The documentation on this subject is fragmentary and episodic, and it appears that many early records no longer exist. Very little policy documentation on projects and operations under psychological and political warfare programs has been found, and those documents that have been retrieved tend to be random and scattered in their subject matter. In addition to the paucity of early documents on this subject, it is also possible that in many instances the written record was deliberately kept to a minimum. Making allowance for major gaps, the main outlines of the formative period can be traced, however, and the documentation that has survived gives a sense of the motives and concerns of the major participants in the debate over psychological and political warfare and how it should be handled within the government.

When the functions of OSS were divided after its dissolution by Executive Order 9621, the War Department inherited the capabilities for “special operations” which had been employed in organizing and assisting resistance movements in Europe in World War II, and for “morale operations” or “black propaganda.” General Magruder and his War Department superiors were concerned to maintain intact the OSS capability in secret intelligence until some decision could be made at the national level about a successor organization. But there was no apparent concern to preserve “s.o.” or “m.o.” capabilities and they were quickly liquidated; in fact, the process was well underway before the OSS was dissolved. In the formative period of the national intelligence structure, there was considerable discussion and debate about clandestine intelligence gathering but no attention seems to have been paid to covert operations.

Indeed, in September 1947 the General Counsel of CIA wrote an opinion in which he concluded that it had not been the intent of Congress that such activities should be conducted by the Central Intelligence Agency and that they could not be undertaken without first obtaining Congressional authorization and funding. (Document 241) From this memorandum, it appears that there was some discussion at the time about cooperation with nascent resistance movements in Western Europe but even this, Counsel concluded, would require Congressional authorization.

In the meantime, the subject of covert political action was coming onto the policy agenda through another route, the growing interest in “psychological warfare.” Since 1946, a subcommittee of the State–War–Navy Coordinating Committee (SWNCC), later designated the State–Army–Navy–Air Coordinating Committee (SANACC), had been [Page 616] charged with developing a plan for wartime psychological warfare and for making whatever peacetime preparations were required to move quickly to a wartime footing in this field. By October 1947 such a plan had been prepared, but it was noted at the time that it related solely to planning for wartime or threat-of-war situations and that SWNCC had not been authorized to look into peacetime psychological warfare.

At this point, however, concerns about the situation in Western Europe began to focus attention on peacetime “psychological operations” in support of U.S. foreign policy. SANACC was a forum for the expression of those concerns. Director of Central Intelligence Admiral Hillenkoetter was one of those who urged that the subject be put on the agenda, and there were similar urgings from Forrestal, Souers, Harriman, and others. By the latter part of 1947 an effort was made to distinguish between the variety of subjects that had been bundled together under the rubric of “psychological warfare”: overt and covert propaganda, and domestic and international information programs.

In early November, the heads of the military services concluded at a War Council meeting that peacetime psychological warfare should be undertaken only in the foreign field (i.e., no domestic program) and that it was a Department of State responsibility. Moreover, the War Council concluded that there should be a “black” (covert) as well as a “white” (overt) program and that the “black” program should also be run by the Department of State, albeit with the advice and consultation of the Director of Central Intelligence and a military representative. On November 7, a SANACC subcommittee made approximately the same proposal. (Document 249)

At its second meeting on November 14, 1947, the National Security Council considered the SANACC paper. Secretary of State Marshall distanced himself from it, expressing concern at the use of the term “warfare” and asking whether the proposed program would conflict with his policy of only telling the truth on the Voice of America. The three service secretaries also backed off, stating that they did not believe the military should be involved in such activities. (Document 250)

The Council remanded the paper to the NSC staff for revision, thereby separating overt foreign information activities from “psychological warfare” and covert action. One “stream” became NSC 4 and NSC 43, establishing Department of State responsibility for foreign information programs, and the other “stream” became NSC 4–A (Document 253) and, somewhat later, NSC 10/2, dealing with covert action.

Also at this point began a jurisdictional battle over how much “outside” supervision and control there would be over covert actions. As the NSC staff worked to develop an acceptable proposal, it became clear that the responsibility for these operations would be lodged in the Central Intelligence Agency but that some sort of monitoring mechanism would [Page 617] be created. The dividing lines were already being drawn. As early as December 2, Deputy Director of Central Intelligence Brigadier General Edwin Wright wrote to the CIA representative on the NSC staff:

“All concerned must appreciate that this Agency is and must be the sole agency to conduct organized foreign clandestine operations. To sabotage this principle can only lead to chaos in this type of operation.

“Whatever Agency is chosen to indicate the type of Black operations to be conducted, or the material and/or propaganda to be disseminated—the Central Intelligence Agency must alone be the Agency to determine how the material is disseminated. The pattern of our foreign operations will not permit supervision of these activities by other agencies if it is to be maintained as an efficient and secure operation and the conduct of Black psychological operations must fit into the over-all operational pattern.” (Document 251)

Two weeks later, George F. Kennan, Director of the Department of State’s Policy Planning Staff, was advising the Acting Secretary, in anticipation of an NSC meeting on the issue, “that whereas it is desirable to establish the authority for the proposed operations, the Council should be frankly informed that before giving our consent to any such activities we would wish to consider most carefully the need therefor. Furthermore, we would want to examine the situation in all its aspects in case of any suggested operation, and to judge each case strictly on its merits.” (Document 256)

At its meeting on December 17, the NSC approved a directive (NSC 4–A) which “directs the Director of Central Intelligence to initiate and conduct, within the limit of available funds, covert psychological operations designed to counteract Soviet and Soviet-inspired activities which constitute a threat to world peace and security or are designed to discredit and defeat the United States in its endeavors to promote world peace and security.” The directive also charged the Director of Central Intelligence with responsibility for “ensuring that such psychological operations are consistent with U.S. foreign policy and overt foreign information activities.” (Document 257)

NSC 4–A did not settle the issue. By March, Secretary of Defense Forrestal was seeking an NSC review of how the NSC 4 series was being applied in practice. Moreover, as a result of a SANACC subcommittee report on wartime psychological warfare, the idea of creating a separate organization for both peacetime and wartime psychological operations, perhaps directly under the NSC, was being raised. The subject was once more docketed on the agenda of the NSC which, at its meeting on April 2, 1948, asked the NSC consultants to review “certain aspects” of the NSC 4 series. (Document 266) The consultants did so later that month; their report admonished the Director of Central Intelligence to work with “anti-Communist democratic forces in foreign countries, particularly [Page 618] those which are politically left of center” and to move faster in the psychological operations area. (Document 267)

In the meantime, the Department of State was becoming increasingly unhappy about CIA’s performance under NSC 4–A. The Policy Planning Staff had been considering various aspects of “political warfare,” and on May 3, 1948, approved a paper entitled “The Inauguration of Organized Political Warfare,” which proposed a program of support for “liberation committees,” “underground activities behind the Iron Curtain,” and “support of indigenous anti-Communist elements in threatened countries of the Free World.” Organizationally, the paper proposed the establishment of a directorate of political warfare operations within the NSC secretariat, under a director appointed by and responsible to the Secretary of State. The director would be assisted by a staff drawn from the State and Defense Departments (at least “initially”) and would “have complete authority over covert political warfare operations conducted by this Government.” The proposal did not mention the Central Intelligence Agency except to say that the covert operations it was conducting should be brought under the authority of the proposed directorate. (Document 269)

The battle touched off by the Policy Planning Staff proposal is difficult to follow in its details and ramifications because of gaps in the documentation, but the main outline of the conflict is clearly visible. The NSC staff seems to have adopted the substance of the proposal, judging by the draft reports that were being prepared and debated at this time, although it made some amendments in the details, such as renaming the Director of Political Warfare the “Director of Special Studies” and placing the office directly under the NSC. Commenting on the proposal, George Kennan wrote to Secretary Marshall and Under Secretary Lovett on May 19:

“Organizationally, the ideal solution would be to place the Director of Special Studies, for cover and intelligence reasons, under the Director of CIA. S/P did not recommend this solution because, at the present time, the CIA set-up in respect both to personalities and organization is not favorable to such a development and it is not likely that there will be any material change in this situation in the near future. We therefore reluctantly decided to let the CIA sleeping dog lie and recommend a separate organization which might at a later date be incorporated in CIA.” (Document 276)

Allen Dulles was a new and important participant in the “political warfare” debate that flared up again in the spring of 1948. Dulles was chairman of the survey group appointed by the NSC in February to evaluate the effectiveness of the CIA. In May 1948, the survey group was more than 7 months from submitting a report but, aware of the controversy that had broken out, Dulles and his colleagues prepared a brief report on “Relations between Secret Operations and Secret Intelligence.” [Page 619] Dulles introduced a new element by proposing that the conduct of secret operations and the collection of secret intelligence should be run by single director who might either be under the Director of Central Intelligence or directly under the NSC. The argument perhaps was weighted slightly in favor of the latter alternative by Dulles’ statement that he and his colleagues had independently decided to consider in their final report whether secret intelligence should continue to be a CIA responsibility. (Document 275)

It was this proposal that led Kennan to recommend to Marshall and Lovett that they should meet with Secretary of Defense Forrestal and present a joint invitation to Dulles to replace Hillenkoetter as Director of Central Intelligence, or become director of secret operations/secret intelligence under Hillenkoetter, or become director of special studies under the NSC. (Document 276)

At an inconclusive NSC meeting on May 20, NSC 10—the designation for the Director of Special Studies proposal—was deferred for action at the next meeting. (Document 277) Kennan prodded Lovett again. He apparently had been in touch with Dulles and knew he would be in Washington in late May. He had also been in touch with Forrestal or his staff and said that Forrestal was prepared to come to Lovett’s office to discuss NSC 10. Kennan’s tone in his memorandum to Lovett was pessimistic: “If the Executive Branch does not act soon to firm up its ideas as to what should be done along these lines,” Kennan wrote, “the possibility of getting secret funds out of Congress for covert operations will be lost. If this is not done now, it will mean that this Government has given up hope of conducting effective political warfare activities for the duration of this administration.” (Document 279) Kennan also told the Under Secretary that if NSC 10 were not adopted, he would have to recommend abrogation of NSC 4–A, “which is not working out well.”

Forrestal, Lovett, and Dulles met late in May (Document 280) and agreed on a proposal with the following elements:

CIA was the proper place for secret operations as well as secret intelligence.
Both subjects should be handled by a new “Special Services Unit” within CIA.
The unit would have a “considerable measure of autonomy within CIA” and its director could appeal to the NSC in case of differences with the Director of Central Intelligence.
The director of the special services unit would be recruited from outside CIA and approved by the NSC.
The director of the special services unit would have access to and receive policy guidance from the Departments of State and Defense.
The system described above would be a “provisional arrangement subject to review at a later date.”

[Page 620]

The proposal was circulated to NSC members and debated at length at the Council’s meeting on June 3, 1948. The discussion was not conclusive but the participants strongly emphasized the importance of political guidance for covert operations. There was also fairly widespread (although mildly expressed) criticism of CIA, with some participants also raising doubts about whether CIA had legal authority to conduct covert operations. After discussing a proposal for an advisory panel on covert operations, the Council again remanded the issue to the staff for a new draft proposal. (Document 283)

By this point, both the Department of State and the Central Intelligence Agency were becoming exasperated by the failure to reach an agreement. When Souers and the NSC staff proposed (apparently on the basis of a suggestion by Hillenkoetter) an arrangement under which the DCI would be responsible for ensuring that covert activities were consistent with U.S. foreign policy, and in which there would be an advisory panel of one State and one Defense member to provide “authoritative policy guidance” and assist the DCI in the preparation of all plans, Kennan wrote to Lovett “that the arrangements which it envisages might easily operate to cause embarrassment to this government.” He continued:

“It is our view that these things, if they are to be done at all, must be done under the intimate direction and control of this Department. If this cannot be arranged (and I understand the difficulties which stand in the way), I think it would be better to withdraw this paper entirely and to give up at this time the idea of attempting to conduct political warfare.” (Document 286)

This proposal was modified a few days later by another draft, which has not been found, but, from references to it in other documents, apparently emphasized the autonomy of the Director of Special Studies within CIA. Reacting to it, Hillenkoetter wrote to the Assistant Executive Secretary of the NSC:

“I should like to suggest that, since State evidently will not go along with CIA operating this political warfare thing in any sane or sound manner, we go back to the original concept that State proposed. Let State run it and let it have no connection at all with us. It seems to me that this is the only thing that will satisfy State in any way and rather than try to keep a makeshift in running order, subject to countless restrictions which can only lead to continued bickering and argument, I think maybe the best idea is to go back and make the OSP work for State alone.” (Document 287)

By mid-June, when the draft had become NSC 10/1 (apparently close to what Hillenkoetter had complained about in the preceding letter), Kennan was recommending to Lovett and Marshall that despite its serious defects they approve the draft, which was “probably the best arrangement we can get at this time.” (Document 289)

[Page 621]

Finally, on June 17, 1948, the NSC approved NSC 10/2, which:

established an Office of Special Projects in CIA to conduct covert operations;
specified that it should be headed by “A highly qualified person” nominated by the Secretary of State and acceptable to the Director of Central Intelligence;
provided that the head of the Office of Special Projects should report directly to the Director of Central Intelligence, but “To the maximum degree consistent with efficiency” the office would operate independently of other components of the Agency;
made the DCI responsible for ensuring, through designated representatives of the Secretaries of State and Defense, that covert operations were consistent with U.S. foreign and military policies; and
mandated that disagreements be referred to the NSC. (Document 292)

Despite the approval of NSC 10/2, the controversy about covert operations continued. The separation of CIA’s secret intelligence and secret operations functions was again brought forward as an issue by the Dulles Report. Although a head of covert operations was proposed by the Department of State and accepted by the DCI, and although the arrangements functioned for a time as originally designed, the system established under NSC 10/2 was distasteful to the Central Intelligence Agency. Eventually, the concept of a head of secret operations who had a special relationship with the NSC, special responsibilities and ties to the Departments of State and Defense, and a quasi-autonomous status within CIA was discarded, and the secret operations and secret intelligence functions were merged under a single head. These developments, however, occurred after 1950.