The Crisis in the CIA

On the surface, the answer to this question should be easy. An intelligence
service should be entirely independent, analyzing the world according to the
highest professional standards. It's on the next level down that the problem
appears. The CIA has not been doing a very good job in analyzing the world.

It has been making some serious mistakes on some very important issues.

Therefore, the question is this: What do you do when an intelligence service
has failed and is incapable of repairing itself? Ultimately, the president
is responsible for U.S. intelligence. It follows, then, that the principle
of independence must submit to the principle of subordination when the
organization has a systemic failure.

That is the argument in a nutshell. The chief lieutenants of former CIA
Director George Tenet argue that the CIA has not failed. Rather, they argue,
the failure was in the administration, which forced the agency to make
dubious analytical calls for political reasons or, alternatively, ignored
CIA analyses they disagreed with in favor of analyses they liked. The least
grievous charge they make against the Bush administration is that it
cherry-picked the analyses that fit with its world view and ignored the
others. Therefore, not only is the CIA not a failed institution, but, to the
extent it failed, it failed because of the administration that is now trying
to repair it through Goss.

The administration counters that not only has the CIA failed consistently,
but it has tried to cover up its failures by leaking classified documents
that are designed to paint the administration in the worst possible light at
the most sensitive political moment. So, for example, they charge that the
CIA leaked a report indicating the agency had warned Bush about problems in
Iraq -- and leaked it in a time and way that would cause maximum damage to
the president. Similarly, they charge that the CIA floated a report that a
Defense Department intelligence analyst was an Israeli spy, in order to
damage Defense Department officials with whom it was at odds.

The Core Problem

This argument is certainly entertaining, and Washington lunches are being
fueled by the cat fight, but it cannot be understood in the current context
alone. The question of CIA effectiveness is a fundamental issue that has
been on the national agenda since the agency was founded. This is merely the
latest edition of arguments that raged in every administration -- from the
Bay of Pigs to Rwanda. Who screwed up and when did they do it is an issue
that has raged from the beginning.

The issue cannot be approached in a simplistic matter. It is essential to
understand what the CIA is good at and what it is not good at. It is then
necessary to determine what part of the CIA is most important and what part
can be dispensed with at a particular historical moment.

The CIA has consistently failed to identify major historical events:

1. It failed to predict the North Korean invasion of South Korea or the
Chinese intervention.

2. It failed to forecast or clearly understand the Sino-Soviet split.

3. It failed to understand the nature of the Cuban revolution until after
Castro was in power.

4. It did not know that the Soviets had tactical nuclear weapons in Cuba and
were prepared to use them in the event of an American invasion.

5. It failed to understand the probable course of the Vietnam War 6. It
failed to predict the collapse of the Soviet Union.

This is far from an exhaustive list. Moreover, it isn't quite fair to say
the CIA failed to predict these things in the sense that no one in the CIA
had any idea these things were happening. Rather, it means that
institutionally

-- in the official guidance given by the CIA to policymakers -- the CIA
failed to clearly and unequivocally forecast what was going to happen. As
all of us in the intelligence game know, one should always hold a contrarian
analysis in a file cabinet somewhere, which, when produced, demonstrates
that you knew it all the time. But the fact is, the only analysis that
counts is the one you brief to the president and the National Command
Authority -- and on that basis, this is a sampling of the failures.

If we look at this list, there are two classes of events with which the CIA
has trouble. The first are events that are discontinuities -- or, in other
words, when something completely outside the box occurs. When we look at
these six cases, we see that they share a common thread: They violate the
conventional expectations of the time. Arguing that the Soviets and Chinese
were enemies, or that the Soviet Union was going to collapse, went against
the received wisdom of the time. All of these did. The CIA has difficulty
imagining major historical discontinuities.

The second class of events it has trouble with are those that are not
amenable to covert intelligence collection. Some of these were, of course,
things the Directorate of Operations should have known, such as the Korean
War or tactical nuclear weapons in Cuba. But the most important of these
things, such as the collapse of the Soviet Union or the Sino-Soviet split --
things that really transformed history -- were not amenable to covert
collections, because the decision-makers involved were not themselves aware
of what was happening. The Sino-Soviet split emerged over time, even in the
minds of the decision-makers. The last people to know that the Soviet Union
was going to collapse were in the Soviet Politburo.

The greatest capability of the CIA -- and the intelligence community in
general -- is covert operations that gather information from a nation's
leadership. The CIA is not perfect at this, but it is outstanding. However,
an event that involves non-nation-state actors (such as Castro, prior to the
Cuban revolution) or more important, in which the leaders of the
nation-state are themselves unaware, leaves the CIA helpless.

An event that breaks the paradigm of an era and that cannot be covertly
sourced is what the CIA is worse at. Broad historical events that are
visible to everyone, but which requires an ability to intuit the deep trend,
is something the CIA simply doesn't do very well. When that broad historical
event violates all conventional expectations, the CIA is fairly helpless.

The War

Al Qaeda was the classic failure for the CIA. Al Qaeda was not a national
government but a small, apparently eccentric, collection of Islamists. This
was already outside of the CIA's sweet spot. The Sept. 11 attacks were
completely outside the paradigm that the CIA -- and others, including
Stratfor -- was working with. The model of terrorism they had studied for a
generation did not include an attack of this order. Therefore, since the CIA
was dealing with a non-state group and with a historical discontinuity, the
agency continued its record for getting it wrong.

The problem the CIA has is that it also failed in what was supposed to be
its sweet spot -- covert gathering of intelligence from senior state
officials in Iraq concerning a war that had been going on, in effect, since
1990. There were no surprises here, no discontinuities, no funky,
off-the-wall groups.

This was mainline intelligence-gathering.

It was here that the CIA made the core mistakes:

1. It did not tell either Presidents Bill Clinton or George W. Bush that
Iraq had no weapons of mass destruction. It told both of them that it did.

2. It did not understand Saddam Hussein's war plan and did not warn Bush
that the fall of Baghdad would trigger an organized guerrilla war. Warning
of unrest is absolutely not the same as warning of a war plan.

3. It did not provide clear intelligence on the status of the Shia in Iraq
and the degree of organization that had been achieved by Iranian
intelligence.

The failure to predict the Sept. 11 attacks was ultimately a systematic
failure hardwired into the CIA. The ways in which it collects intelligence
and the way its analytic process works have consistently generated failures
on this level. When an institution fails to do a certain type of work well
for 50 years, it is hardly fair to condemn it when it repeats the failure.

The failures it can be condemned for, however, are the mainstream collection
and analytic failures that shaped the Iraq campaign.

This is what the debate has raged over. The Bush administration gave the CIA
a pass over Sept. 11; they are not giving it a pass over Iraq. The CIA is
responding by arguing (a) they were forced to skew data and (b) they did
provide accurate analysis but were ignored. The administration is arguing
(a) no one forced them to skew data and (b) the claim that they did provide
accurate intelligence undermines the claim in (a). They say that the CIA was
just dead wrong in its intelligence and then tried to cover it up by
savaging the administration.

There are two conclusions here. First, the fact that the agency is being
given a pass on Sept. 11 is the most serious problem. The consistent
inability of the CIA to capture hard-to-source discontinuities is not a
charming foible, but an unacceptable shortcoming. Being good in the small
things doesn't matter if you can't do the big things. On that basis alone,
the CIA should be rebuilt. But it is not on that basis that the
administration is going after them.

Instead, they are going after the failure of the agency to do the small
things right. We tend to agree that the CIA's failures in Iraq are too
numerous to be explained by political pressure. The consistent inability to
generate radical analysis is caused by the inherent conservatism of the
complex process that Tenet put into place. Where committees rule, the
product will be the lowest common denominator. On this, we side with the
administration.

However, the problem is not simply to streamline a process that works well
on small things. The administration doesn't appreciate the fact that the
enormous failures of the CIA on the big things are the real problem. It is
what gave us everything from the Chosen Reservoir to bafflement at the sight
of the Berlin Wall coming down. The administration is missing its chance to
rebuild American intelligence in fundamental ways -- and there is no better
time to do it than during a war, as "Wild Bill" Donovan and the OSS showed.

(c) 2004 Strategic Forecasting, Inc. All rights reserved.

http://www.stratfor.com

Intelligence Oversight: In Need of Reform

By Nick Iltsopoulos, CEO of Spartacus Security

Introduction

The role of intelligence services in a democratic government, such as
the United States is often misunderstood. Citizens in a democracy feel
uncomfortable with the concept of a secret entity that can operate within
their open, free society where a Constitution, the rule of law, and
accountability serve as the foundation for the working of the society.
Spying and covert action are to some Americans, antithetical to the founding
principles of the United States and its global leadership position in the
21st Century. A democratic government, however, is elected to represent the
interests of the people, and as such, that government's defined purpose is
to protect the "national interest" by formulating policy.

The foundation for any decision making process of course is always
information. Information and/or intelligence is that data that provides
government with a broader picture and is thus the principal component of
policy formulation. Without detailed and accurate information, the policy
process becomes flawed. What sets intelligence apart from information is the
concept of secrecy or "the basis of its relationship with governments and
its own self-image."1 The defined purpose of secrecy is to protect sources
of information, from any adversary. Secrecy, however, does not and should
not absolve the U.S. intelligence services from responsibility for its
actions and accountability to the American people.

The genesis of the U.S. intelligence community followed World War II
and evolved to high levels during the Cold War when the United States and
the U.S.S.R. emerged as the world's two most dominant governments, often
referred to historically as "superpowers." Each nation was driven by a
different agenda, but the advent of nuclear weapons and the achievement of
mutual assured destruction increased each nation's reliance on intelligence.
As the Cold War played out nearly forty-five years, so did the need and
desire for responsible intelligence oversight in the United States. In the
mid 1970's, allegations were made concerning intelligence agency abuses,
disregard for international law, and interference with the sovereignty of
foreign nations. As a result of these concerns and ongoing investigations
into them, the United States Government had to redefine what oversight might
be so as to ensure that the intelligence services were serving the best
interests of the United States.

Current Oversight

Oversight and accountability are an integral and also important part of
the democratic process. History has shown that left unchecked, governments
can turn against the very people they were designed to serve. Intelligence
agencies, in particular, have throughout history been used to control and
repress citizens. Intelligence agencies also have historically had a
profound impact on foreign policy and how a country is perceived by other
governments. Regime changes, assassinations, and participation in illicit
activities can undermine a country's credibility at home and abroad and
impede its ability to forge economic and strategic alliances. Intelligence
plays a vital role in protecting a nation's interests. However, intelligence
can also increase a country's political and economic liability, if these
agencies pursue agendas that are not consistent with their governments.

The United States has taken measures to lessen its exposure and to
ensure that its intelligence agencies are serving the national interest.
There are multiple levels of oversight, but that function of oversight also
presents a number of unique challenges, the greatest of which is maintaining
maximum operational security regarding secure sources, methodologies, and
processes employed by the intelligence agencies. The U.S. intelligence
budget, operations, and assessments are all considered classified. To
address this security challenge, special oversight committees and
arrangements have been introduced within both the Executive and Legislative
branches of government. Indeed in the United States, the oversight process
is ultimately governed by the constitution, the rule of law, and a number of
restrictive stipulations that have been mandated by Congress over the years.

U.S. intelligence agencies not only are required to obey the laws of
the United States and the policies of the President, but they also must
honor treaty obligations and international agreements entered into by the
U.S. government. The agencies are additionally bound by parameters and
directives set forth by the President and the Attorney General. Employees of
intelligence agencies found to be in violation of laws or policies can be
disciplined and held criminally and/or civilly liable. The Attorney General
is responsible for enforcing guidelines established in the early 1970's to
regulate the collection, analysis, and dissemination of information
concerning U.S. citizens or permanent resident aliens.

There are two entities tasked with routine oversight of
intelligence activities outside the Executive branch. These are the Select
Committee on Intelligence in the Senate and the Permanent Select Committee
on Intelligence in the House of Representatives. Both committees authorize
appropriations for the intelligence agencies (IA) and have the authority to
issue subpoenas, thereby these legislative bodies with the political power
and legal leverage to fulfill their responsibilities. The federal law also
obligates the President to ensure that these oversight committees are "fully
and currently informed" of all IA activities and are provided key
information on all "significant anticipated intelligence activities (SAIA),"
all "significant intelligence failures (SIF) and all covert action
"findings" once these circumstances have been reviewed and approved by the
President."2 Information regarding SAIA or SIF is provided to the oversight
committees on demand and without delay.

Every member of the U.S. intelligence community (IC) has or falls
within the purview of the Inspector General (IG). The IG is responsible for
inspections, investigations and audits of all IA's. Larger IA's have their
own IG, i.e. the CIA, while smaller agencies or departments fall under the
purview of a department IG and the parent agency IG. For instance several
units within the Department of Defense (DoD) have their own IG, but are
still responsible to the DoD's IG. The DoD also has an Assistant to the
Secretary of Defense who provides an oversight function and is responsible
for the internal IG's within the DoD. Most IG's are hired by the agency or
department head except for the CIA, whose IG is appointed by the President
and confirmed by the Senate. The IG for the CIA also reports directly to
the intelligence committees in Congress and not to their Secretary or
department head.

The final level of oversight is within the Executive Office of the
President and is named the Intelligence Oversight Board (IOB). The IOB holds
oversight over the entire intelligence community and is "constituted as a
standing committee of the President's Foreign Intelligence Advisory Board
(PFIAB)."3 Four members of the PFIAB also serve as members of the IOB. The
IOB receives regular reports from the agency's IGs and also from other
oversight offices. The IOB reports to the President and discloses potential
legal issues to the AG.

Assessment and Recommendations

September 11, 2001, has been labeled one of the greatest intelligence
failures in American history. In light of the estimated $30 billion that the
U.S. government spends on intelligence annually, many believed that the CIA
and FBI should have been able to intercept and interrupt the terrorist
attack on the World Trade Center and the Pentagon. American politicians
blamed the Directors of the CIA and the FBI and subsequently launched an
investigation in Congress. The scope of the investigation was limited to the
internal operations of the agencies with little or no consideration given to
the oversight process and whether that process needed to be reformed.
Essentially, the legislative branch of the U.S. government proceeded to
absolve itself of any responsibility, but strangely this very branch of
government was the entity that enacted the laws and processes that regulated
and controlled the American intelligence agencies, and therefore, was
obviously partially responsible for the intelligence failure. Interestingly
enough, the CIA is one of the most politicized agencies in the world and
its, objectivity has often been compromised by the Executive branch which
often demands certain intelligence to justify policy. In other words, it was
the oversight process that may have been inherently flawed on 9/11.

For oversight to be effective, it must be objective and impartial; yet
ironically, the head of each agency with the exception of the CIA, appoints
its own IG. The IG is accountable to the director, secretary or section
chief; however, the IG, more often than not, spends its time protecting the
agency's reputation. It does not hold personnel accountable or make
hard-nosed recommendations for process improvements. The oversight process
at the Executive branch is also organizationally ineffective, as the IOB is
appointed by the President. The IOB's primary function, it appears, is to
insulate the President from exposure and handle damage control.

The U.S. Government should consider a separate IG department that is
not affected by politics or changes in the government. Such a department's
primary mission would be to ensure that the people's best interests are
being served, and as such, a IG department would be able to report to the
legislative and executive branches of government without fear of
recrimination from internal departmental disagreements. Furthermore, for
this department to be effective, it has to have many of the same powers as
the Congressional oversight committees have regarding subpoenas and
enforcing the rule of law. Any workable oversight entity has to be able to
analyze, investigate, recommend, follow through, and punish, if necessary,
to be effective in the long term.

The current committees, i.e. the Select Committee on Intelligence in
the Senate and the Permanent Select Committee on Intelligence in the House
of Representatives, have traditionally employed commissions to assist them
with oversight. There have been twenty-five such commissions established
since 1946, many of which have identified problems with management,
interoperability, resource allocation, and vulnerabilities. Many of the
intelligence "failures" that contributed to September 11, 2001, have already
been addressed in these commissions. Retired Admiral David Jermiah, former
Vice Chairman of the Joints Chiefs of Staff, conducted an investigation at
the request of the DCI George Tenet in 1998. The investigation found that
the CIA and its "sister" agencies have a number of ongoing problems,
including a chronic failure of imagination and personnel, flows in
information gathering and analysis, and faulty leadership and training. This
investigation was in response to the IA's failure to detect India's nuclear
test in 1998. In 1997, the House Intelligence Committee reported that the
CIA and its "sister" services lacked "the analytic depth, breadth and
expertise to monitor political, military and economic developments
worldwide."4 This examination was part of the post "Cold War" analysis, that
strove to deal with U.S. intelligence agencies' inaccurate assessment of the
Former Soviet Union's military capabilities and its eventual collapse.
Oversight has little value, if all it does is bring issues to light, makes
recommendations after the fact, but does not have the power to effectuate
any meaningful change.

The problem with the U.S. intelligence service exceeds oversight and
politics. The failures are rooted in systemic issues, specifically
organizational. There are fourteen intelligence agencies serving the U.S.
government, yet there is not one person who serves as an independent
coordinator of them all. The Director the CIA essentially serves two
functions. He is the head of the CIA and is responsible for its operations,
but he also advises the President as the DCI (Director of Central
Intelligence). As such, he is responsible for coordinating all intelligence
agencies. The problem is that the DCI position, in terms of command and
control, carries little weight with the agencies. Approximately eighty
percent of the intelligence agencies' budget is controlled by the Department
of Defense, which means that the DCI holds on paper the responsibility for
coordination, but has little leverage to carry it through. Furthermore, the
DCI has little influence or control over how the resources are allocated in
every agency or what their respective objectives are to be. The DCI is
essentially Captain of the ship, but cannot control that ship's course. As a
result, the current intelligence apparatus is chronically inefficient. There
is no fusion anywhere that synthesizes all the sources to provide an overall
effective and timely intelligence product. In fact, most "failures" of
intelligence are usually attributed to availability and timeliness, not lack
of information.

Intelligence is a vital component of U.S. national security. It is as
important as diplomacy, defense, and homeland security; yet there is no
Secretary of Intelligence. The United States government has spent hundreds
of billions on intelligence but its return on that investment has been
dismal. Not only have the intelligence agencies failed to detect, but they
have also failed to protect. The U.S. intelligence agencies have suffered a
number of internal breaches because of counterspies, i.e. Robert Hansen,
Rick Ames, and John Walker. There has been a disproportionate emphasis on
collection without a corresponding effort on counterintelligence. The future
of the United States democracy and its economy are keenly dependant on an
effective and efficient intelligence apparatus. The United States government
needs to de-politicize its intelligence agencies and put them under a
Secretary of Intelligence who is selected and confirmed much like a Supreme
Court judge is, for a predetermined term, by a committee that is equally
divided among Democrats and Republicans. Only then, will the necessary
resources be both reallocated and maximized to serve the best long-term
interests of the United States.

Citations

1. Harold Brown and Warren B. Rudman. Preparing for the 21st Century:
An Appraisal of U.S. Intelligence. Reports of the Commission on the Roles
and Capabilities of the United States Intelligence Community. March 31,
1996. P. 139.
2. Harold Brown and Warren B. Rudman. Preparing for the 21st Century:
An Appraisal of U.S. Intelligence. Reports of the Commission on the Roles
and Capabilities of the United States Intelligence Community. March 31,
1996. P. 145.
3. Harold Brown and Warren B. Rudman. Preparing for the 21st Century:
An Appraisal of U.S. Intelligence. Reports of the Commission on the Roles
and Capabilities of the United States Intelligence Community. March 31,
1996. P. 145.
4. Tim Weiner. Report Finds Basic Flaws in U.S. Intelligence
Operations. New York Times. June 3, 1998.

Reference

Anderson, Kevin. US Intelligence efforts fractured. BBC News. May 18, 2002.

Brown, Harold and Warren B. Rudman. Preparing for the 21st Century: An
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Gertz, Bill. Reports fail to reform intelligence agencies. The Washington
Times. October 4, 2002.

Hersh, Seymour M. The Intelligence Gap. The New Yorker. Decemeber 6, 1999.

Hillen, John. Know nothings: U.S. intelligence failures stem from too much
information, not enough understanding. National Review. August 3, 1998.

Johnson, Loch. The CIA's Weakest Link: What our intelligence agencies need
are more professors. The Washington Monthly Online. July/August 2001.
www.washingtonmonthly.com

Loughlin, Sean. Report: FBI, CIA need overhaul. July 17, 2002. www.cnn.com

Raman, R. US Intelligence Failure: Dßjà vu. Southeast Asia Analysis Group.
September 9, 2002. www.saag.org/paper6/paper521.html

Reform of U.S. Intelligence Agencies (Senate-May 23, 1996). Congressional
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Weiner, Tim. Report Finds Basic Flaws in U.S. Intelligence Operations. New
York Times. June 3, 1998.

Zakaria, Tabassum. US lawmakers: spy reforms crucial to terror fight.
Reuters. February 20, 2003