The Intelligence Community was not created, and does not operate, as a single, tightly knit organization.**1** Rather, it has evolved over nearly 50 years and now amounts to a confederation of separate agencies and activities with distinctly different histories, missions and lines of command. Some were created to centralize the management of key intelligence disciplines. Others were set up to meet new requirements or take advantage of technological advances. Not surprisingly, the ad hoc nature of their growth resulted in some duplication of activities and functions. All but the CIA reside in policy departments and serve departmental as well as national interests. Except for the CIA, which for reasons of security is funded in the Defense budget, they are funded by their parent department's appropriation. Their directors are selected by the Secretaries of the departments they serve, although in some cases consultation with the DCI is required.

Despite their separate responsibilities, lines of authority, and sources of funding, the United States has sought to operate these agencies as a "Community" in order to best serve the nation's interests. Today, intelligence remains the only area of highly complex government activity where overall management across department and agency lines is seriously attempted.


The National Security Act of 1947, which established the CIA, did not define an "Intelligence Community" or specify the DCI's responsibilities or authorities in relation to the other intelligence agencies which existed at the time. As the head of CIA, the DCI was only to make recommendations to the National Security Council for the coordination of U.S. intelligence activities and to "correlate and evaluate intelligence relating to the national security" and disseminate this intelligence to other agencies. The CIA Act of 1949 provided the DCI with special financial and acquisition authorities that became critical in later years in the rapid procurement of technical intelligence capabilities.

As more intelligence agencies came into existence during the 1950s
and 1960s, many began to feel the DCI should play a stronger coordinating
role relative to these agencies to improve their efficiency and
effectiveness. Within two years of CIA's establishment, the DCI
was admonished by President Truman to take a stronger role in
coordinating the intelligence function. Similar calls were made
by successive Presidents, congressional committees, and independent
commissions.**2** In all, over the last forty years, more than 26 proposals
have been offered to strengthen the authorities of the DCI over
the agencies of the Intelligence Community, motivated, for the
most part, by a desire to eliminate waste and duplication.

The first formal changes in the DCI's authorities in relation to other intelligence agencies did not come until the early 1970s. By this point, spending for intelligence had substantially grown as a result of advances in space technology. In 1971, President Nixon, by classified memorandum, directed the DCI to establish requirements and priorities for intelligence collection, and to combine all "national" intelligence activities into a single budget. These responsibilities were carried over in the first Executive Order on intelligence, issued by President Ford in 1976. In addition, the comprehensive Ford order created for the first time the position of Deputy to the Director of Central Intelligence for the Intelligence Community and instructed the DCI to delegate day-to-day operation of the CIA to the Deputy Director of Central Intelligence. The position of the Deputy Director for the Intelligence Community did not survive in subsequent executive orders. However, the executive orders issued by Presidents Carter and Reagan did substantially clarify the DCI's authorities and responsibilities in relation to other elements of the Intelligence Community. (See the discussion of these orders in Appendix A.)

In 1992, the Congress enacted amendments to the National Security Act of 1947 which defined the "Intelligence Community" in law for the first time and codified many of the specific responsibilities and authorities of the DCI vis-à-vis the Intelligence Community which had previously existed in Executive Order. (See Title VII of Public Law 102-496.) Among other things, these amendments:









Taking these together, the DCI appears to have considerable authority vis-à-vis other elements of the Intelligence Community. In practice, however, this authority must be exercised consistent with the authority of the department heads to whom these elements are subordinate.


The preponderance of U.S. intelligence agencies are within the Department of Defense. The National Security Agency, the Defense Intelligence Agency, the National Reconnaissance Office, the Central Imagery Office, the offices which carry out specialized reconnaissance activities, the joint intelligence centers of the Joint Chiefs of Staff and the Unified Commands, and the intelligence organizations in each of the military departments, all are subordinate, directly or indirectly, to the Secretary of Defense. Together these agencies spend 85 percent of the total U.S. intelligence funds and employ 85 percent of intelligence personnel. Nearly two-thirds of all DoD intelligence personnel are active duty military. Owing to their subordination within the Defense Department, these agencies benefit substantially from logistical and administrative support provided by DoD but not reflected in the funds allocated for national foreign intelligence activities.

Most of these agencies have multiple roles. Not only are they responsible for producing intelligence and analysis in response to national requirements, but they also respond to departmental and tactical requirements. Certain DoD intelligence agencies are designated by law as "combat support agencies," signifying their roles in supporting tactical military operations.

The Department of Defense also is the largest single user of national intelligence. In times of war or crisis, its requirements take preeminence over those of other agencies. In addition to supporting military operations, national intelligence contributes significantly to other DoD functions such as planning force structures, making weapons acquisition decisions, and conducting relationships with foreign governments.

While the elements of the Intelligence Community that belong to departments other than the Department of Defense (such as the Bureau of Intelligence and Research within the Department of State, and the National Security Division of the Federal Bureau of Investigation) are, by comparison, very small, some of the same dynamics come into play. They receive their appropriations from their parent department; their personnel report, directly or indirectly, to the head of the department; and they have departmental duties and responsibilities wholly apart from their roles as members of the Intelligence Community.

Further, the DCI has at times been viewed by other agencies as less than an honest broker. Because he also heads the CIA, efforts on his part to exert control over other elements of the Community or to resolve differences between them tend to be viewed as biased, sometimes providing additional grounds for resisting the DCI's leadership.


Although the DCI has statutory authority to develop a separate budget for national intelligence, there is no separate appropriation for intelligence. Approximately 98 percent of this budget, including the funding for the CIA, is covered in the bill that appropriates funds for the Department of Defense. In practice, at the beginning of each budget cycle, the Secretary of Defense decides, in consultation with the DCI, how much of the Defense budget will be allocated for national intelligence. Once that decision is made, the DCI knows how much money he has to parcel among national intelligence activities, but the total budget decision is not his to make.

After the DCI has been given a budget number to work with, he must, in allocating the budget for national intelligence, take into account what the Department of Defense plans to spend on defense-wide and tactical intelligence activities that are funded separately from national intelligence activities. The amounts involved in funding these activities involve billions of dollars; and the activities themselves are diverse and complex. Yet if the DCI fails to take them into account, he may overfund some areas in his own budget and underfund others.

Even if he surmounts this challenge, the DCI confronts the difficulties presented by his own budget structure and process. The budget is broken into separate "programs," each of which, with the exception of the CIA program, is headed by a "program manager" outside the line supervision of the DCI. Moreover, the "programs" themselves are not organized around consistent principles or criteria. Some, such as the CIA program, pertain to an agency; others fund certain types of activities, such as signals intelligence or space activities. Like activities are not grouped together so that it is difficult for the DCI to identify waste and duplication or decide what activities should be reduced or increased. (See Chapter 7 for a fuller explanation of this problem as well as the Commission's recommended solution to it.)

Even after money for national foreign intelligence activities has been appropriated by the Congress, the DCI lacks the ability (except for the CIA) to know or control how it is spent. The current Executive Order requires that the DCI monitor how national intelligence programs are being implemented to judge whether they are accomplishing their objectives. The law requires that elements of the Community obtain the DCI's concurrence before they "reprogram" funds for a purpose different from the one appropriated. However, the Executive Order and the law lack any enforcement mechanism. If an agency chooses to ignore the requirement and use national intelligence funds for its own departmental purposes, the DCI's only remedy is to complain to the President or Congress, hardly a position of strength.


Notwithstanding his statutory authorities vis-à-vis the elements of the Intelligence Community, which on their face appear substantial, the DCI is left in a relatively weak position. It is not surprising, therefore, that most DCIs have chosen to spend the bulk of their time on their other major functions, serving as principal intelligence adviser to the President and head of the CIA.

In view of this situation, a fundamental organizational question facing the Commission was whether the concept of centralized control over the Intelligence Community should be preserved at all.


Some who spoke with the Commission urged that, in light of the intractable situation which any DCI faces, the Commission should recommend a return to a more decentralized system. Under this concept, the DCI would head the CIA and serve as the chief intelligence officer to the President. He would continue to "correlate and evaluate" all the intelligence held by the Government, but he would not attempt to manage an intelligence community by developing its budget. The Secretary of Defense and the heads of other departments with elements currently within the Intelligence Community would allocate the resources to these elements and provide guidance for their operations. The "national" agencies within DoD, i.e. NSA, CIO, and NRO, would continue to satisfy the requirements of non-DoD departments. In essence, this approach would resemble the state of play prior to 1970.

The advantage of this option would be to free the DCI of his Community responsibilities and allow him to devote full attention to advising the President and managing the CIA. Some argued that if the resources currently allocated for national intelligence programs had to compete more directly against other defense needs, they would receive more rigorous review. In view of the management shortcomings recently in evidence at the CIA, it was said that the Agency requires virtually full-time attention from the DCI.

**The Commission carefully considered these arguments but
concluded that returning to a more decentralized system would
be a step in the wrong direction. In the Commission's view, there
are numerous and compelling reasons for retaining a centralized
system:**





**5-1. The Commission recommends that the existing system which
provides centralized management of the Intelligence Community
by the DCI be retained. **


The Commission heard numerous proposals for restructuring the Intelligence Community during the course of its inquiry and also commissioned a separate "clean slate" analysis by an outside consultant. While there were considerable variations and permutations in these proposals, they generally fell into three basic models: (1) giving the DCI more direct authority over the "national" elements of the Intelligence Community; (2) reducing the DCI's present responsibility for the CIA to allow more time for his two other major responsibilities; and (3) retaining the present structure generally but giving the DCI better means to carry out his community role. While these are not mutually exclusive options, they are considered separately below.


Some recommended that the intelligence agencies within the Department of Defense which have the most substantial responsibilities for "national" intelligence, e.g. the National Security Agency, Central Imagery Office, and National Reconnaissance Office, be subordinated to the DCI. Under this approach, funding for these entities would be pulled out of the Defense budget and would be appropriated, together with the funding for the CIA, directly to the DCI. These agencies would continue to satisfy Defense as well as national requirements and, in times of war or crisis, the Secretary of Defense would be given overarching authority to set requirements and priorities for intelligence collection.

The Commission rejected this approach for several reasons. First, while it is true these defense agencies provide considerable support to the Government as a whole, in times of war or crisis their capabilities are essential to the Defense Department's mission. Moreover, if not for that function, the national intelligence budget would be only a modest fraction of its present size. It seems prudent, therefore, to place these capabilities where they must relate to and support that mission. Indeed, for the large "national" technical systems operated by these agencies, the key challenge lies in tying these systems on a "real-time" basis to military forces in the field to a far greater degree than ever before. Thus, the justification for keeping them within the Department of Defense has grown stronger, not weaker. Second, subordination to the DCI would risk losing the personnel and logistical support now provided by the Department of Defense. While clearly the Department of Defense would retain a substantial interest in seeing these agencies operate effectively and retain, to some degree, their military character, if the military personnel levels were to decrease substantially, requiring comparable increases in civilian personnel, or the DCI had to reimburse the military for the logistical support now routinely provided, the costs to these agencies could increase substantially.

As a general proposition, the Commission believes it would be a serious mistake to weaken the relationship between intelligence and defense. While the DCI as head of the Intelligence Community may be in a position of relative weakness in relation to the Secretary of Defense, it must be understood that these agencies (other than the CIA) in all likelihood would not exist if there were no military justification. While they do satisfy the requirements of non-Defense agencies, they are nonetheless funded from Defense resources, staffed by Defense personnel, and vital to the performance of Defense functions. To alter this relationship would pose considerable risk, in the view of the Commission, to the continued support of these activities.


Many believe the DCI should be relieved of the responsibility of running the CIA in order to devote more attention to the Intelligence Community and to serve as principal intelligence adviser to the President. (This idea has been suggested in various forms since at least 1961.)

Those who favor this approach also generally favor the creation of a Director of National Intelligence (DNI) who would preside over an Intelligence Community which included a Central Intelligence Agency headed by a separate "Director of the CIA." Most also would separate the analytical function from the CIA and place it under the DNI to support him in his role as presidential adviser, leaving CIA strictly as an operational element. Thus, the DNI would have responsibility for establishing policy for the Intelligence Community (e.g. setting collection requirements and priorities), for resource allocation for the Community, and for "national" analysis. The Director of the CIA, on the other hand, would not be distracted by other duties and could devote full time and attention to the Agency's sensitive human source collection and operational missions.

The Commission carefully considered this option but does not endorse it. Removing the Director (DCI or DNI) from direct control of CIA operations would deprive him of an important source of his authority. The operations of the CIA form a unique aspect of U.S. intelligence. Having direct responsibility for those operations and communicating the results of those operations to the President and other recipients are important and traditional elements of the DCI's power. Separating CIA's analytical and operational functions also would have costs. As discussed in Chapter 6, the steps being taken at the CIA to move the two functions closer together appear to be producing dividends for both the analysts and the collectors. While this "partnership" needs to be carefully managed to avoid undue reliance on, or uncritical acceptance of, human source reporting, the Commission is not persuaded that the analytic element should be artificially removed from CIA. The Commission is reluctant to recommend the creation of an additional organization under a DNI, albeit one constructed of existing offices and components, in the absence of a clear showing that it is needed and preferable to other alternatives.


The Commission received many suggestions to improve the DCI's ability to carry out his responsibilities as head of the Intelligence Community within the context of the existing framework. These included proposals calling for new and expanded staff support, the creation of advisory mechanisms, and the establishment of functional managers for collection, analysis, and infrastructure on the DCI's staff. While some of these ideas have merit, others appeared unworkable. For example, the idea of creating separate agencies or functional positions on the DCI's staff to manage all collection, all analytical activities, and all infrastructure activities across intelligence agencies seemed to the Commission to be infeasible. The number of activities in each category is so large and diverse that managing them as a whole would require expertise and organizations that do not now exist in the Intelligence Community. To create new agencies or a new bureaucratic level of functional managers would be both costly and disruptive without producing clear benefits over the existing system.

**The Commission did conclude that the development of an improved
framework in which the DCI exercised his Community role-while
perhaps not the most dramatic option available-was, nonetheless,
the most sensible one.****The Commission believes that
the DCI's existing legal authorities with respect to the Intelligence
Community are, on the whole, sufficient, but that certain enhancements
to those authorities are desirable.**

**5-2. The Commission recommends that:**










* The Commission believes that adoption of these recommendations
would provide a stronger framework for the exercise of the DCI's
Community responsibilities without interfering unduly or inappropriately
with the authorities and prerogatives of the policy department
heads who "own" the intelligence components affected
*.

Having a separate Deputy Director for the Intelligence Community appointed by the President and confirmed by the Senate would provide the DCI with a senior manager of stature who can be looked to by both the Executive branch and the Congress as an authoritative spokesman and "alter ego" of the DCI on Intelligence Community matters. To carry out the responsibilities of this position, the Deputy would require a strong staff of diverse skills. The existing staff which performs this role, the Community Management Staff, should be expanded in number and should comprise both permanent positions as well as positions filled by professionals on rotational assignments from agencies within the Intelligence Community. The Deputy should direct this staff to perform management audits and otherwise assure that the DCI's policies are being properly implemented and that performance standards are being met.

Having a separate confirmed deputy for the CIA would provide the
DCI with a senior assistant of stature to administer the day-to-day
operations of the CIA while leaving ultimate responsibility with
the DCI. As elaborated in Chapter 6, the* *Commission
believes it is preferable for this position to have greater stability
to achieve continuity of management.

The Commission believes it is important that the DCI have an active
body composed of the heads of intelligence agencies as well as
others with key responsibilities for intelligence to be his principal
source of advice and to serve as the principal conduit for his
directions to the Intelligence Community* .* While
the current IC/EXCOM is structured to provide the DCI this kind
of support, the use of similar coordinating bodies in the past
has not been consistent. For the DCI to carry out his Community
responsibilities effectively, the community coordinating body
must have permanence and must play an active, "hands-on"
role.

The Commission further urges that the DCI direct a zero-based
review of the numerous advisory committees, working groups, boards,
and committees within the Intelligence Community to determine
which continue to serve a useful purpose.** **While many appear
to undertake well defined and helpful functions, others seem to
have confusing missions that do not facilitate management of the
Intelligence Community.

Requiring the DCI's concurrence in the appointment of the Directors
of NSA, NRO, and CIO, when made by the Secretary of Defense, or
his concurrence with the recommendation of the Secretary when
such appointments are made by the President, would represent a
change to existing law which requires only that the Secretary
of Defense consult the DCI with regard to the NSA and NRO appointments.**4**
The Commission believes more involvement by the DCI in the appointment
of these Directors is desirable in light of the current roles
each of these agency heads plays in the national intelligence
and in light of the expanded roles each will play if the Commission's
recommendations are adopted*.*

The Commission also believes that the DCI should be consulted with respect to the appointments of the Director, Defense Intelligence Agency, the Assistant Secretary for Intelligence and Research (State Department), Assistant Director, National Security Division (FBI), and the Director, Office of Nonproliferation and National Security (Department of Energy).

With respect to the appointment of the Director, DIA, consultation
with the DCI is already required by existing law.**5** While the responsibilities
of the Director principally involve support to the Department
of Defense, they also include significant national roles. (See
the discussion in Chapter 10.) While the State and DOE officials
identified also manage activities that primarily support departmental
requirements, their organizations similarly play substantial roles
in Intelligence Community activities, including the production
of National Intelligence Estimates.

The Assistant Director of the FBI's National Security Division is the senior official responsible for U.S. counterintelligence activities within the United States. The DCI is responsible for coordinating U.S. counterintelligence activities abroad. The two functions necessarily require extensive interaction. The cooperative arrangements between the FBI and the CIA which have grown out of the Ames case must be sustained and preserved. One way of doing so would be to give the DCI an opportunity to consult on the appointment of the senior FBI official responsible for counterintelligence matters. Providing the DCI with the opportunity to consult on the appointment of these officials would not alter the reporting relationships that now exist, but should result in greater cohesion among senior Intelligence Community managers.

In a similar way, dual-hatting the Directors of NSA and the CIO as Assistant Directors of Central Intelligence for Signals Intelligence and Imagery, respectively, is intended to establish more formally their roles within the Intelligence Community. These roles would be considerably expanded in the resource management area if the Commission's budget recommendations are adopted. (These are explained in detail in Chapter 7.) Formalizing their roles at the national level also provides a logical basis for allowing the DCI to comment on their job performance prior to being rated by the Secretary of Defense.

**In sum, the Commission does not believe it is necessary
to recommend new legal authorities to enable the DCI to perform
effectively the three key functions of leading the CIA, serving
as the President's principal intelligence adviser, and guiding
the Intelligence Community. 6 However, the Commission believes the
adoption of the recommendations outlined above would put the DCI
in a far stronger position to carry out these responsibilities.
They would provide permanent support mechanisms and give the DCI
a stronger hand in his relationships with the heads of the agencies
within the Community. It is also important that these recommended
organizational changes be understood as part of the significant
budget realignment proposed in Chapter 7, along with the personnel
proposal outlined in Chapter 9. Taken together, these recommendations
should enable the DCI to re-engineer and manage a stronger and
better coordinated intelligence apparatus.**

**1** The Intelligence Community is defined by law to include the Office of the Director of Central Intelligence (which includes the National Intelligence Council), the Central Intelligence Agency, the National Security Agency, the Defense Intelligence Agency, the Central Imagery Office, the National Reconnaissance Office, other offices within the Department of Defense for the collection of specialized national intelligence through reconnaissance programs, the intelligence elements of the Army, Navy, Air Force, Marine Corps, Federal Bureau of Investigation, the Department of Treasury, and the Department of Energy, the Bureau of Intelligence and Research of the Department of State; and such other elements of any department or agency as may be designated by the President or jointly by the Director of Central Intelligence and the head of the department or agency concerned. (None has to date been designated under this latter authority.) For a general description of the operation of the Intelligence Community, see Appendix B.

**2** Summaries of recommendations from many of the key reports are included in the discussion of the historical evolution of the Intelligence Community found in Appendix A.

**3** The IC/EXCOM, chaired by the DCI, includes the Deputy DCI; the Deputy Secretary of Defense; the Vice Chairman, Joint Chiefs of Staff; the Directors of NSA, NRO, CIO, and DIA; the Assistant Secretary of State for Intelligence and Research; the Chairman of the National Intelligence Council; the Executive Directors for Intelligence Community Affairs and for the CIA; as well as others with key responsibilities in the intelligence area, including the Assistant Secretary of Defense for Command, Control, Communications, and Intelligence, and the Under Secretary of Defense for Acquisitions and Technology.

**4** See Section 106 of the National Security Act of 1947. The head of NSA is a military officer whose selection as head of the agency usually carries with it a promotion in rank. The head of the NRO is ordinarily a civilian political appointee. These appointments are usually made by the President based upon the recommendation of the Secretary of Defense. Pursuant to existing law, the Secretary of Defense appoints the Director of the Central Imagery Office, currently a civilian, based on the recommendation of the DCI. The current proposal to subsume the Central Imagery Office into a National Imagery and Mapping Agency, discussed in Chapter 11, calls for the Director of the new agency to be a military officer whose appointment, like the Director, NSA, would presumably be made by the President in most circumstances.

**5**Section 106(a) of the National Security Act of 1947.

**6**While the DCI's overall legal authorities are generally sufficient, additional authority will be required to implement the personnel program recommended in Chapter 9.