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DATE: 03/10/1976

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Vol. 2 OF 3

Ohr Knitri Statra Sruate

NATTONAL SECURITY INFORMATION

Unauthorized Disclosure: Subjects

to. Criminal Sanctions.

R2829

Report of Proceedinge

Hearing held before.,

Senate: Select Committee to Study: Governmental

Operations: With Respect to Intelligence Activities

Wednesday, March 10, 1976

Washington; D: Che

* (Stenotype Tape and Waste turned over

- to the Committee for destruction)

WARD & PAUL

410 FIRST STREET, SE

WASHINGTON, D. C.: 20003

(202) 544-6000

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FOREIGN AND MILITARY SUBCOMMITTEE MEETING

Wednesday, March 10, 1976

- -

United States Senate,

Select Committee to Study Governmental

Operations with Respect to

Intelligence Activities,

Washington, D. C.

The Committee met, pursuant to notice, at 2:45 o'clock

p.M., in Room S-407, the Capitol, the Honorable Walter D.

Huddleston presiding.

Present: Senators Huddleston (presiding), Hart of

Colorado and Mathias.

Staff: William G.

Miller, Staff. Director, and David

Aaron, Joseph diGenova, Lynn Davis, William Bader, Elizabeth

Culbreath, Charles Kirbow, Rick Inderfurth, Pat Shea, Elliot

Maxwell and Al Quanbeck, Professional Staff Members,

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And then the question is whether or not there is a prohi:

bition on printing in the English language.

Mr. Bader. And as I heard the consensus this morning,

we would not move to that recommendation: for a prohibition.

I did_not hear whether on the distribution this would be by

law, though I took it it was to be by law, though I can be

corrected on that.. I don't think we addressed that this morning.

Mr. Kirbow. Mr. Chairman, on these that we considered

to be rather - that we have a fairly light record on or that

we are not too sure what the future holds, one of the members

that I rode over with on the car suggested that perhaps in those

instances we could recommend fairly strongly whatever we want

the followon people to do to ensure that

the recommendation

does not create havoc within the Agency or does not leave the

rights of citizens unprotected.

But that is not a cop out. It is something that you

frequently do, say, let us reserve this for the permanent

oversight committee or for whatever other group. We may have

all the information we need.

Senator Huddleston. Let them make the determination whether

or not it-should be a statute.

Mr. Kirbow. Determine whether in the law whether it is

working all right under

the set of regulations.

Mr. Bader. Mr. Chairman, may I say in this instance in

the publishing trade there is no lack of record? The evidence

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we•

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PROCEERINGS

Senator Huddleston, I call the Committee to order.

Mr. Aaron. I believe Bill Bader had the temerity to

summarize where we stand.

Mr. Bader. Mr. Chairman, where I think we are at the

moment is taking the three major issues before the Subcommittee

in the order they were presented, and discussed this morning,

the first being the academic issue, and as I heard the Subcom

mittee this morning, then I will have another go at the

options, give enough options in the option paper and bring it

back before the Committee for a further look before we go

Senator Huddleston:

By Friday.

MI. Bader. By Friday, without question.

I think by this time we will all have -- we will try to

include.a. positive.option,.that is.to.say.to.approve if not

applaud. the.expanded.efforts.of.FRD to undertake these activi-

ties, or at.least.to endorse them.

Now, going to the second was the covert use of books and

publishing houses. We discussed two recommendations: one which

I believe here the Committee has agreed to, and that is a

prohibition on the distribution of subsidy of any books,

magazines or other publications not attributed to the CIA in-

side the United States.

Senator Huddleston:

I think we can all accept that, can't

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and inquiry into it has been thorough, and I think we know this

well. There is no dispute from the Agency.

Senator Huddleston.

well, is the law inconsistent with

the statute on the information service?

MI. Bader. It is the same thing. I would recommend,

Mr. Chairman, that this would be by law, by statute.

Senator Huddleston. On the publication.

Mr. Bader. On the publication.

Senator Mathias.

I would support that.

Senator Huddleston:

I think Gary Hart would also, so I

think we will make that

recommendation, that this one on the

academics is the one we are not sure of.

MI. Bader.. That's the one we would go forward with, and

now we are moving

.to -

I would also reiterate that in our

session the other night

I took it as agreement that the

recommendation by statute the CIA should be prohibited from

making operational use of all educational and cultural .

grantees of all U.S. Government sponsored programs, this was the

issue which was raised of government funded programs

such as

the Fulbright program.

Senator Huddleston

And that's either already a regulation

or a directive or something to that effect.

Mr. Aaron.

Certain

categories.

Mr. Bader. Certain

categories.

Mr. Kirbow. That is brand new ground.

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MI. diGenova. The John McCloy exceptions to that rule, they

are the only ones that are protected.

Mr. Aaron. That justifies Charles' view that there are

some similarities between Ford Foundation and Government

sponsored activities.

MI. Bader. Where our discussion was left before lunch

was on the question of the covert use of U.S. journalists and

media institutions, and as it was laid out, it was indicated

that the CIA's intended internal prohibition on the use of the

media extended to the internal prohibitions on the use, opera-

tional use of individuals, American and foreign, who were

accredited to American media organizations.

As I heard it this morning, what we were discussing and

moving to was to extend that prohibition to cover all American

individuals and media organizations, and that the question then

was whether this would be recommended to be something done in

law or a recommendation, or an insistence, if you will, to the

Agency that it further amend its

internal directives, its

50-10, to put all media personnel, American media personnel on

the prohibited list, and that is I think where we were.

Senator Huddleston. I think that's an accurate statement.

That's where we were.

I had expressed a thought that I thought that it ought to

be expanded to include all, but we should hold off on the

statute business for the time being.

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Senator Mathias.. My role here seems to be the Devil's

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advocate.

Senator Huddleston. Good.

Senator Mathias. There is no question about the writing

American press or the value in print domestically. Maybe the

role, any legitimate role that news men could, journalists,

writers could fulfill is available through the information

agencies, USIA and groups of that sort.

So does anybody know whether there is any real need

for allowing some latitude, which is not covered by situations

that can be envisioned under USIA or other programs?

Mr. Kirbow. Well, Senator, the one that I discussed

earlier

that I probably didn't make my point well because no one

seemed to have picked

it up, is we do, by the words here, if I

understand Mr. Bader, prohibit an American citizen living in

Brussels and working for a local newspaper there from having

anything to do with the CIA.

Senator Huddleston. No we don't, do we?

You mean by his extension?

MI. Kirbow. Yes, sir.

Senator Huddleston.

But not by --

MI. Kirbow. But wasn't that what you wanted to put in

the law, that you didn't know if you wanted --

Senator Mathias. This is the point I wanted to raise

here.

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Mr. Kirbow. That kind of relationship is something that

we should stay away from because I don't see any harm in it,

nor do I think the record demonstrates any harm in it. I don't

see - I don't know how in the world this person doing that

taints the minds of the American reading public, which is

apparently what you are trying - you're not trying touprotect

the newsman. You are trying to protect the reader who doesn't

know that what he's getting is being spoonfed to him from the

CIA, and I don't know why we would be so concerned about

protecting newsmen from working, or prohibiting them from

working, because I think they have a right to do that as

American citizens, just as they do to work with the Department

of Defense or any other agency.

Mr. Bader. You would then rescind the Agency's standing

prohibition?

Mr. Kirbow. I just don't think you ever prohibit it in

law.

Mr. diGenova. Are you talking dout an affiliated,

accredited journalist, because that's what the Agency regulation

deals with. It doesn't deal with an American citizen. It

deals with an accredited

person, whether he is a foreign

national or an American.

Mr. Bader. To an American media organization.

Mr. diGenova. But that's not the example Charles gave

you.

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Mr. Kirbow. Well, perhaps I misunderstand the extension

that you, your full recommendation.

Do you want to go beyond where the administration is in

their position?

Mr. Bader. I am recommending to go beyond where the

Administration is at this stage, to extend the operational

prohibition on the part of CIA to use American -- Americans in

the media -

Mr. Kirbow. Wherever located.

Mr. Bader. Where they are using them undercover, at this

stage, to the extent that it is a cover proposition.

Senator Huddleston. Even if they are in foreign media?

MI. Bader. Yes, sir.

Senator Huddleston. And even though all of their

activities are related to foreign; they are not writing for

American news services.

Mr. Bader. Alternately,' they could be with American

media organizations.

Mr. Kirbow. Mr. Chairman, I don't think there is a single

shred of evidence on our record that that is in any way wrong

doing or in any way adversely affects the rights of American

citizens. Clearly it will prohibit or could prohibit in the

future the proper use of an individual. that could be essential

to the intelligence collection processes of the CIA, and it

singles out a

specific agency which is not doing any harm to

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the American citizenry, and says no, you cannot do this because

you

happen to be a secret organization.

Senator Mathias. If

I wanted to do it, Charlie, I think

I could work out a scheme. I would hire a prominent American

columnist to go and live in Paris, as Art Buchwald did, for

example.

Mr. Kirbow. And to pick off his columns and run them

in the New York Times.

Senator Mathias. And run them in the Paris Trib first..

and then let the domestic press pick him up.

Mr. Kirbow. But if he's in the Paris Trib, that's

an

affiliated U.S.--

Mr. Aaron.: Well, suppose he writes for the Financial

Times?

Senator Mathias.

well, you could work out an echo program

if you wanted.

Senator Huddleston.

Well, the basic point, instead

of picking instances, it seems to me, is whether or not as an

official policy of the United States Government we want an

institution such

l as the press with all it means and all it is

supposed to be in American with its constitutional provisions and

whatever, to be subverted to the secret, clandestine operation

that it can; Anytime we put any prohibition anywhere, we are

eliminating somebody as a potential agent. You can't use

that as a guideline.

ПОСЕРЕУ

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Mr. Kirbow. These people are not necessarily subverted.

Senator Huddleston. I'm talking about the institution of

the free press being subverted, not the individual..

Mr. Kirbow. I'll extend that one further. I don't see

how using.

them for cover, which has no direct effect, like the

example I guess you gave, Senator, of a vice president of a

bureau of some sort who has nothing to do with the writing or

editing or anything; he is the business head of the operation

just like any other corporation. This thing extends to that.

Senator Huddleston. He may have something do : with the

selection of the people who do write.

Mr. Kirbow. Well, if you could give us an abuse that we

are trying to correct, or

some reason for it?

Mr. Bader. It's not a question of abuse, it's a question

of the use, the operational use of an institution such as

the press for operational purposes.

Mr. Kirbow. Well, explain then, and perhaps I'm going -

explain the sanctity of the press if it is not to protect an

uninformed reader from having his mind tainted by the relation-

•ship. What is the sanctity of the press as an organization?

It is not sanctity like the church and state. I just don't

see the record for this.

Senator Huddleston.

Well, the clergy and the press I think

are institutions.

MI. Kirbow.

Well, I think the clergy and maybe the

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academic, like you say, that teaches the student directly,

but a businessman who happens to have elected going into the

business of running a newspaper or a magazine, to be singled

out and say you as a patriotic American are proscribed against

doing any business, and if you are going to do it with an agency.

you should do it with the whole United States

Government. I"

don't see how we can single out the CIA and not single out

military or FBI.

Mr. Aaron. Well, I think the domestic group will have -

may well have: some: recommendations regarding the FBI's covert

use of American media.

Mr. Kirbow. Well, domestic media, obviously.

Mr. Aaron. I would like to say, to take Charles'

example of an American working for a foreign press, and what

the problem is. I think the problem is that you have two

kinds of problems with the press. One is the fact, if it is

operating domestically, if it is. working.for American media

institutions, it is clear that they are subject

• to some

manipulation or at least questionable manipulation, and there

are issues in people's minds as to its integrity.

Now, the question goes beyond that to what about people

who might be working for some foreign - American journalists,

American writers or what have you, working for foreign media

institutions. There you have a somewhat more extended

situation. But it seems to me that what

you have is the

TAI COTT

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possibility of the American press getting discredited, having

problems of being able to perform its normal functions in the

world and performing in the United States because

it is part

of a clandestine intelligence organization.

Mr. Kirbow. Don't you think that's an individual right

that a person has the right to exercise both ways, instead of

one way?

Mr. Aaron. Charles, what I think I have told the

Committee, I have a real problem with the concept of the

American people having the right to spy, somehow, and these

prohibitions don't go to what people are allowed to do on

the outset. They go to what the Government is allowed to do.

Mr. Maxwell. Well,

let's take a different kind of

example.

What would happen if in some way -- and it's not, I think,

impossible to imagine -- an American citizen was writing full

time for the Communist Party paper in Italy or Portugal or

France.

Now, that obviously would be covered by the example that

Bill has provided as a prohibition.

There are two questions. One is whether the person has

any real operational use that you want to preserve, and second,

whether it goes to the question that David presents, which is

the possible contamination of the American press, which seems

a difficult extension in that example, as well as the possibility

TAGEDET

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of distortion, the flowback problem in America.

And the second problem seems to be, with an example like

that, is that it seems to - there is very little stock in the

argument, because the argument about distortion of what goes

on in foreign countries and people's perceptions is at the heart

of the question of whether the CIA or any government agency

should be engaged in propaganda, because it is quite possible

the propaganda gets picked up in the same way, and the questión"

is obviously of line drawing: how do you want to draw the

line.

It strikes me that there may be better ways to draw

the

line than the suggested

prohibition that Bill has

for any

American, regardless of

status, or who they write for or what

they are doing.

Mr. Kirbow. By having citizenship as an American --

MI. Bader. Well, you misunderstood me.. I was putting out

the various possibilities.

Let's turn to the text for just a moment and maybe that

will help.

First turn to 61. Let's try to

get some idea of what the

problem is before we get to the semantics of it. All right,

just let me go through this, then we'll see what is actually

being recommended here.

I have confused you, obviously, by giving a series of

possibilities, not what the recommendations are.

TAn GAI

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"Ten U.S. news organizations and five U.S. publishing

houses provide cover for CIA agents abroad. Four of the

organizations do not know that they provide this cover."

Then there are some examples.

Mr. Kirbow. Meaning management or individual?

MI. Bader. Management.

Mr. Kirbow. At any level.

Mr. Bader. At any levei.

MI. Kirbow. All right.

Mr. Bader. Then there are some examples of the kinds of

relationships that the CIA officer engages in intelligence

collection under cover as a roving international news corres

pondent, a CIA officer under cover as a European representative

of an American company

while working as a stringer for a

United States publication engages in intelligence collection

and covert action. In this case the company is aware of the

CIA relationship while the publication is not. Bona fide

journalists who regularly provide the CIA with intelligence,

some are paid regularly while others are

not. In one case

the journalist is apparently not aware that the U.s. embassy

official to whom he is providing information is

actually a

CIA officer.

Now, what the recommendation here on 64, or the bracketed

recommendations -- and I'm sorry. I created this situation

by giving. various options - by statute the CIA should be

TOO CIAOET

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prohibited from using American media organizations for

cover. That is the extent of it.

What is the trouble,

JOE?

Mr. diGenova. That seems to be somewhat - that seems

to be a back off from what the Agency prohibits as well. I mean

do you want to make a recommendation saying that the Agency's

prohibition against using Americans who are accredited -

Mr. Bader. No.

This is the additive. The recommendation here is to

take the Agency's prohibitions which go to the question

of.

American and foreign journalists, accredited to American

media organizations, and extend it to what is not covered under

those prohibitions, which is the use of these American media

organizations for cover purposes.

Mr. Maxwell. Is it clear that people who are in media

organizations are not accredited to those organizations?

Mr. Aaron. If they were, then they would be covered.

If they are accredited journalists, then they would not.

Mr. Maxwell. So the issue is whether individuals who

don't write

Mr. Aaron. But may edit.

Mr. Maxwell.

But may edit.

Ms. Culbreath.. Or may type it up.

Mr. Aaron. Or may type it up.

Mr. Kirbow. Well, is this the same point that we're

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talking about less than

25 people, where you are going to make

statutory prohibition

against use of all people in that

category because on page 61 it says, "of the 65 Americans

employed by the CIA in the media field, only a little over

one third are journalists; another third are CIA agents operat-

ing under media cover, and the remaining individuals are either

employed as CIA media proprietaries abroad or are propaganda

writers and consultants."

So we are really talking about making a major prohibition

against a segment of our society where at the present time there

is less than 25 people who have any direct contact with

1 the

reading mind, apparently.

Senator Hart of Colordado. I think, Charlie, it's called

a principle. If it was only one person, You've still got the

problem. I don't think it is the quantity.

Ms. Davis. Bill, in your examples on 61, the first one

at the bottom, would that now be covered under your prohibition?

CIA officer engages in intelligence collection under cover as a

roving international news correspondent?

Mr. Bader. I can't remember from the text here whether

the man is accredited or not.

If he is accredited, it would be covered.

Ms. Davis.

If not;

he is not additionally covered by your

prohibition.

Senator Huddleston.

This does not extend to the example

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that you gave, Charlie.

Mr. Kirbow. No, sir,

it doesn't here.

MI. Bader. Only if he is affiliated with that group.

Mr. Kirbow. His affiliation covers anybody who is an

American citizen is forever and hereafter would be prohibited, if

it goes into the statute

from dealing.

Mr. diGenova. That!

s only one of the possibilities.

Mr. Kirbow.

That's one of those recommendations based

on investigation.

Mr. Bader. I wasn't recommending that. I was saying that

was one of the possibilities of the whole list.

Senator Huddleston.

But the recommendation at

the top

of 64 doesn't cover an American citizen who is using the

foreign media as cover.

Mr. Bader. This would not cover an American citizen who

is, let's say, is working for Stompe, Or Le. Monde, and who is

not accredited, and at the same time is not accredited to

an

American media organization.

•It does not cover an American citizen who is a stringer to

a Latin American newspaper unless he is accredited to an American

media organization.

Mr. Kirbow.. Let me

try one more time, then, to state the

position of not Senator

Tower in this case, but another Senator,

as I indicated, spoke to me on this very subject, and indicate

to you that we not do to harm or to prevent the use by the

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agency of certain people unless in some way that use affects

the rights and/or in some vague way affects the mental processes

to the detriment of the American citizenry, that we don't

concern ourselves with passing laws to protect the person who

reads something that these people do. If you do this, you open

that can of worms which gets you into a prohibition against any

work in the press

or elsewhere in a propaganda fashion.

Now, the Committee may decide that propaganda is in fact

something that we should prohibit by law, but doing this

piecemeal like this, it does just exactly that. I see nothing

in our record that indicates that the use of certain of

these

people overseas or for cover in any way - there is not

any evidence that it has adversely affected

the rights of the

citizens of the

United States. There is a potential for

abuse in practically anything secret and covert.

Senator Huddleston. I don't believe the recommendation

at the top of page 64 violates what you have just said.

Mr. Maxwell: I would not think that --

MI. Kirbow:. Well, it says, Mr. Chairman, that by statute,

by statute, which means by law, the CIA should be prohibited

from using American media organizations for cover. We apparently

have 65 people, a portion of which are being used for cover,

and apparently they consider them to be an essential asset, or

they wouldn't be using them.

•Is that correct, Mr. Bader?

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Mr. Bader. The CIA?

Mr. Kirbow. Yes.

Mr. Bader. I would assume that they would have extended

their prohibition to this, or on the other hand one could argue

I don't know what their motives were.

It could have been they

felt that this, the first step they took was the one that was

dealing with what the public was demanding.

Mr. Kirbow. Well, I really don't see anything in our

record or any evidence that they have given us or anything

other than a stäff position on this which we are trying to

sell the Committee that this is a harmful procedure.

Senator Huddleston. What this does is extends beyond

the practice of journalists to any other person, be it an

executive or clerk or typist of whatever, on the assumption

that you can't be a little bit pregnant.. If the agency is

going to be subverted anywhere, not the agency, if the insti-

tution of the press is, that it is going to be subverted..

MI. Bader. Mr. Chairman, the Agency has accepted the

basic principle, because it has removed from its list of

operational assets a rather larger number than this would

call for.

Mr. Kirbow. But if I hear correctly what you are saying

then, we are out to protect the American media from being made

pregnant by the CIA and not worrying at all about the reading

public of the other, but just the media.

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Senator Huddleston. The assumption is if the media of

the press is subverted, that it will affect the citizens, or

they will suffer.

Senator Hart of Colorado. Mr. Chairman, in the interest

of expedition, I move the passage of these three

recommendations.

Senator Huddleston. All right.. Let's see what.

the three

are.

Mr. Aaron. Well, let me summarize the first one. I think

we have agreed the first is that the prohibition on distribu-

tion of CIA funded, supported, subsidized and so forth, that

that be prohibited within the United States.

Mr. Inderfurth. Printed.

Mr. KirboW. Excuse

me.. Not printed.

Mr. Aaron.

The word "printed" dropped out for the following

reason. One, it makes it easier to prohibit the distribution

if you don't identify where the printing is taking place, and

secondly, while there is no printing going on here, the

question really goes to distribution. I think that was the

concurrence of the Committee:

The second point is that the prohibitions of - that the

Agency now has upon itself, be made law.

Mr. diGenova.

On the use of media personnel and

institutions?

Mr. Aaron:

On the use of media personnel and institutions,

and the third point is that it be extended to say by statute

TARCE

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the CIA should be prohibited from using American media organiza-

tions for cover.

Senator Huddleston. Well, the style of this ought to

be changed, it seems to me, because one of the recommendations,

instead of listed under recommendations, is the last paragraph

on 63, is that correct?

Mr. Aaron. Yes, that would be picked up as a recommenda-

tion, that is correct.

MI. diGenova. Plus the other one, which is not on 64.

Mr. Aaron. Well, the one on 64, the bottom one comes out.

Senator Huddleston. Right.

Senator Mathias. Before you leave that, as a matter of

record, I am requested to note an exception on behalf of

minority.

Mr. Aaron. The second section was the covert use of

American clergy and laity. This is on Page 64.

Senator Huddleston. Was that included in your motion?

Senator Hart of Colorado. No.

MI. Aaron. I think that covers the recommendation.

Mr. Maxwell. They hadn't discussed whether it :

should be made public.

Senator Huddleston. Well, if it becomes a statute, it

becomes public

Mr. Inderfurth. But the statute will remain secret.

Mr. Aaron.

No, we are ready to move on it,.:to covert

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use of American clergy and laity.

Senator Huddleston.

Weld,. the covert

action.is

with the notedel exception, those recommendations go before

the Committee.

Senator Hart of Colorado. Just for clarification, Mac, is

that the entire minority or what?

Senator Mathias. No, it's only one member.

Senator Huddleston. Now we are ready to deal with the

clergy •

Mr. Aaron. The point here is, I think, the CIA takes

the position that it has no covert arrangements with Ameriçan

clergy and laity, and that this will continue as policy, but

they have relationship of a clandestine character which don't

involve remuneration.

Senator Huddleston. Incidentally, is that a new policy?

Mr. Bader.

Yes, as of February 10, 1976.

MI. Aaron. It's pretty short. This is the sum total of

our findings, and it explains it better than I can.

Mr. Bader. This has not been, obviously you can see,

Senator and members of the Committee, from the text that the

Committee has found the CIA has a total of 14 covert arrangements

involving direct operational use of 21, that should be religious

persons, and I found it very difficult in this to properly or

respectively address the category here, whether they are American

clergy, regligious persons, or what. It is a term of art I

fogwrig

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really haven't quite been able to deal with.

As of February l0th, the CIA announced that the CIA has

not secret paid or contractual relationships with an American

clergyman or missionary. This practice will be continued as a

matter of policy.

Senator Huddleston. I think we ought to clarify that

religious persons.

That would include Chuck Colson.

Mr. Bader.

The issue here is, we are saying in the first

instance, we welcome this policy which they intend to put into

their operational prohibitions, and the recommendation that

we bring to you is a very simple one, in addition to that is

that it be extended from contractual to all operational

- relation-

ships, paid and unpaid.

Senator Huddleston. By statute.

Mr. Bader. By statute.

Mr. Inderfurth. May I ask a question here?

How does: this conform to Senator Hatfield's bill on this?

MI. Bader. I don't know.

Mr. Inderfurth. I don't know. I'll get a copy of it,

but I think to the degree possible, if the committee

recommends by statute a prohibition, it should be made to conform

to that because he has put in a great deal of work on that, or

without knowing the facts, I might add.

Mr. Kirbow. The other thing is the Committee may want

to support legislation that is already pending.

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Mr. Maxwell. What is the nature of the covert relationship

with religious persons now in effect?

Senator Mathias. A few patriotic volunteers.

Mr. Bader. Patriotic volunteers, at least one of them,

from the operational records.

I think, too, they have what is called a memorandum of

agreement which is not contractual in the sense that it

involves paid or unpaid.

Mr. Maxwell. What are they doing?

Mr. Bader. They collect intelligence information.

Mr. Kirbow. What is a religious person, Mr. Bader,

as. they

use it or as you use it here?

Would that mean the organ player that is a civilian who

travels with a preacher and plays the organ?

MI. Bader ..

No. It is intended to be the American clergy,

although I certainly would lean on whoever can tell me what a

proper term is to define American clergy.

Senator Mathias. What about this fellow around, Maharaja

Rani?

Senator Huddleston. I'll think on your defintion.

Mr. Bader. I think we'll have to have a footnote as to

what American clergy may be.

Mr. diGenova. American clergy or missionaries, certainly.

Senator Huddleston. Well, missionary gets a little

fuzzy.

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Mr. Bader.. The Agency uses "American clergy or missionary.

Senator Huddleston. It has to be a person whose primary

occupation is for a religious order or sect or something, it

seems to me.

MI. Kirbow.

How about the Mormon youth who do their things

overseas?

Would this take care of them and prevent them from getting

gobbled up?

Senator Huddleston. I think that's a good question. They

receive no pay.

Mr. Kirbow.

They are not church people, per se.

It

part of their religion, doing the service. You see, this gets

tobe a rather broad extension, or you leave out certain

things if you are not careful with your definition.

Senator Huddleston. I think there may be somewhere in our

litany a definition. I am not sure.

Mr. Inderfurth. I would imagine that Senator Hatfield's

bill, a definition of what clergy -- that would be spelled out.

There are copies coming over now.

Mr. Bader. Well, I think maybe we will get a copy of the

definition of clergy or missionary. Maybe that will clear

that up.

Senator Huddleston. Well, I think, you know, some

churches send people over for a very short period of time. They

are lay people, really, but while they are there, they are

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there more or less under the auspices of the church group.

Mr. Kirbow. At least a local church frequently sponsored

them.

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Senator Huddleston. I don't think you can prohibit all

those kinds of people. I think some kind of definition should

include the primary occupation of clergy. clergy itself.

Senator Mathias.. Well, why don't we commit to staff for

the moment the question of definition?

Senator Huddleston. I think we

will have to do that.

Okay. Are we ready to move on that?

Mr. Aaron. The recommendation is that whomever or however:

we define them -- and that's obviously an important question,

that they either be prohibited by statute. The other alternative

is to simply prohibit any further or recommend the prohibition

of any further CIA recruitment in this field.

Ms. Culbreath. The way this is worded, this would get

anybody who is a lay member of a church. You have got recruit-

ments of American clergy or laity.

If I am a member of the Methodist church, I am in the

Jaity of the church.

Mr. Miller.. You have raised a quastion. There are people

who are not priests in the religious hierarchy in a- particular

sect who may devote their entire lives to that particular

church.

Senator Mathias. Well, I think the word "a religious" --

TATTORET

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I'm serious here -- should be considered.

MI. Aaron. "A rèligious?"

Mr. Bader. We'll have to obviously work on that. Laity

was not meant here to be a member of a church, for technical

terms, the technical terms Mr. Miller mentioned.

Mr. Miller. As distinct from the congregation, it was

meant to deal with the administrators in a

religious order.

Senator Huddleston. Well, some sects have lay preachers and

lay clergy.

Mr. Kirbow. Senator Hart, do you want each of these

categories like this examined in the light "of the constititional

question that you raised earlier?

Senator Hart of Colorado. I just raised the issue where

the academics were concerned to resolve it, so I'm sure it

should be raised by somebody.

Senator Huddleston.

Are you ready to go on the religious

insofar as what is the definition? Then that will be

Senator Hart of Colorado. Yes, sir.

Senator Huddleston. Then that will be moved. up, I assume,

with exceptions noted?

Mr. Kirbow. I don't have any exception to that one, sir.

Mr.. Inderfurth. That is by.

statute, right?

Senator Huddleston. Pardon?

Mr. Inderfurth. Is that by statute?

Senator Huddleston. Right.

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MI. Maxwell. There may be a First Amendment argument

here, particularly in fundamentalist groups whose religious

beliefs are committed, are directed toward opposition toward

Godless atheism.

Mr. diGenova. Except that the control of religious organi-

zation has historically been subject to governmental regulation

in this sense: the Supreme Court in light of Senator Hart's

question last night, I did a little bit of research.. The

example, the prime example of regulation doesn't deal

much with prohibition of the Government dealing with someone,

although there are vast areas where the government is not

permitted to get into. The question is, for years the Supreme

Court has ruled that there are certain health regulations &

states that religious sects must comply with, and they have

to comply with it even if it conflicts with their basic religious

belief, that they have to comply with it, like quarantines

or things of that nature.

So there is clearly an area where the First Amendment of

religious freedom concept falls in the face of a greater good,

the need of the general public, and that has generally been

in the

health area, where there is some practice of the

religion which conflicts with some standard which has been

set in the community at large, and that generally has dealt

with health.

Mr. Kirbow.

Maybe the HEW Act can bring the CIA under one

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of these health threats.

Mr. diGenova. Self-immolation.

Senator Huddleston. The snake acts and innoculations.

Mr. diGenova. That's exactly right.

Mr. Maxwell. The problem is that's not quite applicable

to this, and one has to argue in the past the Court has ruled

on things that are found to be a threat to the personal liveli-

hood or health of the individual rather than something that

could be construed in a fundamentalist sense.

Senator Huddleston. This doesn't preclude a sect that

may be anti-atheist and as such anti-Communist from pursuing

its principles, but the restriction would be pursing them through

a government agency, which happens to be the CIA, or any other

methods.

Ms. Culbreath. Would this prohibit, then, somebody who was

a member of one of these sects that was in an area where they

gained information that would be helpful from them being sources?

Senator Huddleston. I wouldn't think so if they wanted

to write letters to the CIA.

Ms. Culbreath. Well, just in terms of the debriefing kind

of thing, or contact.

Ms. Davis.

We are talking about operational, not coming

in to the Domestic Contact Service.

Mr. diGenova. It is not very clear on this.

Mr. Maxwell.

The problem in part goes back to the difficult

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we had with the Domestic Contact Division in trying to determine

what was operational support, if operational support would be

what did you learn about individuals there who might be

receptive to American approaches. Then the clergy would be

prohibited from providing that kind of information if that

is operational support.

Senator Mathias. Well, it seems to me if the religious

came in and said I was at a meeting of the Holy Rollers last night

and we all went down on the mourner's bench, and i heard the

most remarkable things, and this is what 'I heard, there would

be no prohibition against listening. Now, if you say, go

back

to the Holy Rollers tonight -

Mr. Kirbow. And listen again.

Senator Mathias. Then you've got a question.

Senator Huddleston. Then it is operational.

I don't think there's a need to write in that it doesn't

pertain to the voluntary furnishing of information. I don't

know.

MI. Aaron. I don't think - no, that's really not an

operational use, quite frankly. It's very similar to the DCD

which takes information from lots of people, including people

who are and have been for some time proscribed by CIA's own -

Senator Huddleston. Well, anyway, that would be worked

out in the statute itself.

MI. Aaron. We are spared the problem.

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Senator Huddleston. We ought to move on.

Mr. Aaron. The next section is proprietaries and cover.

Senator Huddleston. I just wonder if in presenting this,

these three, these four, now, that we have just approved, it

would be of any value to assert in our report that we recognize

that the Agency has to find proper cover for its agents, that

restricting that cover is a matter of some importance, but there

are certain institutions that the Committee feels because of

their nature and because of their standing in the country, and

because of the need for the public to have confidence in them,

that they should be, in effect, off limits, and because off that

we recommend that these four recommendations be brought. I

don't know whether you want to make it sound any better a

not.

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Senator Hart of Colorado. Mr. Chairman, does the absence

of brackets on the next set of recommendations mean that they

are non-controversial?

Senator Huddleston. On the proprietaries?

Senator Hart of Colorado. Yes.

Mr. Aaron. That is correct.

Senator Huddleston.

The gentleman did such a great job

that nobody can question them.

Mr. Aaron. I think there is only one set of brackets, and

the next section is on page 67 in which it says that -

Mr. diGenova. Oh, yes, there is something.

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Mr. Kirbow.

What page are you on?

Mr. diGenova. 67.

At the bottom of page 67 is a bracketed quote about

Admiral Raborn, a former Director of Central Intelligence:

Now, if my memory serves me correctly - now, first of all,

this is the first time that anyone is mentioned by name in the

findings.

Senator Huddleston. And the total findings are in that

section.

MI. Kirbow. The findings are this foreign and military.

Senator Huddleston. We referred to Helms and Laird,

but

I think we decided we could write around that.

Mr. diGenova. Well, here's what happened here. This

paragraph deals with the fact that when the Agency disposes or

dissolves a proprietary, it tries to avoid conflicts of interest.

However, when noted that sometimes pressures were brought

to bear on the Agency to dispose of the entity as a favor. to

someone, so that it would benefit someone else.

Now, the most glaring

example of this was this activity

of the former Director, Admiral Raborn, who actually became

involved in negotiations on behalf of a client, Overseas

National Airways, which he represented, and he wanted the sale

of Southern Air Transport, which was a CIA proprietary, large

assets and large property, to Overseas National Airways, which

of course would have acquired Southern Air Transport's lucrative

TAM

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routes.

Now, the way I originally had it written was "A former

Director of the Central Intelligence Agency sought unsuccess

fully to influence the sale." However, if it was left that way,

people would have to guess at which one of these guys did this

and it would unfairly impugn all of the directors. The name

was inserted. Therefore, the question now becomes whether it

should be left in at all since the name is inserted, and since

the name is mentioned in the report, and whether or not the

whole sentence-

Senator Hart of Colorado. Well, what if we just said

former Director"?

Mr. diGenova. Well, the problem there, Senator, is then

people

say, which one was it?

Senator Hart of Colorado. Good.

Mr. diGenova. Oh, all right.

Mr. Inderfurth. I think the assumption would be Richard

Helms.

MI. diGenova. McCone more than Helms.

Senator Hart of Colorado. Well, we ran into this last.

summer with the Exener matter and all like that.

Ms. Culbreath. A former person..

Mr. diGenova. The Agency itself cited this as the most

flagrant example of intercession on behalf of anyone. As a

matter of fact, the memorandums on this refer to dozens of

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phone calls and overtures, and it is a former Director trying to

gain a benefit. It is an unseemly situation, and they labeled

it as a conflict of interest which they sought to avoid, and

in fact they did, and they are praised for it in the report

because they were really under tremendous pressure.

So I have no feeling one way of the other. I think to

leave out his name unfairly impugns

the other. To leave it in,

also, is only the second time in the whole findings and conclusior

that we mention anybody's name, so I don't care.

Senator Huddleston. And you've got one, Recommendation

No. 5, related to the disposal of the

proprietaries, that

Justice Department approve?

the

Mr. diGenova. Be consulted on the disposition.

Mr. Kirbow. Mr. Chairman, can I be heard on that?

Senator Huddleston. Yes, sir.

Mr. Kirbow. Senator Hart, in this regard we have consistently

attempted by most every reasonable means to not use the names

of people unless they had committed

something illegal.

Senator Hart of Colorado. Well,

not taking a position.

don't side with me. I'm

Mr. Kirbow. But the Exener thing was a big example, but

we must have had 20 other names that we went through on that

assassination, and we wrote around them.

Senatör Hart of Colorado.

But a

number of people argued

strongly that we ought to name her and go into details, so I

TOD GEEDET

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suppose the same arguments could be used here on this matter.

Mr. Kirbow. But the point I raised at the staff meeting

just before the Committee came back, when the subject was

raised, was did Admiral Raborn, as a retired military officer,

currently in a civilian status, although he was former -- break

any American law, or had they sold it to this, would it have

been a violation of the law, and the answer was no.

If he was involved - or they knew of no law that he

had violated, and none is apparently cited in the record.

pressure was brought to bear, there is no doubt about it, by

Admiral Raborn. I think there's another example. I'm not

sure whether Joe described it to me or someone else, of a

very senior official out there dealing back with the Agency.

Now, the military, as Senator Hart knows, is prohibited

from this by regulations and I think by law. I know that as a

regular military officer, you are not allowed to do contractual

business with your agency forever, but with the other military

departments and the Department of Defense, I think you have to

have a cleansing period of five to seven years.

I don't believe there is any such provision in the Act

that applies to former Directors, and probably what the Committee

should do is consider this action without necessarily naming

him unless he was in violation of some really serious

wrongdoing, and make a prohibition, drawn similarly, with what

now applies to senior officials going back and kind of exerting

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undue influence on those people.

Senator Huddleston. Joe, is it accurate to say that

pressures were often brought to bear?

Mr. diGenova. We changed that to say sometimes. This is

a rewrite.

Someone else wrote this after I had submitted it,

and we had a meeting today, and we changed several things in

there.

So I leave it up to the Committee. This was a matter that

I -- I wanted to flag it and leave it there.

The explanation

is as clear as I can give it.

MI. Inderfurth. This is the first time he is mentioned

in the entire paper.

Mr. diGenova. That's right.

Senator Huddleston. Why don't we delete that sentence and

keep it in our full report, our big report.

Mr. Kirbow. There is a major classified report on

this that would contain all the facts.

Senator Huddleston. I am concerned now whether any other

instances of someone may be, of similar standing as Admiral

Raborn.

Mr. diGenova. Yes. There are instances in the record

which do not deal with proprietaries, of John McCone interceding

on behalf of Pan American directly with the Director of

Central Intelligence, and it is not mentioned in the report,

and it should be, and it is a problem that we have had, Mr.

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Chairman, has been that the work involving the relationship of

the Central Intelligence Agency with American business companies

was severed off from the proprietary work for the simple

reason that they are not the same thing.

That work has been done. It has not been pursued vigorous

ly, not because the individual who was responsible for ita

didn't want to.

Senator Huddleston. That happened after he left.

MI. diGenova. That's right, after Mr. McCone left the.

DCI, he had frequent contacts, according to the records, with

the Agency, with high level Agency personnel, and in one instance:

he interceded personally with the Director of Centräl Intelli

gence to avoid actions which would be taken by another govern-

ment and its airline which would adversely affect Pan American

World Airways.

Senator Huddleston. It is hard to separate a man from his

past totally:

Mr. diGenova. It seems particularly hard with DCIs.

Mr. Kirbow.

well, not only here, this is not with the

Agency, but it came up in my experience with the Armed Services

Committee involving Continental Airlines.

Senator Mathias. This sentence.

senator Huddleston.

Just the sentence in brackets.

Senator Mathias. Well, I think if you've got a Raborn Case

a. McCone Case and whatnot, that you can't make fish of one and

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fowl of the other.

Senator Huddleston. I think we've already said that

pressures sometimes were brought to bear and we make recommenda-

tions to correct that.

Ms. Culbreath. Mr. Chairman, could I suggest that maybe if

we do delete that, that we perhaps redo that previous sentence:

to make it a little stronger, and perhaps in some way

indicate that these were serious pressures, and they were, I

think, hard pressures to withstand when somebody in that kind

of position -

Senator Huddleston. They were withstood, though.

Mr. Maxwell. They would get lost the way the sentence is

cut.

Mr. diGenova. I think what we will do is David and I

will get together, and Elizabeth, and we will change this

"however" sentence, the sentence that precedes the one that

has just been deleted, and we will expand that sentence to.

more accurately explain that the pressures came from high sources

sometimes.

Some of them may have been maybe former Agency

directors.

Senator Huddleston. I think we should make the point that

it was former.

Senator Mathias.

Well, if they were former directors,

then you may as well leave in the last sentence.

MI. diGenova. Maybe.

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Mr. Kirbow. Mr. Chairman, may I suggest that maybe

perhaps we use this type of part of the investigation and what

we know from certain of the other files to prohibit this type

of conduct by law in the future in our general recommendations?

Senator Huddleston. And make it similar to --

Mr. Kirbow.: Similar. I think you would have

to look at

something from the staff.

Mr. diGenova. I didn't have that recommendation in there,

but I think the record indicates it ought to be there.

MI. Kirbow. It wouldn't be proper, necessarily, to put it

right here under proprietaries, but let's put it in the

general recommendations.

Mr. diGenova. David, did you get that?

Mr. Aaron. I'm sorry.

There's a recommendation that --

Mr. diGenova. That Agency personnel

Mr. Kirbow.

Senior officials.

Senator Huddleston.. -Similar to what applies now for

military.

Mr. Maxwell. Well, perhaps the statute, perhaps we could

recommend a statute similar to that governing the Department of

Defense.

Mr. Kirbow. Be enacted by the next Committee, similar

in effect to.

Senator Huddleston. And find a proper place to put it in

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our recommendations.

Mr. Aaron. Okay.

Mr. Maxwell. Well, Charlie, correct me. I think the

proprietary section would be the appropriate section because

that would be where it came up most,, unless there is another

one that you see more readily.

Mr. diGenova. We can work that out. I don't think

that's terribly --

Mr. Kirbow.. I think there have been two or three sug-

gestions made here that will result in general

recommendations

on a page that isn't necessarily supported by findings, but

you

come to this overally conclusion based upon your total concept

of the Agency and its procedures and everything else in view

of the findings.

Mr. diGenova. The only thing I want to do is -- David,

I know you have gone through this, but the Senators may want to

look at page 68 through 70, which deal with cover, and particu

larly with Mr. Welch.

Ms. Culbreath. • I had a point I wanted to raise on that.

Mr. diGenova. Well, Mr. Chairman, I think the Senators

want to read this.

Ms. Culbreath. Why don't we let them look through it.

(Pause.)

Senator Huddleston. Let's go back on the record.

Mr. diGenova. I do know the Agency is going to come in

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tomorrow to review the cover paper from which this summary is

drawn. I know Eric has some problems with the cover paper, both

editorially, because they view it as overly simplistic and

harsh because it reflects all of the Inspector General's

judgments, but they have some problems with cover in general,

but. I don't think this is going to be part of that problem.

Senator Huddleston. I have some problem with this page

70 relating to Welch because it seems the whole implication of

that is that he was murdered because his cover was blown, and

so far there has been no evidence that that is the case. It

highlights the argument, I think, correctly, but it seems to me

it leaves the impression that here is a case where a fellow's

cover oi lack of cover resulted in his death.

I think the Agency people have specifically said to us

so far that they have no reason at this point yet to expect

that that was the reason he got killed.

Mr. Maxwell. In regard to the specific quote, I think

we have to be very careful as to getting involved in an argument

which would imply that anything that we possibly did had an

effect on it; and also, that it seems to point to Mr. Welch

and say, well, it is all his fault.

Senator Huddleston. He didn't protect his cover, he

didn't do what they advised him to do, and you see down here

we have another quote which says, referring to international

terrorism and incitement for these kind of people to take the

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kind of action which unfortunately led to the death of Dick

welch.

There again we are ascribing something to the death of

Dick Welch which nobody knows yet, you know, what terrorists

killed him or why; at least our record doesn't show.

Mr. diGenova. These statements here, Senator, this is a

direct quote from Eric Eisenstead's memo. Do you think that

we should maybe in the findings and recommendations shorten

this and maybe -

Mr. Kirbow. I think the part of the record which is an

unknown fact is why Dick Welch was killed, and we should stay

away from any quotes or other pronouncements in our paper

which

attribute his death to any particular thing unless we know

something.

Mr. Aaron. I think that is a good point.

We might put

in here a statement which says the Committee has no information

as to the reasons, purposes or cause, specific cause, of his

death. The point is to get at the question of cover, to

step out to the question of cover in the report, as we do, I

think, appropriately, but not have talked about the one case

where this all came out in public, rightly or wrongly.

Mr. Kirbow. Why don't we use the cover

for the gentleman

in London, then, where as the tour buses go by, of course, you

know this is the home of the CIA chief, and he hasn't been

killed yet or anything like that. If we want to use that

kind instead of using this death example, which, by the way,

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has brought some thousands.of letters from the constituency.of

certain southern Senators who shall remain unnamed or near-

Southern Senators, because it kind of was a catalytic agent

in getting a lot of complaints on the Committee and everything

else, and this pointing out or explaining Welch's death goes

back to it.

Senator Huddleston. I'm sort of southern.

Mr. Kirbow. And you've got a lot of them.

Senator Huddleston. Of course, it was used for that

purpose by certain high officials for that.

Mr. Kirbow. The very highest, including attending the

funeral.

Mr. diGenova. Well, I think one of the things we wanted

to pinpoint here, and first of all, I think we can summarize the

Agency's testimony a little better. The Agency said, nothing

this Committee did, first of all, had anything to do with his

death, as far as they know..

Ms. Culbreath. But they don't know.

Mr. diGenova. As far as they know, they don't know : one

way or another, but the impression that was created in the

press was, and was pandered to by the DCI and the President,

was that the general actions of exposure of Agency operations

were responsible for the death of Mr. Welch, and they pandered

that by inviting Committee members to the funeral as if they

bore some responsibility.

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4.4

Now, the obvious public relations value of Mr. Welch's

death, the first time in history the DDO and the DCI go

to

a funeral in public, they never did that, and there is no doubt

that they tried to make political hay out of his death. I

think it is only fair that the Committee ultimately say --

Senator Huddleston. Right, but I think you've got two

different problems. You've got a problem with whether the

Committee wants to present its case and exonerate itself on the

basis of everything that is known about the death of welch,

and whether that is pertinent to the problem of cover.

Now, we make a recommendation that the CIA shall make an

effort to place a greater proportion of its officer abroad !

under nonofficial cover.! It seems like what we need, there's

a statement here is that official cover has not proved to be

effective, and if we mention welsh at all, I think the point we

mention there is that his name was carried; that while he was

there supposedly under cover, his name was in fact carried in a

newspaper, the name of his newspaper had been carried in a

foreign newspaper, and he was living in a house that was known

to be the house.

MI. Kirbow. His true identity was widely known.

Senator Huddleston.. We can cite him as an example without

indicating why he had been killed, of here is a case that

everybody knows about, so-called official cover was not in

fact very deep cover. There may be other instances that we

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want to refer to, but if we get into his death at all, I think

we have got to present the case, that blowing his cover is not

necessarily what killed him. Nobody knows that as of now, so

far as I know. Nobody knows it wasn't just a street gang or an

idiot.

MI. Kirbow. It could have been like the Senator. John

Stennis case, where they buttonholed him in front of his

house and killed him for robbery purposes.

Senator Huddleston. We've asked them two or three times

here, have we not?

Mr. diGenova. Yes, we have. In fact they don't know.

Senator Huddleston. In fact, the last time Nelson

was

here we asked him.

Mr. Aaron.

Can I try a fix on this, turning to page 70,

instead of saying "the career and tragic death of the station

chief," let's just say the "situation of the station chief in

Athens illustrates the tension. As the Chief of the Cover

Staff stated, by the time a person becomes a chief of

station, there is not a great deal of cover left," leaving in

the rest of that sentence, and then add in here, as you did,

"Mr. Welch and his predecessor were both identified and named

in the local press.

Further, Mr. Welch occupied

the same

house."

Senator Huddleston; Which presumably was known to be

the house of the station chief..

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2.5

Mt. diGenova. In fact, the station chief's name and

address in Athens had been presented, so when he wasiin there

the address had already been printed previously.

Mr. Aaron. Which was also known.

Senator Huddleston. Now, if we want to say something about

an added dimension to the seriousness on blowing cover or

cover being diminished, is the situation in the world with

terrorism or the vulnerability it makes of people --

Mr. Kirbow. To the unstable.

• MI. Aaron:

Well, the point in the testimony is that

this was an added danger, but because they've got a job

do, they're not going to really do too much about it. It's

a real risk they are just going to have to bear.

Senator Huddleston., That's an occupational hazard, but we

are talking about how to protect their cover, and our recommen-

dation is that they use - have an official cover.

Mr. Kirbow. Well, can the staff change the language,

because we know

exactly what you want to do, and without

taking further time, why don't we just change it.

MI. Maxwell. I would just hope that the two quotes after

the one that david cited, the quote, he, welch, was

asked, the

last quote, we could make the point in a different way because

the impact of the first quote,,I think, is this guy was stupid

and irresponsible, and I don't think we need to have any

implication like that in the report, and the second one, I

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think we can make the point that terrorism may constitute a

greater threat now.

Senator Huddleston. I think that quote ought to go entirely

because it does leave the implication that there was a direct

link to losing his cover and his assassination.

Now, we don't know. that.

Mr. Aaron. So just take out the last one.

Mr. diGenova. But still speak about the added danger of

international terrorism. Just stop at the word "international

terrorism."

Senator Huddleston. Down in the recommendations I've/been

talking to Joe about defining the small business, and I think

we fairly well understand what the concern is, or do we, Joe?

Mr. diGenova. Senator, I was going to suggest, if you

look at Recommendation No. 3, while it doesn't define what a

large proprietary is, the Senator was concerned about what

was meant by "should be kept small," and I tried to indicate

really we are talking about Air America where you had 8000

employees of the CIA, both in Langley and abroad, and then

another 8000 employees of the Air America complex. That is

big.

But I think what weshould say is, organizationally small,

and organizationally and numerically small, because what we are

really talking about is when they get big, whether it is in

numbers or finances, and larger in terms of people usually means

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larger in terms of finances, also. Then you have both of the

problems we addressed in the paper, which was the risk of

unfair competition with private enterprise, and the risk of

blowing cover, of compromising security.

So I think that

Senator Huddleston. I was wondering if it could be

designed in such a way as care should be taken that it not be

any larger than necessary to achieve the objective for which

it was established.

Mr. Kirbow. Excuse me, Senator. It would not get the

Air America thing because at the time they needed one twice

that size.

Senator Huddleston. They needed it that big, that's

right.

Mr. diGenova.. The reason this language is in here is that

the Agency officials themselves who testified, all of them,

including the DDO, said they would like to have small ones, in

other words, a small number of employees, small operation.

Senator Huddleston. What about their insurance business?

Mr. diGenova. "That's kind of an exception, although

actually that is an example of a lot of money with only a few

employees.

There are only a couple of people that run that

whole thing, Isenstead and a couple of - one investor,

Istenstead, and an auditor. There are three men that run that

$32 million complex. So that is a different animal, really.

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Senator Huddleston. So if you are going to use the term

"small," you've got to say it from the standpoint of employees

or resources.

Ms. Culbreath. I was just going to suggest that, since

another of our recommendations suggests annual review of all

of these criteria, and since their budgets are going to have to

be included for the oversight committee with review for the

others, and we have got a proposal that the Committee also

establish guidelines for the approval of the creation of large.

proprietaries, should these become necessary.

Perhaps the better thing to do, since these proprietaries

are for a specific need at a specific time, and since we have

got the review procedure, is sort of trust it to the oversight

committee to see to it that they don't get too big, whatever

that may be, and leave

it to them, maybe just delete that

second sentence.

Mr. Kirbow. Well, that's certainly a workable way.

Senator Huddleston. I don't see how you are going to keep

that sentence in there without having .it..

• MI. Aaion. I would also suggest that perhaps in the

section on proprietaries, where we make a comment about how

large proprietaries run risks in blowing their cover, we might

would it be possible, do you think, to make a finding or make

an example in regard to Air America?

Mr. diGenova. Absolutely,because they have conceded

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that's the one that ran all of the problems.

Senator Huddleston. You do mention that somewhere, don't

yOu?

Mr. Aaron. It's not mentioned specifically, but it might

be possible to say, you know, maybe you can put a footnote on

the first paragraph which simply said -

Mr. diGenova. You mean on the findings of page 66 that

"too often large proprietaries have created unfair" --

Mr. Aaron.

"Unwarranted risks of unfair competition with

with private business in compromising their cover."

You should

say, "for example,! "Air America, for example, which had 8,000

employees," and sa forth, ran into both of these problems.

Senator Huddleston. I think that would be all right.

MI. Aaron.

And then you would have at least some reference

to what "large" was.

Senator Huddleston. Then you've got the review and the

oversight.

Mr. Inderfurth. So the idea here in the recommendation was

to take out the second sentence.

Mr. diGenova: Yes.

Mr. Inderfurth.. Why not take out the first as well and

just go to Recommendation No. 2 as No. 1?

Mr. diGenova. Well, I think -- can I just say this -= that

by indirection, approving of an activity is, I suppose, one

way of doing it. I don't see anything wrong with stepping up

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and saying we examined proprietaries, we found them to be --

they had problems but basically they were all right.

Mr. Inderfurth. Couldn't that be in the body as well?

Mr. Kirbow. The one thing we have failed to do on this

Conmittee is where we are strongly in favor of, is to speak

out in

a manner supporting an agency under otherwise violent

attack from many sources, and I think -

Mr. Inderfurth. I think that is not true, Charlie. I

think you will find, if you read the findings of Bill Miller

and others wrote in the first part, it says very strongly,.

intelligence is necessary; we need it.

MI. Kirbow.

I'm saying up until now it has been an agency

under attack.

I think this whole section on foreign and

military has been to make a balance between past wrongdoing

and current operations..

The Chairman. There can't be anything wrong with leaving

the sentence in there.

Mr. Maxwell.

May I raise a question to the second

recommendation,

as to the reason why by statute there would be

an annual review

rather than recommending that to Congressional

Committees:

The second part of that is, my understanding of a number

of the proprietaries is that they are not operating, and to

require GAO audit of a whole group of in a sense notional

organizations may be preempting the kind of review

that the

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oversight committee should be doing rather than setting it out

here.. It's just a question.

Mr. diGenova. This is a rewrite of my original recommen-

dation, and it is a good point. It may very well be that that

is superfluous, if you are considering oversight by a committee.

Senator Huddleston. The Committee cannot conduct an audit,

though.

Mr. diGenova. And that was the purpose for the Committee

taking on board independent GAO auditors.

Mr. Maxwell.

The Committee can request GAO auditors.

MI. Kirbow.

Anything that appears to be on an audit

calls for an audit.

Senator Huddleston. Calls for a GAO audit of gives the

Committee authority to call for one.

Mr. diGenova. I don't think we need a statute. We can

talk about it as part of Congressional oversight. As part of

the Congressional oversight function, the oversight committee

should review proprietaries

annually and where necessary

conduct audits with the assistance of the General Accounting

office.

Mr. Kirbow.

Here, Mr. Chairman, I think again the point we

made yesterday,

that we should say at least annually, so that

they don't put you in a box if you want one every two months

because of circumstances, "at least annually."

Senator Huddleston. You could add in Section 3, at least

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there, giving the Committee authority to establish guidelines,

to establish for large proprietaries, should they become

necessary.

You could also make the statement there that the Committee.

may call for a GAO audit periodically.

Mr. diGenova. So we will rewrite ? to eliminate the statute

Senator Huddleston. Independent GAO audit.

Mr. Aaron.

No. 2 is rewritten so it is not required by

statute that there be an audit, internal audit?

Mr. Kirbow. No GAO audit.

Senator Huddleston. The only thing I had in mind of

taking out of 2 was just the independent GAO audit being

required by statute, and leave that to the discretion of

the Committee, but leave the rest of the review, right?

Mr. Maxwell. You amend it by statute that an annual

review of all proprietaries?

Senator Huddleston. An internal CIA audit.

Mr. Maxwell. Or would it recommend that, I'm not sure

which.

Mr. diGenova. I'm wondering whether it should be done

by statute. Maybe we should recommend to the oversight

committee that there should be an annual review consisting of

internal CIA audit.

Mr. Maxwell. An annual report to the oversight committee

and such GAO audits as the Committee -

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Mr. diGenova. May deem necessary.

Senator Huddleston. That's all right.

Mr. diGenova. And then we could add, as part of its

annual report, the GAO should record all of its intercessions.

That should be "report." They record all of them, so change

"record" to "report".

We. can rewrite that.

Senator Huddleston. Make that a little stronger.

Mr. diGenova. Must report?

Senator Huddleston. Shall be required to report.

Mr. Aaron. I'm sorry.

Could we now have a recapitulation by whomever thinks they

followed this?

Mr. diGenova. Elliot?

I defer.

MI. Maxwell. "There should be an annual review"-

Mr. Aaron. There is no longer a statute. The Committee

recommends: that there be, right?

Mr. Maxwell. - "a review, at least annually, of all

CIA proprietaries."

Mr. Aaron. By whom?

Ms. Culbreath. By the oversight committee.

Senator Huddleston. By the oversight committee.

Mr. Maxwell.

Well, you're defining what the review is

in the next part.

"consisting of an internal CIA audit and a

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report to the oversight committee as well as such independent

GAO audits as the committee shall direct. As part of its

annual report to the oversight Committee".- "As part of its

report to the oversight Committee, the CIA shall report," and

then the rest of the sentence, "all its intercessions on

behalf of its proprietaries."

Mr. Aaron. May I just make a quick editorial fix? "The

Committee recommends the overight Committee conduct an annual

review of all proprietaries consisting of an internal CIA

audit and report to the oversight Committee."

Mr. Kirbow. No, the Committee cannot conduct a GAO

audit.. They can insist that that's part of the report that is

presented to it.

Mr. Aaron.. That's it, consisting of a

report to the over

sight Committee of an internal CIA audit, is that rigt?

MI. Kirbow.

What you are trying to do is to require

the CIA to reveiw it, to conduct a CIA audit, and to report

fully all of the

review entailed.

Mr: diGenova. Not just the audit themselves. There are

certain operational details you are going to want to know about

also, not just financial security.

Mr. Kirbow. Mr. Chairman, let us rewrite that one.

We

will include it.

Senator Huddleston. Well, you see, you could combine

I and 2 together, since we are just going to use one sentence,

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the first sentence in No. l, and after we say the external

and internal controls, the oversight committee should require an

annual report of all proprietaries by the CIA, including an

internal CIA audit and all intercessions that the CIA may have

made on behalf of proprietaries.

Mr. diGenova! That's it, that's all in one sentence.

We

can fix that.

MI. Aaron.. All right. We'll take Joe's fix.

MI. Kirbow. In three I am not sure what you mean,…"In the

DCI's budget presentation." That almost has a word of art

connotation in the Senate.. A budget presentation is that

thing which the Secretary of Defense and the Director of the

CIA makes to the Appropriations Committee.

Mr. diGenova. We are talking about an authorization,

aren't we, an annual authorization here?

Mr. Inderfurth. Look on page 26 and you'll see the

definition of that under (b). The DCI shall have responsibility

for preparing the budget of the national intelligence program

for presentation to. the President and the Congress. This

is the budget presentation that's being referred to under

this:

Mr. Kirbow. well, now you come to the real question,

proprietaries being listed in the DCI's budget presentation.

Most of his proprietaries neither use any money up nor make

any money or anything. They are just shelf items.

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Here again you come to the notional.

Mr. diGenova. No, no, Charles, because the point they

made during our

review out there was

that never have the

proprietaries appeared in the budget presentation. They have

been hidden, and the object is to identify them in the budget.

as a line item, for example.

Mr. Maxwell. One suggestion might be, be listed, that

implies a list of proprietaries.

Senator Huddleston. Where does this list go?

MI. Kirbow. What you want to do is to require them to

include a discussion of the proprietaries in his annual report

to the oversight committee is what you want to do, isn't

it, because they don't have that now. They don't report to

the Armed Services_Committee. They only report to Appropriations

Senator Huddleston. How would it be listed in the budget

under your proposition here, Joe?

Mr. diGenova. Well, I'm just assuming -- well, I am

assuming in terms of oversight the Committee is going to want

to know, even though this is not going to be published, where

this money is going and what it is going to be used for.

if they are going to authorize it.

MI. Aaron. I think the term really should be -

Mr. Kirbow. I think it ought to be more than in the

budget.

Mr. diGenova. I know that's not just what they are going

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to be asking, but the thrust of this was to make sure that

proprietaries found their way into the budget, and that Senators

knew what they were authorizing when they authorized the budget.

Now, how it gets in there, I am not a budget expert.

Mr. Kirbow. That is what I am trying to supply here because

in this process there is a procedure that when you say there shal

be authorizing legislation, where the line items are discussed

before the authorizing committee and not before the budget

committee, which is the appropriations committee, and if you

require that he discuss or report the annual operation of the

proprietaries in his annual report to the oversight committee,

you will accomplish what you are trying to do, and not exclude

it only for the presentation before the Appropriations Committee.

Mr. Maxwell. Could I try a fix on this?

Mr. diGenova. You are invited.

Mr. Maxwell. The oversight committee should require that

the DCI's budget presentation to the Appropriations Committee

and the oversight committee include a specific discussion of

the financial aspects of CIA proprietaries. I mean, we are

trying to bring them out and see what the impact is on the

budget, where do they fit in.

Senator Huddleston. Can they

do that, though, without

identifying the proprietary and where it is located and whatever.

Mr. diGenova. They have indicated they could.

Mr. Aaron. •Jim, Taylor, when he was here talking to the

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Committee, talked about how they are beginning to -- drawing a

way to work in the proprietaries so that they can both identify

them and indicate their cash flow implications for the budget,

and in effect

Senator Huddleston. What would you have proprietaries

un ones

Mr. Aaron. Proprietaries, income and outgo.

Mr. Kirbow. But that would never be published, Senator.

If you want to accomplish what you are suggesting here,

that they report the cash status or the financial status, you

add that additional sentence to this combined 1 and 2 up here

that the Senator just proposed a minute ago, and indicate that

that report should also include the financial status or the -

Senator Huddleston. But you do that with the audit, don't

you, the internal audit?

Mr. Kirbow. Well, in fact you do, in fact you do.

Mr. Aaron. Well, I think. the point -- maybe I'm not

captioning this properly, Joe, but I think the point here is

that proprietaries either earn money or cost money, sometimes

a little of both, and it has an impact, therefore, on the

overall CIA

budget, particularly in the past when income from

the proprietaries could be placed in either the contingency

reserve or used to finance, in effect, operational purposes

of the proprietary. In other words, Air America was earning

money on its operations, and yet it was costing them more

because they were engaged in certain risky operations. In

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In effect, the proprietary was earning money which was

financing the proprietary.

organization.

Mr. Kirbow. But they can no longer do that. What they

earn now must go into the general Treasury.

Mr. Aaron. No, gross earnings do not go into the general

Treasury. Their net, and part of the cost of doing business

would include the cost of some of their operational purposes.

I think the point of this inclusion here was to see if

one could require in connection with the budget, not just in

general, with an audit of what it does specifically, but in

terms of

the entire activity of the CIA, to get a spelling out

of its sort of macrobudget implications in terms of up or down,

and secondly, its budget implications for the certain categories

of operations which were involved, such as, if you are talking

about the conduct of the support for the activities in Laos.

Mr. diGenova. Paramilitary operations.

Mr. Kirbow. Well, leave it like it is if that is what you

are trying to do, because they will be sure to report it-to

the Appropriations Committee in excruciating detail, but they

won't report it to the authorization committee unless they

require it to get money.

So if you want to leave it a detailed budget, their

presentation to the budget committèe, this language will get

that done.

Senator Huddleston. Well, what if you said something like

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this, furthermore, or adding to that, the fiscal impact or

the budgetary impact of the proprietaries should be included

or defined in the DCI's budget presentation.

MI. Maxwell. Specifically discussed?

Mx. diGenova. That language would mean it's included in

his presentation in some way because

the allusion that David

made to Jim Taylor is that they are beginning to put it into

their budget presentation.

I know that is a term of art.

Senator Huddleston. That eliminates any idea of listing

them .

Mr. diGenova. Elliot's point also about the authorization

committee should be added in there.

Senator Huddleston. We've got so much money invested,

and 33 money made money and 40 made money for a net gain of

so and so.

MI. Maxwell. And you should have some notion of that

and the problem was that you weren't able to get ahold of it.

Senator Huddleston. And we sold two or three of them for

this amount.

Mr. diGenova. That is the whole issue of their visibility

in the budget, the whole question.

Senator Huddleston. Well, where does that visibility

disappear?

Mr. diGenova. Well, before they never showed up.

MI. Maxwell. Before you had the : coverti action.

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Senator Huddleston. Well, where will; it disappear:

now? It won't come to the authorization committee and the

appropriations committee. I mean, it won't be a line item.

Mr. Aaron. Proprietaries as a category?

Mr. Maxwell. I would assume it is going to be a subsection

of operational support in covert action.

Mr. Aaron. Not necessarily. I think they are struggling

with that at this point trying to define it properly and how

it should be presented.: I mean, I really don't think we know.

They have an intention to do it because they recognize that.

potentially it is a source of real question as to how much

money is being spent on clandestine activities that is self-

generated by the Agency because of its proprietary

activities.

Mr. diGenova. The impact, Senator, was also to show that

the Committee had looked at this broadly, was aware of possible

budget and authorization implications of various entities,

including proprietaries, and that it wanted to say

something

about that. It was not necessarily anything dramatic.

Senator Huddleston. Well, I will agree with that. I am

just worried about if you say you expose proprietaries too much,

you are exposing cover.

Mr. Aaron.

Well, this is internal. This is classified.

Mr. diGenova. This is not public.

MI. Maxwell. Well, I think the language the Senator

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suggested got to that.

Mr. Aaron. Well, let me see if I can read out what I would

propose along the lines I think we discussed.

The oversight committee should require that the fiscal

impact of proprietaries be made clear in the DCI's budget

presentation to the oversight committee. If you want to add

the appropriations committee, you can, but I think the point is

that that happens.

Mr. Kirbow. If you'll listen just one minute, Mr. Miller

knows and I believe the Senator knows that "in the Senate there

is a formal budget presentation'?. made to the Appropriations

Committees." They are not made elsewyere. Reports are made

to oversight committees on the status and all of these other

things, and if they request any money for those proprietaries,

they would request that before the authorizing committee. If

you are just trying: to accomplish getting it made known to the

oversight committee, drop the word "budget presentation" and

adopt the common usage of the annual report of the Agency or

of the DCI.

But that is kind of a word of art. Those are words of

art in the Senate, and they will seize on it because today

they don't do it for anybody else but

the Appropriations

Committee.

Senator Huddleston. I think that's reasonable enough.

It ought to be clear.

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Mr. Aaron.

Let me try another fix here because I'm

not too sure.

The oversight committee shall require the fiscal impact of

proprietaries

in the CIA's budget be made clear in the Director's

authorization presentation, or what phrase is that? In the

Director's what?

Mr. Kirbow.

The DCI's annual report to the appropriate

oversight committee.

Senator Huddleston. The DCI's annual report.

MI. Kirbow. The Agency would not report separately. They

should make their presentation a part of the DCI!s report

to the appropriate oversight committee.

Mr. Maxwell. While we are on that, could I, on No.. 6, we

have already, I thought, by statute prevented any covert action

being funded other than by (a) appropriation to a covert action

budget,

or (b) the contingency reserve.

Mr. diGenova. That's right.

Mr. Maxwell. D oes that make No. 6 redundant?

Mr. Kirbow. Yes.

Senator Huddleston. The only comment I would make is

that the other is not an accomplished fact yet. This might

be accepted and that might not.

Mr. Maxwell. Well, the reason I say that is that the

way this reads, I would have of would be opposed to it because

it provides an exception with the approval of the versight

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committees, when we want, I think, to be able to go to the

Congress and

say, we recommend most strenuously that only these

two methods be used for funding, rather than providing a third

method. and someone says, well, maybe we should have a fourth

method, and I would like to go with the strongest possible

recommendation in regard to the earlier statutory requirement

that it only be by specific apropriation to covert action and

the contingency reserve fund.

Mr. Kirbow. Otherwise, Mr. Chairman, we will stand a

chance of getting the other amended; to allow the oversight

committee: to allow it.

Mr. diGenova. Why don't we say this by statute, and then

have the rest of the sentence an addendum which would just

allude to the fact that funding is to be accomplished to the

method we set out if you want to eliminate it.

Well, this was the problem that was raised, or an issue

that was raised during the study, and this is set in here

for that reason. It can easily be removed if it is inconsistent

with another recommendation of the Committee.

Mr. Aaron. Well, we have two or three different earlier:

provisions that relate to this. The first is that re-

programming authority, defining reprogramming authority, the

possibility that something used for a program covert action x

which involves a proprietary that generates a certain amount

of money, can be used for program y.

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The second issue is we have proposed that covert actions

be funded either by line item or by the contingency reserve.

The third thing we proposed is that the contingency reserve

be replenished, if I am correct, only by appropriation, concur-

rence of the oversight Committee.

Now, what this in effect does, I think the question that

he's driving at is, what do you do with the profits of a

proprietary organization? Can you put it in the contingency

reserve?

•If so, our other recommendation would pick up the notion

that it can only be done with the concurrence of the Committee.

Is there some other purpose, direct transfer? Well,

presumably one of the limitations on reprogramming - and this

would be a fair point to make here, as part of its definition

of limitations on reprogramming, it is recommended that the

oversight committee proscribe the allocation of profits from

any proprietary to a covert operation without their express

consent. And this is really kind of -- if it doesn't go through

the contingency reserve, it really goes to the question of

reprogramming.

Nowe. I realize that we have said that our other recommen-

dation by implication would prohibit this, but it is only by

implication, I would think.

Mr. Maxwell. My sense is that by providing this -

Mr. Aaron. You kind of create a channel.

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Mr. Maxwell. It's not that you create a channel, but you

aid the, increase the temptation for the proprietaries to try

to generate funds, and secondly, I think it is the easiest way

for the oversight committee to have a handle on covert action,

and particularly its funding, is to say there are two ways you

can do it. You can do it either by the regular appropriation

process, of you can do it through the contingency reserve fund.

But if you start to build in the ways that the contingency

reserve fund can be replenished, I think people -- I think there

may be a loss of control.

Mr. Aaron. Well, this is a way it can be replenished,

and this is not prohibited by anything we have recommended

yet.

MI. Maxwell. I understand that, but I guess I was trying

to clean up the organizational structure.

Mr. Kirbow. I think this is the problem with recommending

the legislation piecemeal, is that the insurance company out

there is a covert operation. It is a secret operation at

the

agency conducted in that manner; and if you allow only

covert operation to be funded only from the contingency

reserve:

whatever monies they generate will have to go back into

the general treasury because they cannot be used to either

replenish the contingency reserve or to operate a covert or

to perform a covert function or operation.

So they are not even -- they can't not only use the profits

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to do that, they cannot use the general monies that they

generate from that to conduct. They will have to fund that

insurance program in the contingency reserve.

MI. diGenova. No, not at all, because it is not a covert

operation. That is not being use to fund a covert operation.

It has been used to pay pensions and annuities to foreign

agents. It's not

a covert operation.

Senator Huddleston. Agents are covert. If you restrict

it to use of funds, if it is not already done, no funds

derived from the operations of proprietaries shall be used foi

any other purpose except the operation of the proprietary and

any profits shall be returned to the general treasury.

It precludes it, doesn't it?

Mr. Aaron. That would solve the problem, yes.

Mr. Kirbow. And that's what they are doing today by

regulation.

Senator Huddleston. Can we say that?

MI. Aaron. I don't see why not.

Mr. diGenova.. Well, we say that in our recommendation No.

Mr. Aaron. Well, this says --

Mr.

diGenova. That deals with terminations and liqui-

dations.

MI. Aaron. This is liquidations, and terminations. This

is not just operations.

Mr. Maxwell.

There is one problem, a slight problem.

That

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is that some of the profits are reinvested. It is not

• that they

take everything over or break even.

Senator Huddleston. Well, I didn't say that. I said all

funds not needed in the operation.

Mr. Bader®

Perhaps, Mr. Chairman, you could amend No. 4

to all returns of funds or profits not needed for the operation.

Mr. diGenova. There you go, whether from liquidations,

terminations or profits exceed for the needs of the operation

of the individual proprietaries should be remitted to the U.S.

Treasury.

Senator Huddleston.

You can work that out so that it would

be understood that there is a need to keep a certain reserve

back.

MI. diGenova. We will unite 4

and 6.

Senator Huddleston.

That's all but 5.

Mr. diGenova. 5 is only about the Department of Justice

being notified as to the disposition.

Mr. Aaron. Now, we have two recommendations with respect

to cover. The first is just to recommend that the Department of

State stop publishing data which makes it possible to identify

people under cover.

Mr. Kirbow. Well, just a minute. On No. 5 I do have

a question here.

The Agency doesn't sign off on any other disposal of

United States properties and military bases or major edifices

or

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anything like that.

Mr. diGenova. And the reason for that is every other

governmentagency is subject to the rules and statutes of the

Federal Disposal 'of Property Act, and the CIA isn't.

MI. Kirbow. Do you see this could be an abuse area?

Mr. diGenova. I could see the Attorney General, if he

knew that Admiral. Raborn or some other Director is putting

pressure on the CIA to dispose of a piece of property, would

want to know about that, since they are not subject to the

Federal Disposal of Property Act like every other government

agency is.

I don't think -- I think the record clearly shows, and

the General Counsel indicated that he was not opposed to having

outside review of their disposals, provided it was classified

or done in a classified way since they have never had any

problem.

MI. Kirbow. What you are doing here, approving the final

disposition of disposal, if you are intending that he review

the disposal process or participate in it, he wouldn't have know!

about Raborn. He wouldn't have known about Raborn at all

because

he didn't dispose of it to his client, and this would

not pick up that kind of abuse that you have discussed here.

Mr. diGenova. Suppose it had been disposed of to Admiral

Raborn, and they knew about it, and the AG said, why is this

being done?

It would raise a red flag which would not otherwise

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be raised since the Federal Disposal of Property Act would not

have applied which would have flagged that legally to any other:

agency•

MI. Aaron. It would also strengthen the Agency's hand to

resist those purposes, to just simply say, hey, this has to be

signed out by the Attorney General. This isn't going to work.

It seems to me that what we do need here .

Mr. Kirbow. If what we are trying to do is get his

participation, just having him approve it doesn't get his

participation, I think we ought to put that in if that's what

we want to do.

Mr. diGenova. I think the word "approve" is wrong.

It

should be "participate." The sale or disposition of any CIA

proprietary --

Senator Huddleston. How are you going to make it "partici-

pate?"

Mr. diGenova. I think the word we want is "consultation."

Senator Huddleston. I think what-we are trying to do is

replace what other agencies have to do in an overt way and

under a specific law, which this agency is not under, so it will

have some

assurance that it is being done in a proper way.

MI. Kirbow.. I don't disagree with the AG being in on the

act,

but this one gets you participation on disposition.

Senator Huddleston. Well, figure a way to get it done.

Mr. Aaron. Well, what I wanted to say was I would like to

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note that back on page 67 where we have struck out the reference

to MI. Raborn and intend to expand on the pressures having

been brought to bear, part of that expansion should include

a statement that there is no - or that the Federal Disposal

of Property Act does not apply to the CIA, which is a crucial

aspect.

Mr. Kirbow. They are exempt,-and then bring in the

requirement for CIA, of for the AG participation.

Mr. Aaron. And that includes that.

Mr. diGenova. So we will rewrite 5 to make it consultation.

Ms. Culbreath.. David, on cover, may I just say, didn't

we decide to delete the opening paragraph?

Mr. Aaron. You're right, you're right.

Ms. Culbreath. We were just going to list the recommen-

dations.

Mr. diGenova. Yeah, we already said that.

Mr. Aaron. Now, we have a recommendation that the

CIA should make an effort to place a greater proportion of its

officers abroad under nonofficial cover, and that recommendation

is in brackets. Recommendation (a), that the CIA make a

greater effort to place a greater proportion of its officers

abroad, "under nonofficial cover" is in brackets.

Senator Huddleston.

That relates to the Welch discussion.

Mr. Aaron.

It relates to the Welch discussion and it

relates to the difficulties and problems of official cover.

TOO CLINET

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Mr. Bader.

How do you feel about this, Joe?

Mr. diGenova.

This is a problem because just like the man

says, cover is a relative thing. I don't think there is

anything wrong with saying that the CIA, that they should make

an effort to put - really not much of a recommendation - should

make an effort to place a greater proportion of its officers

abroad under nonofficial cover, and the Agency does not see

that in this form, wouldn't view that as a bad thing. They thin

cover is, if it is deep and effective, is okay. They just say

well, their answer this way, well, you know, you don't do

much work under deep, nonofficial cover, and one of the prices

you pay is you don't have a lot of operational freedom. You

have to work hard at your regular job and you don't do a whole

heck of a lot.

The recommendation, the way it is phrased, is sort of a

push to them to see if they can find better ways. It also

probably tells them that maybe they should use proprietaries

abroad a little more, which are very, very efficient, according

to Eric, according to both things, operations and cover.

MI. Aaron. I think we have got to be careful on this

point.

I mean, we ought to wait until the staff director-

returns because I think he has a particular interest in this

suggestion, but we are talking about moving more people into

unofficial cover. I would like to express my own persional

reservations about that in terms of its relationship to a

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number of things that the Committee has already decided to do.

Senator Huddleston.

We are eliminating a lot of cover.

Mr. Aaron. That's the first thing.

Now, the second thing - and these are nonoffocial cover

categories. The second thing that we are doing is trying to

place somewhat greater authority in the hands of the ambassador

and the missions overseas to know what is going on. That is

something that they can do when it is in their house. It is

something that's extremely difficult for them to do when it is

off in the forest someplace.

So it is -- and as Joe just said, it looks like a recommen.

dation to use more proprietaries, in part because it is in the

same section, but in reality because that is one of the ways

they might do it, and I just wonder how much we have thought

through for ourselves where the balance of our recommendations

lie, particularly since most of the stuff is derived basically

from operational experience anyway.

There was a period, toward the end of Mr. Bissell's

career: in the Agency, or maybe shortly thereafter, when they

began to try to put more people in unofficial cover, and it

wasn't a very good experience for them.

Mr. Kirbow. David, how does the ambassador lose control,

whether it is official or unofficial, except that he has got

them in his compound? It is an official government function

over which he has absolute control.

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Senator Huddleston. But if they keep coming to the

embassy to check with him, they blow their cover, unless they do

it by telephone.

Mr. Kirbow: Well, I don't think they should go to the

embassy at all. I think their contact should become covert.

Mr. diGenova. Well, we're sort of caught between a rock

and a hard place because we know the official cover is we cover

it best.

Senator Huddleston.

well, maybe we could approach in

that one way is to improve official covert

Mr. Aaron.

That is the one recommendation we make here,

but the limits on that are very -- they are just structural,

Jike..

Senator Huddleston. It seems to me like we are in an

area that we know a lot less about than the people who are.

in the business.

Mr. Aaron:. That is sort of my feeling.

Mr. Kirbow. We are asking them to proscribe against

anything that they can convince an oversight committee in the

future is essential in the trend of that time.

Senator Huddleston. Shouldn't we say that the time has

come for a whole review of cover to see whether or not they

can find some better ways?

Mr. Maxwell: We might say that the first large scale

study in 48 and '49 of the Agency, done by Mr. Dulles, among

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others; recommended very strongly that there be more unofficial

cover..

I think the Agency has been under considerable pressure

throughout its existence to do that, and as Joe pointed out

there are cettain limits to what it has been able to do.

Senator Huddleston. Well, I think rather than suggest

what ought to be more or less official or unofficial cover, the

whole matter ought to be studied immediately by the Agency, and

see if they can find some new ways consistent with all the

restraints and prohibitions that the Committee has placed upon

them.

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(General laughter.)

Senator Huddleston. All right, where does that leave us

here today as we close out today's session?

MI. Kirbow. MI. Chairman, might I suggest that in keeping

with an earlier discussion today, that because it is a summary

of findings as well as an introduction, that perhaps while

we are nice and fresh, tomorrow we might take up the intro

ductory section prepared by the Staff Director, so that if we

change it much, we either make the rest of our -

Senator Huddleston. Have any of the other members seen it

at all, Bill?

MI. Miller. Just Senator Mathias.

Senator Huddleston. All right, do you want to meet at

10:00 o'clock in the morning?

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Mr. Aaron. Are we going to terminate now?

Senator Huddleston. They've got a vote going and it's 5:10.

I think we'd better.

(Whereupon, at 5:10 o'clock p.m., the Subcommittee

recessed subject to the call of the Chair.)

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