SCOPE OF THE COMMISSION'S INQUIRY

EXECUTIVE SUMMARY

The Commission is charged by Public Law 103-359 with assessing the activities of the United States Intelligence Community in the post-Cold War environment. During the Cold War, U.S. intelligence agencies focused their activities principally on monitoring and analyzing the activities of the Soviet Union and its Warsaw Pact allies. With the disintegration of the Soviet Union and Warsaw Pact, is this inte lligence apparatus still needed? If so, what are the continuing objectives served by such an apparatus? How should it be organized? What should it cost?

With the end of the Cold War, the United States presumably will continue to need information concerning countries with interests inimical to its own, information about activities abroad which threaten its security (e.g. terrorism, weapons proliferation, .narcotics trafficking), information to support U.S. military operations abroad, and information which supports U.S. diplomacy. Beyond these, there appear to be other categories of information concerning "things foreign" which might be considered legitim ate objectives for intelligence, to include information that would improve U.S. economic competitiveness abroad, information pertaining to environmental and humanitarian crises abroad, and information in support of law enforcement, among others. Should the Intelligence Community maintain a capability to collect and analyze information in these categories?

How should priorities be assigned within the categories of information of legitimate intelligence interest? Do these priorities dictate a strategy or approach in terms of determining how resources are invested in intelligence capabilities or in terms of deciding how existing capabilities are allocated? If not, what factors should inform these decisions?

To what extent do the objectives and priorities for intelligence in the post-Cold War period suggest changes to the existing organizational structure?

If the United States were starting with a blank sheet of paper and could establish an organization for the conduct of intelligence activities without reference to the existing system what organization would best achieve the objectives and priorities assig ned the intelligence function?

Short of complete restructuring, are there organizational changes which would improve the effectiveness and efficiency of the existing Intelligence Community? In particular:

  • What roles, responsibilities, authorities and status should be given the Director of Central Intelligence?

  • Should the Central Intelligence Agency be maintained as a separate entity?
  • Should the National Reconnaissance Office be maintained as a separate entity?
  • Should there be a single manager who controls all collection activities? Who controls all analytical activities?
  • Should there be a Director of Military Intelligence, and, if so, what roles, authorities, and status should be assigned this position?
  • Should there be established a new National Imagery Agency, and, if so, what roles and authorities should be given this agency?
  • Should the Defense Intelligence Agency assume functions now performed by the military departments, or should the functions assigned the Defense Intelligence Agency be dispersed elsewhere in the Department of Defense?
  • Should the Intelligence Community make more consistent and comprehensive use of open sources prior to undertaking collection and/or analysis, and, if so, how should this function be structured?
  • Are there organizational changes which would make intelligence analysis more useful to customers or which would ensure intelligence reaches customers in a timely manner?
  • Are there organizational arrangements employed by other governments which, if implemented, would likely improve the effectiveness and efficiency of U.S. intelligence activities?

    Apart from organizational changes, are there ways to reduce the costs of U.S. intelligence activities while preserving the capability necessary to satisfy the objectives and priorities-of the post-Cold War era? In particular - .

    Are there aspects of the intelligence function other than organizational structure and resource allocation which should be changed to improve the overall effectiveness and efficiency of intelligence activities? In particular:

    THE MANDATE OF THE COMMISSION

    IN GENERAL

    The Commission is charged by Public Law 103-359 with assessing the activities of the United States Intelligence Community in the post-Cold War environment. The statute sets forth 19 separate issues for the Commission to address. Generally, these iss ues deal with an assessment of the intelligence needs of the United States in the post-Cold War world and the resources to address these needs.

    Before undertaking this task, it is important to have a common understanding of the terms "intelligence" and "Intelligence Community," as well as what is implied by looking at this subject in terms of the "post-Cold War world."

    "Intelligence," for purposes of the Commission's review, should be understood as information concerning "things foreign" (e;g., people, places, events, things) which is needed for the performance of governmental functions but which is not readily availabl e through public sources and cannot be obtained from other governments through official (albeit confidential) channels. Thus, information about "things foreignn which is available to the U.S. Government in the press, in official statements of foreign gov ernments, or which can be readily observed, should not be understood as "intelligence," nor should information obtained through official but confidential contacts between U.S. agencies and their foreign counterparts.

    This is not to say "intelligence" agencies do not need information from public sources and confidential diplomatic channels to carry out their functions. Knowing what information is otherwise available to the U.S. Government is essential to deciding whet her intelligence resources should be employed to collect particular information about "things foreign." Once a decision is made to use such resources, the information collected must be analyzed in the context of information that is otherwise available to the Government, i.e. information from public sources and diplomatic channels, to assess its reliability and significance.

    Intelligence agencies thus seek to provide added value by collecting information that is not otherwise available and integrating it with that which is available, for the benefit of ' Government consumers. It is this role that distinguishes the Intelligen ce Community from other elements of the U.S. Government.

    The term "Intelligence Community" was defined in law for the first time in 1992, as an amendment to the National Security Act of 1947. The term includes the Office of the Director of Central Intelligence (DCI), the Central Intelligence Agency (CIA), the National Security Agency (NSA), the Defense Intelligence Agency (DIA), the National Reconnaissance Office (NRO), the Central Imagery Office (CIO), the intelligence elements of the Army,' Navy, Air Force, and Marine Corps; other offices in the Department o f Defense (DoD) for the collection of intelligence through specialized reconnaissance programs; the'intelligence elements of the Federal Bureau of Investigation (FBI), the Department of Treasury, and the Department of Energy; and the Bureau of Intelligenc e and Research of the Department of State.

    While the Inteliigence Community grew in size and complexity in response to the needs of the Cold War period, the stimulus for establishing a coordinated approach to intelligence occurred earlier in response to what President Truman perceived as the need, growing out of the surprise attack on Pearl Harbor, to provide for the coordination of intelligence gathering and analysis. He also sought a source of objective advice to the President independent of the departments with policy responsibility.

    During the Cold War period, the United States betame locked in a struggle with countries which threatened its survival.In addition, information on the activities and affairs of those countries was largely inaccessible to the U.S. Government. U.S. intelli gence agencies multiplied and grew in response to the need to obtain and analyze the information that could not be obtained in any other way.

    With the end of the Cold War, there are still countries with interests inimical to our own and which remain largely inaccessible in terms of their activities and intentions. Few seem to threaten our survival, but the post-Cold War world is a more uncerta in place, and fashioning the U.S. response to events around the world is a more complex problem for policymakers. Political rivalries once held in check by the superpowers have escalated into regional, ethnic and religious conflicts. These conflicts ofte n have fostered new, more intensive efforts to acquire weapons of mass destruction and advanced conventional weapons. The economies of other countries appear to challenge our own on an increasingly broad front.

    The United States, as the dominant military and economic power in the world, frequently is called upon to respond to events outside its borders.- Some are of a political or military nature, but there also are humanitarian and environmental crises. So long as it remains a global power, therefore, the United States would appear to require an intelligence capability with a global reach.

    Determining what this capability should look like has been complicated not only by changes in the world's political, economic, and military landscape, but also by the explosion in communications technologies that has made information instantaneously avail able from around the globe. While these advances have dramaticaily increased the capability of intelligence agencies to eollect, process, store, and analyze information, they also pose new obstacles to traditional intelligence gathering techniques. Th ese, too, must be weighed in assessing the intelligence function in the post-Cold War world.

    Finally, the post-Cold War period, for the near-term, is apt to be marked by a continued decIine ih real federal spending. During the Cold War, few intelligence capabilities seemed "too costly if national security interests were at stake. This has change d in the post-Cold War environment, and intelligence capabilities which are not productive, efficient or responsive to the needs of Government need to be trimmed or eliminated. New systems will be assessed not simply for what they can do but for whether they are "affordable." In light of the continuing need to reduce the federal budget deficit, this trend is likely to continue.

    BASIC QUESTIONS

    While there are many subsidiary issues involved in the Commissionvs assessment of U.S. intelligence in the post-Cold War period, there are four core questions:

    I. What are the intelligence needs and priorities of the U.S. Gover lent in the post-Cold War world?

    II. Do the existing organizational arrangements within the Intelligence Community provide the most effective and efficient framework for satisfying those needs?

    III. Are the resources currently allocated for intelligence activities well justified in terms of satisfying those needs, and does the existing budget process result in the optimal allocation of these resources?

    IV. Are there aspects of the intelligence function other than organizational structure and resource allocation which should be changed to improve efficiency and effectiveness?

    The subsidiary issues involved in answering these questions are set forth in the next section.


    I. WHAT ARE THE INTELLIGENCE NEEDS AND PRIORITIES OF lhs U.S. GOVERNNENT IN THE POST-COLD WAR ERA?

    A. What categories of information about "things foreign" will be needed by the U.S. Government in the post-Cold War era which are likely to involve information that is not accessible to the United States, either through public sources or through the offi cial contacts of the United States with other governments? President Clinton recently issued Presidential Decision Directive 35, which expressed these needs in terms of certain objectives for the Intelligence Community (e.g., support for military operatio ns, support fpr the foreign policy process, etc.) and assigned priorities among and within these objectives. The directive also instituted a process whereby these objectives and priorities would be continuously reevaluated in response to changes ln the gl obal environment. The Commission, while taking no issue with the objectives and priorities assigned by the President, would identify the needs for intelligence in the postCold War era in the context of the following categories of information:

    i. Countries Whose Interests are Seen as Inimical to Those of the United States. For the foreseeable future, there will be countries whose interests appear inimical to those of the United States, and whose activities remain largely inaccessible to the United States. At present, these include Libya, Iraq, North Korea and Iran. While these countries do not pose a threat to the survival of the United States in the same way the former Soviet Union did, they do threaten regional stability (which might require U.S. involvement to resolve) and are capable of carrying out limited forms of violence or aggression against the United States or its allies. Whether the political posture of these countries vis-a-vis the United States remains the same, or whethe r other countries - perhaps posing risks to U.S. security as substantial as those posed by the former Soviet Union - are added to the list in the future, the United States will continue to need information concerning such countries.

    ii. Activities that Threaten the Security of the United States.

    a. - Proliferation of Weapons of Mass Destruction and their Related Delivery Systems. Countries which build and deploy weapons of mass destruction (nuclear, chemical and biological weapons) typically-do so in secret. Ordinarily, such countries requ ire components, materiel, or technical expertise from other governments or private suppliers. Transfers of this nature usually occur in secret. While proliferation among countries whose interests are seen as inimical to the United States poses the most serious concern, proliferation activities by friendly countries also may raise concerns.

    b. International Terrorism. Terrorist activities planned and/or undertaken in the United States or against U.S. citizens abroad remain a paramount security concern. Undertaken in secret, these activities may involve state sponsorship or may be acts perpetrated by foreign groups unconnected to a particular government.

    c. International Narcotics Trafficking. The introduction of illegal drugs into the United States from abroad leads to increased domestic crime, higher public health costs and ruined lives. The production and transportation of th ese drugs into the United States is necessarily carried out in secret by foreign-based entities, whose activities also may threaten the stability of democratic states friendly to the United States.

    d. International Organized Crime. International organized crime is a growing problem for the United States. Not only are the number and size of these foreiga organizations growing, but their activities are becoming more varied. Such groups ar e involved in narcotics trafficking, attempting to smuggle illegal aliens into the United States, marketing pirated goods, extorting money from ethnic groups within the United States, and attempting to obtain and sell nuclear materials. On a more str ategic level, the influence of such groups in countries such as Russia could ultimately threaten the stability of thay government.

    e. "Information Warfare. The explosion in telecommunications technology in the post-Cold War world has greatly facilitated the processing, transmission and storage of huge volumes of information, but it also has increased the ability of pers ons and governments outside the United States to penetrate electronically U.S. computer systems, both governmental and private. As a result, U.S. computer systems are increasingly vulnerable to electronic theft, data modification, and even being entirely shut down at a critical moment.

    iii. Information in Support of Military Requirements. The post-Cold War period has seen the deployment of U.S. military forces in a variety of circumstances - from humanitarian missions to combat oDerations. Often these deployments have occurred in places where such involvement was unexpected. There is an obvious need to protect the forces engaged in such deployments in the future and to ensure the successful completion of their missions. This will require information about the areas where U.S. forces are deployed and the threats they face. In combat situations, it also will require detailed information to target "smart" weapons and an ability to assess the results of U.S. military actions once undertaken. Beyond suppgrt for the planning and execution of military operations, U.S. forces will have a continuing need to know wh at weapons to buy, where research and development of military systems should be oriented, what countermeasures to develop, and what tactics and military doctrine should be developed. These decisions are largely determined by the nature of the foreign mil itary threat which U.S. military forces may face.

    iv. Information to Support the Foreign Policy Process. The conduct of U.S. foreign policy requires a thorough knowledge of foreign political and economic developments, (e.g., developments in the Middle East peace process, the success of reform efforts in Russia), insight into the background and thinking of key foreign leaders, and an understanding of the interests and aspirations of foreign countries or groups (e.g., elements of the former Yugoslavia). It also requires adequate and timely warning when key bilateral relationships (e.g., Iran in the late 1970s) are taking a turn for the worse. The success of U.S. diplomatic initiatives, undertaken bilaterally or multilaterally, frequently depends upon otherwise inaccessible information being mad e available to the President, Secretary of State, and other U.S. policymakers in a timely manner. There will be specific needs for information concerning such topics as the status of international negotiations; compliance with existing treati es; and the effectiveness of diplomatic or trade sanctions. While the public statements and private communications of foreign governments yield a great deal of information bearing upon these topics, there will be a continuing need for intelligence t o verify and corroborate what is obtained through official channels and to furnish the missing pieces.

    v. The New Agenda.

    In the years following the end of the Cold War, the demands of consumers have grown in other areas. While those areas are not entirely "new", the proper role of the Intelligence Community in collecting and analyzing information in these areas has prompt ed much of the recent debate.

    a. Information to Improve Economic Competitiveness Abroad. Increasingly, the ability of U.S. industry to compete successfully in the world market is seen as a critical element of U.S. security. The Departments of State and Commerce are char ged with promoting the economic interests of the United States abroad. The collection of information which could have an impact on the competitive position of U.S. industry and which is not otherwise available to the U.S. Government may be a task for th e Intelligence Community.

    b. Information Pertaining to U.S. Regulatory Functions. The United States needs information regarding "things foreign" to support a myriad of regulatory requirements: for example, licensing foreign banks to do business in the United States; re gulating fgreign investment in the United States; and determining the legitimacy of foreign "end-users" before of granting an export license to a U.S. manufacturer of controlled goods or services. Much of the information required by the United States for these purposes can be obtained from public sources or from the foreign government or foreign entity concerned. However, the U.S. agency involved typically wants to know if the Intelligence Community has non-public information that bears on its regul atory functions.

    c. Information Concerning Environmental, Health and Humanitarian Probiems Abroad. The United States needs information on environmental, humanitarian and health problems around the world in order to protect its own environment, maintain the public health and respond to humanitarian crises. Much of the information required is available publicly or can be obtained through official channels, but there will be cases where the information is not readily available either for lack of reliable so urces or because the problems occur in remote locations ngt readily accessible to the United States.

    d. Support to Law Enforcement. Historically, the intelligence and law enforcement functions have remained largely separate for legal reasons ;(involving intelligence agencies in domestic law enforcement) and for practical reasons (avoiding the exposure of intelligence sources and methods in court proceedings). The Intelligence Community often acquires information on "things foreign which overlap and support law enforcement functions (e.g., international terrorism, international drug trafficking). Rel atively little intelligence support, however, traditionally has been provided to criminal investigatigns against particular individuals or entities, even when those individuals or entities are outside the United States. Increasingly,criminal investigatio ns within the United States appear to have foreign elements. The suspected perpetrators are abroad, the suspected criminal conduct occurred outside the United States, or international communications were used to carry out aspects of a crime. At issue is whether the Intelligence Community has the capabilities, or should develop them, which could contribute to federal criminal investigations.

    B. Assuming these categories identify, for the most part, the potential needs of the Government for information concerning "things foreign" in the post-Cold War era, should the United States maintain an intelligence capability to collect and analyze information in each of these categories? Could some of these needs be reasonably satisfied by "non-intelligence elements of the U.S. Government, e.g., the Drug Enforcement Administration for counternarcotics information, or the Foreign Commercial Service of the Department of Commerce for information regarding economic competitiveness? If not, is the value likely to be added in each category by the Intelligence Community sufficient to justify maintaining a capability to collect and analyze such information? Should departments and agencies simply be told to rely upon other available data to satisfy these needs? Who should be responsible for making these determinations?

    C. Can a strategy or approach be developed, based upon prioritizing the legitimate needs for intelligence identified above, to govern future investments in intelligence capabilities? If so, what would such a strategy look like? If not, what factors should inform such decisions?

    D. Similarly, can a strategy be developed to govern the allocation of capabilities which already exist within the Intelligence Community? If so; what would this approach look like? If not, what factors should inform such decisions?

    E. Would it be desirable and/or feasible to establish limits upon the nature or extent of what current and potential U.S. Government "consumers" may request from the Intelligence Community? For example, should limits be established on the quantity or subjects that U.S. agencies request-from the Intelligence Community? For agencies who request such support, should their requests only be accepted when they are within established needs and priorities or can be satisfied by existing capabilities? Should intelligence agencies reject requests from consumers which exceed such limits? Should a new mechanism be created to review and prioritize all agency requests?

    II. DO THE EXISTING ORGANIZATIONAL ARRANGEMENTS WITHIN THE INTELLIGENCE COMMUNITY PROVIDE THE MOST EFFECTIVE AND EFFICIENT FRAMEWORK FOR SATISFYING THOSE NEEDS?

    A. An Ideal Framework? Given the intelligence needs of the post-Cold War era, does the existing organizational and management structure provide the optimum framework for satisfying those needs? If the United States were starting with a blank slate and could establish an organization for the conduct of intelligence activities without reference to the existing system, what structure would provide the greatest efficiency and effectiveness?

    i. Should the CIA be maintained as a separate organizational entity? Is the rationale for 'maintaining a separate organizational entity apart from the Departments of State and Defense still valid? If CIA should be maintained as a separate organizational entity, are there structural changes that would improve its efficiency and effectiveness?

    ii. Should the National Reconnaissance Office (NRO) be maintained as a separate organizational entity? The NRO is responsible for building, launching and operating satellites in satisfaction of the requirements of other intelligence components. Elements of the Department of Defense and, indeed, other parts of the Government (e.g., the National Aeronautics and Space Administration) have similar non-intelligence related functions. Does it continue to make sense to maintain NRO as a separate organization, or should its functions be parceled out to other agencies? If NRO should be retained, should authority over the agency continue to be split between the Secretary of Defense and the DCI? In the interests of promoting accountability and reducing costs, would it be preferable to make the NRO an element of the Department of Defense?

    B. Cost of an Ideal Framework. Would the benefits of the changes envisioned above outweigh the costs of implementation?

    C. Major Restructuring Short of the Ideal Framework. Assuming the costs of implementing the ideal framework outweighed the benefits perceived, would major restructuring of the Intelligence Community nonetheless be desirable? Issues the Commission will consider in this regard include the following:

    i. The Concept of "Community." Does it continue to make sense to manage the intelligence function as a "Community" under a single leader, or should the U.S. return to a system of decentralized control and rely upon coordination among the departments and agencies involved? Would the latter increase or decrease the costs, responsiveness, and efficiency of the function?

    ii. The Role of the DCI. If it makes sense to continue to manage the intelligence function as a "community," should the person who executes this function (currently the Director of Central Intelligence) also head an agency within the Intelligence Community (currently the CIA)? Have the responsibilities of both positions grown too large for one official to handle effectively?

    iii. The Status of the DCI. Should the DCI be appointed for a fixed term - for example, 10 years - similar to the appointment of the FBI Director, or should the DCI serve at the pleasure of the President who made the appointment? Should the DCI have cabinet rank and/or be a participant in policy decisions?

    iv. Authorities of the DCI. What authorities should the DCI have with respect to the departments and agencies of the Intelligence Community other than the CIA? In particular, how should the DCI relate to the Secretary of Defense, who currently has responsibility for executing most of the budget for national foreign intelligence? Are the existing authorities of the DCI adequate to manage the Community effectively and efficiently?

    v. Unified Management of Collection. As a general proposition, intelligence collection is currently managed by separate discipline, e.g., SIGINT, HUMINT, IMINT. While there are linkages between each discipline and the DCI plays an overall supervisory role, should there be a single manager who controls all the collection disciplines? If so, what form should this take? Is a new agency desirable?

    vi. Management of Analysis and Production. Historically, intelligence analysis and production has been decentralized. The underlying assumption has been that departments and agencies (to include military commander.s) require intelligence analysis tailored to their particular needs and delivered to them by their own employees. For some areas, such as analysis of foreign strategic weapons systems, competitive analysis has been seen as desirable. Do these assumptions continue to have validity? Are there new arrangements that would reduce unwarranted duplication, for example, by creating an all-source analysis center which provides an analytical base for many departments and agencies to utilize? Alternatively, would greater centralized control over the anvlyses being produced by departments and agencies on their own initiative reduce waste and duplication?

    D. Second-Order Restructuring. Regardless of whether a major restructuring is desirable and/or feasible, there may be discrete areas where organizational or management changes would bring significant benefits.

    I. Collection.

    a. Open Source Coordination. Inasmuch as the role of the Intelligence Community is to collect information that is not otherwise available to the U.S. Government, how does the Intelligence Community determine what information is available . through open sources prior to investing in, or employing, intelligence gathering techniques? To what extent does this function deserve further institutionalization within the Intelligence Community?

    b. Director of Military Intelligence. Intelligence collection and production activities are currently carried out by several elements of the Department of Defense: the Defense Intelligence Agency, intelligence components within each of the military departments; and intelligence elements assigned to the unified and specified commands. While the Director of the Defense Intelligence Agency validates intelligence collection requirements for all Defense intelligence components and ostensibly manages intelligence production for DoD as a whole, the Director has been in a relatively weak position in terms of managing intelligence collection or production assets which he does not "own." If the Director, DIA, were made "Director of Military Intelligence with authority to coordinate intelligence collection and production activities within the Department of Defense, would such designation provide for greater effectiveness and efficiency?

    c. DoD Analysis and Production. The Defense Intelligence Agency is responsible for providing intelligence analysis to the Office of the Secretary of Defense, the Organization of the. Joint Chiefs of Staff, and other DoD components on military topics of general interest. Separate analytical organizations, however, are maintained within each of the military services to support; their respective departmental-functions (e.g.,- acquisition, training, and doctrine) and at each of unified and specified commands to provide tailored analysis on specific subjects within the purview of the CINC concerned. Is each of these separate analytical organizations and staffs necessary? Could analytical support be consolidated outside the department or command concerned without sacrificing effectiveness? If it is desirable to maintain separate analytical organizations within the military departments and the unified and specified commands, should the analytical functions of the Defense Intelligence Agency be dispersed-to other intelligence components?

    d. Crisis Support to Joint Task Force Commanders. The entire Intelligence Community (including the CIA) comes together during crises to provide support to U.S. combat forces - typically under the control of a Joint Task Force commander - but there is no permanent organization within the Intelligence Community dedicated to the provision of crisis support. Does the staff within the Office of the Joint Chiefs of Staff which provides intelligence support to theater combatant commands have sufficient capability, or should the Intelligence Community itself organize a discrete capability to meet this need?

    e. Imagery Collection, Exploitation, and Dissemination. While certain functions pertaining to imagery were joined together by the creation of the Central Imagery Office (CIO) in 1992, key elements - notably the Defense Mapping Agency and the National Photographic Interpretation Center - were omitted from the reach of the CIO charter. In addition, responsibility for the Office was split between the DCI and the Secretary of Defense. Would it provide greater efficiency and effectiveness to create a new National Imagery Agency which pulls together these elements? If so, where should such agency be placed and under whose control?

    e. Airborne Reconnaissance. In 1993, the Secretary of Defense, with the approval of the DCI, created the Defense Airborne Reconnaissance Office (DARO). It is responsible for the acquisition and integration of all airborne reconnaissance assets of the Department, including those which serve both national and tactical requirements. Has this consolidation of responsibility provided for greater efficiency? Is a DoD office able to take into account adequately national needs for air reconnaissance (i.e. other than for military purposes)?

    ii. Analysis and Production

    a. The Estimates Process. Does the National Estimates process, as currently structured and implemented, serve the needs of consumers for long-term analysis? If not, how should it be changed? For example, does-it bring in sufficient expertise from outside the government? Would an estimates structure, outside the Intelligence Community and involving relevant experts from the - private sector, be a more effective way to produce national estimates?

    b. Current Intelligence. Does the output of current intelligence serve the needs of the consumer? Is too much information of uncertain significance or reliability being disseminated? What provision should be made for the dissemination of "raw intelligence to consumers without intervening analysis by intelligence agencies? In short, what criteria should govern the provision of current intelligence to consumers?

    c. Use of Open Sources in Analysis. All-source analysis integrates information obtained from intelligence sources with that obtained from open sources to arrive at a finished product. To a lesser degree, intelligence reports produced by "single source agencies, e.g., NSA, the CIA Directorate of Operations, also take into account what is otherwise available from open sources. How is open source information integrated into intelligence analysis at both the all-source level and at the "single source" level? Would it be desirable to institutionalize this function in a more uniform manner across the Intelligence Community?

    d. Dissemination and Relations with Consumers of Intelligence. Unless consumers are able to receive intelligence information in a timely manner and in a form easily understood and usable, the effort to collect, analyze and report such information has gone for naught. The customers of intelligence are not all of one kind, and it is unlikely that a single form, process, or structure for disseminating intelligence information will serve the needs of all. Are there sufficient links with consumers to ensure that intelligence which is pertinent to their needs arrives in a timely fashion, and are consumers, in turn, able to interact with intelligence analysts, to raise questions and to identify continuing needs? Who is responsible for establishing these linkages and monitoring their effectiveness? Would a separate organizational element to perform this function improve efficiency and effectiveness?

    e. Communication Systems for the Dissemination of Intelligence. While greater attention has been given in recent years to acquiring communications systems that are compatible and that effectively reach the pertinent users, does an adequate structure currently exist to ensure that intelligence reaches pertinent consumers throughout the Government on a timely basis? For example, do adequate communications systems exist to tie intelligence to the battlefield to enable U.S. military commanders to target "smart weapons and to protect U.S. forces put at risk by enemy weapons systems?

    f. The Intelligence Structures of Other Governments. How do other governments structure their intelligence functions? Are there lessons to be learned from them in terms of improving the efficiency and effectiveness of the U.S. Intelligence Community?

    III. ARE THE RESOURCES CURRENTLY ALLOCATED FOR INTELLIGENCE ACTIVITIES WELL JUSTIFIED, AND DOES THE EXISTING BUDGET PROCESS RESULT IN THE OPTIMAL ALLOCATION OF SUCH RESOURCES?

    A. Should intelligence cost more or less in the post-Cold War era? Many of the political and military conditions that drove up the cost of intelligence collection during the Cold War no longer exist. Areas of the world once denied to the United States, such as the former Soviet Union and Warsaw Pact nations, now are more open and maintain regular commercial and diplomatic relations with the United States. The threat of a nuclear attack on the United States has vastly diminished, and the threat of an invasion of Europe has all but disappeared.

    The regional and intra-state tensions - political, ethnic, religious, or economic - that once were held in check by the superpower struggle, however, now are driving arms races, a search for weapons of mass destruction and economic competition. These new challenges to U.S. security present very different targets than did the Cold War.

    In addition, the target set has become more fluid. A country, region, or issue that was "back burner" one month, can be "front burner" the next. This situation would appear to require an intelligence capability with greater-flexibility than the capability developed to cope with the problems of the Cold War.

    At the same time, the "intelligence targets" in the post-Cold War world may not be as costly to collect against. For example, some countries of intelligence interest may not have sophisticated means of protecting information from intelligence gathering; indeed, the United States may be able to satisfy key intelligence requirements without resorting to the expensive capabilities developed for use against the former Soviet Union.

    On the other hand, the explosion in communications technology has made it easier for the targets of intelligence gathering to protect themselves. While this same technology has dramatically improved the ability of U.S. intelligence agencies to gather, analyze, and disseminate information, it also has expanded exponentially the potential universe of information available.

    Given these multiple, off-setting factors, the Commission will consider whether the overall cost of intelligence gathering and analysis ought to be more or less than the costs associated with the Cold War.

    B. Are there intelligence capabilities that are no longer required in the post-Cold War era?

    i. Collection. Assuming the need to maintain a capability in the post-Cold War world to collect otherwise unobtainable information by way of human sources, electronic emanations, photography, and other specialized means, can existing capabilities be scaled back or eliminated while preserving a capability to satisfy current and legitimate needs?

    ii. Analysis and Production. Can analytical elements of the Intelligence Community be scaled back or eliminated without sacrificing effectiveness? Given the political and military changes that have taken place, does the United States continue to need competitive analyses, particularly on military-related topics?

    C. Apart from actions that might be taken to eliminate or reduce existing capabilities, are there new ways of doing business that could reduce the costs of intelligence?

    i. Consumer Financing. Intelligence has historically been "a free good" available to government consumers (departments, agencies, and their contractors) upon request and free of charge. This may have led to unjustified requests and requests on very low priority issues. Should consumers have to pay for the support they receive from intelligence agencies? If not routinely, should consumers make payments after such support reaches an established threshold or for any new or additional capability required to satisfy their particular request? Regardless of whether consumers pay for intelligence support, should the Intelligence Community have greater discretion to turn down requests without adequate justification or priority?

    ii. Special Procurement Practices. Is there a continued need for special procurement practices - once required for security reasons and to provide faster response - but which arguably have resulted in greater cost to the taxpayer?

    iii. Greater Use of the Private Sector. Can some activities of the Intelligence Community be privatized to save money and increase efficiency?

    iv. Adoption of Private Sector Business Practices. During the last 10-15 years, elements of the American business community have taken far-reaching measures to reduce their costs in the face of growing international competition while maintaining the quality of their products. These measures have, in some cases, involved substantial personnel downsizing as well as innovative management approaches. While the Intelligence Community is not driven by the same economic imperatives, it does face a similar problem in terms of having to preserve quality while its budget is shrinking. Could the Intelligence Community take greater advantage of private sector business practices to reduce its costs without sacrificing quality? If so, what sorts of practices might be adopted?

    v. Use of New Technologies. What new technologies might be employed to reduce costs without sacrificing the quality of service? To what extent are changes desirable in the manner in which research and development efforts are coordinated among intelligence agencies with similar needs? Is the industrial base which supports the Intelligence Community diminishing, and, if so, what effect does this have on the ability of the Intelligence Community to develop and utilize new technologies?

    vi. Centralizing Common Functions. To what extent could common functions among intelligence agencies (e.g., training, security) be centralized to reduce costs without sacrificing effectiveness? In particular, to what extent, could the costs of research and development be reduced and the effectiveness of this function be enhanced by greater centralization of management responsibility?

    vii. International Cooperation. To what extent could and should the United States attempt to shift a greater share of the costs of intelligence-gathering to other governments with whom the United States has cooperative arrangements in the intelligence area?

    D. Does the existing budget process establish an optimal allocation of resources for intelligence activities?

    i. One Intelligence Budget? Currently, intelligence and intelligence-related activities are funded out of three separate "pots~ of money: (1) the National Foreign Intelligence Program (NFIP) which contains the funding for "national" intelligence activities and is controlled by the DCI; (2) the Joint Military Intelligence Program (JMIP) which funds Defense intelligence activities that serve defense-wide purposes and is controlled by the Secretary of Defense; and (3) the Tactical Intelligence and Related Activities (TIARA) aggregation which funds intelligence activities solely in support of tactical military requirements and is controlled by the military department concerned under the supervision of the Office of the Secretary of Defense. Does it make sense to continue these separate funding arrangements or to combine some, or all, of the resources into one intelligence budget?

    ii. Control of the Budget. If it is desirable to have one budget for intelligence, who should control it: the Secretary of Defense or the DCI? If it is not desirable to have a single budget for intelligence, should the existing structure nonetheless be changed? In other words, should the DCI have greater control over JMIP or TIARA? Or should the Secretary of Defense have greater control over the formulation of the NFIP (less the budget for the CIA)?

    iii. Location of the Intelligence Budget. Should the budget for intelligence continue to be included as part of the Defense Department budget (and essentially determined between the DCI and the Secretary of Defense) or should it be separately provided for in the President's budget and be evaluated in terms of other funding priorities?

    iv. Disclosure of the Intelligence Budget. Presumably, if the budget for intelligence were included as a separate line item in the President's budget, it would require the disclosure of at least the aggregate figure. What are the implications of such disclosure? Should the intelligence budget be disclosed even if it remains part of the Defense budget?

    v. The Resource Allocation Process. While the DCI is responsible for issuing general budget guidance to elements of the Intelligence Community funded within the National Foreign Intelligence Program, basic decisions regarding resource allocation are left to the individual program managers (the Directors of the National Security Agency, National Reconnaissance Office, etc.). The budget requests of the program managers are then jointly evaluated by the DCI's staff and the President's Office of Management and Budget, prior to being submitted to the DCI for approval and forwarding to the President and then Congress. Does this process expose unnecessary duplication of effort, excess capability, and critical funding shortfalls? Does it provide an adequate basis for determining tradeoffs between programs?

    vi. Measures of Performance. In allocating resources for the different aspects of the intelligence process, measures of performance are desirable to determine the cost-effectiveness of programs and their marginal contribution to the whole. Performance measures could apply to procurement (e.g., was the system delivered on time, within budget, and did it perform as specified) or to intelligence reporting to policymakers (e.g., was the product useful in the development of policy). How does the Intelligence Community evaluate its performance in terms of measuring costs vs. benefits? If it is not possible to measure performance in these terms, what means should be used to measure performance? How should they be employed in the budget process to optimize resource allocation?

    IV. ARE THERE ASPECTS OF THE INTELLIGENCE FUNCTION OTHER THAN ORGANIZATIONAL STRUCTURE AND RESOURCE ALLOCATION WHICH SHOULD BE CHANGED TO IMPROVE EFFICIENCY AND EFFECTIVENESS?

    A. Covert Action. Does the United States need to retain a capability to carry out actions abroad to influence political or military conditions in support of foreign policy objectives without the role of the United States being acknowledged or becoming apparent? If so, what should this capability be structured to do, and where should it be lodged in the Intelligence Community?

    B. Counterintelligence. Over the last 15 years, the United States has seen many of its intelligence activities compromised to other countries. The Aldrich Ames case is the latest and most egregious example. New legislation was enacted in 1994 to address many of the deficiencies perceived in that case, and the Administration established new policy frameworks for counterintelligence and security programs, adopted new arrangements to improve coordination between the FBI and the CIA, and instituted new policies and procedures to identify security problems among employees in sensitive positions. Are the actions taken thus far in response to the Ames case sufficient? Could the counterintelligence posture of the United States be improved significantly by new policy, additional resources, or organizational changes?

    C. Personnel Policies and Practices Within Intelligence Agencies. Are there systemic changes needed in the personnel policies and practices of intelligence agencies to improve their ability to attract and retain highly qualified personnel? Are there adequate personnel policies in place to employ and retain persons with the ethnic backgrounds, linguistic or technical skills, and knowledge of foreign cultures needed to effectively carry out the functions of the agencies? Are there systemic problems with respect to the assignment and promotion policies of intelligence agencies which reduce efficiency and effectiveness?

    D. Adequacy of Oversight Arrangements in the Post-Cold War Era. The oversight arrangements established for intelligence activities, both in the Congress and within the Executive branch (e.g., the inspectors general of intelligence agencies and the President~s Foreign Intelligence Advisory Board), were created during the Cold War era. Do the changes in intelligence in the post-Cold War era (e.g., new targets, new priorities, etc.) suggest any comparable changes in oversight arrangements? If so, what changes are desirable?