174. Draft Memorandum From Director of Central Intelligence Dulles to the Director of the Bureau of the Budget (Dodge)1

I am writing this memorandum with reference to the policy, recommended by the National Security Council and approved by the President, for increasing observation of Soviet Bloc diplomatic representatives, including personnel with international organizations, while within the continental United States, with special reference to those whose activities are suspected to extend beyond the scope of normal diplomatic assignments. This policy was most recently stated in par. 20b(9) of NSC 5408.2 As you know, the President has approved this program being undertaken by the Federal Bureau of Investigation.

It is our opinion that it may be very helpful to our activities outside of the United States to have such a selective surveillance intensified within the United States, and that such a program may have a potential in the field of foreign intelligence information which could be exploited on a continuing basis. The individuals who would be under surveillance are in this country temporarily and eventually will depart for their own or other countries. Information and leads derived from this program would be of assistance to the Central Intelligence Agency in carrying out its responsibilities with regard to this class of persons outside the United States.

We understand that the Federal Bureau of Investigation’s budget for Fiscal Year 1955, which has been approved by the Bureau of the Budget and is before the committees of the Congress, made no provision for this increased activity and contains no funds which can be allocated to its support. Because a program for observation of foreign diplomats is one of considerable sensitivity, it is not considered desirable to reopen the Bureau’s budget for Fiscal Year 1955, which is now before the Congress, in view of the obviously attendant publicity. We [Page 489] are, therefore, proposing, because of our interest in developing this program on an experimental basis, that the Central Intelligence Agency make available during Fiscal Year 1955 to the Federal Bureau of Investigation, funds from its Contingency Reserve up to an amount to bring the program to the full stage of development considered desirable by the FBI by the end of Fiscal Year 1955; [1 line not declassified].

If the program is deemed successful during the course of its development in Fiscal Year 1955, it is understood that the Federal Bureau of Investigation would provide for the entire activity for Fiscal Year 1956 and thereafter in its regular budget requests to the Congress, and would continue to make available to the Central Intelligence Agency the information and leads derived from thereafter carrying out the program which would be of assistance to the Central Intelligence Agency.

The Special Assistant to the President for National Security Affairs has explained to the President how this matter is to be arranged. Your approval of this proposal is, accordingly, requested.3 Upon receipt of such approval, I will discuss the matter with the Chairmen of the House and Senate Appropriation Committees.

Central Intelligence Agency
  1. Source: Eisenhower Library, Special Assistant for National Security Affairs Records, NSC Series, Briefing Notes, CIA-Funds, Box 4. Top Secret. A copy was sent to the Attorney General for the Director, Federal Bureau of Investigation. Two handwritten notations in the upper right corner read: “Copy given to Cabell March 31” and, in a different handwriting, “RC draft after talking with P.” RC was Robert Cutler, the Special Assistant to the President for National Security Affairs. A brief memorandum of conversation by Cutler describing his talk with the President, at 11:30 a.m. on March 30, is in ibid. The President’s views are reflected in this draft memorandum, which Cutler presumably prepared for Dulles’ signature.
  2. NSC 5408 is printed in Foreign Relations, 1952–1954, vol. II, Part 1, pp. 609633. Paragraph 20b(9) is redacted, however. The fully declassified text of NSC 5408 is in National Archives, RG 59, S/S–NSC Files: Lot 63 D 351, NSC 5408.
  3. A March 15 letter from Dodge to Dulles indicates Bureau of the Budget approval of the monetary transfer. (Eisenhower Library, Special Assistant for National Security Affairs Records, NSC Series, Briefing Notes, CIA-Funds, Box 4)
  4. The draft memorandum is unsigned.