Created: 3/10/1971

OCR scan of the original document, errors are possible




bout the ppod-jct



specificio.:m. issurs

leadership or theur:iTy

r;.SE LrADcasiii*


ix. TO'AVtD Ii:PROVE:2sts IN the PBODUC'i





i. 2ktrod'jct:on: Tund

The operations of the intelligence co^aunity havetwo disturbing phenomena. The first ia an impreasive rise in their size and cost. The second is an apparenttoos-jnonaurate improvement in the acope and overall quality of intelligence products.

During the past docada alone, the cost of thotime,increases in collection activities havesatellite photography is concerned, the increasesto greatly improved knowledge about >ho militaryof potential eneaies. But expa: ded collectionother .than photography haa not brought about ain our uncertainty about the intentions,political processes of foreign powers. Instead,in raw intelligenceand hare satellitebe includedhas coma to acrveroxy forinference, and estimation.

The following report aeeke to identify the causes of thaae two phenomena and tha areas in which constructive change can take place. Ita principal conclusion is thatumber of specific measures may help to bringloser

niatiOMhip tet'.'sen coat and effectiveness,i hope

for tiding so lies in areforn of tha Intelligence

commuriicy's do-iaionca>:ing bodiesrocedures.

This conclusion is advanced in full recognition that reorganisation will, at best, only create the conditions ln which wise and imaginative leadership can flouriah. In the absence of reorganisation, however, the habits of Intelligence community will reaain at difficult to control as waa theof the nepartment of Defense prior to tho Defense Reorgcnization ActB.

ro? tMOCJ


'- 3

To understand ihe phenomenon of in::eising costs, it is necessary to consider briefly the organizational history of the intelligence comminity. The National Security Act7 and the National Security Council Intelligence (NSCIDs) of thendstablished the basic division of responsibilitiesgencies and departrrcnts. This division had its origins in traditional distinctions between siilitary and non-nilitary intelligence. between tactical and national intelligence, and between corsr.unicotions andnic*tiona (or agent) intelligence, thus, CIA was directedIoy clandestine agents to eoilnt "non-military" intelligence and produce "national" intaltigence. The Dcpsrtxent of State was stade responsiblee overt collection of "non-mi litary" The National Security Agency (KSA) wasto nanage COMINT collection. Tho rd litary Services wore instructed to collect "ndlitary" intelligence as well as maintain tactical intelligence capabllitiea tor use in wartime. All wore permitted to produce "departmental"to meet their separate needs. Khile not ideal, this division of functions and responsibilities workedwell into the.

Since that time, these traditional distinctions and the organizational arrangementi which accompanied then have

ncreasingly l*scant. The lira between "nilitery" and "non-military" nit faded: scientific and technicalwith both civilian and Military applications hasrincipal area of endeavor for almost allorganizations Similarly, undor the old distinctions, the national leaderahlpnanaly tho Prraidant and the KSCconcerned Itself with "national" intelligence. while pre-aunnbly only battlefieldcared about tactical apidly advancing tect-nology which has revolutionised the collection, processing, and communication of intelligence data casta doubt on tho validity of the.

echnological advances have created new collection possibilities whichot fil cor.vanientlytructure baaed on traditional distinctions and ware not covered in the original directives. Satellite photography, telemetry interenpt, electronic intelligencecoustic detection, and radar have become some of the most important and vital methods of intelligence collection not currently covered by any uniform national policy.

The breakdown of the old distinctions and the appearance of now collection methods hasimultaneous processost of educations about intelligence organisation, is CLINT related to COMINT, is it technical or military ln

nature. is it of primary inter;** to tactical or national consumera? Where should tha radix tracking of missile or tha acoustic aurvoillance of Ssvaet ballistic nissilafit? Is teleratry more similar to COMINT or to ELINT; vho should analyze it? Kho should be responsible for satellite* photography? Cn the more mundane, but nonetheless critical level, questions arise about the organisationalfor such topics aa Sihanoukvillo supplyVC/KVA order of battle, anddeployments in the Sues Canal area. Are theso military or non-military

iaauos? Is the intelligence about thee, tactical or. should beponsible for collcctioi and vhat collection resources shoulo b- taakod?

In tho absonca of an authoritative governing body to resolve these issues, the community haa resortederies of compromise solutions that adversely ;ffeci its performance and cost. In general, thesehave favored multiple and diffuse collectionnd the neglect of difficult and searching analytical approaches. The most serious of the resulting problems are outlined below In briof form, andin more detail in tha appendices.

J. The distribution of intelligence functions haa become

* The old distinctions among national, departmental, and tactical intelligence are out of date. Today,


CIA ic as likely to produce intelligence relevant to, aay, KVA/vc order of battle as OIA or KACV, just as KACV produces nany reports that arc of interest to the national leadorship.

Similarly, the relatively neat ordering offunctions that existed after World War II has broken down. CIA now engageside range of collection activitiesaircraft and satellite photograjhy, ELIKT, COIIIKT, radar, telemetry as well as clandestine, and overt agent collection. NSn has ldded leleratry and ELINT to ita COMIMT capabilities. The Services nowull panoply of acmes toariety of functions tactical intelligence, surveillance, early warning, and.

lluatrates how almost all majorof the intelligence cowumty arein each of ita various collection and production functiona.

" The blurring of traditional boundaries has encouraged community mortars to engageompetitive struggle for survival and dominance, primarily through new technology, which has reaultad in the redundant acquisition of data at virtually allactical, theater coetoand, and national.

' Gross redundancies in collection capabilities have become conotonplacc as exemplified by aircraft inboth CIA and Defense which collect photography.



Collection capabilities remain in operation beyond

their useful lives. As older systenr, lose their

attractiveness at the national level, thty are

taken over at the command or tactical level where they duplicate higher level activities or collect date of little value.

cowarJlmentali sation within various security systems has servedde or obscuretitivf capabilities fro- evaluation, cor.pariaon, and trawoff analysis.

The corjsjnity'a growth la largely urplcnned and un-guided.

forward planning is often lacking as decisions are isade about the allocation of rosources.

' The consumer frequently fails to specify his product needs for the producer) the producer, uncertain about eventual demands, encourages the collector todata without selectivity or priority; end the collector emphasizes quantity rather then quality.

4. The'activitieso*'gy

The (raerr-cntatio- of intelligence function* and the competitive drive for improved collection technology

are important reasons why the cost of intelligence

* ignificant part of thia cost growth ie attributable to the acquisition of expensive now systems without^--

aicultannous reductions in obsolescent collectionprograms.

Jn the ibscnco of planning and guidance, internally

generat id valuesha community's Those values favor increasinglyand expansive collection technologies at tho expense of analytical capabilities.

Few interagency comparisons are contemplated. Vo-

tential tradeoffs betweenST and SIGIKT, between PHOTIYT and Hl'XIKT, and between data collection and analysis are neglected.

* While the budgetary process night be used to curb some of the more obvious excesses, it cannot sub-atitute for centralized management of the community.


orld of perfect information. there would be DO

uncertainties about tho presort ond future intentions,ilitles, *nd activities of foreign powers. Information, however, is bound to bo imperfect for the most part. the intelligence Quaes unity cen at best reduce the uncertaintiesonstruct plausible hypatheses about these factors on the basis of what continues to be partial and often conflicting evidence.

Despite the richnoss of the data made available bythocr. of collection, and the rising eO'ftl of theirit is not at all clear that our hypotheses aboutntentions, capabilities, and activities have improved co=-mensurately in acope and qunlity. rt be asserted with confidence that the intelligence concuniry has ahovn nuchin developing the full range of possible explanations in light of available data. Among tho mere recent results of this failure to acknowledge uncertainty and entertain new ideas in the face of it, hasropensity to overlook such unpleasant possibilitiesarge-scale exploitation of Sihanoukville by the NVA to tiansahlp supplies, aof theuildup and its possible MIRVlng, or Soviet willingness to invade Czechoslovakia and put forces into the Middle Cast.

Difficulties of this kind with the intelligence product are all the more dasturting because the need to explore andumber of hypotheses will, if anything, expand as the Soviets project their nilitary power and corns toore direct global role. Yet there is no evidence that theconrnunity, given its present structure, will cone to grips with this class of problems.

The community's heavy emphasis on collection is itself detrimental to correcting product probleua. Because each organisation sees the maintenance and expansion of itacapabilities as the principal rnute to aurvival and strongih with th- corvnunity. thoro is a .trong presumption ln today's intelligence set-up that addi:lonal datarather than ii.psoved analysis, will provido the answer to particular intelligence problems. It has become eonjron-place to translate product criticism int" demands forcollection efforts. Seldom docs anyone askurther reduction in uncertainty, however small, is worth its coat.

The inevitable remit is that production remains the stepchild of the coma-unity. Itrofession that lacks strong military and civilian career incentives, even within CIA. Tho analysts,eavy burden of responsibility, find thomselvoa Bwarpcd with data. The consumers, at the

reat their productree good, so that demand exceeds supply, priorities ero not established, thebccorws overloaded end tho quality of the output suffers. As If this were not enough, production, instead of guiding collection, is itself guided by collectors and tho impetus of technology. Since the military arc the principalthey ara pore likely to focus oneeds and interests of their ovn Services than on tho issues of concern to the national leaderrhlp, and they continue the wasteful practice of counterpart targeting. Under such difficult conditions, it is not surprising that hypothoses tend to harden into decr-a, thatensitivity to changod conditions is notera* that new data are not sought to test then.



y.:cstio:is about cost and product nicht exist ever, if the intelligence coircrunity possessed strong leadership. Itteworthyfthat they have arisen under conditions the most marked of whichack of institutions governing the community with the authority nnd responsibility toissues without excessive compromise, allocate resources according to criteria of effectiveness, and consider thebetwssn cost and substantive outputational perspective.

This lack of governingens fundamentally from tho failurn of the rational Security Act7 to cnticipctc the "constitutional" needs ofrodarn andcomplex intelligence community. The primary intent of the Act, understandably, "as toecurrence of the intelligence confusions and delays that occurred prior to Pearl Harbor. These problems were seen as having resulted from defects in the central processing, production, andof intelligence. The critical need,s to create an organization which would have access to all intelligence and report its estimates to the national

he size and cast of individual programs were relatively small, and the scope and nature of the management

prcblflM associated uirh today'*ty ware not Consequently the iasue of how to plan and rationalize the collection of intolllgsnce did not seem of greet moment, and tho Act did not explicitly provideechanism tothose functions or evaluate the scope and quality of its product.

There is another roason why7 Act did so little to provide strong leaderahip for the community: poworfulin tho Military Services and elsewhere opposed (and continue to oppose] core centralized management ofactivities. Partly, this opposition arises from the belief of tha Sirvices that direct control over intelligence prog:arts Is essential if they are to conduct successfuloperations: partly, it results fron bureaucratic concerns. The Serx'iccs are reluctant to accept assuranco thatfrom systems not controlled by thee will be available as and when they require it.

Despite such opposition, the National Security Act7 did stipulate that the CIA would coordinate theactivities" of the Government under the direction of the National Security Council. However, the Act also made clear provision for the continuation of 'departmental Since then, three Presidents have exhorted the Director of Central Intelligence (DCI) to play the role of

r.ity leader and coordinator,his authority over the

has rerainfiL riciaaj. irhilf. the DC1Uer. taM catalyst in coordinating substantive intellicence production, he bas xade little use of such authority as he possesses to manage tha resources of the cojnmunity.

Realistically, it is clear that the DO, as his office ia now constituted, cannot be expected to perform effectively tha cor^iunity-wiao leadership role becau<a:

At an agency head heumber of waightyand advisory responsibilities vhich limit the effort he can davota to community-wide management.

articularly hesvy bgiden for the planning and conduct of covert actions.

Ilia mult.pie roles as community leader, agency head, and intelligence adviser to the Pretident, and to

a number of sensitive executive committees, are mutually conflicting.

ompetitor for resources within tho community ovlng to his responsibilities as Director of CIA, which haa largo collection programs of ita own; thus he cannot be wholly objective in providing guidance

for contmunity-wlde collection.




m contrailf the community's ra-sourcea and bus therefore rely on pa:suation so


appropriated to tha Department of Defense. Since Defense is legally responsible for those very large resources, it feels that it ear-noi be bound byadvice on how they should bo used.

Tho DCI is outrankod by other departmental heads who report directly to the President and arc his immediate

supervisors on the National Security Council.

In spite of thoseicaps, the DCI has established several Institu:icncl devices to assist him in leading the COA-murity. They are the National Intelligence Program tvalua-tioa Staff (NIPEi and the Rational Intelligence Resources board (KIRB). However, tho principal agencies have largoly ignored or resisted the efforts of management by these bodies.onsequence, the WIPE andB have concentrated on developing inproved data about intelligence programs and better mechanisms for coordination. Because of their work, both institutions could prove usefultrong coasaunity leader: however, their contribution to the efforts of the

currently constituted DCI is small.

the absence of annstitutional ttumu9tk within which ono official could t: noli! responsible andfor the performance and coat of tha intelligence cor-munity, the United States Intelligence Board CJSID),established to advise theasort of govarning body fcr the community. tho USIO has provad generally ineffectiveanicer.ent mechanism for several reasons:

Itittce of equals who must for* coalitions todecisions.

it is o'"*inEtod by collectors and producers kko avoid raiting criticil questions obout the collection pro-grans op1rated by their cclloagucs.

esult. USIB's collection requirementswhich areuoregate of all resuosts, new and oldmean all things to all agencies, thus leaving them free

to pursue their own interests.

' Since policy-level consusers are not represented on the Board, they aro unable to give guidance as to priority needs.

Even within the Department of Defense, there is nomanageeont of intelligence resources and activities.

Although the Assistant Secretary for Administration has been


esponsibility in this area, togetherali staff fox resource analysis, his efforts to nastor th* Defense Intelligence complex, have proved of little avail for several reasons. First, not all Defense programs cone under hisand this limits his ability to do cross-program analysis Second, he remains responsible for his functions as Assistant. Secretary for Administration.

Belov tho level of reviow provided by an Assistant Secretary, manac,cxant leadership is atil- absent. The Directorsnd IfSA are thamselvea unable to control the activities of thesupposedly subordinate to then but opera toJ byilitary Services. Becauseistory of compromises andie Director of the National Peconn; issancc Office (tlftO) is similarly unable to arge pert of his program which is run by the Deputy Director for Science and Technology (DD/rtTl in CIA.

This lack ol lower-level leadership shows up in theway* i

" The current failure of HSA adequately to direct

Service cryptologic activities, organise themoherent aystem, or manage ELINT activities.

Large-scale Service-controlled tacticalassets, inflated by the war and partlyboth notional and allied capabilities, but programmed and operated outside of the comunity-



host of unrosolved problem* concerning organisation and the allocation of resoureee within both General Defenno Intelligence Program (CDIP) and non-GDIP activities, inducing! duplication in the collection

tUgMgMgMgMgMgMgMa^ntcrnally overlappin nctivities among varOUl napping, charting, and geodesy agencies, and the several investigative services; and inadequate supervision and control of counterintelligence activities.

It follows from this analysis that the President'scan be achieved only if reform addresses fouri ?ues:

The leadership of the intelligei.ee community as a


" The direction and control of Defense intelligence activities.

The division of functions among the autjoragencies.

The structuring, staffing, and funding of the processes by which our raw intelligence data are analyzed and interpreted.


The effectiveness and efficiency o* th; intelligence community dependarbor'of organizational variables. Among the most important of these variables arei

The power over resources available to the leader of the coi-irv.'nity. How much power the leader canparticularly over collection programs. Will determine the size of theei that can be achieved within the cow-unity.

e The size and functions of the staff provided to tho leader cftv. The efJectivcneSSational intelligence leaderepend not only on his power over resources, but also on how well informed he is about issues and options within the coacr.unity, which, in turn,unction of his immediate staff. Ar'ong the potential functions fortaff arc:

The planning, programing, and budgeting of resources.

Control over resources once allocated.


Inspection of ongoing programs.

Production and dissemination of national estimates.

llied, and opposing

capabilities andfuture role of the United States (USIC1. As natters now stand, the USIB isparliamentonfederate head of thaauthoritative leadership is established,could become airply on obstruction unlessis specifically redefine*.'. Sit.ce tha leadercorr-jnity, however powerful, will naed closerelation ship! vith producers andveil us consumeis, one possibility would be totho USIB so at to foraoiiMn advisory basla. In any case theof USID should be addroasad aa part of areview of now institutional.the functioningaorgan.'zed

Future Defense Department control over the resources undar its jurisdiction. Evan without changes in the comfMinityhole, major improvea-ents lnand efficiency could bo achieved if Defense were to master ita own massive intelligence operations.umber of community-wide issues would still remain, and substantially firmer Defense management

of its intelligence re-saurces could prejudice the abilityuture leader of the community tohis own authority.

The jurisdiction ofational leadersfensa leader ovcy the Military Services. The thre< Military Services etc estimated to spend at %W Wf year on intelligence activities apart from their support of the national acencies. Yet these activities, which partly duplicate nationalprograms, are reviewed in isolation from them. If the Services retain control ever the assets for thisntelligence, fiey can probably weapon efforts to iitprove the efficiency of the community. At the same time, thero is little question about their need to have access to the output of specified assets in both peace and war. How to combine overallmanagement end control with this access is an issue that will require resolution.

The future functional boundaries of the maforagencies. Collection and production activities do not now tend to be consolidated by type in particular functional agencies. Importantcan probably be achieved by rationalizing these

activities. However, it shou!:roted that economy and organisational tidiness, without concomitant strengthening of the community leadership, night be achieved at the cost.of creating even more powerful vested interests and losing diverse and usefullyapproaches to collection problems.

The number and location of national analytical and catinetinq centers. The National estimating machinery no doubt will have to be preserved under the leader of the cort-unity in order to continue production of national' estimatesnputs torocess. Tho continuation of DIA And the Stateureau of Intelligence Research (IKS) as producers is essential as well. Beyond that, improvement in tha intelligence product will probably depend to arge extent on increasing the competition in th* interpretation of evidence and the development of hypotheses about foreign intentions, capabilities, and strategies. This may require not only the atrengthening of existing organizations, but perhaps tho addition of now estimating centers. In addition, some entirely new organizational units may be needed to perform currently neglected intelligence analysia functions, for example, to conduct research onintelligence analysis methods and techniques.



* The role of tht ingspa.-idcntiir.t. of the secrecy surrounding thef

the intelligence cc**ruinity. tht need forhani-.ns within the Executive Branch remains particularly important. Since the President's Foreign Intelligence Advisory BoardheCor/Bit tee, tha Office of Science and Technologynd tha Office of tUinagenent and Bucketlreadyerform this function, tha only issues are hou they can be strengthened, to what extentneed larger and more perjQBOnt staffs, and whether new reviewould bespecially to evaluate the arih.ytiealestimating ac.ivitias of the cowaunity.

ctiona do not address all of these issues: nor do they exhaust tha list of organisational possibilities. Only the most salient options are presented with rospect to the leadership of the comaunity, the Department of Defense, and functional reorganization. Each ia described in ache-natic form.

ew leader of the community will depend critically on his ability to control intelligenceand rase his decisions stick. Basically, there are three different roles he can play in this respect, each with different organizational implications. They arc:

* Aa legal or direct controller of all or saostresources.

" As de facto onager of most resources even though they are not appropriated to him.

" As coo.-dinator of resources that are appropriated elsewhere, as now.

Although each of the three basic approaches couldumber of different waya, the principal options that accord with these roles arc listed below.

A Director of National Intelligence (Option ii),bulk of budget appropriated

to his office. That office would control all the majorassets and research and development activities, which are the most costly programs of the community and are most likely to yield large long-term savings. The Director would also operate the Government's principal production and national estimating center and retain the CIA's present


responsibility for covert action program. Defense and State would retain production groups, both to aerve their own lcader-ahip and to provide ccopeting centers in the analysis ofinputs to tha national intelligence proceaa. The


Defense Department would maintain budgetary and operational control over only the selected "tactical" collection and processing assets necessary for direct support of military forces, although these assets should he subject to the DNI'a review.

This optionumber of advantages:

It pinpoints responsibility; tha President knows who is in charge.

It permits major economies through rationalisation of tho community's functions and through the elimination of .duplicative and redundant capabilities.

Itanagement system which can deal com-prehenaively with the implications of evolvingand make efficient choices between competing collection systems.

It brings producers and collectors closer together and Increases the probability that collectors will become more responsive to producer needs.

It allows the Director to evaluate fully theeach component makes to the final product,

enabling ready identification of low performance elements and permitting subsequent adjustments to their mission.

provides ore responsible point in the coeasunity to which high-level consumers can express their changing needs.

. * It facilitates the timely selection and coordination of the intelligence assets necessary to providesupport to the President in periods of crisis.

CreationS! has at least five potential disadvar.- agesi

gives still further responsibilities to theajor criticism of the present confederateis that the DCI is overloaded and cannot be expected to perform well the many functions now assigned to him. As noted, these include substantive advice to the President and to several high-level committees, day-to-day managementarge operating program, appearingitness before Congress, and running numerous sensitive collection and covert action projects. It should be noted, however, that with adequate staff and competent deputies, the

Director should te able to delegate responaibilitiea and ease hia talk. Also, under this option, the DCI's power would bewith bis present responsibilities.

Thia option could generate substantial resistance froa the Secretary of Defense and the Joint Chiefa over tha transfer of intelligence functionsew agency. It would also necessitate fundamental changes in the National Security Act which might cause major, congressional resistance and open debateange of sensitive national security issues.

Evan if all V. S. Goverr.tf.ent intelligence Besets were transfeired to the Director, there would remain the serious and continuing problem of finding ways to meat the intelligence needs of Defense without, at the saate time, causing tha Services to reconstitute their own intelligence activities, even at the expense of other programs.

There could be adverse reaction from the news media

and the publiconsolidation of such sensitive activities under the control of one man, even though so many of them already arc controlled, in principle, by the Secretary of Defense.




- 29 -

It possibla that this option will continue the present dominant influence of collector* relative to producers and consumers in the intelligence



A Director of Central Intelligence ,trong Presidential mandateubstantial staff. HSA, NRO, and DIA would remain under present jurisdiction. The CIA would be dividedone part supplying the DCI staff and intelligence production component, the other part, principally current CIA collection organiration,ew agencyeparate director. The DCI would hava senior status within the Government and would serve ashe NSC. lie would produce all National ntelligence EsMaates and other national intelligenceby top level national decisionmakers, and would control the necessary production assets, including NPIC. This would include continued managementational intelligence process that involved the participation, and inputs from, other intelligence production organizations.

Undor Presidential directive, the DCr would review and

make rocoinmondations to the President on the Intelligence


plans, programs, and budgets of his owneconstituted CIA. and the Department ofe would alsoonsolidated Intelligence budget for review by the OKB. By

this nutans tha Directcro able to guide resourceand influence ct-^jaunity organization.

Although Optionffers the greatest promise of achieving the President's objectives, this option hasover it and over the present situation in therespectsi

" The DCI would be freed from the day-to-day sutBagement tasks incumbent upon the headarge operating agency with major collection and covert action This would enable him to devote most of hla attention to substantive' intelligence matters, the tasking of collectors, and community resource management issues as they relate to his production activities.

option eliminates the present situotion In which tho PCI serves as both advocate for agency programs and judge in community-wideole which diminishes the cotwinity's willingness to accept his guidance as impartial.

reforms could be accomplished, without major legislation,eorganization plan and Presidential directives to the DCI, the Secretory of Defense, and the head of CIA.

This option would offer improvements in efficiency

and effectiveness without the rcajor disruptions in the community required under option one.

would enhance the stature of tho community leader while.avoiding the potentially dangerousof power inherent in option one.

Optiones several potential disadvantages:

Responsibility for the communityhole would bo mora diffuso than under option one.

The ability of the DCI to aupervise the detailed activities of tha operating parts of the community would bf weaker.

The now DCI, compared to the DN1 under option one, vould hive to rely on persuasion and the process of budgetary review rather than directive authority in order to eliminate redundant and duplicativeresolve trade-off issues, and reduce overhead.

He would lack the ability to mobilise, deploy, and target collection assetsime of crisia, unless given apecific Presidential authority.

A Coordinator, of national Intelligence , who, under Presidential mandate, would act as White House or NSC



overseer of the Intelligence Commur.ity, directing particular

attention to:

- Intelligence resource and management issues.

" Representing the concerns and needs of national policy level consumers.

Evaluating the suitability of intelligence output in light cf consumer demand.

Under thin arrangement, CIA, Defense, and Stateresponsibilities would remain essentially unchanged. The Coordinator would express the views and concerns of the President anil the National Security Council on product needs and quality; he would provide guidance on present and future collection priorities; he would critique and evaluate the current performance of the community, identifying gaps ond oversights; and he would conduct studies of specific intelli-

community activities aa required. But he would not be

responsible for the actual production of intelligence. Nor would he have any direct control over resources.

option offers two advantages;

The creation of this position wouldeans

more direct representation of Presidential in-

in the Intelligence Community. Consumer



v::. ? crrr.-iSE LiAS-iasa:?

Although the President has indicated his desire tocommunity-wide reform, changes within the Departmont of Defense alone could improve the allocation and management of resources and reduce the overall else of the intelligence budget. Provided that care ia taken ln making them, these reforms need not be incompatible with aubsequent dacisiona about the governance of the communityhole.

Within the Department of Defense, there has neverindividual with formal responsibility for managementDoD intelligence activities. Tho Drputy Secretaryhistorically has beerh this task, butvery little staff to assist him and can devote onlyof time to the complex intelligence iaauea that

arise within hia domain. Consequently, if the problems of Defense intelligence are to bo ronolvedashionto tho President, it will be necessary cither toirector of Defense Intelligence (ddi) with specific responsibility for the Department's collection assets, or provide the Deputy Secretary with major staff support in tht form of an Assistant Secretary of Defense for Intelligence.

Neither of these posts would be incompatible with options two and three relating to community-wide leadership reform. However, the DDI concept conflicts with option one, in which




of U.ntelligence resources wouldirector ol "National Intelligence.

ft Diroctor of Defense Intelligence would have theand responsibility to direct and control all Defense intelligence activities. He would allocate all the Defense intelligence resources, including those for tacticalence, the funds for the NRP, and budgets for other natior

t toT

programs under departmental jurisdiction. He would rcpor and represent the Secretary of Defense in all mattersto the management of intelligence resources; review the need for, and conduct of, sensitive intelligenceand operations; review all Defense intelligencewith resource implications in order to evaluate need and determine priorities; serve as the principal Defense" representative on the USIB; and monitor other DoD programs which have clear implications for the collection of under this option the DDI would be able to reorder completely the Defense intelligence collection structure as deemed appropriate.

The DIA would be involved in collection management only if so directed by the DDI, and would concentrate on theof finished intelligence for the Secretary of Defense and other national consumers.

"Xt is important that the Director of Defense Intelligence

be responsive to tasking by the community leader, who would



be the principal substantive intelligence official of tha Gove resent. Both thety leader and the DDI shouldauthoritative guidance about national consumer interests. This could be providedouncil of Intelligencewithin the NSC and with the Assistant to the President for National Security Affairs, the Secretary of State, and the Secretary of Defense as its sembers. The restructuring of USIB end revision of KSCIDs can help in establishing the appropriate DCI/DOI relationship.

The post of DDI has great prospective advantage*!

It would provide for the concentration of resource management authority in one individual, which would allow authoritative comparisons and decisions about competing collection

It would provide for the centralization of direction and control over all Defense intelligence activities, including conduct of sensitive intelligenceoperations.

But there are possible drawbacks as well, in that the position would:


" Concentrate great poweringle point in Defense. This could possibly diminish the communityccess to information, as well as his ability to

task collection systems in support of nationalproduction, and design balancedprograms, in support of his production

a large staff over those of otheraanagers within Defense (theDIa, NSA, andeduction incoordination staffs should be possiblesame

a:i i'. Secretary v. I r fi.i :i i'y (aso/I) who would act as the principal staff assistant to the Secretary of Defense. His responsibilities would bo similar to those of tho DDI, except that he would not exercise direct control over Defense intelligence collection programs, and would notember of USIfl unless the Board were reconstituted to advise the DCI on the allocation of collection resources.

This optionumber of advantagesi

allows for effective cross-program analysis within Defense.

." It avoids the concentration of power inherent in the DDI option, if that isanger.


top .Secret


* Co-?ered to tho DDI. onould be more likely to respond to the needs of the present DCI or the community-wide loader established under either option two or three.

The postumber of potential weaknesses inompared with the DOI. it would probablyi

both the strong mandate provided to the DDI and direct authority over Defense intelligence activities, including_those carried out by tha program managers.

ulnerable to "endy major cofponcita within the Defense irtelligencewho might wish to appeal directly to tho Deputy Secretary of Defense.



ea, parLieulary without sajo:

reorganisation, will be difficult for several

* Savings that we foresee as ImMdiataly feasible are likely to be counterbalancedonsiderable degree by further pay and price increases.

With the heavy BSD costs for proposed new systems,

there already is built into thetrong upward bias which nay prove difficult to control, particularly considering the Intense interest in high-technology and expensive new systems fornd otlitr purposes.

U.S. withdrawal from Southeast Asia will permit reductions in STGIHT and HUHINT resources, but they will only partially offset the above cost increases.

of the largest savings can only result from shifting and consolidating currant activities inay as to redraw the functional boundaries of tha major intelligence organiiations.

Despite these difficulties, it ie the case thatboundaries can be withdrawnajor reorganise tion of Defense intelligence or tha communityhole. We


should stress, however, that aetiona of this character will stillumber of -. iisues unresolved and at tha sane tine arouse all the opposition of the military Services and the Joint Chiefs of Staff- Moreover, with the rapid evolution of technology, further changes in boundaries and comparable upheavalsill probably have to follow in the future.

Kith all these cautions, thereumber ofactions that can be taken at the preaentthe most important aro the establishment of SSA aanational cryptologieal service with authority overintelligence, and tha consolidationumbernow operated separately by tha Militaryeffect of these changes should be to achievescale, eliminate excessive duplication, and promoteamong like activities so as to weed out the

The following table of possible .savings, while only an estimate, indicates what economies might be feasibleesult of redrawing functional boundaries, consolidating activities, and eliminating duplication:

A major issue arises in connection with changes of such scope and magnitude. It is whether we should attempt to make the reforms now, or await more general reorganisation andthe head of the community to exercise his judgment and authority in instituting them. Our current judgment is that reductions of this magnitude should be attempted onlyeorganisation has significantly isrproved the capabilities of the comnunity to direct, control, and monitor program



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Wa also believe that the economies shoulderiod of years. Without these two conditions, tho reductions could prove illusory or transient,eavy price in disruption and lowered norale right follow.

Ite noted that the anticipated savinga come primarily fron collection activities; major analytical and eatimating capabilities are not affected. Their improvement is the subject of the next aection.

Huch of the emphasis by the intelligence communitybulk of its resources go to the high technologyovercome barriers to information in the USSR andthis stress or. tha technology of collectioncoicesime when improved analysis is,

Because of the keoner competition from tha Soviets, and the narrowing gap in relative resources devoted to defense, the U. S. must refine its evaluation of foreign capabilities, intentions, activities, and doctrines rather than assume that it has the resources to insure against ull possibilities. The coamuiity must also irprove its current politicaland find ways of becoming mora responsive to national consumers and their concerns.

Important icprovementa in performance may be feasible without major reorganization. But preliminary investigation suggests that higher quality is much more likely to come about within the frameworkoherently organizedwhich is focused on improving output rather than Indeed, itair assumption that the President would be willing to rebate some of the potential savings from the community if he had any hope of improved performanceonsequence. As of now, however, he has no such assurance




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nay reasonably argue that, for current performance, he should at least obtain the benefit of lower costs.

Even if we knew how to measure the benefits ofit would be difficult to relate specific changes in programs to improvements in performance. Nonetheless,observers believe that the following stepsll of then cooperatively inexpensiveshould increase thoof the product to the national leadership:

" Major consumer representation to and within thecommunity, perhapsestructureda high-level consumer coencil, or otherways of communicating consumer needs, priorities, and evaluations to intelligence producers.

of the intelligence product through quality control and product evaluation sections within the production organisations themselves.

existing analytical centers to increase

the competition of ideas,IA with Improved organization and staffingajor competitor to CIA in the area of military Intelligence.

reviews by outsiders of 'intelligent* products, of the main working hypotheses within the community, and of analytical methods being used.

A not assessment group established at the national level which, along with the KSSM proctss, will keep

queationing the community and challenging it to re-

fine and support ita hypotheses.

Stronger incentives to attract good analysts, better career opportunities to hold them as analysts instead of forcing them to become supervisors in order to achieve promotion,ore effective use of per-aonnel already trained and experienced in intelli-'


Increased resources and improved organizationalwithin tha intelligence community for research on improved methods of analysis and

It is probably premature to recommend the detailed neasures necessary to improve the quality and scope of the intelligence product. In the near future, this issue should be considered at greater length by the leadership of acomranity. Indeed, the leadership should be specifically charged with the task of product improvementatter of the highest priority. What steps will prove feasible will depend on tho particular type of reorganization

Original document.

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