REPORT ON THE COVERT ACTIVITIES OF THE CENTRAL INTELLIGENCE AGENCY

Created: 9/30/1954

OCR scan of the original document, errors are possible

SPfXIAL.

U

The President The White house

Dear Mr. President:

In conpliance with your verbal directivej confiraed by

your letter ofi1he undersigned

haveomprehensive study of the covert activities of

the Central Intelligence Agency. We have carefully

examined its operations In this area. We have also given

due consideration in our study to the Agency's overt

activities and to its relationship with the intelligence

cotxunityhole.

Our findings are embodied in the attached report. For

your convenience, conclusions and reconmendations are

sunnarized on With these we are in unanimous

agreenent.

"lie cannot speak too highly of the assistance and cooperation that baa been jiven to us by the Central Intelligence Agency at all levels, and by tba other agencies of Government and individuals contacted.

We are particularly indebted to our Eiecutive Director, Hr. S. Paul Johnston, and to Kr. J. Patrick Coyne of the Kational Security Council, both of whoa have worked with us throughout and whose assistance has been invaluable.

contents

Pag.

I. "

12. CONCLUSIONS AND

Respect to Personnel

Respect to Security

Respect to Coordination

Operations

Respect to Organization

Administration

Respect to Cost Factors

A.

Personnel Factors

Security Factors

and Operations

and Administration

Factors

.

and

- Present Organization

of

- Possible Organization

of

'A

REFOnT ON THE COYSg ACTIVITIES OF THE

CENTRAL OTBXIOEWCK AOElCr

' I. DiTBSDOCTION

The acquisition and proper evaluation of adequate and reliable intelligence on the capabilities and intentions of Sorlet Russia ia today's Boat importantand political roqolreaeot. Sereral agencies of Go vena eat and auury thousands of capable and dedicated people aro engaged in tho accooplishreent of this task. Because the United States is relatively new at the gaao, and because we aro opposedolicetate enesy whose social discipline and whose security measures have been built up and maintainedigh lovel for many years, the usable information we are obtainingill far abort of our needs.

Ass It reaairts national policy, another important requirement in an aggressive covertpolitical and paramilitary organization sore effective, core uniquo and, if necessary, wore ruthless than that employed by tbe eneay. No one should be penaltted to stand in the way of the proept, efficient and secure accoopllshaent of this mission.

In the carrying out of this policy and in order to reach alnlsal standards for national safety under present world conditions, two things Bust be done. First, tbe agencies charged by law with ths collection, evaluation and distribution of intelligence must be strengthened and coordinated to the greatest practicable degree. Thisrimary concern of tbe National SecurityCouncil and rust be accomplished at tha national policy level. Those elencuts of tbe problea that fall within the scope of our directive are dealt with in the report which follows. Tbe second consideration is less tangible but equally important. Itow clear that we are facing an implacable enemy whose avowed objective is world domination by whatevor Beans and at whatever cost. There are no rules iname. Hitherto acceptable norms of huaan conduct do not apply. If the United States

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is to survive, long-standing American concepts of "fair play" oust be reconsidered. We must develop effective espionage and counterespionage services and Bust lea re to subvert, sabotage and destroy our enemies by more clever,sophisticated and more effective methods than those used against us. It may become necessary that tho American people be made acquainted with, understand and support this fundamentally repugnant philosophy.

Because of tbe tight security controls that have been established by. and its satellites, tbe problem of Infiltration by human agents is extremely difficult. Most borders are made physically secure by elaborate systems of fencing, lights, mines,acked up by constant surveillance. Once across bordersy parachute', or by any other meansescape from detection is extremely difficult because of constant checks on personnel activities and personal documentation. The information ve have obtained by this method of acquisition has been negligible and the cost in effort, dollars and human lives prohibitive.

The defection of Soviet and satellite personnelore profitable field for exploitation. Tbe Agency is properlyreat deal of its effort

this source has been of value but is sporadic,

A still greater potential lies in cosuaunications Intelligence. This leads to the conviction that sucheffort should be expended in exploring every possible scientific and technical avenue of approach to tho intelligence problem. Tho study group has been extensively briefed. personnel and by the Armed Services in tbe methods and equipment that are presently in use and under development in this area. We have also had the benefit of advice from certain civilian consultants who aro working on such special projects. We are impressed by what has been done, but feel that there ls an immense potential yet to be explored. We believe that every known technique should be intensively applied and new ones should be developed to increase our intelligence acquisition by communications and electronic surveillance, highvisual, photographic and radar reconnaissance with manned or unmanned vehicles, upper atmosphere and oceano-graphic studies, physical and chemical research, etc.

Introduction5

such sources aay coae early warning of impending attack, fcb price is too high to pay for this knowledge.

In ths short time that has been available to us we hare been intensively briefed by the Director and ataff of the Central Intelligence Agency, by the rest of tbe intelligence conaunity, and by the principal users of the intelligence product. We have conferred with representatives of other Interested Government agencies and with certain koowledgable individuals whose past experience and present thinking have sade their views of value. The procedures which have been followed, and the list of witnesses who have been heard are detailed In Appendix B, attached. Our findingo andfollow.

H. CONCL'SIO.'S AfiTJgCATI'JNS

With respect to the Central Intelligence Agency in general we conclude! (a) that ite placement in theorganization of the Government le proper; (b) that the laws under which it operates are adequate; (c) that tha established pro via long for its financial support areflexible to ncet its current operational needs;

that in spite of tbe limitations imposed by its relatively short life and rapid expansion it isreditable Job;

that it is gradually Improving its capabilities, and

that it is exercising care to insure the loyalty of ite personnel.

There are, however, important areas in which. covert organization, administration and operations can and should be improved. Tho Agency is aware of theae deficiencies and in many cases steps are being taken toward their solution.

While we believe our study to have been as comprehensive as possible in the time available to us, we realize that it is not complete. Wo are well aware of the tremendous problems facing the Director and staff of an organization euch. and appreciate the sincere efforts being made to solve them.

In an attempt to be constructive and in tho hope that we may

be helpful, we make the following recommendations i

Agency should continually strive to achieve this and if necessary reduce its present work load to expedite its realization. Necessary steps are:

Elimination of personnel who can neverufficiently high degree of competenco to meet. standard. This willubstantialin present personnel. There is do place. for mediocrity.

Review aDd Improvement of recruitment plans and procedures in order to obtain higher qualityfor Agency jobs. Tha time required to process them should be reduced.

Continual improvement of tho present excellent training facilities and capabilities in all covert activities to keep step with future requirements.

ii. An intensified training program to include those key personnel in the covert services who roquiro additional training, by rotationacilities. At present at leastercent of total covert personnel should be in training'.

ssignment to field stations and to country areas of only those people who are fully qualified to handle the highly specialized problens involved.

6. Maintaining the position of Director above political considerations in order to assure tenure and continuity as in.

B. With Respect to Security

That greater security be developed at all levels of the Agency to the end that tbe good nana of tho United States and the fulfilment. 's important mission may not bo jeopardized. The following steps should be taken to accomplish these objectives:

Licinatlon. to the maximum extent practicable, of provisional and preliminary clearances in the security processing of prospective Agency personnel.

Improved and more standardized securityof alien operational personnel prior to their use by tho covert services overseas.

Immediate completion of full fieldand polygraph examinations of tho several hundred Agency personnel who have not yet been fully processed.

Conclusions and Recongaer.dat

Eetablisbing of uniform and tighter security procedures at headquarters and suitable safeguards in the field the better to Insure the security of the Agency's facilities, operations, eources and methods.

$. Insurance of the closest possible coordination of the counterespionage activities of tho covert aervices with the over-all counterintelligence activities of the Office of Security to prevent, or detecteliminate, any penetrations of CI.A.

6. Augmentation of tbe present sound policy of polygraphing all new employees and all personnelfron oversees assignments to include periodic recbecks of all personnel,ore comprehensive basis, wbenover effectlve counterintelligence practices indicate.

7* Creation of greater security consciousness on the part of all personnel by improving initialcourses and by conducting regular "security awareness" programs.

-Imposition of severe penalties upon employees at any and all levels who advertently or inadvertently violate security.

Establishmentniform system for tbe submission by all overseas missions of regular reports on the status of personnel, physical, documentary and

related elements of security. Such reporta should be submitted to tbe Office of Security with copies to the Inspector General and to the appropriate division of the Deputy Director of flans.

10. Periodic security Inspections by the Security Office of overseas missions and of DD/P's divisions, staffs and facilities in tha United States.

U. Rigid adherence to the "need-to-know"as tho basis for dissemination of classifieddeveloped by the covert services and for intra-Agency dissemination of classified data.

12. Continuous indoctrination and guidance to correct tbe natural tendency to overclasslfy documents originating in the Agency.

Formulation for immediate implementation of emergency plans and preparations, geared to the specific needs of each overseas mission and station, to Insure, as far as possible, adequate safeguarding of personnel and safeguarding or destruction of material, in the event of emergency.

Concentrations headquarters operations in fewer buildings with increased emphasis In tho interim on Improvement of tbe physical securitys many buildings and the classified data and materials contained therein.

C. With Respect^ to Coordination and Operations

That one agency be charged with the coordination of all covert operations In peacetime, subject to the provision that necessary flexibility be achievable in time of war. The covert operating capabilities. mxtst be continually improved. Steps toward these ends are:

1. Implementation of ICChich now. the coordinating agencyational emergency.

2. Preparation and teateadily lnplec en table-plan for the immediate and effective availability of local covert assets to theater commanders at tbe outbreak of war in their areas.

3* Immediate resolution, by tbe National Security Council, of the miaunderstendings that still exist. and some of the Armed Services with respect to "agreed activities.*

It. DevelopBent of better understanding between other agencies, relative to exploitation of Soviet and satellite defectors.

5* reater interchange of information, at all working levels,. and tbe military services regarding tbelr intelligence programs and policies.

7. Establishment of definite world-wide objectives for the future, and formulationomprehensive long-range plan for their achievement.

D, With Respect to Organisation and Acbilrlstration

That an intensive organizational study be made to the end of streamlining functions, clarifying lines of responsibility and authority, reducing overhead and increasing efficiency and effectiveness. From our relatively brief examination of organisation it is obvious that:

The present elaborate staff structure of tbe Deputy Director for Plans should be simplified.

The covert organization should bo so located, organised and administered as to maintain maximum security with reference to personnel and activities.

3- The Inspector General should operate on an Agency-wide basis with authority and responsibility to investigate and report on all activities of the Agency.

U. The activities of tbo Operations Coordination Board under. should be broadened to provide. with adequate support on the more Important covert projects.

. TuFatfel

espite tbe recosser.ced reduction in present personnel and budgetary econoaies that. Bust continue to grow in capacity until It Is ablo to eject, entirely, Its national cooaitaents.

entralized accomodations, hand-tailored to its needs, should bo provided to house the Agency.

With Respect to Cost Factors

That although the activities. should be expanded, costs of present operations should be reduced. This can be in part, accomplished through:

The exercise of better control overfor all covert projects, and specifically that (except for those of an extrenely sensitive nature) they be mado subject to review and approval by tbe Agency's Project Review Coaaittee.

Furnishing the Comptroller (under proper security provisions) with sufficient information on all covert projects to enable hia to exercise proper

accounting controliscal year basis.

istory and Growth. .

Tho Central Intelligence Agency la an organization of nixed origins and recent growth.

Tho overt aideell described by the Agoncy'a title, took overron the former Central Intelligence Group. It receives the intelligence collected by all government agencies, processus it, disseminates and files It. This phase of the work is well administered under tho Deputy Director of Intelligence and serves the whole intelligence community. l It has grown to Its present else ofely

The covert side. etartedpecial Operations) whichemnant of the. (Office of Policy Coordination) which wasWarn offshoot of the State'Department. operated. in virtual independence ofuntil theyhot-gun marriageputeputy Director for Plans. This covertnumbersthe regular table of

organization, and approximately as many more engaged in special projects, or all.

TCP fflflSET

on2

and serving Intelligence and Plans arepersons, of whom about

eputy Director for Administration, and about one-third are under Directors or Assistant Directors reporting directly to the Director of Central Intelligence himself, as in the case of Personnel, Training, and Communications. The work of theso f| ^La largely in support of covert operations, as the requlrcnenta of the overt Intelligence side are relatively simpler, whether for training or for support.

Additional personnel on special projects bring the current total to approi! ^ he total was less than f[ ^ This represents aj increase in seven years.

(Note: Throughout this report we have considered as tovert" all activities that are not "overt." Specifically, wt have included underthe operations assigned to the Agency by KSCs well as its clandestine espionage and counterespionage operations.)

A. Tbe Personnel Factors

Tbe most important elements In the successful conduct of covert intelligence operations are the people who run

baring little or no training for tbeir Jobs.

Fortunately, tho Agancy diet possess an invaluablen the formard core of capable and devoted men as a

part of its World War II inheritance, and did succeed in

attracting to this cadre an appreciable number of capable people. In some areas tbey have done, and are doing, an excellent Job, but it appearsersonnel standpoint,. tends to accept more commitments than are warrented by its human assets. This leads us to the belief that an immediate re-evaluation of all programs should be undertaken by the Project Review Committee to eliminate those of lessor importance aad to cut back the activity rates of all but tbe most essential to bring the over-all programore realistic coincidence with current Agency capabilities. When improved recruitment, adequate training and over-all experience level justify, Agency activity may again be accelerated.

We havetudy of the educational and experience background ofey people in tbo Agency's rhain of command. From this the following composlto figures emerge: all are natural. citixensj they range in age fromo9 yrs;re married;r more dependent children;re wholly dependent on

government salary; allxe college graduates;ave advanced degrees. Twelve haver more years business ezperier.ee; allave served In. Armed Forces; IS have had Intelligence experienceArmed Forces,riorndave had. training. Of this groupaveears or more service0 haveears or acre, andave been with ths Agency for theears since it was established in its present fora

The Office of Personnel supplied an excellent statistical studyntatf employees and agents on the roster as ofU from which tbe following data were takeni males make upercent of total, females, 1x2 percent; average age isears and two-thirds are inear age bracket. As for education, approximatelyercent of the total are high school graduates, some U7 percent. (or equivalent) degrees, and aboutercent have donework or possess advanced degrees. Forty-five percent haveears or more with. looking at prior Intelligence experience, which includes service with the Armed Forces or with tho Agency's predecessor organizations^and realizing that all Agency personnel do not require such training,ercent bad none, butercent haveear or morer more years. Of the Agency total,ercent have had

Pis cuss io:i6

acme foreign language training or experience, and nearly naif have had some prior foreign area knowledge. Slightly overercent are Armed Service veterans.

From the above we feel that the present personnel potential of the Agency is reasonably good. There isevidence, however, that "dead wood" exists at virtually all levels. We have heard critics remark to the effect that there are too many ex-military people. We have been advised that some people coming back tofrom overseas assignments are sometimes not assigned to new jobs for long periods. Uncertainties in policy, frequent Internal reorganizations, together with competition from industry frequently cause good people to seek employment outside. As in other governmental agencies, thereendency through inertia or becauseesire for financial security, for the mediocre to stay. esult, despite the continual and necessary acquisition of additional good people, the competence level of the Agency is not rising as rapidly as is desirable. Prompt and drastic action to Increase the rate of improvement is indicated. We are of the opinionlanned reduction of at leastercent In present personnel can and should bo achieved without reducing the amount and quality of Agency output.

We nave been briefed on the Career Service Plan by neans of which the Agency hopes to increase personnel stability. Whether the plan will achieve this results yet unknown, but it will not in itself solve the Agency's personnel problems. Nevertheless we believeound Career Service Plan is desirable and should be implemented as prooptly as possible.

.ecruitment program operating in colleges and universities throughout the United States. This program has not been entirely successful in producing either the quantity or the quality of applicants needed for Agency requirements.

In pert, this ie due to 'the general shortage of technically trained peopleis heavy current demands by industry in practically all fields. On the other hand we have heard criticism from scholastic sources that. approach, both to the school and to tbe in dividual, is not what It should be, and furthermore, that many potentially good people are lost because of the very great length of tine- that now elapses between initial contact and entry into the job.

Discussion0

, takes onlyays maximum for clearing lte own

personnel. Although wo appreciate fully the special problems

involvedbelieve Itoth practical and essential to reduce the prosentay period ae much as

possible.

Uarry applicants find the necessary clearance procedures unpalatable and annoying. Some are repelled by adsunder-etatiding ol* the purpose of polygrsphlc examination end the techniques employed. Soee (particularly in scientific fields where future professional reputation may depend uponof papers,re unwilling to accept the implicationsifetime of anonymity, or of lifeseudonym. We do not suggest that these requirements bo abandoned or relaxed in any degree. We are certain that they arefor maximum security and success of covert operations. But eoae better means of approach should be developed to assure the prospective employee that he is necessary, and to persuade hin that in this Agency he canesirable career and at the same timeital service to his country.

Wo have been impressed by the excellence of the Agency's training facilities and tho competence of its Instructor

Our comment Is that Insufficient use Is made of

TO? jedflET

Discussion9

these facilities. It is obvious that the language, cocaruni-cation and clandestine agent training centers which we inspected are being operated far under capacityhis, of course,eflection of the slacking off in recruiting progress, but it suggests also that adequate use of the facilities is not now being made to improve tbe over-all quality of Agency covert activities by newor refresher training of personnel already in tbe Agency.

We are aware that the present tendency of the Agency to take on more work than it can handle satisfactorily has limited optimum use of the training facilities, but it cannot be repeated too frequently that. covert operations quality is more important than quantity. mall number of competent peopleensitive agency-can bc more usefularge number of incompetents. In the long run it will pay to stop some of tbe less essential operations now toercent of Agency covert personnel to go into training. As the backlog of inadequately trained personnel is reduced and the competence level of Agency personnel increased, this percentage may be lowered.

TC:

Discussion10

B. Tbe Security Factors

Nothing is more important in the planning and executions covert activities than continuing recognition at all levels throughout tbe Agency of the importance of security in all of its aspects. Although many sound and important security steps have already been put into effect by the Agency, in view of the outstanding importances mission to tho national security, constant effort must be made to improve security wherever possible.

We have been thoroughly briefed by the Security Office of the Deputy Director of Administrationnd byoffices of the Deputy Director of Plans (DD/P) on personnel, physical, documentary, operational and cover security. We have examined the Agency's methods of screening outapplicants or present employees by interrogation, field investigation and polygraph techniques. We have also examined DD/P'a methods of processing alien operational personnel prior to their use by the covert services overseas.

We believes security clearance criteria for prospective Agency personnel are sound. Without exception, they should be fully adhered to in practice. The granting of provisional or other interim clearances should be minimized.

28

Full background investigations and polygraph examinations

i1 liTWiTf'tZ

continue to be prerequisite to hiring for ell positions, Individuals now on the rolls who have not had the benefit of these full security clearance procedures should be so processed at the earliest possiblo date, (at'the tine of our study there v HaV^ arters andpersonnel who had not been polygraphed because they bad entered on duty prior to the institution of the polygraph programB.)

We are impressed with the competent manner in which tbe polygraph program is bandied in the Agency and with the results obtained therefrom. Polygraph examination has proved extremely useful inl

endorse tbe agency's continuation of the polygraph program as an aid to investigation and interrogation as long as the

present high standards govern the use of this device.

There is considerable room for improvement in existing

security processing procedures for alien operational personnel.

Because some personnel must be used for Immediate short term

operations, it may sometimes be difficult to apply full

security clearance procedures to them.

reports on tbe status ol* personnel, physical, documentary end related cleaents of security. Such reports should he submitted to the Office of Security with copies to the Inspector General and the appropriate division of DD/P. We recommend that periodic security inspections should be made by the Office of Security of all overseas missions and of DD/P'a headquarters and other facilities in tha united States. Tighter security procedures at headquarters and particularly in the field will better insure the security of the Agency's facilities, operations, sources and methods. Implementation of these recommendations should aid inthe level of security throughout the entire Agency, particularly throughout tho covert services.

Ifystem of reporting and inspecting is adopted, the Director can, for the first time, look to one office for the security of tho entire Agency. He will thenore precise and timely picture of security-related developments throughout tbe Agency.

We cannot emphasize too strongly the importance of the continuation and intensificationsefforts to prevent, or detect and eliminate penetrations. We endorse fully tho presentpractices of the Agency which include

polygraphing all personnel returning from oTerseasautomatic security checks and file reviews of personnel being considered for transfer in the field or reassignment at

hcackjuarters, security checks of personnel nominated for

special types of clearance, etc. We do not think that periodic re-investigation of all personnel is now necessary, but we believe that comprehensive rechecks of personnel should be madeelective basis whenever soundpractices dictate. Questionable cases should be Intensively investigated and expeditiously resolved.

The counterespionage activities of the clandestine services can be one of the most fertile sources ofconcerning attempted penetrations* Appropriate steps should be taken to insure the closest possibleof DD/P'a counterespionage activities in this field with the over-allence activities of the Office of Security. Any penetration attempt madehether it involves Agency personnel and/or clandestine intelligence operations, can never be fully controlled and exploited until all information concerning euch attemptswhether made in the United States or overseasis channeled through one focal point, preferably tho Security Office.

"Security consciousness" is an obvious "must" for. personnel. Constant efforts should be made to Improve tbe Agency's security indoctrination courses. Regular "security awareness" programs should be inaugurated in order that all personnel may be reminded of theneed for "security consciousness" in tho conduct of their day-to-day affairs.

Host breaches of security committed. personnel appear to be inadvertent rather than intentional. The net effect of such breaches on the national security is the same regardless of intent. Without exception, an Inflexible attitude must be adopted with respect to security breaches and severe penalties meted out to employees at all levels who advertently or inadvertently vlolato security.

Too easy access to much. 's classified dataotential source of trouble. Except for tbe tightdrawn around super-sensitive matoriel, large segmentss files are open to inspection and use by Agency personnel without qualification as to "need-to-know.Improvement is needed in carrying out theruleasis for intra-Agency, as well as interdepartmental, distributiona classified data. This situation

ii - -

Is aggravated considerably by the fact that there are tooduplicate records. The securitys data in further jeopardizedendency to over-classifydata originating in theondition which operates in derogation of the security classificationhole.

. 's unduly dispersed headquarters fuildings in the Washingtonts physical security program is reasonably good. The potential security risks inherent in such wida-spread dispersal make it essential that tbe Agency continue its efforts to consolidate the heabquarters facilities into fewer, more adequate bull dingo.

The physical security measures in effect. installa-

tions which were visited in the general vicinity of Washington are excellent. The physical security of overseas installations visited by representatives of oar study group appeared to vary with local circumstances and conditions. The limited number of inspections made was not sufficient to allow of definitive conclusions as to tbe general security of all overseas missions. There appear to be, however, no basic, minimum physical security requirements governing these missions or stations, except for the safeguarding of classified oncuments. We believe that acceptable minimum standards should be promulgated

iaoediately and that regular inspections by qualified Security

plans and preparations should be made for immediate implementation of war-emergency measures by all overseas missions and stations, tailored to the local They should provide for maximum safeguarding of agency personnel and operations, and for adequate safegiiardlng or'destruction of classified data and material in the custody of tbe installations in question.

Secure cover is an inherent part of all clandestine operations. The security of some of the Agency's cover devices is excellent, security of others is inadequate. Cover securityroblem that requires continuous and exhaustive study. Detailed standards andolicies and regulations, should be issued for the guidance of the personnel concerned. There is need for more adequate briefing of personnel departing for overseas assignments concerning the cover of their missions and their personal

problems. fl

C. Coordination and Operations '

The success of the covert operations. depends upon how efficiently they are conducted and how well they are coordinated with other agencies ofvernaent. These criteria prevail both in peace and in war, but both coordination and operations are necessarily somewhat differ' ent during each of these periods. Peace In any ordinarily accepted sense of the word, appears to be impossible of achievement in the foreseeable future. The covert operations of the Agency must therefore be planned and coordinated in order to meet the requirementsontinuing cold war situation as well as the requirements of possible hot. has this obligation under KSCD SUi2U).

looking toward the possible outbreak of actual hostilities in any theater ofetailed plan should be developed now delineating the wartime. to insure that appropriate policy guidance, integrated.. plans, be furnished. representatives in the field. In an emergency situation time obviously will not permit referral of all critical covert operational questions to Washington.

It Is absolutely essential, therefore, that well-considered, well-implemented and pre-tested plans be prepared In advance

and to deal with any other local covert operational problems.

In the case of espionage and counterespionage oporatlone there Is disagreement- and sons of tbe military services which has yet to be resolved. This relates to the area of 'agreed activities" (KSCIDs toispute has dragged on for years. Some of the services feel that certain foreign espionage and counter- espionage operations must be run directly by them. The Director of Central Intelligence has been desirous of securing the voluntary agreement of the Armed Services, and hasvarious proposals to them as to the delimitation of these areas of "agreed activities." To date the attempts to resolve tbe differences have been unavailing. Ve believe that the prime responsibility for the failure does not lieut with theaen fact, we believe that the Director of Central Intelligence, in his desire to reach an amicable solution, has gone further than was intended by. directives. Since agreement has not been reachedoluntary basis, tha^Uapute should be resolved

TG^iET

. Id th* settlement of this dispute, In addition to recogniilng ths right of the Armed Services to perform counterintelligence activities for tho security of their own installations snd personnel, the Armod Servlcoa should be allowed to engage in espionage end counterespionage operations (provided they aro coordinated by tbe Director of Central Intelligence) until such tine. has the capability to perforn ell espionage and counterespionage operationsthe United States.

In order to avoid undue delay in the resolution of such problems In the future, the Director of Central Intelligence (as coordinator of all foreign intelligence) should report regularly to. on the status of efforts to. directives, with particular eaphasis on major unresolved questions.

Inasmuch as the exploitation of Soviet and satellite defectors outside the United States hasource of annoyance (and even hostility) on ths pert of some of the military services and other agencies, and vice versa, we believe that steps should be taken immediately to Insure full lmplementatloo of tbe defector program inwith.the spirit and letter of RSCID.

The misunderstandings which exist. and the Armed Services eten largely from insufficient exchange

rOPjftflET

of Information and coordination with respect to espionage, counterespionage, and covert operations* have been advised, for era-pie, that in certain. operators appear to have been too secretive with respect to information which is of direct interest to the military services and vice versa. We have been told of incidents where important covert operations have been "blown"I.A. and military intelligence units were operating against each other, without knowledge of each other's interest or activity.

of knowledge of plans, facilities, and operations seems to exist in some areas between the Pentagon. Compaxteentatlon can be carried too far. Improvement in collaboration at the working levels Is particularly essential.

IET

Relations'a other principal customer, the Department of State, also are not entirely satisfactory. In Washington, coordination seeas to bo reasonably good with well-established liaison channels

esult, people have worked.at cross purposes with unfortunate results. It is realized that there are situations in which disclosure of plan and purpose should bc heldinianira number of people,]

D. Organization and Administration

In the course of investigating the covert operations of the Agency, we were briefed on the organization of the individual components of tbeomplex. '* We also had the benefit of the thinkingumber of key Agency people with respect to therganizationhole. esult certain general observations with respect torganization havo emerged which are germane to the problem of the efficiency and economy of its operations.

From the remarks that have been made on the subject of Agency history and personnel problems. It is dear that tbe organization is still in an evolutionary stage. It has sufferedixedack of policy continuity, tremendous pressures to accept commitments beyond its capacity to perform,ushroom expansion. esult there has been an absence of long-range planning with consequent organizational difficulties. We are strongly of the opinion that further streamlining of organization, clarification of functions, and straightening of lines of authority will result in more and better work with fewer people at lower costs.

The covert activitiesall under the direction of the Deputy Director for Planshey are presently conductedomplicated organizationixed straight-line

and functional type in which staff hag been superimposed on staff to such an extent that duplication of effort,command authority, and division of responsibility have inevitably resulted in dilution of the total effort.

There are six principal staffs in the DD/Pin size from

These are superimposed over seven area divisions rangingfjj staffs

have subordinate divisions, and two of the staffs have subordinate staffs. In addition, each of the divisions has its own set of staffs. Altogether, theomplex totalsajor units.

We are strongly of the opinion, based upon our limited review of thelement, that considerationomplete reorganization of the element is needed.s an indication of the type organization that might be more effective and less costly, wo have included in this report forpurposesevised organization chart as Appendix D. hart of the presentrganization is also included, for purposes of comparison, as Appendix C. Tho personnel contemplated under the revisedrganization would number

4f:

element.

In considering any reorganization, we cannot emphasize too strongly our feelings with respect to the'need for greater

security In allperations. As the covert side.

it should operateaximum of anonymity. Knowledge of its physical location, operation and the identity of its

personnel should be kept on an absolutely need-to-know basis.

Ve feel that continuous inspection and closer control (both fiscal and operational) over covert activities are necessary. We realize that certain security risks are involved but we believe they can be handled properly.

The subject of fiscal control, and the relationship of the Comptroller to the organization aro discussed under Sectionfollowing.

The concept of an Inspector General for the agency is sound. He should report only to tbe Director. He should be given the greatest possible latitude and authority to Inspect all aspects of the Agency at any tins, including the Director's own office and theomplex. We beliovo that any limitations that have been placed on this function in the past should be completely removed.

TOPJtGBET

Discussion28

Because of the rapid expansion of the Agency, its operations are conducted inidings in thearea. Some of these buildings are of temporary wartime

construction andire hazard. This forced de-

i

centralization of operations results in great loss of time of personnel whose duties require them frequently to visit various buildings of the Agency; it increases security problems; and it resultsreat reduction in over-all efficiency. We recommend that sympathetic consideration be given to the Agency's effort to obtain funds with which to provide centralizedfor its activities, and we suggest that thesewould best serve tbe peculiar requirements of the Agency if they were hand-tailored to its needs. We are of the opinion thatelatively short time the expenditure required would be self-liquidating.

Although in the present organizational plan of the. seems to ba well Integrated into theCommunity at the National Security Council level, events have occurred recently!

which indicate that gaps exist in high leveland coordination of important covert operations which may expose the U. S. Government to unnecessary risks of compromise. Over-all policy guidance comesnd Is satisfactory,

but better coordination is Deeded for the more inportant covert activities. at the national level. This is the function of the Operations Coordination Board, but at the present time it does not appear to be giving .the Agency adequate guidance and advice on. the aore inportant covert projects. The activities of the Board should be broadened in order to provide, with the support he needs on such projects.

n

'4-

E. The Cost Factors

The budgetary procedures of tbe Agency were reviewed with the Agency Comptroller and representatives of the Bureau of the Budget and appear to be satisfactory. Between the fiscal years ended75 the total budget has increased from approximately the latter figureeserve fund oi5 fiscal year budget exclusive of the reserve fund is divided approximately as follows i

Direct ,

Covert operations Overt operations Indirect or support costs i

Since indirect or support costs are relativelyto direct costs, the total budget may bo considered to be approxinatolyjpjfor covert andfjffor overt operations.

The number of civilian employees of the Agencyceilings baa increasedtan estimated fft9tor thfl 'lsCil 7ear endingmilitary personnel has increased during the same| fiscal

to?

This total does not include individuals under contract,not regular employees of tho Agency, Individualsin

indigenous personnel. The aggregate of persons in these categories is eetinntec: atfjjss^P? oast of whom aro engaged in covert operations.

The actual number of individuals to be engaged on Agency activities for tbe fiscal5 will, therefore, be approximately fBLsmsr*

The covert operations of tbe Agency are budgeted and accounted forroject basis except for headquarters and overseas support costs. Political and psychological and paramilitary projectspecified minimum dollar total- are in general reviewed and approvedroject

Review Committee. Foreign Intelligence projects are not

t

subject to review by this committee but are authorized by

TOP ifdfltl

32

tbe Director of the Agency, tbe Deputy Director of the Agency, the Deputy Director of Plena, or certain other individuals depending upon the estimated dollar costs of individual projects. We believe that for purposes of control and as an aid in auditing, Foreign Intelligence projects (except those of an extresely sensitive nature) should be madeto review and approval by the Project Review Coamlttee.

Due to DD/P's "pre*"nt secrecy policies with respect to Foreign Intelligence projects, tbe Co apt roller of the agency Is unable to na in tain meaningful records showing tbemade for individual projects In this category. The Foreign Intelligence Staff keeps certain records of such expenditures but on the basisalendar ratheriscal year. We believe that the Comptroller should be furnished with information which will enable him to record, control and account for the costs of the individual projects of this element of the Agency. Adequate protection for security purposes can and should be provided within the Office of tbe Comptroller.

Certain other projects in the political andand paramilitary areas,ensitive nature are occasionally developed and processed without full information with respect thereto being given to tbe Deputy Director for

Administration and the Comptroller. Since, of necessity, the funds must be made available by the Comptroller, it is inevitable that he will have knowledge that operations of this nature are being conducted and it ia unlikely that more specific information relating to the projects can long be kept secret from him. In one particular instance where substantial suns were expended, the Comptroller was called upon to make the expenditures with no supporting data being furnished to him at the time or at any future date. When we requested breakdowns of costs of the operation we found that they were available only in the area division involved and that they were incomplete and unsatisfactory. We aro of the opinion that this deviation from the normal procedure of placing upon the Comptroller tbe responsibility offor expenditures is unsound, and is not justified by the claim that the security, of the operation is improved by this deviation.

Wo are of the opinion that the administrative plans for individual covert projects are not in all instances as complete in detail as is desirable and that if they were amplified the Comptroller and the Audi tor-in-Chief would be

uch better position to carry out their respective

duties and responsibilities.

/

f

APPENDIX A

COPT

THE WHITE HOUSE

,

It. Gen. James H. toe-little, USAFR Washington, D. C.

- Be: Panel of Consultanta on Covert Activities of tbe Central Intelligence Agency

Dear General Doolittle:

I have requested you, and you have agreed, to act as Chairmananel of .consultants totudy of the covert activities of tho Central Intelligence Agency. With yourave invited Messrs. William B.orris Hadley, and William Pauley to act with you Me members of the panel. Hr. S. Paul Johnston has kindly agreed to serve as Executive Director of the panel.

, It is my desire that the Panel of Consultants shoulda comprehensive study of the covert activities of the Central Intelligence Agency, in particular those carried out under the terms of NSCIDfndfU. Xou will consider tbe personnel factors, tbe security, the adequacy, the efficacy and tho relative costs of these operations and, as far as possible, equate the cost of the over-all efforts to the results achieved. Ibu will make any recommendations calculated to improve the conduct of these operations. To tbe extent that agencies of tbs Government, other than the Central Intelligence Agency, are engaged in covert operations which may parallel, duplicate, or supplement the operations of CIA, you may investigate such other operations conducted by any other department or agency of the Government in order to insure, insofar as practicable, that the field of foreign clandestine operations ls adequately covered and that there is no unnecessary duplication of effort or expense.

SE/!ET

9 54

Appendix A2

In view of tbe particularly sensitive nature of these covert operations, their relation to the conduct of our foreign policy, and the fact that these sensitive operations are carried on pursuant to National Security Council action approved byesire that your report be made to me personally and classified TOP SECRET'. ill determine whether or not the report or any part thereof should have further dissemination. hould appreciate it if your report could be available to me prior to Octoberb,;'

As you know, the Commission on Organization of tbe Executive Branch of the Government, generally known as the Hoover Commission, isask Force to study and make recommendations with respect to the organization and methods of operations of the CIA. General Mark W. Clark has been designated by Mr. Hoover to head this Task Forcenderstand, will probably be organized and start its work sometime in September next. Under the law constituting the Hoover Commission, the Task Force shall study and investigate the present organization and methods of operation of the Agency to determine what changes therein are necessary to accomplish the policy of Congress to promote economy, efficiency, and improved service byi

a. recommending methods and procedures for reducing expenditures to tbe lowest amount consistent with the efficient performance of essential services, activities and functions;

duplication and overlapping ofand functions;

services, activities, anda similar nature;

services, activities, and functionsto the efficient conduct of .Government;

nonessential services, functions,which are competitive with private enterprise;

* f. defining responsibilities of officials; and

g. relocating agencies now responsible directly to the President in departments or other agencies.

As the work of the Hoover Task Force will get under wayuggest that you and General Clark confer in order to avoid any unnecessary duplication of work as between you. Tho distinction between the work of your Study Group and of the Hoover Task Force is thlst

S^RET

SEfiKEI

A3

vill deal with the covert activities of the CIA as Indicated Inbove, and your report will be submitted to me. General Clark's Task Force will deal largely with the organization and methods of operation of.the CIA and other related agencies within the limits prescribed in the law as outlined in paragraph (u) above. Reports of the Hoover Commission are made to the Congrese.

The purpose of these studies, both that of the Hoover Task Force and that of your Group, is to insure that the United States Government develops an appropriate mechanism for carrying out its over-all intelligence responsibilities and the related covert operations. onsider these operations are essential to our national security in these days when international Coimnunisa ia aggressively pressing its world-wide subversive program.

Sincerely,

/S/ Dwight D. Eisenhower

vDn b

PROGRAMS AND PROCEDURES

In early July,,senbower verbally directed Janes H. Doolittle topecial Studyo conduct an Investigation and to report to Mi on the covert activities ol* the Central Intelligence agency. The other aethers of the Group included Willi an b. Franke/ Willlan D. Pauley, and Harris Badley. Mr. J. Patriek Coyne, of tho Rational Security Council Staff, was designated as conscltant to tho Group. Mr. S. Paul Johnston, Director of the Institute of the Aeronautical Sciences} was appointed Executive Director. Tho teres of reference for the project were spelled out in the Presidential directive ofii

The first aeetlng of the Study Group (excepting Kr. Badley and the Executive Director, neither of whon had been appointed by that date) took place. headquarters on Iii July. On that occasion the Director of Central Intelligence and key neebers of his staff

tc? fim

B2

presented the over-all problem iron the viewpoint of the Agency.

The Grouphole met for the first time in its assigned space. headquarters onuly. The Chairman outlined his views as to the Job to be done and the procedures to be followed. rogram of briefings which had been prepared by Agency personnel in tbe interim was discussed and accepted. The. agencies to be heard were agreed upon and the program outlined below was initiated. Tbe schedule of tbe hearingsist of all witnesses beard by the Group is attached.

At the request of the Group extensive briefings were arranged by the Office of the Secretary of Defense, the three Armed Services, the Department of State,"the Federal Bureau of Investigation and the Bureau of tbe Budget. In most cases the documentation from which briefings were conducted was made available for Group study.

A number of individuals whose knowledge and background seemed pertinent to tbe study were invited to present their views. Others were consulted informally by various members of the Group. The Chairman discussed intelligence matters of interest to the Atomic Energy Commission with its Chairman, Mr. lewistrauss. He also discussed matters of

-TOPT

Appendix B3

cooperation between the two committees with Ex-President Herbert C. Hoover and General Mark W.. (Ret.)

Several field trips were taken during tbe coursestudy. The entire Orcup

the Office of Cosnaunications Staff Training installation. During the week ofeptember tho Chairman, accompanied bynsPection of. stations in Western Europe,

Because of tbe extremely sensitive nature of most of the paper work made available to the Group, specialwere taken with respect to itsnd security. No such papers were taken out of the immediate office area except under suitable precautionary measures, and all working papers, files, or other records have either been destroyed or returned to their source. This Group has developed no

*

archives.

TVJEfiaf

The fact that the Group was able to cover so much ground inimited time etests from the assistance and cooperation that wa3 received from the Agency at all levels. The Director took personal and continuing interest In seeing that the Group had all needed facilities and

information. Particular credit must be givenGen. J. D.. ho vaaLiaison Officer for tbe Group, and bis twoCrodr. E. I. Carson, (USKR),

They laid on briefing schedules, set up conferences, cane up with needed info nation promptly and arranged for local transportation. Without their help tho Job accomplished would have been vastly bo re difficult. Mention must be made also of the assistance rendered in connection with the "general housekeeping" needs of ths Group. Everything Deeded, including numerousfor complicated air and rail travel arrangements, was promptly and efficiently handled by the Agencypeople.

Particular thanks are due to

tho solo secretarial assistant of tho Group, for her efficient and effective handling of all paper work and other day-to-day office requirements.

SPECIAL STUDYAILY LOG

lli July

, Covert Activities

Presented by

Allen V. Dulles ,Frank G. Wisner Richard Helms

Planning "Cold" War

Planning "Hot" War

Foreign Intelligence

Communications Intelligencearamilitary

3 August issemination

h August Technical Services

Functions, Dep. Dir./Intelligence State Department

6 August Training

5 August Security Services

7 August Field Trip -j

Coordination 0C8 and Defense

Special Operations

Clandestine Planning Committee Research it Development

FieldAugust . Air Force Intelligence

ugust Federal Bureau of Investigation

Belmont Sanuel ?acj

Augustugust

Acquisition Office of Naval Intelligence

U. S.

National Security Agency

State Department

. Trudeau As StR.J. Canine tt Staf

> Armstrorg it Star:

eptember

Ii September

Sc-cialiorjral^

Sec tester

of the Budga; Tur.cticns, Inspector Genera

M. Kaey Lyman C. BiaUtes Lyase Kir*pa".rii--

wrier ntel. Operati

Security

htiOSsl SecuritySeptember AjrteiSeptember Special Briefing

Other Than CIA

Abbott, Tf.

Acker, F. C,

Armstrong, TT. Part,

Aysr,James ' Harvard

.Belmont, A.

Canine,t. Gen.,

Chandler, Fitxhugh,

Cutler,

Drain,

Drako,

Espo,ear

. Friedman, William

Gibes,

Godol, William

Gregg, G.

Eamilton, Lymao

Earrold,t.

Harvey,

HeddoD,

Holland, Henry

Holtwick,apt.,Fishor Stato

Buliok,

Joraegau, John

Jones,

Jones, J.

Junghanc,

Boons, Tilghman

Lay,

Leretto,

Lindbeek,

Lydman,

KeOlure,rig.SA MAAG

McConaughy,

McFarlane,

Macy, Robert

Matlack, Mrs.

Montgomery, USA .

Mooney,

Moore, DSM

Murphy,

Papich,

Perez,

Reeder,

Samford,aj.

Scanmon,

Setchell,USAF

Siegmund, T.

Spore,ice Adm.,

DSN

Stuart,

Sullivan, J.

Thurston,

Trudeau, USA

Weinbrenner,

Welden,-Frank,

.Wiggin, USN

Young, Kenneth

Original document.

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