediaaccount of the role of national-level agencies during recent hostilities in Iraq concluded:
As with imagery and early-warning [satellite] constellations, space-based signals intelligence was far more responsive to tactical users in OperationIraqi Freedom than in earlier campaigns. National Security Agency teams and related Air Forcecryptologic units were forward-deployed to the theater of operations to assist tactical commandersin accessing and interpreting signals intelligence from orbital and air-breathingsources.
The need to integrate intelligence resources has also become more important inasmuch as 
The distinction between strategic and tactical ISR [intelligence, surveillance, and reconnaissance] systems gradually has melted away as militaryrequirements shifted from the nuclear and conventional threat posed by Russia to more diversedangers arising from rogue states and terrorists. (9)
Propelled largely by the need for precise locating data to target precision-guided munitions (PGMs), intelligence from national sources has been woven into military operations at all echelons. Senior DOD officials and military leaders emphasize their reliance on this stream of information andargue that the national agencies need to be more responsive to their direction.
Some observers have long argued that the focus on support to military operations by national agencies has led to reduced support for national-level policymakers at the State Department and theNSC. For instance, it has been suggested that this emphasis on supporting the military was acontributing factor in the Intelligence Community's failure to provide advance notice of the Indiannuclear test in May1998, at a time when U.S. reconnaissance satellites were primarily tasked withthe support of U.S. military forces operating in the Persian Gulf region. (10)
In recent years, DOD's intelligence effort was coordinated, loosely according to some observers, by the Assistant Secretary of Defense for Command, Control, Communications, andIntelligence (ASD C3I). In 2002, Secretary of Defense Donald Rumsfeld sought congressionalauthorization to establish a more senior position, that of Under Secretary of Defense for Intelligence(USD(I)); a provision was included to that effect in the Defense Authorization Act for FY2003 ( P.L.107-314 , section 901).
In March 2003, Stephen A. Cambone, who had previously served as Deputy Undersecretary of Defense for Policy, was appointed to the position and his appointment was confirmed by the Senate. His responsibilities include coordinating DOD intelligence, and intelligence-related policy, plans,programs, requirements and resource allocations. He is to "exercise authority, direction, and control"over DIA, NGA, the NRO, NSA, and other agencies. (11) He had served as a single point of contactbetween DOD and the DCI on intelligence resource and policy issues. (12)
A significant responsibility of the Secretary of Defense is ensuring that the national intelligence programs of the NIP and the joint military and tactical intelligence programs (known as the JointMilitary Intelligence Program (JMIP) and Tactical Intelligence and Related Activities (TIARA)) aremutually supportive and not duplicative. (13) Inrecent years the various sets of programs have beenbrought into closer alignment to support national policymakers concerned with details of tacticalintelligence and military commanders who need information from national systems such as satellites.
section_title: Impetus for Reform
paragraphs: In the aftermath of the attacks of September 11, 2001, a number of observers as well as the JointInquiry of the two congressional intelligence committees and the 9/11 Commission, concluded thatthe organization and management of the Intelligence Community was inadequate and that, as aresult, the DCI was unable to ensure that crucial information about the 9/11 plot was shared withanalysts who might have been able to identify the threat in advance. The 9/11 Commission took noteof
... some of the limitations of the DCI's authority over the direction and priorities of the intelligence community, especially its elements within theDepartment of Defense. The DCI has to direct agencies without controlling them. He does notreceive an appropriation for their activities, and therefore does not control their purse strings. Hehas little insight into how they spend their resources. Congress attempted to strengthen the DCI'sauthority in 1996 by creating the positions of deputy DCI for community management and assistantDCIs for collection, analysis and production, and administration. But the authority of these positionsis limited, and the vision of central management clearly has not beenrealized. (14)
The Joint Inquiry of the two intelligence committees concluded that the DCI was unable to establish a comprehensive intelligence effort against Al Qaeda even when the extent of the threat hadbecome evident to the DCI at least by 1998. It reported:
Following the August 1998 bombings of two U.S. embassies, the DCI placed Bin Ladin's terrorist network among the Intelligence Community'shighest priorities. The DCI raised the status of the threat further still when he announced to CIAsenior managers in December 1998:
We are at war [with Bin Ladin].... I want no resources or people spared in this effort, either inside the CIA or the [Intelligence]Community.
These were strong words. Rather than having a galvanizing effect, however, the Joint Inquiry record suggests that the Intelligence Community continued to be fragmented without a comprehensivestrategy for combating Bin Ladin. The Joint Inquiry concluded that the DCI was either unable orunwilling to enforce consistent priorities and marshal resources across the Community. (15)
Simply put, the Joint Inquiry argued that, although DCI George Tenet put the Intelligence Community on a war footing against Al Qaeda, his writ did not run beyond the CIA to other partsof the Intelligence Community, including the major Pentagon agencies. Accordingly, the JointInquiry and the 9/11 Commission as well as others have urged that there should be a single seniorofficial, having the title Director of National Intelligence or National Intelligence Director,responsible for managing the entire Intelligence Community, including NSA, the NRO, and the NGAalong with the CIA and other intelligence entities.
Management and budgetary authority has been seen as needed to control national intelligence agencies of the Community. The Joint Inquiry recommended the creation of a statutory Director ofNational Intelligence with "the full range of management, budgetary and personnel responsibilitiesneeded to make the entire U.S. Intelligence Community operate as a coherent whole." Theseresponsibilities would include "establishment and enforcement of consistent priorities for thecollection, analysis, and dissemination of intelligence throughout the Intelligence Community." TheDNI would have responsibilities for the "review, approval, modification, and primary managementand oversight of the execution of Intelligence Community budgets... ." (16)
The 9/11 Commission recommended that a National Intelligence Director "manage the national intelligence program and oversee the agencies that contribute to it." The NID would:
submit a unified budget for national intelligence that reflects priorities chosen by the National Security Council.... He or she would receive anappropriation for national intelligence and apportion the funds to the appropriate agencies, in linewith that budget, and with authority to reprogram funds among the national intelligence agencies tomeet any new priority (as counterterrorism was in the 1990s). The National Intelligence Directorshould approve and submit nominations to the president of the individuals who would lead the CIA,DIA, FBI Intelligence Office, NSA, NGA, NRO, Information Analysis and Infrastructure ProtectionDirectorate of the Department of Homeland Security, and other national intelligencecapabilities. (17)
A number of bills were introduced designed create to a single director of the Intelligence Community. (18) In some approaches, this individualwould have operational control of all intelligenceagencies, including those in DOD. Other approaches envision the person filling the USD(I) positionsimultaneously serving as a Deputy of the DNI/NID. Other versions do not precisely define theextent of the DNI's authorities. 
On August 2, 2004 President Bush announced his intention to seek changes in the National Security Act to establish a National Intelligence Director, appointed by the President with the adviceand consent of the Senate, who "will oversee and coordinate the foreign and domestic activities ofthe intelligence [community]." (19) The Presidentindicated that the CIA will be managed by a separatedirector. The Administration plan apparently did not envision the NID having the authority tocontrol the budgets of the various agencies nor would the NID singlehandedly submit nominationsfor agency head positions to the President. (20)
Subsequently, congressional attention focused on two bills dealing with intelligence reorganization -- H.R. 10 , introduced by Representative Hastert, and S. 2845 , sponsored by Senators Collins and Lieberman. After extensive floor consideration andamendments, S. 2845 was passed by the Senate on October 6th; H.R. 10 was passed by the House on October 8th. Both bills would have established a NID with authoritiesmore extensive than those assigned to the DCI by current legislation, but there were significantdifferences in the area of budgetary authority as well as in regard to other issues. (21) As is noted below("Recent Developments"), it proved difficult for the resulting Conference Committee to reachagreement on the language adopted by the two chambers.
subsections: section_title: Concerns About Reorganization Proposals
paragraphs: Whereas there appears to be no question that a failure to fully correlate information in the possession of intelligence and law enforcement agencies hindered the effort to uncover the 9/11 plotbefore it occurred, some observers argue that the main obstacle prior to 9/11 was the regulatoryframework that created a "wall" between foreign intelligence and law enforcement analysts -- andnot organizational arrangements per se . From their perspective, the problem in large measureinvolved the CIA and the FBI and, among DOD agencies, primarily NSA which had to work withinthe constraints of the "wall" in regard to surveillance of U.S. persons. The 9/11 Commissioncriticized NSA's "almost obsessive protection of sources and methods, and its focus on foreignintelligence, and its avoidance of anything domestic...." (22) It is noteworthy, nevertheless, that the 9/11Commission's list of ten missed opportunities for stopping the plot does not cite a misstep by NSAor any other DOD agency. (23)
Criticisms of proposals to establish a DNI/NID centered on the possibility (or likelihood) that they would undermine the authority of the Secretary of Defense over agencies that are closelyintegrated into the operational capabilities of the military services. Writing in June 2004, formerDCI Robert Gates argued that:
More than 80 percent of foreign intelligence dollars are spent by agencies under the control of the secretary of defense. Virtually all of those agencies havetactical, combat-related tasks to perform for the Pentagon and the military services, in addition tothe roles they play under the guidance of the director of central intelligence. In the real world ofWashington bureaucratic and Congressional politics, there is no way the secretary of defense or thearmed services committees of Congress are simply going to hand those agencies over to anintelligence czar sitting in the White House. Indeed, for the last decade, intelligence authority hasbeen quietly leaching from the C.I.A. and to the Pentagon, not the other wayaround. (24)
Bruce Berkowitz, who has worked with the Hoover Institution and the RAND Corporation and is currently serving as a DOD consultant, has written:
Proposals to yank intelligence organizations out of the Defense Department also overlook the role they play in combat operations today. The ability to feedelectronic data to units on the battlefield through digital pipelines is essential for the kind ofnetwork-style warfare that has proved so effective in Iraq and Afghanistan. Combat forces use moreof this data than anyone else. It seems odd that anyone would want to drag several intelligenceorganizations out of the Defense Department simply to create a new mega-organization whose mainmission would be ... supporting the Defense Department. (25) 
Another longtime observers of U.S. intelligence agencies, Richard Betts of Columbia University, wrote in mid-2004: "Trying to wrest the National Security Agency and like agenciesfrom the Defense Department ... would leave Capitol Hill and Pennsylvania Avenue awash inblood.... The military services will never accept dependence on other departments for performanceof their core functions, which include tactical intelligence collection, and politicians will not overridemilitary protests that their combat effectiveness is being put at risk." (26)
Such views were undoubtedly shared by some current and former DOD officials. In April 2004, months prior to the President's August 2nd announcement, USD(I) Cambone testified that "we earlyconcluded that the relationship between intelligence and operations was growing closer -- so close,in fact, that it was beginning to become increasingly difficult to separate the two...." Expressingskepticism about plans to increase the role of the DCI or create a DNI, Cambone argued that,"...absent the [current] deep and abiding relationship between the DCI and the Secretary of Defense,it is easy to see the ways in which seams would begin to grow up between organizations and inwhich the Department of Defense would not be benefi[t]ted and in fact, the intelligence communityas a whole be hurt by that split. So sustaining the existing relationship, we think, is essential." (27)
Cambone's testimony echoed testimony offered in 1996 by John P. White, then the Deputy Secretary of Defense in the Clinton Administration, in regard to earlier legislation to reorganize theIntelligence Community: "Confusing the clear lines of authority that currently exist would make itmore difficult for DOD intelligence elements to perform their most important mission -- supportto the warfighter. In the drive to create a strong Intelligence Community, we must not damage theintegration of military intelligence within the Defense Community." (28)
Concerns within DOD persisted. On October 21, 2004 General Richard Myers, the Chairman of the Joint Chiefs of Staff, wrote to the Representative Hunter, Chairman of the House ArmedServices Committee, maintaining that:
... the budgets of the combat support agencies [including NSA, NRO and NGA] should come up from the agencies through the Secretary of Defense to theNational Intelligence Director, ensuring that required warfighting capabilities are accommodated andrationalized and ensuring that the Secretary meets his obligations. For appropriations, it is likewiseimportant that the appropriations are passed from the National Intelligence Director through the[Defense] Department to the combat support agencies.
section_title: Potential Implications of New Approaches
paragraphs: Consideration of legislation to establish a DNI/NID focused on the extent of this official'sauthorities to coordinate all intelligence agencies, but some observers asserted that, separate fromorganizational issues, more significant steps had already been taken to improve sharing ofinformation. Implying that organizational issues were not necessarily the key factor, they assert thatthe Intelligence Community's failure "to connect the dots" before the 9/11 attacks resulted in largemeasure from barriers to communications between foreign intelligence agencies (such as the CIA)and law enforcement agencies (especially the FBI). (29) These barriers were in many cases purposefullyerected in regulations in order to ensure that foreign intelligence agencies would not be used to targetU.S. persons (as had occurred on earlier occasions when intelligence agencies zealously investigatedgroups and individuals opposed to the Vietnam War). 
After 9/11, Congress adjusted these barriers through provisions in the USA-Patriot Act of 2001 ( P.L. 107-56 ) and other legislation. The USA Patriot Act authorized the sharing of law enforcementand foreign intelligence information. In addition, the Homeland Security Act ( P.L. 107-296 )provided that the Intelligence Analysis and Infrastructure Protection component of the Departmentof Homeland Security (DHS) would receive and analyze foreign intelligence and law enforcementinformation relating to terrorist threats to the U.S. Subsequently, the Bush Administrationestablished the Terrorist Threat Integration Center (TTIC) to perform integrative analyticalfunctions. (30) Such initiatives have arguably torndown (or at least significantly lowered) the "wall"between foreign intelligence and law enforcement that may have contributed to the failure to detectthe 9/11 plot in advance. These developments, according to some observers, affect the need forenhancing the powers of a proposed DNI/NID.
Ongoing technological innovations are also, according to some observers, working to remove long-established barriers. The phenomenon of "stovepiping" whereby imagery, humint, or sigintwould be collected by separate agencies in the field and forwarded to respective Washington-areaheadquarters to be processed and analyzed before being made available to users has received muchcriticism. Stovepiping, in essence, means the control of information by collection agencies. Inevitably, processing, transmission and forwarding lead to delays and impede the effort to bring allavailable data to bear on the intelligence needs of all levels of government.
The dangers of "stovepiping" are now widely recognized. DIA Director Lowell Jacoby testified to the two intelligence committee's Joint Inquiry:
... the more widely information is shared, the more likely its hidden meaning will be revealed. Information considered irrelevant noise by one set ofanalysts may provide critical clues or reveal significant relationships when subjected to analyticscrutiny by another. This process is critical for the terrorism issue where evidence is particularlyscant, often separated by space and time. (31)
Well before 9/11, the Defense Department was taking advantage of new technologies to provide intelligence support to its forces. Real-time intelligence has been especially important in the use ofprecision munitions, allowing targeting of specific targets while minimizing casualties. Defenseintelligence agencies are acquiring capabilities to collect comprehensive data, to provideinstantaneous transmission, data storage, and immediate retrieval at all echelons. In many casesprocessing and analysis is undertaken at sites within the U.S., even Washington-area headquarters(a process known as "reachback"), and can be directly accessed by military units around the worldto support ongoing tactical operations. 
Observers, such as Berkowitz, have suggested that, rather than undertaking revision of complex statutes, efforts should be focused on generating "the political will needed to make all intelligenceorganizations implement a truly common set of security standards that balance the importance ofkeeping secrets with the importance of sharing information." (32) Berkowitz notes that Executive Order12333, which serves a charter document for the Intelligence Community, is over 20 years old andneeds revision, an effort that, in his view, "would be a faster, more effective vehicle for intelligencereform than a commission report or legislation. Such an order could also resolve the security barriersand other hurdles that currently keep intelligence agencies from working together more effectively."
In October 2002 testimony before the Joint Inquiry, DIA Director Jacoby argued that a crucial need is "to create a new paradigm wherein 'ownership' of information belong[s] with the analystsand not the collectors." Jacoby argued that the government should follow industry's practice inadopting a standard for data storage that permit retrieval from multiple users at different agencies:
If we are to achieve an end state characterized by the ability to rapidly share and integrate information, we must move toward a common data frameworkand set of standards that will allow interoperability -- at the data, not system, level.... And, thesooner the better, not just for a limited group of intelligence producers and subsets of data; itshouldn't be an elective option. Interoperability at the data level is an absolutely necessary attributeof a transformed intelligence environment because it enables horizontal integration of informationfrom all sources -- not just intelligence -- at all levels ofclassification. (33)
Many observers believe that stovepiping can be gradually overcome because of the availability of technology for rapid dissemination of operational data and the press of operational requirementsas occurred during Operation Iraqi Freedom. Outside observers argue that technological capabilitiesnow permit increasing information sharing with reliable security protection. (34)
The effort to promote wider sharing of information is widely supported, but there remain obstacles. Singling out NSA, the Senate Intelligence Community warned in 2003 of continuingresistance to such innovations:
The Committee has become increasingly concerned in recent years about bureaucratic and cultural obstacles to effective information and data sharing...
Cutting-edge analytical tools, many of which are already in use in the private sector, increasingly involve large-scale, multi-database analysis and patternrecognition. Using such approaches within the Intelligence Community, however, cannot proceedfar without a significant revision of current orthodoxy as to information 'ownership' andcontrol. (35)
The Intelligence Authorization Act for FY2004 ( P.L. 108-177 , section 317) established a pilot program to assess the feasibility of permitting analysts throughout the Intelligence Community toaccess and analyze intelligence from the databases of other elements of the Community. Inparticular, the provision was intended to permit analysts in CIA and DIA to access sigint containedin NSA databases, but not published in formal NSA reports. 
The 9/11 Commission, taking note of this ongoing process, urged that it be accelerated. It recommended that the President lead a "government-wide effort to bring the major national securityinstitutions into the information revolution." (36) The Commission indicated a role for the NID and theSecretary of Homeland Security, backed by the Office of Management and Budget, to set commonstandards for information in the Intelligence Community, other public agencies, and relevant partsof the private sector. The Commission did not specifically address the issue within DOD. Provisionswere, however, ultimately included in P.L. 108-458 directing the DNI to establish uniform securitystandards, common information technology standards, and policies and procedures to resolveconflicts between the need to share intelligence and the need to protect intelligence sources andmethods.
section_title: P.L. 108-458, the Intelligence Reform and Terrorism Prevention Act of 2004
paragraphs: The role of the NID/DNI received considerable attention during floor consideration ofintelligence reform legislation in September and October 2004. Some Members sought to providegreater authority to the position, others preferred more limited changes to current authorities. OnSeptember 29, the Senate voted to table an amendment (No. 3706) that would give the NIDauthority, "to supervise, direct, and control the operations" of the major DOD intelligence agenciesas well as the CIA, but ultimately the Senate bill sought to create a stronger NID/DNI than wasreflected in the House bill. (37) The ensuingconference reportedly had difficulty in reaching agreementon the issue, but many of the media accounts of discussions did not provide precise treatments of thearguments.
After further consideration, the conference version of S. 2845 was passed by the House on December 7and by the Senate the following day. The legislation was approved by thePresident on December 17, 2004. In the signing the bill, President Bush stated:
It will be the DNI's responsibility to determine the annual budgets for all national intelligence agencies and offices and to direct how these funds arespent. These authorities vested in a single official who reports directly to me will make all ourintelligence efforts better coordinated, more efficient, and moreeffective.....
The new law will preserve the existing chain of command and leave all our intelligence agencies, organizations, and offices in their currentdepartments. Our military commanders will continue to have quick access to the intelligence theyneed to achieve victory on the battlefield.
Provisions regarding the budgetary authorities of the DNI and other senior officials were complex and reflected the fact that significantly different views remain. The conference report for S. 2845 authorized the DNI to
provide guidance for National Intelligence Program budget to heads of departments containing intelligence organizations;
"develop and determine" an annual consolidated National Intelligence Programbudget;
present National Intelligence Program budget to the President for approval(together with dissenting comments from heads of departments containing intelligenceorganizations); 
participate in the development by the Secretary of Defense of the annualbudgets for DOD-wide and tactical military intelligence programs;
ensure the "effective execution" of annual intelligencebudgets;
direct the allotment or allocation of appropriations through the heads ofdepartments containing intelligence agencies or organization
provide "exclusive direction" to the Office of Management and Budget (OMB)regarding apportionment and subsequent allocations of appropriated funds;
transfer or reprogram funds from one program in the National IntelligenceProgram to another (with OMB approval and subject to other restrictions);
transfer personnel from one intelligence agency to another for up to two years(under certain conditions). (38)
Taken together, these authorities will provide the DNI with significantly greater budgetary authorities than possessed by the DCI. In particular, provisions authorizing the DNI to directallocations and allotments of appropriated funds gives the DNI significant leverage in the acquisitionand program management efforts of intelligence agencies in DOD. (39) Some Members believed thatthis leverage would amount to a degree of control inconsistent with the Secretary of Defense'sresponsibilities for managing intelligence agencies in DOD that also support the combat forces. Although the proposed language clearly establishes extensive budgetary authorities for the DNI,other factors such as the role of the personalities of the respective officials, the priorities of theincumbent administration, and the influence of congressional guidance will also have significantinfluences.
Moreover, the final version of the legislation includes a provision (Section 1018) that requires the President to issue guidelines to ensure the effective implementation of authorities granted to theDNI, the Director of the OMB, and cabinet heads "in a manner that maintains, consistent with theprovisions of this act, the statutory responsibilities of the head of the departments of the UnitedStates Government with respect to such departments." The guidelines are to be issued within 120days of the appointment of the first DNI. Some observers suggest that this provision provides anopportunity for renewed consideration of the issues that made passage of P.L. 108-458 difficult. (40)
Media accounts indicate that another key issue was day-to-day operational control of the collection assets of intelligence agencies in DOD. Some observers suggest, however, that this issueis not clear-cut. The legislation gives the DNI authority to apportion funds and the apportionmentprocess affects the timing and rate of the flow of funds. Nevertheless, the authority to apportion andallocate appropriated funds does not automatically translate into the authority to direct day-to-dayoperations. There are already well-established distinctions between responsibilities for acquisitionprograms on the one hand, and responsibilities for operational command on the other. The militarydepartments (the Departments of the Army, Navy and Air Force) have major responsibilities for theacquisition of systems to be used by the operating forces, but ongoing operations are controlled bythe unified commands (e.g. Central Command, European Command, Pacific Command) at thedirection of the Secretary of Defense and the President. Analogously, the DNI would haveresponsibilities for acquisition of systems that are part of the National Intelligence Program; theheads of defense intelligence agencies would be responsible to the Secretary of Defense for operatingthe systems.
Day-to-day tasking of the national systems operated by intelligence agencies in DOD has been coordinated among "consumers" from throughout the Government, including DOD, the StateDepartment, the While House, etc.. The DCI has long had authority to coordinate such tasking inresponse to NSC guidance. (41) For geospatialimagery, for example, the Source Operations andManagement Directorate of NGA routinely meets with representatives of agencies outside DOD tocoordinate production priorities. NGA acknowledges that authority to establish priorities derivesfrom the authorities of the DCI rather than solely from those of the Defense Department. (42) Similararrangements exist in regard to other intelligence disciplines, such as signals intelligence. 
The Intelligence Reform Act also established a Joint Intelligence Community Council (JICC) composed of the Secretaries of State and Defense and other senior officials, to advise the DNI onestablishing requirements, developing budgets, financial management, and monitoring andevaluating the performance of intelligence agencies. The statute also provides for the submissionof advice or opinion of individual members of the JICC to the President along with therecommendations of the DNI. (43)
Past relationships among defense agencies, the Office of the Secretary of Defense, and the Intelligence Community Management Staff have been complex; the new legislation establishes aDNI with stronger budgetary authorities than possessed by the DCI. Nevertheless, the requirementfor close coordination between the DNI and DOD agencies will remain. Given the need for agenciesto meet different needs of different parts of the Government, observers believe that this newrelationship will also be complicated and that considerable time will be required to developcoordinative procedures.