Intelligence Community Reorganization: Potential Effects on DOD Intelligence Agencies

Order Code RL32515

CRS Report for Congress

Received through the CRS Web

Intelligence Community Reorganization:

Potential Effects on DOD Intelligence Agencies

Updated February 11, 2005

Richard A. Best, Jr.

Specialist in National Defense

Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

Intelligence Community Reorganization:

Potential Effects on DOD Intelligence Agencies

Summary

Although the Central Intelligence Agency (CIA) is the best known member of

the Intelligence Community, the bulk of the nation’s intelligence effort is undertaken

by the intelligence agencies of the Department of Defense (DOD). In particular, the

National Security Agency (NSA), the National Reconnaissance Office (NRO), and

the National Geospatial-Intelligence Agency (NGA) (formerly known as the National

Imagery and Mapping Agency (NIMA)) are major collectors of information for DOD

and non-DOD consumers and absorb a large percentage of the annual intelligence

budget. (The Defense Intelligence Agency (DIA), albeit a large and important

component of the Intelligence Community, is more directly focused on DOD

requirements.)

Some Members of Congress and independent commissions, most recently the

National Commission on Terrorist Attacks Upon the United States, the 9/11

Commission, have argued that a lack of coordination among intelligence agencies

contributed to the failure to provide warning of the terrorist attacks of September

2001. In response, in December 2004 Congress passed intelligence reform

legislation (P.L. 108-458) that modifies the existing organization of the Intelligence

Community and establishes more centralized leadership under a newly created

Director of National Intelligence (DNI).

As the legislation was being debated in the fall of 2004, attention focused on the

extent of the budgetary and administrative authorities to be assigned to the DNI.

Significant concerns were expressed by DOD officials, some Members of Congress,

and various outside observers that providing the DNI with greater authority and

control of intelligence agencies in DOD could jeopardize the increasingly close

relationship between these agencies and the operating military forces.

The conference committee on intelligence reform legislation (S. 2845)

addressed these concerns with language that gave the DNI substantial authorities over

intelligence budgets, but not operational control over their activities. The final

version of the legislation also provided that the details of budgetary authorities to be

exercised by the DNI and other cabinet officers be worked out in accordance with

guidelines to be issued by the President after the DNI is appointed.

This report will be updated as circumstances warrant.

Contents

Intelligence Agencies of the Department of Defense . . . . . . . . . . . . . . . . . . . . . . . 2

Defense Intelligence Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

The National Reconnaissance Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

The National Security Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

The National Geospatial-Intelligence Agency . . . . . . . . . . . . . . . . . . . . . . . . 2

Intelligence Elements of the Military Services . . . . . . . . . . . . . . . . . . . . . . . 3

National Intelligence Missions of Defense Agencies: The Role of the DCI . . . . . 3

National Intelligence Missions of Defense Agencies: The Role of the

Secretary of Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Impetus for Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Concerns About Reorganization Proposals . . . . . . . . . . . . . . . . . . . . . . . . . 9

Potential Implications of New Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

P.L. 108-458, the Intelligence Reform and Terrorism Prevention Act

of 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Intelligence Community Reorganization:

Potential Effects on

DOD Intelligence Agencies

Although the Central Intelligence Agency (CIA) is the best known component

of the U.S. Intelligence Community, the intelligence agencies of the Department of

Defense (DOD) account for the bulk of intelligence spending and intelligence

personnel. The National Security Agency (NSA), the National Reconnaissance

Office (NRO), the National Geospatial-Intelligence Agency (NGA), the Defense

Intelligence Agency (DIA), and the intelligence elements of the four military services

work around the world to collect and analyze information for consumers in the White

House, federal agencies, the Congress, and DOD itself, including military units

down to tactical levels. Collectively, their budgets are far larger than that of CIA

because they are major collectors of electronic intelligence, that relies on multiple

intercept sites, and reconnaissance satellites. They employ many more personnel

(military and civilian) and, at least in terms of quantity, produce far more intelligence

reports and analyses than the CIA.1

Until the passage of recent legislation, the Director of Central Intelligence (DCI)

has had the statutory authority to establish priorities for collection and analysis for

all national intelligence agencies and to forward an annual intelligence budget to the

President, but he has not had control of the execution of budgets (beyond that of the

CIA) nor could he transfer funds or personnel from one agency to another over the

objection of Cabinet officers.

For some years there were proposals to give the DCI greater authority to manage

the activities of all intelligence agencies, including those in DOD. Many observers

suggested that earlier proposals were not enacted because of concerns by DOD and

some Members of the Armed Services Committees that such an initiative would

weaken the ability of the Secretary of Defense to manage resources considered

essential to carrying out DOD’s statutory missions.

In the wake of the September 11, 2001 attacks and flawed estimates about

weapons of mass destruction (WMD) in Iraq, there were renewed calls for

intelligence “reform” or reorganization to remedy perceived shortcomings in the

performance of intelligence agencies. Some Members of Congress argued that there

was a need to establish a Director of National Intelligence (DNI) or National

Intelligence Director (NID), or to enhance the authorities of the DCI with the goal of

1

The intelligence efforts of the State, Commerce, Homeland Security, and Energy

Departments and the Federal Bureau of Investigation (FBI) are much smaller and focused

on analysis; they do not acquire or operate extensive and expensive technical collection

systems.

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ensuring better coordination. Similar recommendations were strongly urged by the

National Commission on Terrorist Attacks Upon the United States (the 9/11

Commission). President Bush announced his support for creating the position of

National Intelligence Director on August 2, 2004. After lengthy consideration, the

Intelligence Reform and Terrorism Prevention Act of 2004 (hereafter, the

“Intelligence Reform Act,” P.L. 108-458) was signed on December 17, 2004. The

act abolished the position of DCI, establishing in its stead the DNI and a separate

Director of the CIA.

This report will briefly describe the intelligence agencies of the Defense

Department, address their roles in the Intelligence Community and within DOD, and

note the role of the recently established position of Under Secretary of Defense for

Intelligence (USD(I)). It will look at current approaches to intelligence

reorganization and discuss the possible implications of adopting them.

Intelligence Agencies of

the Department of Defense

Defense Intelligence Agency

Established in 1961, DIA manages the Defense Attache System and other

human intelligence (humint) collection efforts. In addition, DIA is responsible for

the analysis of information from all sources in response to requirements established

by the DNI, by the Office of the Secretary of Defense (OSD), and other DOD

officials. DIA provides analytical support to senior defense officials, to the Joint

Chiefs of Staff, combatant commanders, and joint task forces worldwide.

The National Reconnaissance Office

Established in 1960, the NRO designs, builds, and operates the reconnaissance

satellites that collect images of the earth’s surface and signals information. While the

NRO is a DOD agency, it is staffed by both DOD and CIA personnel.

The National Security Agency

Established in 1952, NSA has two primary missions — developing codes to

protect the security of official U.S. communications and providing signals

intelligence (sigint). NSA collects, processes, and analyzes foreign signals in order

to support national policymakers and the operational forces.

The National Geospatial-Intelligence Agency

The NGA, established in 1996 and originally known as the National Imagery

and Mapping Agency (NIMA), provides geospatial intelligence — imagery, imagery

intelligence, and geospatial data and information to DOD users and other officials

responsible for national security. Geospatial information includes topographic,

hydrographic, and other data referenced to precise locations on the earth’s surface.

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Intelligence Elements of the Military Services

The Army, Navy, Air Force, and Marine Corps have their own intelligence

components that are, in general, not intelligence collection agencies, but process and

analyze data, and disseminate intelligence to their respective operating forces.

National Intelligence Missions of Defense Agencies:

The Role of the DCI

Three of these agencies — the NRO, NSA, and the NGA — have significant

responsibilities for collecting intelligence of concern to agencies outside DOD.

These three agencies more directly support national-level decisionmakers than do the

intelligence organizations of the four military services and even DIA. Their efforts

are described as “national,” as opposed to departmental or tactical. Senior

policymakers often have significantly different intelligence needs than military

consumers, although there is considerable overlap. For instance, national

policymakers are directly concerned with implications of nuclear test programs in

countries that are of no immediate concern to military commanders, whereas the

latter could be focused on tactical threats to operations long underway that are not the

focus of high-level policymakers.

“National intelligence” is the term used for intelligence that is of concern to

more than one department or agency and provides the basis for national security

policymaking. Beginning in the 1960's, a generation of arms control agreements

between the U.S. and the Soviet Union was based on satellite imagery that allowed

U.S. policymakers to be confident of their estimates of Soviet military capabilities.

More recently, national systems have permitted policymakers to monitor such crucial

developments as transfers of WMDs, ethnic cleansing in various countries, and

indications of narcotics traffic.

Inasmuch as national systems are expensive, and therefore not available in

unlimited quantities, procedures have been developed to sort out priorities for

coverage. The DCI had statutory authority to develop collection and analysis

priorities in response to National Security Council (NSC) guidance. Generally,

priorities have been sorted out by inter-agency committees working through the

DCI’s Community Management Staff of the Intelligence Community and the

Assistant DCI for Collection, to be implemented by national-level agencies,

including NSA, the NRO, and the NGA.2

The efforts of NSA, the NRO, and the NGA have been funded as parts of the

National Foreign Intelligence Program (NFIP)3 the annual budget for which the DCI

2

3

50 USC 403-4(d).

NFIP is defined at 50 USC401a(6). Funding for CIA and DIA is also provided through the

NFIP. By P.L. 108-458 (Section 1074) the NFIP becomes the National Intelligence Program

(NIP).

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annually develops and presents to the President.4 The DCI also has had authority to

transfer funds and (for periods up to a year) personnel among NFIP programs with

the approval of the Director of the Office of Management and Budget and affected

agency heads. The Secretary of Defense was required to obtain the concurrence of

the DCI before recommending individuals for appointment as head of the NRO,

NSA, and the NGA. If the DCI did not concur, the Secretary of Defense might still

recommend an individual to the President, but he had to include in the

recommendation a statement that the DCI did not concur.5

The 2004 Intelligence Reform Act provides that the DNI will be responsible for

developing and determining the NIP budget and gives him/her authority to manage

appropriations by directing the allotment or allocation of such funds with prior notice

to agency heads. The DNI also has authority to reprogram funds under certain

conditions and if the transfer out of any one department or agency is less than $150

million in a single year and is less than 5 percent of the amounts available to the

agency or department. The DNI will also have certain limited authorities to transfer

intelligence personnel from one agency to another.

National Intelligence Missions of Defense Agencies:

The Role of the Secretary of Defense

In addition to responding to tasking in support of national policymakers, all

defense agencies are closely involved in directly supporting operating military forces.

The Secretary of Defense has statutory responsibilities for the effective functioning

of national intelligence agencies in DOD.6 In addition, statutes require that the

agencies be prepared to participate in joint training exercises, and establish uniform

reporting systems to strengthen their readiness to support operating forces with

respect to a war or threat to national security.7

The Defense Department’s view of the central role of intelligence is evident in

its most recent planning document, Joint Vision 2020:

The evolution of information technology will increasingly permit us to integrate

the traditional forms of information operations with sophisticated all-source

intelligence, surveillance, and reconnaissance in a fully synchronized information

campaign. The development of a concept labeled the global information grid

will provide the network-centric environment required to achieve this goal. The

grid will be the globally interconnected, end-to-end set of information

4

50 USC 403-3(c)(1)(A).

5

50 USC 403-6(a). In the case of appointments of an individual as Director of DIA, the

Secretary of Defense had to consult with the DCI but did not have to note any unwillingness

by the DCI to concur in the appointment. 50 USC 403-6(b).

6

50 USC 403-5.

7

10 USC 193.

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capabilities, associated processes, and people to manage and provide information

on demand to warfighters, policy makers, and support personnel.8

National intelligence is now an essential part of DOD’s planning and operational

capabilities and, since the Persian Gulf War, has become thoroughly integrated into

combat operations. One media account of the role of national-level agencies during

recent hostilities in Iraq concluded:

As with imagery and early-warning [satellite] constellations, space-based signals

intelligence was far more responsive to tactical users in Operation Iraqi Freedom

than in earlier campaigns. National Security Agency teams and related Air Force

cryptologic units were forward-deployed to the theater of operations to assist

tactical commanders in accessing and interpreting signals intelligence from

orbital and air-breathing sources.

The need to integrate intelligence resources has also become more important

inasmuch as

The distinction between strategic and tactical ISR [intelligence, surveillance, and

reconnaissance] systems gradually has melted away as military requirements

shifted from the nuclear and conventional threat posed by Russia to more diverse

dangers arising from rogue states and terrorists.9

Propelled largely by the need for precise locating data to target precision-guided

munitions (PGMs), intelligence from national sources has been woven into military

operations at all echelons. Senior DOD officials and military leaders emphasize their

reliance on this stream of information and argue that the national agencies need to be

more responsive to their direction.

Some observers have long argued that the focus on support to military

operations by national agencies has led to reduced support for national-level

policymakers at the State Department and the NSC. For instance, it has been

suggested that this emphasis on supporting the military was a contributing factor in

the Intelligence Community’s failure to provide advance notice of the Indian nuclear

test in May1998, at a time when U.S. reconnaissance satellites were primarily tasked

with the support of U.S. military forces operating in the Persian Gulf region.10

In recent years, DOD’s intelligence effort was coordinated, loosely according

to some observers, by the Assistant Secretary of Defense for Command, Control,

Communications, and Intelligence (ASD C3I). In 2002, Secretary of Defense Donald

Rumsfeld sought congressional authorization to establish a more senior position, that

of Under Secretary of Defense for Intelligence (USD(I)); a provision was included

to that effect in the Defense Authorization Act for FY2003 (P.L. 107-314, section

901).

8

Department of Defense, Joint Chiefs of Staff, Joint Vision 2020, pp. 9, 10-11.

9

Loren Thompson, “Satellites Over Iraq: A Report Card on Space-based ISR during

Operation Iraqi Freedom,” ISR: Intelligence, Surveillance, & Reconnaissance Journal,

March 2004, pp. 20, 18.

10

See Jeremiah News Conference, CIA Press Release, June 2, 1998.

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In March 2003, Stephen A. Cambone, who had previously served as Deputy

Undersecretary of Defense for Policy, was appointed to the position and his

appointment was confirmed by the Senate. His responsibilities include coordinating

DOD intelligence, and intelligence-related policy, plans, programs, requirements and

resource allocations. He is to “exercise authority, direction, and control” over DIA,

NGA, the NRO, NSA, and other agencies.11 He had served as a single point of

contact between DOD and the DCI on intelligence resource and policy issues.12

A significant responsibility of the Secretary of Defense is ensuring that the

national intelligence programs of the NIP and the joint military and tactical

intelligence programs (known as the Joint Military Intelligence Program (JMIP) and

Tactical Intelligence and Related Activities (TIARA)) are mutually supportive and

not duplicative.13 In recent years the various sets of programs have been brought into

closer alignment to support national policymakers concerned with details of tactical

intelligence and military commanders who need information from national systems

such as satellites.

Impetus for Reform

In the aftermath of the attacks of September 11, 2001, a number of observers as

well as the Joint Inquiry of the two congressional intelligence committees and the

9/11 Commission, concluded that the organization and management of the

Intelligence Community was inadequate and that, as a result, the DCI was unable to

ensure that crucial information about the 9/11 plot was shared with analysts who

might have been able to identify the threat in advance. The 9/11 Commission took

note of

... some of the limitations of the DCI’s authority over the direction and priorities

of the intelligence community, especially its elements within the Department of

Defense. The DCI has to direct agencies without controlling them. He does not

receive an appropriation for their activities, and therefore does not control their

purse strings. He has little insight into how they spend their resources. Congress

attempted to strengthen the DCI’s authority in 1996 by creating the positions of

deputy DCI for community management and assistant DCIs for collection,

analysis and production, and administration. But the authority of these positions

is limited, and the vision of central management clearly has not been realized.14

11

Paul Wolfowitz, Deputy Secretary of Defense, Memorandum for Secretaries of the

Military Departments et al., Implementation Guidance on Restructuring Defense Intelligence

— and Related Matters, May 8, 2003.

12

The Office of the Undersecretary of Defense for Intelligence, consisting of some 120

officials, has no analytical role within the Intelligence Community. All source analysis

within DOD is the responsibility of DIA and the intelligence organizations of the military

services.

13

For background on this issue, see CRS Report RL32508, Intelligence, Surveillance and

Reconnaissance (ISR) Programs: Congressional Oversight Issues.

14

9/11 Commission Report, p. 357.

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The Joint Inquiry of the two intelligence committees concluded that the DCI was

unable to establish a comprehensive intelligence effort against Al Qaeda even when

the extent of the threat had become evident to the DCI at least by 1998. It reported:

Following the August 1998 bombings of two U.S. embassies, the DCI placed Bin

Ladin’s terrorist network among the Intelligence Community’s highest priorities.

The DCI raised the status of the threat further still when he announced to CIA

senior managers in December 1998:

We are at war [with Bin Ladin].... I want no resources or people spared in this

effort, either inside the CIA or the [Intelligence] Community.

These were strong words. Rather than having a galvanizing effect, however, the

Joint Inquiry record suggests that the Intelligence Community continued to be

fragmented without a comprehensive strategy for combating Bin Ladin. The Joint

Inquiry concluded that the DCI was either unable or unwilling to enforce consistent

priorities and marshal resources across the Community.15

Simply put, the Joint Inquiry argued that, although DCI George Tenet put the

Intelligence Community on a war footing against Al Qaeda, his writ did not run

beyond the CIA to other parts of the Intelligence Community, including the major

Pentagon agencies. Accordingly, the Joint Inquiry and the 9/11 Commission as well

as others have urged that there should be a single senior official, having the title

Director of National Intelligence or National Intelligence Director, responsible for

managing the entire Intelligence Community, including NSA, the NRO, and the NGA

along with the CIA and other intelligence entities.

Management and budgetary authority has been seen as needed to control

national intelligence agencies of the Community. The Joint Inquiry recommended

the creation of a statutory Director of National Intelligence with “the full range of

management, budgetary and personnel responsibilities needed to make the entire U.S.

Intelligence Community operate as a coherent whole.” These responsibilities would

include “establishment and enforcement of consistent priorities for the collection,

analysis, and dissemination of intelligence throughout the Intelligence Community.”

The DNI would have responsibilities for the “review, approval, modification, and

primary management and oversight of the execution of Intelligence Community

budgets... .”16

The 9/11 Commission recommended that a National Intelligence Director

“manage the national intelligence program and oversee the agencies that contribute

to it.” The NID would:

15

U.S. Congress, 107th Congress, 2d session, Senate Select Committee on Intelligence and

House of Representatives Permanent Select Committee on Intelligence, Joint Inquiry into

Intelligence Community Activities Before and After the Terrorist Attacks of September 11,

2001, S.Rept. 107-351, H.Rept. 107-792, December 2002, p. 236.

16

Joint Inquiry, Report, p.33.

December 10, 2002.

The recommendations were published separately on

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submit a unified budget for national intelligence that reflects priorities chosen by

the National Security Council.... He or she would receive an appropriation for

national intelligence and apportion the funds to the appropriate agencies, in line

with that budget, and with authority to reprogram funds among the national

intelligence agencies to meet any new priority (as counterterrorism was in the

1990s). The National Intelligence Director should approve and submit

nominations to the president of the individuals who would lead the CIA, DIA,

FBI Intelligence Office, NSA, NGA, NRO, Information Analysis and

Infrastructure Protection Directorate of the Department of Homeland Security,

and other national intelligence capabilities.17

A number of bills were introduced designed create to a single director of the

Intelligence Community.18 In some approaches, this individual would have

operational control of all intelligence agencies, including those in DOD. Other

approaches envision the person filling the USD(I) position simultaneously serving

as a Deputy of the DNI/NID. Other versions do not precisely define the extent of the

DNI’s authorities.

On August 2, 2004 President Bush announced his intention to seek changes in

the National Security Act to establish a National Intelligence Director, appointed by

the President with the advice and consent of the Senate, who “will oversee and

coordinate the foreign and domestic activities of the intelligence [community].”19

The President indicated that the CIA will be managed by a separate director. The

Administration plan apparently did not envision the NID having the authority to

control the budgets of the various agencies nor would the NID singlehandedly submit

nominations for agency head positions to the President.20

Subsequently, congressional attention focused on two bills dealing with

intelligence reorganization — H.R. 10, introduced by Representative Hastert, and S.

2845, sponsored by Senators Collins and Lieberman. After extensive floor

consideration and amendments, S. 2845 was passed by the Senate on October 6th;

H.R. 10 was passed by the House on October 8th. Both bills would have established

a NID with authorities more extensive than those assigned to the DCI by current

legislation, but there were significant differences in the area of budgetary authority

as well as in regard to other issues.21 As is noted below (“Recent Developments”),

it proved difficult for the resulting Conference Committee to reach agreement on the

language adopted by the two chambers.

17

9/11 Commission Report, pp. 411, 412. The Report added that DOD’s “military

intelligence programs (JMIP) and the tactical intelligence and related activities program

(TIARA) — would remain part of that department’s responsibility.” (P. 412.)

18

For details on specific legislative proposals, see CRS Report RL32506, The Position of

Director of National Intelligence: Issues for Congress.

19

U.S., President George W. Bush, Remarks by the President on Intelligence Reform,

August 2, 2004.

20

21

See Andrew Card, White House Briefing, August 2, 2004, Federal News Service.

For further information on specific provisions, see CRS Report RL32601, Comparison

of 9/11 Commission Recommended Intelligence Reforms, S. 2845, S. 2774, H.R. 5024,

Administration Proposal, H.R. 10, Current Law.

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Concerns About Reorganization Proposals

Whereas there appears to be no question that a failure to fully correlate

information in the possession of intelligence and law enforcement agencies hindered

the effort to uncover the 9/11 plot before it occurred, some observers argue that the

main obstacle prior to 9/11 was the regulatory framework that created a “wall”

between foreign intelligence and law enforcement analysts — and not organizational

arrangements per se. From their perspective, the problem in large measure involved

the CIA and the FBI and, among DOD agencies, primarily NSA which had to work

within the constraints of the “wall” in regard to surveillance of U.S. persons. The

9/11 Commission criticized NSA’s “almost obsessive protection of sources and

methods, and its focus on foreign intelligence, and its avoidance of anything

domestic....”22 It is noteworthy, nevertheless, that the 9/11 Commission’s list of ten

missed opportunities for stopping the plot does not cite a misstep by NSA or any

other DOD agency.23

Criticisms of proposals to establish a DNI/NID centered on the possibility (or

likelihood) that they would undermine the authority of the Secretary of Defense over

agencies that are closely integrated into the operational capabilities of the military

services. Writing in June 2004, former DCI Robert Gates argued that:

More than 80 percent of foreign intelligence dollars are spent by agencies under

the control of the secretary of defense. Virtually all of those agencies have

tactical, combat-related tasks to perform for the Pentagon and the military

services, in addition to the roles they play under the guidance of the director of

central intelligence. In the real world of Washington bureaucratic and

Congressional politics, there is no way the secretary of defense or the armed

services committees of Congress are simply going to hand those agencies over

to an intelligence czar sitting in the White House. Indeed, for the last decade,

intelligence authority has been quietly leaching from the C.I.A. and to the

Pentagon, not the other way around.24

Bruce Berkowitz, who has worked with the Hoover Institution and the RAND

Corporation and is currently serving as a DOD consultant, has written:

Proposals to yank intelligence organizations out of the Defense Department also

overlook the role they play in combat operations today. The ability to feed

electronic data to units on the battlefield through digital pipelines is essential for

the kind of network-style warfare that has proved so effective in Iraq and

Afghanistan. Combat forces use more of this data than anyone else. It seems

odd that anyone would want to drag several intelligence organizations out of the

Defense Department simply to create a new mega-organization whose main

mission would be ... supporting the Defense Department.25

22

9/11 Commission Report, p. 88.

23

Ibid., pp. 355-356.

24

Robert M. Gates, “Racing to Ruin the C.I.A.,” New York Times, June 8, 2004, p. 25.

25

Bruce Berkowitz, “Intelligence Reform: Less is More,” Hoover Digest, Spring 2004.

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Another longtime observers of U.S. intelligence agencies, Richard Betts of

Columbia University, wrote in mid-2004: “Trying to wrest the National Security

Agency and like agencies from the Defense Department ... would leave Capitol Hill

and Pennsylvania Avenue awash in blood.... The military services will never accept

dependence on other departments for performance of their core functions, which

include tactical intelligence collection, and politicians will not override military

protests that their combat effectiveness is being put at risk.”26

Such views were undoubtedly shared by some current and former DOD

officials. In April 2004, months prior to the President’s August 2nd announcement,

USD(I) Cambone testified that “we early concluded that the relationship between

intelligence and operations was growing closer — so close, in fact, that it was

beginning to become increasingly difficult to separate the two....” Expressing

skepticism about plans to increase the role of the DCI or create a DNI, Cambone

argued that, “...absent the [current] deep and abiding relationship between the DCI

and the Secretary of Defense, it is easy to see the ways in which seams would begin

to grow up between organizations and in which the Department of Defense would not

be benefi[t]ted and in fact, the intelligence community as a whole be hurt by that

split. So sustaining the existing relationship, we think, is essential.”27

Cambone’s testimony echoed testimony offered in 1996 by John P. White, then

the Deputy Secretary of Defense in the Clinton Administration, in regard to earlier

legislation to reorganize the Intelligence Community: “Confusing the clear lines of

authority that currently exist would make it more difficult for DOD intelligence

elements to perform their most important mission — support to the warfighter. In

the drive to create a strong Intelligence Community, we must not damage the

integration of military intelligence within the Defense Community.”28

Concerns within DOD persisted. On October 21, 2004 General Richard Myers,

the Chairman of the Joint Chiefs of Staff, wrote to the Representative Hunter,

Chairman of the House Armed Services Committee, maintaining that:

... the budgets of the combat support agencies [including NSA, NRO and NGA]

should come up from the agencies through the Secretary of Defense to the

National Intelligence Director, ensuring that required warfighting capabilities are

accommodated and rationalized and ensuring that the Secretary meets his

obligations. For appropriations, it is likewise important that the appropriations

are passed from the National Intelligence Director through the [Defense]

Department to the combat support agencies.

26

Richard K. Betts, “The New Politics of Intelligence: Will Reforms Work This Time?,”

Foreign Affairs, May/June 2004, p. 6.

27

Testimony of Stephen Cambone, Under Secretary of Defense for Intelligence, Defense

Department, before the Strategic Forces Subcommittee, Senate Armed Services Committee,

April 7, 2004, FDCH Political Transcripts.

28

Statement of Dr. John P. White, Deputy Secretary of Defense, before the House National

Security Committee on Intelligence Community Reform, 11 July 1996, in U.S. Congress,

104th Congress, 2d session, House of Representatives, Committee on National Security, H.R.

3237 — the Intelligence Community Act, Hearing, H.N.S.C. No. 104-9, July 11, 1996, p. 10.

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Potential Implications of New Approaches

Consideration of legislation to establish a DNI/NID focused on the extent of this

official’s authorities to coordinate all intelligence agencies, but some observers

asserted that, separate from organizational issues, more significant steps had already

been taken to improve sharing of information. Implying that organizational issues

were not necessarily the key factor, they assert that the Intelligence Community’s

failure “to connect the dots” before the 9/11 attacks resulted in large measure from

barriers to communications between foreign intelligence agencies (such as the CIA)

and law enforcement agencies (especially the FBI).29 These barriers were in many

cases purposefully erected in regulations in order to ensure that foreign intelligence

agencies would not be used to target U.S. persons (as had occurred on earlier

occasions when intelligence agencies zealously investigated groups and individuals

opposed to the Vietnam War).

After 9/11, Congress adjusted these barriers through provisions in the USAPatriot Act of 2001 (P.L. 107-56) and other legislation. The USA Patriot Act

authorized the sharing of law enforcement and foreign intelligence information. In

addition, the Homeland Security Act (P.L. 107-296) provided that the Intelligence

Analysis and Infrastructure Protection component of the Department of Homeland

Security (DHS) would receive and analyze foreign intelligence and law enforcement

information relating to terrorist threats to the U.S. Subsequently, the Bush

Administration established the Terrorist Threat Integration Center (TTIC) to perform

integrative analytical functions.30 Such initiatives have arguably torn down (or at

least significantly lowered) the “wall” between foreign intelligence and law

enforcement that may have contributed to the failure to detect the 9/11 plot in

advance. These developments, according to some observers, affect the need for

enhancing the powers of a proposed DNI/NID.

Ongoing technological innovations are also, according to some observers,

working to remove long-established barriers. The phenomenon of “stovepiping”

whereby imagery, humint, or sigint would be collected by separate agencies in the

field and forwarded to respective Washington-area headquarters to be processed and

analyzed before being made available to users has received much criticism.

Stovepiping, in essence, means the control of information by collection agencies.

Inevitably, processing, transmission and forwarding lead to delays and impede the

effort to bring all available data to bear on the intelligence needs of all levels of

government.

The dangers of “stovepiping” are now widely recognized. DIA Director Lowell

Jacoby testified to the two intelligence committee’s Joint Inquiry:

29

See, for instance, Statement of Mary Jo White, former United States Attorney for the

Southern District of New York, before the Joint Intelligence Committees, October 8, 2002;

Joint Inquiry Report, pp. 363-368; 9/11 Commission Report, pp. 78-80.

30

See CRS Report RS21283, Homeland Security: Intelligence Support, updated February

23, 2004.

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... the more widely information is shared, the more likely its hidden meaning will

be revealed. Information considered irrelevant noise by one set of analysts may

provide critical clues or reveal significant relationships when subjected to

analytic scrutiny by another. This process is critical for the terrorism issue where

evidence is particularly scant, often separated by space and time.31

Well before 9/11, the Defense Department was taking advantage of new

technologies to provide intelligence support to its forces. Real-time intelligence has

been especially important in the use of precision munitions, allowing targeting of

specific targets while minimizing casualties. Defense intelligence agencies are

acquiring capabilities to collect comprehensive data, to provide instantaneous

transmission, data storage, and immediate retrieval at all echelons. In many cases

processing and analysis is undertaken at sites within the U.S., even Washington-area

headquarters (a process known as “reachback”), and can be directly accessed by

military units around the world to support ongoing tactical operations.

Observers, such as Berkowitz, have suggested that, rather than undertaking

revision of complex statutes, efforts should be focused on generating “the political

will needed to make all intelligence organizations implement a truly common set of

security standards that balance the importance of keeping secrets with the importance

of sharing information.”32 Berkowitz notes that Executive Order 12333, which

serves a charter document for the Intelligence Community, is over 20 years old and

needs revision, an effort that, in his view, “would be a faster, more effective vehicle

for intelligence reform than a commission report or legislation. Such an order could

also resolve the security barriers and other hurdles that currently keep intelligence

agencies from working together more effectively.”

In October 2002 testimony before the Joint Inquiry, DIA Director Jacoby argued

that a crucial need is “to create a new paradigm wherein ‘ownership’ of information

belong[s] with the analysts and not the collectors.” Jacoby argued that the

government should follow industry’s practice in adopting a standard for data storage

that permit retrieval from multiple users at different agencies:

If we are to achieve an end state characterized by the ability to rapidly share and

integrate information, we must move toward a common data framework and set

of standards that will allow interoperability — at the data, not system, level....

And, the sooner the better, not just for a limited group of intelligence producers

and subsets of data; it shouldn’t be an elective option. Interoperability at the data

level is an absolutely necessary attribute of a transformed intelligence

environment because it enables horizontal integration of information from all

sources — not just intelligence — at all levels of classification.33

Many observers believe that stovepiping can be gradually overcome because of

the availability of technology for rapid dissemination of operational data and the

press of operational requirements as occurred during Operation Iraqi Freedom.

31

Rear Admiral Lowell E. Jacoby, USN, Statement for the Record for the Joint 9/11 Inquiry,

1 October 2002, p. 4.

32

Berkowitz, “Intelligence Reform.”

33

Jacoby, p. 8.

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Outside observers argue that technological capabilities now permit increasing

information sharing with reliable security protection.34

The effort to promote wider sharing of information is widely supported, but

there remain obstacles. Singling out NSA, the Senate Intelligence Community

warned in 2003 of continuing resistance to such innovations:

The Committee has become increasingly concerned in recent years about

bureaucratic and cultural obstacles to effective information and data sharing...

Cutting-edge analytical tools, many of which are already in use in the private

sector, increasingly involve large-scale, multi-database analysis and pattern

recognition. Using such approaches within the Intelligence Community,

however, cannot proceed far without a significant revision of current orthodoxy

as to information ‘ownership’ and control.35

The Intelligence Authorization Act for FY2004 (P.L. 108-177, section 317)

established a pilot program to assess the feasibility of permitting analysts throughout

the Intelligence Community to access and analyze intelligence from the databases of

other elements of the Community. In particular, the provision was intended to permit

analysts in CIA and DIA to access sigint contained in NSA databases, but not

published in formal NSA reports.

The 9/11 Commission, taking note of this ongoing process, urged that it be

accelerated. It recommended that the President lead a “government-wide effort to

bring the major national security institutions into the information revolution.”36 The

Commission indicated a role for the NID and the Secretary of Homeland Security,

backed by the Office of Management and Budget, to set common standards for

information in the Intelligence Community, other public agencies, and relevant parts

of the private sector. The Commission did not specifically address the issue within

DOD. Provisions were, however, ultimately included in P.L. 108-458 directing the

DNI to establish uniform security standards, common information technology

standards, and policies and procedures to resolve conflicts between the need to share

intelligence and the need to protect intelligence sources and methods.

P.L. 108-458, the Intelligence Reform and Terrorism

Prevention Act of 2004

The role of the NID/DNI received considerable attention during floor

consideration of intelligence reform legislation in September and October 2004.

34

See Markle Foundation, Task Force on National Security in the Information Age,

Creating a Trusted Information Network for Homeland Security, December 2003.

35

U.S. Congress, 108th Congress, 1st session, Senate, Select Committee on Intelligence,

Authorizing Appropriations for Fiscal Year 2004 for Intelligence and Intelligence-Related

Activities of the United States Government, the Community Management Account, and the

Central Intelligence Agency Retirement and Disability System, S.Rept. 108-44, May 8, 2003,

p. 24.

36

9/11 Commission Report, p. 418.

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Some Members sought to provide greater authority to the position, others preferred

more limited changes to current authorities. On September 29, the Senate voted to

table an amendment (No. 3706) that would give the NID authority, “to supervise,

direct, and control the operations” of the major DOD intelligence agencies as well

as the CIA, but ultimately the Senate bill sought to create a stronger NID/DNI than

was reflected in the House bill.37 The ensuing conference reportedly had difficulty

in reaching agreement on the issue, but many of the media accounts of discussions

did not provide precise treatments of the arguments.

After further consideration, the conference version of S. 2845 was passed by the

House on December 7and by the Senate the following day. The legislation was

approved by the President on December 17, 2004. In the signing the bill, President

Bush stated:

It will be the DNI’s responsibility to determine the annual budgets for all

national intelligence agencies and offices and to direct how these funds are spent.

These authorities vested in a single official who reports directly to me will make

all our intelligence efforts better coordinated, more efficient, and more

effective.....

The new law will preserve the existing chain of command and leave all our

intelligence agencies, organizations, and offices in their current departments.

Our military commanders will continue to have quick access to the intelligence

they need to achieve victory on the battlefield.

Provisions regarding the budgetary authorities of the DNI and other senior

officials were complex and reflected the fact that significantly different views remain.

The conference report for S. 2845 authorized the DNI to

provide guidance for National Intelligence Program budget to heads

of departments containing intelligence organizations;

! “develop and determine” an annual consolidated National

Intelligence Program budget;

! present National Intelligence Program budget to the President for

approval (together with dissenting comments from heads of

departments containing intelligence organizations);

! participate in the development by the Secretary of Defense of the

annual budgets for DOD-wide and tactical military intelligence

programs;

! ensure the “effective execution” of annual intelligence budgets;

!

37

As passed by the Senate, S. 2845 provided that the NID would “manage and oversee

appropriations for the National Intelligence Program” (section 112). This would encompass

execution of funds, reprogramming of funds, and the transfer of funds and personnel. The

Senate bill also contained extensive acquisition and fiscal authorities for the NID to develop

and implement program management plans for major intelligence systems (section 162).

The version of S. 2845 as passed by the House would assign the NID the responsibility to

“facilitate the management and execution of funds appropriated for the National Intelligence

Program” (section 102A).

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direct the allotment or allocation of appropriations through the heads

of departments containing intelligence agencies or organization

! provide “exclusive direction” to the Office of Management and

Budget (OMB) regarding apportionment and subsequent allocations

of appropriated funds;

! transfer or reprogram funds from one program in the National

Intelligence Program to another (with OMB approval and subject to

other restrictions);

! transfer personnel from one intelligence agency to another for up to

two years (under certain conditions).38

!

Taken together, these authorities will provide the DNI with significantly greater

budgetary authorities than possessed by the DCI. In particular, provisions

authorizing the DNI to direct allocations and allotments of appropriated funds gives

the DNI significant leverage in the acquisition and program management efforts of

intelligence agencies in DOD.39 Some Members believed that this leverage would

amount to a degree of control inconsistent with the Secretary of Defense’s

responsibilities for managing intelligence agencies in DOD that also support the

combat forces. Although the proposed language clearly establishes extensive

budgetary authorities for the DNI, other factors such as the role of the personalities

of the respective officials, the priorities of the incumbent administration, and the

influence of congressional guidance will also have significant influences.

Moreover, the final version of the legislation includes a provision (Section

1018) that requires the President to issue guidelines to ensure the effective

implementation of authorities granted to the DNI, the Director of the OMB, and

cabinet heads “in a manner that maintains, consistent with the provisions of this act,

the statutory responsibilities of the head of the departments of the United States

Government with respect to such departments.” The guidelines are to be issued

within 120 days of the appointment of the first DNI. Some observers suggest that this

provision provides an opportunity for renewed consideration of the issues that made

passage of P.L. 108-458 difficult.40

Media accounts indicate that another key issue was day-to-day operational

control of the collection assets of intelligence agencies in DOD. Some observers

suggest, however, that this issue is not clear-cut. The legislation gives the DNI

authority to apportion funds and the apportionment process affects the timing and

rate of the flow of funds. Nevertheless, the authority to apportion and allocate

38

S. 2845, version of November 20, 2004, published by Congressional Quarterly.

39

Appropriated funds are not available to agencies until they are “apportioned” by the

Office of Management and Budget (OMB) to government agencies in response to an agency

request; an apportionment may be further subdivided by an agency into allotments,

suballotments, and allocations. (See Office of Management and Budget, Circular No. A-11,

Section 20-3.) Heretofore OMB has apportioned funds to DOD intelligence agencies at the

request of the Secretary of Defense; the draft legislation now under consideration provides

that such requests would be initiated by the DNI.

40

See the separate comments of Representatives Hunter and Hoekstra, Congressional

Record, December 20, 2004, pp. E2207-E2210.

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appropriated funds does not automatically translate into the authority to direct day-today operations.

There are already well-established distinctions between

responsibilities for acquisition programs on the one hand, and responsibilities for

operational command on the other. The military departments (the Departments of the

Army, Navy and Air Force) have major responsibilities for the acquisition of systems

to be used by the operating forces, but ongoing operations are controlled by the

unified commands (e.g. Central Command, European Command, Pacific Command)

at the direction of the Secretary of Defense and the President. Analogously, the DNI

would have responsibilities for acquisition of systems that are part of the National

Intelligence Program; the heads of defense intelligence agencies would be

responsible to the Secretary of Defense for operating the systems.

Day-to-day tasking of the national systems operated by intelligence agencies in

DOD has been coordinated among “consumers” from throughout the Government,

including DOD, the State Department, the While House, etc.. The DCI has long had

authority to coordinate such tasking in response to NSC guidance.41 For geospatial

imagery, for example, the Source Operations and Management Directorate of NGA

routinely meets with representatives of agencies outside DOD to coordinate

production priorities. NGA acknowledges that authority to establish priorities

derives from the authorities of the DCI rather than solely from those of the Defense

Department.42 Similar arrangements exist in regard to other intelligence disciplines,

such as signals intelligence.

The Intelligence Reform Act also established a Joint Intelligence Community

Council (JICC) composed of the Secretaries of State and Defense and other senior

officials, to advise the DNI on establishing requirements, developing budgets,

financial management, and monitoring and evaluating the performance of intelligence

agencies. The statute also provides for the submission of advice or opinion of

individual members of the JICC to the President along with the recommendations of

the DNI.43

Past relationships among defense agencies, the Office of the Secretary of

Defense, and the Intelligence Community Management Staff have been complex; the

new legislation establishes a DNI with stronger budgetary authorities than possessed

by the DCI. Nevertheless, the requirement for close coordination between the DNI

and DOD agencies will remain. Given the need for agencies to meet different needs

of different parts of the Government, observers believe that this new relationship will

also be complicated and that considerable time will be required to develop

coordinative procedures.

41

Derived from the DCI’s authority under 50 USC 403-3(c) and section 1.5(m) of E.O.

12333 as amended by E.O. 13355 signed on September 1, 2004.

42

See comments of Robert Cardillo, quoted by Joe Francica, “Exclusive Interview-Robert

Cardillo, Director, Source Operations and Management, National Geospatial Intelligence

Agency,” Directions, July 29, 2004 (www.directionsmag.org). .

43

S. 2845, version of November 20, 2004, Section 1031.

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