79. Memorandum for the Record1
IC 76–2432
SUBJECT
- Economic Policy Board Meeting on Intelligence, 9 November 1976, 0830, Roosevelt Room, White House
PARTICIPANTS
- Principals
- Treasury—Secretary Simon (Chairman)
- Commerce—Secretary Richardson
- Agriculture—Acting Secretary Knebel
- Labor—Secretary Usery
- Transportation—Secretary Coleman
- DCI—Mr. Bush
- State—Deputy Secretary Robinson
- President’s Special Trade Representative—Ambassador Dent
- White House—Mr. Seidman
- Mr. Gorog
- OMB—Mr. Lynn
- PFIAB—Mr. Cherne
- Mr. Casey
- Others
- White House—Mr. Porter
- CIA—Mr. Ernst
- [1 line not declassified]
- NIO—Mr. Heymann
- Treasury—Mr. Morell
- Commerce—Mr. Laux
1. Secretary Simon requested all EPB members to send memos to Mr. Morell giving their views on intelligence support. Treasury will collate the recommendations and refer them to the DCI.
2. Mr. Bush noted the extent to which economics plays an increasingly pervasive role in our overall intelligence. He listed some recent accomplishments of the Intelligence Community and outlined efforts to improve the integration of various pieces of the intelligence production into a more comprehensive multidisciplinary framework. He concluded by soliciting the views of the EPB members on the perennially difficult question of how close the relationship between policy [Page 266] makers and the Intelligence Community should be (see attachment for further details on his remarks).2
3. Secretary Simon observed that Treasury had tried to draw CIA close to policy through debriefings, sharing policy papers, etc. There was a special problem in communicating some kinds of information because of State’s use of the EXDIS classification on cables. Economic policy users felt more of the Intelligence Community resources should be devoted to economics.
4. Mr. Lynn suggested headline clippings from the foreign press and more analysis of domestic political trends in foreign countries would be useful. The various Departments should do more to alert the IC to downstream problems which the USG will have to face. Intelligence should make a particular effort to report on how countries cope with domestic problems such as unemployment. Intelligence can also help verify trade agreements with foreign countries and alert the economic community to potentially harmful foreign actions such as East European countries dumping cheap goods on Western markets.
5. Secretary Usery said his Department needs to understand what the IC can provide in the labor field, including information on multinational corporations and the international trade unions. There is a problem in finding ways to disseminate intelligence to lower-level officials without security clearances. The IC has been of great help to him in recent months.
6. Secretary Richardson commended Simon for his efforts to improve relations between policy makers and the IC, noting the current study in Commerce on this matter. He felt there should be better representation for the economic community on NFIB and EIC —possibly an observer on NFIB for Commerce. More systematic review and documentation of economic intelligence needs is required, including regular user-producer interchange. A regular monthly meeting of the EPB with the IC might be scheduled. There is a need for an EPB–NSC–IC examination of the economic levers which could be used for national security purposes—i.e., “opportunity-oriented” intelligence. Ways must be found to get sanitized (downgraded) intelligence to staff-level users. Richardson thought there was a tendency to overclassify; Simon agreed.
7. DCI Bush replied that this subject was currently being studied but emphasized source protection was a real problem which limited what could be done to downgrade sensitive material. Richardson said that better IC awareness of user needs will permit intelligence reports to be sanitized in ways tailored to specific user needs. Ernst said OER [Page 267] does this in answering specific requests but problems arise in producing reports for a wide audience of users.
8. Secretary Coleman noted that there was an extensive exchange of information between USG officials and foreign dignitaries, with no systematic means of checking for security on the information so disseminated. He also mentioned the outflow of technology information and data.
9. Ambassador Dent urged the IC to develop a briefing for new top people. It should include information on what’s available and the ways in which users and the IC mesh. Users need to do more to relate to the IC.
10. Mr. Gorog said there was need for an early warning system on foreign production, investment and trade decisions to alert the USG [1½ lines not declassified].
11. Deputy Secretary Robinson remarked that State was generally pleased with its relations with CIA but felt a closer exchange of information between State and Treasury was needed. In the real world the distinction between economic and political factors is often blurred. CIA needs to integrate political and economic analysis. Bush noted that the reorganization of the DDI is intended in part to effect improvements in multidisciplinary analysis.
12. Robinson urged that CIA make a clear distinction between facts and assessments (analysis of the facts). CIA should do more policy assessment of facts. Bush, noting Congressional criticism, said CIA needs to be extremely careful not to appear to be favoring one course of policy over another. Richardson said the answer is more top-level policy maker–IC interaction.
13. Robinson suggested regular OER/State/Treasury coordination meetings concerning the production of economic studies.
14. Acting Secretary Knebel said Agriculture has been a user of intelligence since 1972. He seconded the motion for establishment of an economic intelligence coordinating mechanism.
15. Mr. Seidman remarked that the need for an EPB or some other White House mechanism to coordinate economic policy and intelligence will continue.
16. Mr. Gorog agreed with the point made earlier by Mr. Lynn that more information on how other countries cope with domestic problems such as unemployment will help in formulating U.S. policy and justifying U.S. programs to Congress.
17. Mr. Cherne asserted that major progress had been made during the last several years in improving the intelligence inputs to economic policy decisions. We must do something to assure that the new Administration has similar cooperation between intelligence and economics. [Page 268] Bush said he would raise this problem and cite the conclusions of the EPB meeting when he sees President-elect Carter.
18. Mr. Casey said PFIAB should report to the President on economic intelligence requirements and he will circulate a paper on the subject. The real deficiency in intelligence output is the lack of analysis, especially on long-term problems. He felt, for example, that intelligence should project the ways that a country might convert its economic assets into political power and military strength. Casey said there is no forum for long-term evaluation of economic strategy and threats, comparable to the NSC forum in the military and arms control areas. Some intelligence resources should be shifted from military S&T to economic S&T. [1½ lines not declassified] Bush remarked that many business contacts are very sensitive to the appearance of collaboration with CIA. Casey added that he had in mind obtaining economic analytic help from the business community, rather than increased use of businessmen to collect information.
- Source: Ford Library, L. William Seidman Papers, Seidman Subject File, Box 124, Economic Policy Board, Memoranda, 9/76 (3)–1/77. Confidential; [classification marking not declassified]. Drafted by [name not declassified], Chief of the Production Assessment and Improvement Division, OPEI.↩
- Bush’s opening remarks to the EPB are attached but not printed.↩