263. Memorandum From the Assistant Secretary of Defense for Intelligence (Hall) to Secretary of Defense Laird1


  • Taking Stock

In your memorandum of February 3, 19722 you asked me to take stock of the programs and areas for which I am responsible, assessing past performance and projecting the probable future. Here are my thoughts on each of the questions which you put to me.

[Page 595]

Key Issues During the Past Year

These were, in brief:

  • —The requirement to implement the President’s directive of 5 November on intelligence reorganization.3
  • —The impact of the [dollar amount not declassified] Congressional reduction of DoD intelligence programs for FY 72, enacted late in the fiscal year.
  • —The need to improve our processes for intelligence resource allocation, and to bring the intelligence community into better interface in these processes.

Major Accomplishments

I believe our major accomplishments in intelligence over the past year were these:

  • —Prompt implementation of the President’s directive on intelligence reorganization, particularly in regard to the complex area of Signals Intelligence. The conceptual structuring and planning for the new Central Security Service as the unified operating arm for U.S. SIGINT collection in the time prescribed was a major achievement which should bring about major management improvement and resource economies in this area.
  • —Our reduction, in the program review process, of the FY 73 intelligence program by some [dollar amount not declassified] from fiscal guidance to Congressional submission without loss of effectiveness, and our success in minimizing the combined effects on this program of (1) the carry forward of the FY 72 Congressional cuts, and (2) the additional [dollar amount not declassified] reduction directed by the President during budget review. Through these efforts, we have retained what I believe to be a sound and balanced DoD intelligence program at the requested levels of [dollar amount not declassified] and [less than 1 line of source text not declassified] manpower spaces for FY 73. I should add that improvements in our program and budget review process were a material factor in these successes.
  • —For the first time this year, we extended intelligence’s fiscal review to include tactical intelligence assets, not included in Program III. Through this review we reduced Service requests for tactical programs by [dollar amount not declassified] and, were able to be immediately responsive to the requirement in the President’s memorandum for attention to the tactical intelligence area.

[Page 596]

Major Objectives Not Achieved

We have fallen short of our goals in the following significant respects:

  • Credibility with Congress. Congressional opinion still appears hostile. The Conference Report on the FY 72 Defense appropriation cited “a disenchantment with intelligence.” From other statements, it would appear that influential members of Congress apply this blanket comment to both intelligence products and management of expenditures.
  • A 7-Year Intelligence Resource Plan. You directed development of this plan in your original assignment of intelligence management responsibilities to the Assistant Secretary of Defense (Administration) on 1 August 1969.4 Congress noted the lack of progress last year. From my perspective, lack of progress seems attributable to (1) more pressing demands on staff manpower, (2) lack of an understanding as to how to develop a meaningful plan, and (3) the number of independent variables involved, including those not under DoD control.
  • Compartmentation and Classification of Intelligence. In your memorandum of 1 August 1969 you tasked the ASD(A) to see what could be done about over-compartmentation and over-classification of intelligence. Over the next two years, substantially no progress was made. This has primarily been due to the position of USIB and the DCI, who have responsibility for this area. DIA proposals to the USIB to relax compartmentation of imagery have not been seriously considered. A series of leaks of sensitive intelligence has also tended to harden Executive Office views against any relaxation of controls.
  • Intelligence Career Development. DoD intelligence career opportunity, both military and civilian, continues to be unsatisfactory in comparison to other career areas, except in the case of National Security Agency, which appears to have enhanced the effect of special legislation with an enlightened personnel policy. Even here, however, CIA policy is in advance of NSA. White House staff statements to the media, promising improvements related to the 5 November directive, have so far not been accompanied by corresponding initiatives for performance.

Key Issues and Problems Over the Next Five Years

There are several of these; they include both substantive problems and management issues.

Substantive Problems

  • Crisis Management. We need to tune the intelligence system better to give clear and prompt warning of impending major international [Page 597] crises and to provide timely intelligence needed for decisions on crisis abatement and solution.
  • SALT. Verification of any strategic arms limitation agreement will almost certainly depend on intelligence means. Any further SALT talks will continue to require highly responsive intelligence inputs. For both aspects, we must work to bring the intelligence system to peak effectiveness.
  • R&D. We have two problems in regard to R&D—intelligence support to our weapons RDT&E, and better R&D for intelligence itself. I believe that we can improve the first by better control of intelligence operations and products, tailoring these more closely to the real needs of the R&D community. In regard to intelligence RDT&E, the requirement is for better planning and closer supervision to insure that we focus on those new systems and technologies which are most applicable to the genuine needs of intelligence for improved performance.
  • Improving Relevance of Intelligence Products. We can’t afford to continue intelligence operations which result in products we don’t really need or can get along without. Our needs for finished intelligence depend on our basic national security posture; we must realign production (and its associated collection and processing) more closely to the needs of this posture. This means stopping or cutting back some programs, regardless of their traditional position, and moving the resources into what we need most.

Management Problems

Keeping A Balanced And Adequate Intelligence Program. This is going to be our hardest job. Costs—both manpower and technical—are going on up. Congress continues to believe that intelligence is both inefficient and ineffective, and that we can stand more cuts. In point of fact, however, our projected fiscal level for FY 73 brings key programs to minimum levels of investment at which they can remain effective. Further cuts would necessitate stopping some of these programs, and would badly unbalance our overall program. Another factor of fiscal pressure will be the emergence of large new intelligence systems. If cost increases continue, the procurement and operating costs of these systems are almost surely to be higher than we are now projecting. Absorbing increased costs under the probable tight ceiling on overall intelligence resources would be very difficult, since flexibility for tradeoffs will be largely eliminated by previous reductions.

If we are to preserve a sound and adequate intelligence effort, I believe we must progress in the following specific ways:

  • —Convince Congress that the levels we request for intelligence are necessary and that we are using intelligence resources effectively and successfully.
  • —Use technology to lessen dependence on manpower.
  • —Upgrade the quality of the intelligence manpower force, particularly production analysts. Career incentive is the key to this problem.
  • —Get a better understanding of the relationship between intelligence investment and the usefulness of intelligence products.
  • —Improve the usefulness of national intelligence resources to tactical forces and make fuller use of tactical intelligence resources for national needs.
  • The continuing problem of over-compartmentation. Unless they are eased (which seems unlikely), the limitations which this problem places on the use of intelligence will continue to be a source of complaint from key customers. I do not plan much emphasis on this problem now, however.
  • Interface with the DCI. The strengthened role of the DCI raises questions of his future relationship with the DoD resource allocation process, access to information, participation in resource decisions, etc. A lengthy period of adjustment in this new relationship appears in prospect, and substantial effort in my office will be needed.

How Could We Improve Our Capability or Chances to Deal With the Outstanding Problems

I think our posture of DoD intelligence organization—present and intended—provides a sound base for attack on these problems. In regard to my own situation, I believe that I have the necessary authority and means to move forward.

I am taking the problem of credibility with Congress as a personal assignment. I regard this problem as pivotal to our success in continuing to get the intelligence resources we need. Our objective will be to convince Congress that:

You do, in fact, have a focal point for the management of DoD intelligence.
Your office is indeed cutting out or reducing efforts that are marginally productive.
Your office is providing leadership to develop new means of intelligence collection and analysis to meet the needs of the coming decade.

Albert Hall
  1. Source: Washington National Records Center, RG 330, OSD Files: FRC 330 77 095, 020 DOD 1972. Secret. A notation on the memorandum indicates Laird saw it.
  2. Not printed. (Ibid.)
  3. Document 242.
  4. Document 193.