247. Memorandum From the Director of the Bureau of Intelligence and Research (Cline) to the Under Secretary of State (Irwin)1


  • Implications for the Department of the President’s Reorganization of the Intelligence Community

The President’s reorganization of the management of U.S. Intelligence activities is a hopeful and timely move toward strengthening the entire Intelligence Community. The Department of State is likely to benefit substantially from the improvements visualized, since most of the [Page 553] problems which intelligence agencies are trying to solve relate to key elements in American foreign policy and the conduct of our foreign relations. As you commented some time ago when this reorganization plan was under review, the Department of State ought to play an active role in helping establish the procedures and policies of the “new” system and should be better integrated at all levels in it than in the past.

The reorganization is designed, first, to provide a more positive means for the users of intelligence to define and obtain the intelligence they need in order to reach and implement policy decisions, and, second, to give the Director of Central Intelligence (DCI), under the guidance of the new NSC Intelligence Committee, greater responsibility and a stronger hand in the management of U.S. resources dedicated to the collection and production of intelligence.

I believe that this is a strong move toward making intelligence and policy truly “partners”—so that policy may become more informed and effective, and intelligence more purposeful and efficient. It will also give the State Department a greater degree of influence in the intelligence process, influence that it requires if it is to play the role of leader of the foreign affairs community. It is not yet clear how the skeleton structure created by this reorganization directive is to be fleshed out or how the elements in the structure will in fact perform their new roles. This very uncertainty, however, gives the Department an opportunity to act as a catalyst in bringing about much needed improvements if we seriously address ourselves to the task.

The Department’s stake in getting and using high-quality raw and finished intelligence is great. Much of what we need is collected and produced by the Department of Defense and CIA, but State itself is an active collector (foreign political and economic reporting) and producer (INR Notes and Studies). It is also a prime user. In many of its activities, for example in preparing for SALT or responding to NSSM’s, the Department is obliged to measure carefully the impact of intelligence on its own preferred policy positions and on the proposals of other participants in the national planning process. The intelligence input in this process often serves to define the problem and the environmental conditions under which the problem must be attacked, thereby automatically limiting the range of feasible policy options. The Department cannot afford to rely on the judgments of others on what intelligence to collect or what conclusions can be drawn from it.

State needs good intelligence not only as a basis for its own policy proposals but also for sophisticated interpretation (and, if necessary, rebuttal) of information cited in support of other policy proposals. The cheapest and most effective way to obtain what the Department needs is to make the entire interdepartmental intelligence apparatus [Page 554] work in a coordinated effort with a strong input from State. Unfortunately, the more limited the role State plays in the work of these interdepartmental groups, the more dominant will be the intelligence judgments and preferences of CIA, of Defense, and of other larger, more bureaucratically aggressive elements. Influence in policy-making and the skillful use of intelligence go hand in hand. In everything related to foreign affairs, State should take a leading role. This principle dictates a strong performance by State in the entire new structure established for the management of intelligence activities.

State’s Role in the Intelligence Community Today

Following World War II, the intelligence programs grew for many years at a steady rate, and funds were available for most intelligence needs. More recently, this situation has changed. We are faced with sharply rising intelligence costs when our political leaders are demanding a sharp reduction in the cost of the total intelligence program. Those in need of intelligence to meet their responsibilities must now prepare to fight for programs in which they have a vital interest, whether these programs are managed by Defense, CIA or State.

State today is a user of intelligence, a collector, and a producer. State must perform well in all three spheres, not only for the welfare of the Department but also for the benefit of the government as a whole. State is a major collector of intelligence in that its political and economic officers in foreign posts are a primary source of intelligence on the countries in which they are posted. A recent survey estimated that each year State invests 1065 man years in this activity, and this figure does not include those involved in embassy support activities. These resources, viewed in comparison with the resources of other agencies, need to be taken into account in determinations of the effectiveness and balance of the total U.S. collection effort.

Making sound judgments about U.S. intelligence collection programs requires State to do some serious analysis of the problems involved. Some collection capabilities are so flexible they can be redirected in a matter of hours, but many require advance preparations ranging from months to years. Consequently, sophisticated judgments must be made on need and political feasibility far in advance of actual employment of these capabilities. Such judgments rest in turn on planning assumptions about the location, nature, and severity of threats to our security, on the state of our relations with various countries, on the opportunities for U.S. initiatives in support of our objectives, and on the various types and availability of operating facilities that can serve our intelligence needs. State’s views on these questions ought to weigh heavily in decisions on what intelligence to collect, how to collect it, and how much to collect. If State does not have views to put forward, it will in the end get less of what it needs and more of what others want.

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State today is also a producer of finished intelligence. By Presidential directive, State has long had primary responsibility within the Intelligence Community for political and sociological intelligence, worldwide, and for economic intelligence on the free world. Over the years, CIA has also developed a capability to produce both political and economic intelligence. CIA production staffs in these areas of State’s primary responsibility have grown to sizes much larger than those in State. We are fast approaching a situation, if we have not already reached it, in which the NSC staff and the President depend on CIA and the DOD for the analysis of most of the political and economic activities of foreign nations. These areas of intelligence production traditionally belong to State, since State is the main collector and evaluator in these fields. Usually the quality of our personnel is superior and more experienced, but the greater manpower resources of other agencies sometimes outweigh our efforts.

State sometimes usefully plays another role in the Intelligence Community. It often has an opportunity to provide the political and foreign-policy guidance which helps to determine the appropriate size and focus of collection and production programs. In this process, it is necessary to ensure that there is an effective interaction between intelligence program directors and end users. An input reflecting the knowledge of users at policy and operational levels in the Department of State, carefully weighed against existing and potential intelligence capabilities, is crucial for the effective guidance of collection and production.

Though State is a principal user of intelligence and has important collection and production responsibilities, State’s budget for intelligence is small. INR spends less than [dollar amount not declassified] a year. The total annual expenditure by State for intelligence, if we include most Foreign Service reporting, would be considerably less than [dollar amount not declassified]. The Defense intelligence budget specifically so identified runs to about [dollar amount not declassified] and other tactical intelligence activities would greatly enlarge this total if they were included. These intelligence systems managed by Defense provide information of vital importance to the conduct of international affairs, and thus to the Department of State. Today State’s influence on the allocation and management of resources in this large Defense program, as well as those in the somewhat less costly CIA program, is by no means commensurate with State’s interests in ensuring an optimum intelligence data base for foreign policy planning and the conduct of foreign affairs.

Opportunities Offered by the Reorganization

While the precise impact of the reorganization of the Intelligence Community will not be clear for some time, I am confident that the [Page 556] new organization offers State an important opportunity to strengthen its role in the whole broad spectrum of intelligence activities. In fact, the potential gains for State are of such importance that we should make a special effort to ensure effective implementation of the new plan.

You are to be a member of the most important of the new committees, the NSC-Intelligence Committee (NSCIC). This body will provide general guidance to the Community as a whole, and will make final determinations on assessments of the intelligence product in terms of current and potential contributions to the formulation and execution of national policy.

The NSC-Net Assessment Group (NAG), supporting this committee, will be charged with responsibility for making assessments of U.S. foreign and military policy. It is intended for these net assessments to be made in such a manner as to bring to the same table both planners and intelligence officers familiar with the subjects under review, a procedure that some planners and intelligence officers have long recommended. It has the principal advantage of forcing realism upon the planners and requiring relevance from the intelligence officers. As you know, State already has a net assessment project underway and is the only department that has actual current experience with this method of policy analysis. This experience should enable State to approach the work of the NSC Net Assessment Group from a position of strength.

The reorganization will give the Director of Central Intelligence a larger and stronger personal staff. We understand that it will be composed of the Office of National Estimates and an expanded National Intelligence Program Evaluation group (NIPE), including a comptroller. I believe that the NIPE staff will play an important role in working out the imbalances and duplications of the past. I am developing within INR a group capable of establishing an effective interface with that staff at all levels, for it is there that we can do some of our most useful work. We are of course already very closely involved in the work of the Office of National Estimates.

The role of the United States Intelligence Board (USIB) seems likely to be narrowed and, if so, it will no longer be the highest intelligence group of the land. It will now have a sister committee, the Intelligence Resources Advisory Committee (IRAC), responsible for advising the same person, the DCI. We do not yet know how these two boards will function in relation to each other, but we do know that we now have two more-or-less equal bodies, one responsible primarily for matters of substance and the other for intelligence resources. Membership on the Resources Committee should give us an opportunity to strengthen our influence on intelligence programs of vital importance to our own intelligence analysis and to the development and implementation of our foreign policy.

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State Organizational Measures in Response to the Reorganization

Interim Response. I propose getting an early grip on emerging issues involved in the reorganization so that State can influence the formative growth of these new institutions. I have instructed a small group of INR officers presently assigned to interagency relations to stay in close touch with the NSC and DCI staffs and to report to me any opportunities or requirements for a State input. I am designating other officers to discharge new planning and liaison functions stemming from the reorganization. For the time being, they will operate as an ad hoc Special Intelligence Studies Group attached to my office. The head of this group will be our principal point of contact with your staff for planning and carrying out the responsibilities we will share with it and with other elements of the Department, particularly S/PC, whose views will be essential inputs to the solution of intelligence management problems.

Long-Term Response. Generally speaking, I foresee a response from State to this reorganization on three levels. You may wish to set up, perhaps in your own staff or in S/PC, a net assessments group that would be responsible to you for global and regional policy analysis and for working closely with the PARA guidance group. The work of this group would also help INR to define systematically the intelligence needed by State for foreign policy purposes, and would work with INR to provide support for you in the NSC Intelligence Committee.

The new structures and processes of this reorganization will benefit from active participation by many elements of the Department. Because of the need for careful orchestration of a variety of activities, and the specialized nature of much of the subject matter and programs, it is my belief that you should place primary responsibility in INR, which already is very active in certain aspects of this work. We will need some strengthening in numbers and capabilities, but I feel fairly certain that it would be the most effective manner in which to meet this challenge.

I cannot overemphasize the fact that for the Department to achieve effectiveness in the new organizations, it will be necessary for us to go deeply into the analysis of intelligence systems and capabilities, alternative allocations of effort, and potentials of new systems. Experience has shown that we cannot successfully provide direction and guidance for intelligence programs by reviewing and expressing information requirements in the abstract. We need to formulate our needs in full awareness of the wide variety of intelligence collection systems, existing and potential, which might satisfy them.

We need to express these requirements not only in ways that will reflect our policy and operational needs, but also in ways that can be directly translated into the nature and scope of intelligence collection and production. The Department will need to provide its own judgments [Page 558] in the whole interacting process between guidance of intelligence capabilities and the end-use of intelligence. We will need in INR a few more staff officers with the required expertise in (a) assessing intelligence programs in terms that are meaningful for policy and operational end-users, and (b) applying policy and other end-use considerations to intelligence programs.

State will also need to strengthen its capability to produce finished intelligence in the political and economic fields. It is a deficiency that has been highlighted in the Management Survey of INR of this year, and I anticipate that the NSCIC can profitably address itself to this problem. The Management Survey estimated that INR ought to have 20% more positions (67) in order to carry out our present responsibilities effectively. We have used the Survey’s recommendations as the basis for our budget request for FY ’73. The additional responsibilities imposed by the reorganization may require us to expand this number somewhat, but I recommend we wait until we get some working experience with the new structure before planning anything beyond our FY ’73 request.

If, on the contrary, INR remains understrength in critical areas, it is doubtful that the Department will be able to play the active role it should. In the early days of the reorganization, we have no choice but to work with the people we now have, but we should be able to grow as the work does and as it is possible to recognize our accomplishments on behalf of sound foreign policy planning and efficient management of foreign affairs.


In the light of the foregoing analysis, I recommend:

That the Department of State play a leading role in providing sophisticated guidance for the management of U.S. foreign intelligence activities.
That INR take primary staff responsibility for energizing Department efforts and coordinating Department inputs in this interdepartmental process.
That for this purpose INR be exempted from the 5% cut.
That for this purpose INR be permitted to recruit, by outside hire if necessary, the additional skills and experience it requires, on a case by case basis.
That to support these activities and to carry out the President’s injunction to improve intelligence analysis, INR next year be enlarged along the lines of the Management Survey’s recommendations as spelled out in our FY ’73 budget submission—if necessary going to the NSCIC to get slots assigned to State at the expense of other intelligence agencies.
That you establish a net assessments group somewhere in the Department to collaborate with INR in capitalizing on the experience we are now gaining in this approach to policy planning and to assist INR in its work with the NSC Net Assessments Group.

  1. Source: Department of State, INR/IL Historical Files, Functions and Responsibilities, 1965–1986.