70. Memorandum From the President’s Deputy Assistant for National Security Affairs (Aaron) to President Carter 1


  • New Executive Order for the Intelligence Community

The SCC has completed lengthy and detailed consideration of a proposed new Executive Order for the Intelligence Community (Tab A).2 Per your instruction in PD–17,3 Stan Turner and Harold Brown prepared the initial draft and then others with different perspectives—most notably the Vice President, Griffin Bell, Cy Vance, Bob Lipshutz, Stu Eizenstat, Tom Farmer 4 and their senior associates—were involved through the NSC system in a comprehensive review of the major issues posed in this sensitive area. There was also an unprecedented degree of involvement and input at each stage by the Senate Select Committee on Intelligence5 and to a lesser degree by the new House Select Committee.

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The end result is a proposed Executive Order that reflects both the letter and spirit of your reorganization decisions and which provides for the necessary restrictions on and oversight of our foreign intelligence and counterintelligence activities without interfering unnecessarily with the legitimate intelligence collection and production process. My staff worked particularly closely with the Justice Department on the critical restrictions section. The Vice President has also reviewed it, and agrees with it.

While some at State and a minority on the Select Committees would have imposed more far-reaching restrictions on certain types of activities, all agree that the proposed new Executive Order represents a responsible step forward from the existing Ford Administration Order6 and will provide an acceptable framework for foreign intelligence activities until acceptable statutory charters can be enacted by Congress. We can expect some criticism that we have not gone far enough but we believe we have struck the right balance and avoided restrictions that would cripple our national foreign intelligence effort.

It is not necessary to read through the entire lengthy draft but, before OMB puts it in final form for publishing, your specific guidance is needed on the following major issues:

1. The most difficult problem to handle with the Senate Select Committee was the provision for reporting to Congress. The Committee’s initial demands would have amounted to a broad waiver of Executive privilege without any qualification but, after coming close to the point of confrontation, the Committee now appears reasonably content with a “compromise” position developed by the Justice Department and incorporated into the current draft. (Section 5(d)(1)–(3), p. 49). The language tracks S. Res. 400, which established the Select Committee, except for the preamble that limits its application to be consistent with applicable authorities and duties, including those conferred by the Constitution and to give due consideration to the protection of sources and methods.

The Attorney General believes that this formulation “would permit the Executive Branch to raise all current legal objections to disclosure” and to assert Executive privilege, if necessary (Tab B).7 Cy Vance finds this formulation acceptable but others have expressed some concerns. Harold Brown is concerned that the Administration’s flexibility in dealing with the Congressional oversight committees may be limited too much and thinks that more assertive language subjecting Congressional reporting to undefined Presidential “standards” would help. On the [Page 346] other hand, Stan Turner is concerned that even the reference to your right to “establish procedures” for reporting to the Select Committees goes too far and could be misunderstood and eventually cause problems with Congress.

Tom Farmer and Bob Lipshutz believe that the reporting provision to Congress should specify clearly your intentions—as expressed in a letter you sent to Senator Inouye last summer8—to determine yourself when IOB-reported possible illegalities or improprieties have occurred and, when corrective action is warranted, report them to Congress. In practice this probably means that only insignificant (i.e., those improprieties which did not call for corrective action) would not be reported to Congress. All illegal acts will be automatically reported to the Attorney General for appropriate action by the Justice Department, and also reported to the Intelligence Committees. The language in the SCC approved draft E.O. (Section 5(d)(3), p. 49) was carefully drafted to leave you the implicit latitude to determine yourself when alleged illegalities or improprieties actually have occurred, since all reporting is “under such procedures as the President may establish.” It would, however, commit you to report even those insignificant improprieties that in your judgment did not warrant remedial action.

Farmer and Lipshutz are concerned to make sure that senior Administration officials understand the procedures you wish to follow and do not, as Stan Turner says he intends, report possible abuses on their own without first advising you. They also hope to protect you and the IOB as much as possible from Congressional second-guessing. The counter argument is that this explicit approach will almost certainly be interpreted out of context as a large loophole for you to cover up from Congress your Administration’s future intelligence abuses when in fact it is hard to imagine an actual impropriety you would not want to do something about; and, if it was so trivial that no remedial action was warranted, in most such cases little would be lost in reporting it to Congress. The Select Committees will also tend to suspect the worst, and we are counting on them to negate possible criticism of other areas of the E.O. This is why the SCC members favored a less explicit approach than that set out in your earlier letter to Senator Inouye, that nevertheless implicitly protects your option to decide for yourself when abuses actually have occurred and gives up the meaningless, but politically very troublesome, exception of not reporting insignificant improprieties to Congress on the grounds that “no corrective action was warranted.”

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I believe you should accept the Attorney General’s formulation in entirety on the basis of his judgment that your constitutional prerogatives are adequately protected and your retention of the implicit option to decide yourself when abuses have occurred and will be reported to Congress. This would in effect codify the status quo. To do less would destroy the goodwill we have so carefully nutured with the Committees and which we will need as they turn more actively to the business of drafting statutory charters. It could also contribute to a public impression of possible erosion of legitimate Congressional oversight.


That you approve the Attorney General’s recommended language on reporting to Congress. (Section 5(d)(1)–(3) p. 49)

APPROVE _______ DISAPPROVE _______9

2. Stan Turner, in his own words, “would like to make clear that he believes the Executive Order is seriously flawed” because it fails to give him “full control” over the National Foreign Intelligence Program Budget. PD–17 gives the DCI “full and exclusive authority” for the “approval” of the NFIP budget prior to its submission to you and for monitoring its implementation but is silent on the issue of what specific programs should be included in the NFIP. This was done purposefully since the intent was to only give the DCI budget control over predominantly “national” intelligence activities and some of the programs in the present NFIP are “tactical” and, therefore, should be removed and considered in the regular departmental budgets.

a. What seems to bother Stan most is a provision in the E.O. to the effect that he and Harold Brown must agree on which Defense intelligence programs are predominantly “national” in character and therefore put into a newly constructed NFIP, rather than starting with everything presently in the NFIP—including a significant number of clearly “tactical” programs—and agreeing on what should be removed. (Section 2(g) (3), p. 4). In my view, the problem is much more imagined than real since Harold has promised repeatedly to put everything “national” under Stan’s full budget control as you intended in PD–17 and is fully reconciled to your reorganization decisions. Moreover, there is a provision in the E.O. for NSC review of the composition of the NFIP budget so that a court of appeals exists to arbitrate any differences that might arise over “national” and “tactical” in the future. This has worked well in this year’s budget review.

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b. Stan Turner would also like to change the draft E.O. to specifically state that the FBI’s foreign intelligence and counterintelligence activities will be part of the NFIP budget rather than to be subject to inclusion only upon agreement between the DCI and the Bureau as are other elements of the NFIP like the State Department’s intelligence unit. While he intends to leave the FBI’s foreign intelligence programs within the NFIP, Griffin Bell feels “very strongly” that the Attorney General has certain special responsibilities to protect the rights of Americans and that the more obvious potential for abuse, both in terms of public perception and institutional bias, would result from giving the DCI any irrevocable control on FBI activity in this country. Given the strength of the Attorney General’s opinion and the fact that the NSC will, in any event, retain a capability to review decisions by the DCI and Attorney General in this area, I believe the FBI should not be irrevocably included in the NFIP.10


That no changes be made in the provisions of the draft E.O. that pertain to the NFIP budget (Section 2(g) (1)–(4), p. 4)

APPROVE _______ DISAPPROVE _______11

3. There was considerable discussion within the SCC about intelligence officers participating in U.S.-based organizations on an undisclosed basis. All agree intelligence agencies should be banned from influencing the activities of U.S. organizations or spying on Americans. No one, on the other hand, objects to undisclosed participation for foreign intelligence and counterintelligence purposes in organizations composed primarily of non-U.S. persons which are reasonably believed to be acting on behalf of a foreign power (like Soviet trading entities). Nor is there any serious objection to undisclosed participation in U.S. organizations (universities, professional groups, etc.) for the purpose of enhancing professional qualifications or for obtaining non-proprietary information. The Vice President and Cy Vance, however, are troubled by CIA’s operational requirement for undisclosed personnel membership in U.S. organizations for the purposes of “spotting” possible sources, contacts or recruits and for developing credible cover for subsequent intelligence activities abroad. While they reluctantly accept this requirement, the Vice President in particular is concerned that to detail it in the E.O. could cause strong criticism on this sensitive issue. Therefore, the Justice Department has drafted general language (Section 4(b) (7) p. 39) to allow for such activities under strictly limited conditions and procedures approved by the Attorney General and for published purposes only. CIA finds this requirement onerous and fears that it [Page 349] will involve them in endless bureaucratic red tape but in the end should be able to live with it. I see no other alternative.

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That you approve the Justice Department’s proposed language to cover the more controversial CIA involvements in U.S. organizations. (Section 4(b) (7) pp. 39–40).

APPROVE _______ DISAPPROVE _______12

4. Cy Vance tabled for SCC discussion prohibitions against the use of U.S.-funded exchange programs for intelligence purposes and against “covert destabilization” of “friendly” governments. There was no other support for inclusion of either prohibition in the E.O. The Justice Department, on behalf of the FBI, is strongly opposed to the exchange program prohibition since it would both dry up a useful source of information and provide the KGB with a secure and safe mechanism to engage in espionage in this country. State was content to have a hearing on the “covert destabilization” prohibition in view of the fact that any proposed programs of this nature would first have to be recommended by the SCC, approved by you and reported to Congress.


That neither the covert destabilization nor exchange programs prohibitions be included in the E.O.

APPROVE _______ DISAPPROVE _______13

5. Practical experience since the issuance of PD–17 last summer has demonstrated the need to clarify the relationship between the DCI’s “full and exclusive” control of the NFIP budget and the PRC’s new role of establishing the highest level consumer requirements for foreign intelligence. If NSC-level consumer requirements are really going to drive the activities of the Intelligence Community they must be reflected in and form the ultimate basis for budget decisions. In practice, however, two different staff bureaucracies are involved and, unless they are forced to come together at budget time there will be a continuing tendency for each to go its own way. Therefore, I believe there should be a provision in the E.O. that requires the PRC to review the proposed NFIP budget prior to its submission to you to consider its responsiveness to NSC-level consumer requirements. Since Turner would be chairing the PRC for these purposes it would not be an erosion of his budget authority and would help ensure that the consumer requirements-intelligence programs loop is closed.


That you approve clarification in the E.O. of relationships between the PRC “consumer’s union” and the NFIP budget process as indicated above. (Section 3(b) (1) (iv), p. 7)

APPROVE _______ DISAPPROVE _______14

6. In PD–17 you directed that the National Security Council should act as the “highest organizational entity that provides guidance and direction to the development and formulation of national intelligence activities” and assigned important new intelligence review responsibilities to both the SCC and PRC. This requires a more active NSC Staff role and involvement in the business of the Intelligence Community than in the past, especially in the budget and sensitive activities areas. This new role would be facilitated by providing an NSC Staff observer seat on the National Foreign Intelligence Board (NFIB) which is to be chaired by the DCI and meets regularly to advise him on major foreign intelligence issues, some of which later come before NSC committees for resolution. This will not be popular with the traditionalists in the intelligence bureaucracy who prefer as little White House involvement as possible in their affairs but is totally consistent with the main thrust of the Executive Order.


That a representative of the Assistant to the President for National Security Affairs be given observer status at NFIB meetings.

APPROVE _______ DISAPPROVE _______15

7. The whole intelligence field is still a highly politicized subject and we will want to give careful attention to how we make public the new Executive Order. It would, therefore, be most helpful if you could meet with leaders of the House and Senate Select Committees when the Executive Order is officially issued to thank them for their unprecedented cooperation and to let them share some of the credit. This is one area where we also deserve credit for working well with Congress, and it will be most helpful to have their full support in responding to the inevitable critics.

APPROVE _______ DISAPPROVE _______16

  1. Source: Carter Library, National Security Council, Institutional Files, 1977–1981, Box 33, PRM 11 (2 of 2). Confidential. Sent for action. “The President has seen” is stamped at the top of the memorandum.
  2. Not found attached.
  3. See Document 59.
  4. See Document 66.
  5. See Document 64.
  6. Reference to E.O. 11905.
  7. Not found attached.
  8. See Document 58.
  9. Carter checked the “APPROVE” line and wrote in the margin, “JC. Abbreviate & simplify if possible.”
  10. Carter wrote “I agree” in the margin next to this sentence.
  11. Carter checked the “DISAPPROVE” line.
  12. Carter checked the “DISAPPROVE” line.
  13. Carter checked the “APPROVE” line.
  14. Carter wrote a question mark beside this recommendation. He checked the “DISAPPROVE” line.
  15. Carter checked the “DISAPPROVE” line.
  16. Carter checked the “APPROVE” line and initialed “JC” at the bottom of the page.