The State Department web site below is a permanent electronic archive of information released prior to January 20, 2001.  Please see www.state.gov for material released since President George W. Bush took office on that date.  This site is not updated so external links may no longer function.  Contact us with any questions about finding information. NOTE: External links to other Internet sites should not be construed as an endorsement of the views contained therein.

Foreign Relations of the United States 1945-1950 Emergence of the Intelligence Establishment Department of State Washington, DC

Psychological and Political Warfare

                           

280. Memorandum of Meeting

Washington, May 28, 1948.

//Source: National Archives and Records Administration, RG 273, Records of the National Security Council, NSC 10/2. Top Secret. Drafted on June 1 presumably by Blum. For background information on this meeting, see Document 279.

MEMORANDUM ON A MEETING HELD IN MR. FORRESTAL'S OFFICE ON FRIDAY, 28 MAY 1948 TO CONSIDER NSC-10

"DIRECTOR OF SPECIAL STUDIES"

PRESENT
Messrs. Forrestal, Lovett, Allen Dulles and Blum; also for the first part of the meeting, General Gruenther and Admiral Hillenkoetter; for the latter part of the meeting, Mr. Souers

Admiral Hillenkoetter briefly reviewed the CIA view regarding NSC-10, pointing out particularly that a distinction should be made between covert operations in time of peace, which should be assigned to CIA, and those covert operations which would only be carried out in time of war, and responsibility for the planning of which should be assigned to the JCS.

General Gruenther reviewed the informal view of the JCS as developed at their Wednesday meeting. He said that the JCS seemed to favor, in principle, having secret operations as well as secret intelligence in CIA, but said that they had questions as to CIA's ability to handle this task. He asked whether Hillenkoetter would be prepared to accept the idea of an advisory panel (as in NSC-10) if the operations were placed in CIA. Hillenkoetter replied in the affirmative.

After Admiral Hillenkoetter and General Gruenther had left the meeting, the discussion continued and the following agreement was reached by Mr. Forrestal and Mr. Lovett.

(1) The present head of the Office of Special Operations in CIA should be replaced.

(2) Responsibility for both secret intelligence and secret operations should be assigned to CIA under the new head appointed under (1).

(3) This new office should have considerable autonomy within CIA, and its head should be authorized to appeal directly to the National Security Council in case of differences arising between him and the Director of Central Intelligence.

(4) Allen Dulles, present at the meeting, was asked whether he would accept the new post. He replied that he did not think so, but that he would give his final decision in a few days.

(5) Names of other persons who might fill the new post were considered.

281. Memorandum From the Executive Secretary (Souers) to the National Security Council

Washington, June 2, 1948.

//Source: Truman Library, Papers of Harry S. Truman, President's Secretary's File, Subject File. Top Secret. Attached to another copy of this document is an earlier draft of the proposal with handwritten changes. (National Archives and Records Administration, RG 273, Records of the National Security Council, NSC 10/2)

SUBJECT
Establishment of a Special Services Unit in CIA

REFERENCE
NSC 10

The enclosed proposal on the above subject, which is suggested as a possible alternative to the Conclusions in NSC 10, represents the results of an informal discussion between the Secretary of Defense, the Under Secretary of State, and Mr. Allen W. Dulles./1/

/1/Document 280.

At their request the enclosure is submitted herewith for consideration by the National Security Council in connection with NSC 10, which is scheduled as Item 1 on the Agenda for the NSC 12th Meeting on Thursday, June 3./2/

/2/See Document 283.

Sidney W. Souers

Enclosure/3/

/3/Top Secret.

Proposal Submitted to the National Security Council

ESTABLISHMENT OF A SPECIAL SERVICES UNIT IN THECENTRAL INTELLIGENCE AGENCY

Further consideration of the problem of developing our activities in the field of covert political warfare leads to the following points which, it is suggested, should serve as a basis for the further consideration of this problem by the National Security Council.

CIA provides the legal structure within which covert political activities can be conducted and it is already charged under NSC 4-A with the conduct of covert psychological operations abroad. In addition, CIA is already charged by National Security Council Directive No. 5 with conducting espionage and counter-espionage operations abroad, which operations are by their nature very closely related to covert political activities as contemplated in NSC 10. It, therefore, seems desirable for legal, as well as operational reasons, not to create a new agency for covert political activities, but to place the responsibility for this work within the legal structure of the Central Intelligence Agency and closely relate it to secret intelligence.

The principal objection to this proposal arises out of doubt as to whether CIA is presently so constituted that it can effectively handle this problem which is so different from CIA's primary task of coordinating intelligence activities and correlating and evaluating intelligence relating to the national security. There is also fear lest covert operations develop in a manner inconsistent with our foreign and military policies.

These considerations lead to the following general conclusions and recommendations:

(1) Responsibility for both secret intelligence and secret operations, including covert psychological activities, should be placed in a new Special Services unit to be created in CIA.

(2) This unit should have a considerable measure of autonomy within CIA and its directors should be authorized to appeal directly to the National Security Council in case of differences arising between him and the Director of Central Intelligence.

(3) A highly qualified person recruited from outside the present ranks of CIA and approved by the National Security Council should be appointed to head the new unit in CIA.

(4) Provision should be made so that the chief of the newly created unit has access to and receives policy guidance from the Department of State and the Military Establishment.

(5) It is understood that this is a provisional arrangement subject to review at a later date.

The following actions should be taken if the National Security Council approves in principle the foregoing points:

(a) The Department of State, the National Military Establishment, and CIA should jointly request funds for the proposed operation.

(b) The Executive Secretary, National Security Council, should be directed to prepare a detailed directive covering the above points for approval by the Council.

282. Memorandum From George H. Butler of the Policy Planning Staff to the Under Secretary of State (Lovett) and Secretary of State Marshall

Washington, June 2, 1948.

//Source: National Archives and Records Administration, RG 59, Records of the Department of State, Policy Planning Staff Files 1947-53: Lot 64 D 563. Top Secret.

The text of the paper regarding the establishment of a Special Serv-ices unit in CIA, attached to the June 2nd memorandum from the Executive Secretary of the National Security Council,/1/ conforms with my understanding of Mr. Lovett's views as a result of his conversation with Mr. Forrestal and Mr. Dulles.

/1/Document 281.

The Policy Planning Staff suggests that the detailed directive referred to in the final paragraph (b) of the paper be drafted in the first instance by a representative to be designated by the Secretary and one to be designated by Mr. Forrestal. Mr. Davies of the Policy Planning Staff has been following this subject for the Department. He is temporarily abroad on an official mission. Mr. Butler of the Planning Staff is handling this part of Mr. Davies' work.

George H. Butler/2/

/2/Printed from a copy that bears this typed signature.

283. Memorandum for the President of Discussion at the 12th Meeting of the National Security Council

Washington, June 3, 1948.

//Source: Truman Library, Papers of Harry S. Truman, President's Secretary's Files, Subject File. Top Secret. Prepared on June 4.

The following notes contain a brief summary of the discussion at the 12th meeting of the National Security Council on June 3, 1948.

1. Director of Special Studies (NSC 10)

Mr. Lovett explained the proposal which resulted from discussion between Messrs. Forrestal, Lovett and Dulles, at which General Gruenther and Admiral Hillenkoetter were also heard./1/ Mr. Lovett said that this proposal was a possible method of meeting the problem to enable the Council to move rapidly in getting the necessary funds.

/1/See Document 280.

Admiral Hillenkoetter noted the statement that the principal objection was whether CIA could handle this job. He said that no protest or doubts had been expressed up to the present. The Office of Special Operations in CIA is practically autonomous now. However, Admiral Hillenkoetter thought that the proposed right of appeal to the Council by the Director of that office was totally wrong. Admiral Hillenkoetter stated that CIA now has qualified people. The man heading this work is a Mr. Cassidy who worked with General Donovan in France. Admiral Hillenkoetter, therefore, did not see the need to put in another man who could get necessary policy guidance. Admiral Hillenkoetter wondered why he himself could not be given such guidance.

Mr. Lovett said that the Dulles recommendations revolved around having secret intelligence, covert operations and psychological warfare all under one man who in turn would be under Admiral Hillenkoetter. Mr. Lovett drew a distinction between the overall function of CIA and these covert operations which were a specialized extra curricular activity.

Secretary Forrestal said that the proposals also took account of the criticisms that CIA should not be an operating organization. These would be answered in part by making a separate unit for covert operations from the parts of CIA which discharged its coordinating and evaluating functions. Secretary Forrestal said that the real thing to face is the feeling that a military organization cannot deal with the political subtleties in this activity. He felt that we must have a very able man with a civilian type of mind.

Mr. Lovett pointed out that CIA is intended to be a civilian agency.

Secretary Forrestal said that it comes down to getting a man who will be acceptable to Admiral Hillenkoetter, the type such as Mr. Dulles.

Admiral Hillenkoetter said that he had started carrying out NSC 4-A by getting Mr. Cassidy who was recommended by General Donovan and by David Bruce. Mr. Cassidy is a broker and banker from Chicago.

Mr. Lovett said that another point about the right of appeal arose in part from the feeling that it might be necessary, because of the multiplicity of military interests, for the NSC to compose any differences that arise.

Mr. Souers pointed out that NSC 4-A originally proposed an advisory panel which was stricken out. The result has been that there has been no authoritative guidance. If no official tie-in is established, there is the danger that this activity will be celled off.

Admiral Hillenkoetter said that the organization chart provided a tie-in with State, but it was not official enough.

Secretary Royall said that he agreed with Admiral Hillenkoetter's comments. Secretary Royall had no faith in the proposed right of appeal. He felt that if you gave a man responsibility, you should give him the full authority to run it.

Mr. Hill agreed with Secretary Royall.

Secretary Forrestal said that he was confident Mr. Cassidy could do the job. Admiral Hillenkoetter agreed and said that Mr. Cassidy came with the best recommendation.

Mr. Lovett said that he certainly could not ask for more than CIA had done [less than 1 line of source text not declassified].

Mr. Whitney said that there were many papers on this subject. He pointed out that there is a JCS paper/2/ along the lines of Admiral Hillenkoetter's view which had been monitored by General Vandenberg who feels quite strongly on this subject.

/2/Not found.

Mr. Lovett said that the wording of the second principle in the Forrestal-Lovett proposals did not adequately convey their thought. They had understood that the Director of the special unit would only be authorized to report to the NSC on matters which affected the interests of other agencies in this activity.

Admiral Hillenkoetter felt that this still has the same objectionable features.

Mr. Souers pointed out that part of this activity is extra curricular to CIA. Secret intelligence is all right, but the other activities envisaged are not normal CIA functions.

Admiral Hillenkoetter felt that the other activities should be either in CIA or set up entirely separate.

Secretary Forrestal said that their proposals were an effort to preclude setting up a separate agency but still to recognize the complexities in this field. He said that they were trying to deal with the realities arising out of the criticisms in Congress and elsewhere on this subject. He agreed that Admiral Hillenkoetter must be allowed to keep his finger on this activity, but felt there should still be a channel to the NSC.

Secretary Royall said that this activity carried a lot of responsibility since it is felt to be questionable morally in some quarters. He didn't see how the NSC could give responsibility without authority.

Secretary Forrestal said that giving it completely to CIA would not meet the criticisms regarding military influence.

Secretary Royall felt that if CIA was not civilian in nature, it was the fault of the NSC because CIA is supposed to be above the military. If it is not, he felt that the NSC should correct the situation. His first choice is to give it to CIA. The second choice would be to create a separate organization. His third and last choice would be to retain the right of appeal.

Mr. Lovett noted that the Dulles recommendations were that this activity be placed either under the NSC or under CIA as the NSC desires. He understood that the Dulles point would be met by a tightly knit unit under CIA, but he was concerned because this goes beyond CIA legislative authority. There is no legal authority for this activity except that residing in the NSC. He, therefore, felt it was necessary to have an umbilical cord to the NSC.

Mr. Souers noted that Mr. Kennan had made the point that State wants to work with partisan groups in this country. He was afraid that this activity would be destroyed if they had to work with an intelligence agency. Mr. Souers pointed out that in peacetime State has the biggest stake. [1 line of source text not declassified] When this is not done the operations are likely to go astray. There must, therefore, be a direct channel to State for policy guidance.

Admiral Hillenkoetter pointed out that CIA has a channel to State and that CIA can operate properly if State will indicate what it wants.

Mr. Lovett said that the proposed activity goes beyond the type of work done [less than 1 line of source text not declassified]. He felt there must be some way, if funds are to be obtained, to show that NSC authority flows directly into this unit.

Mr. Souers said this means that there must be an advisory group which can come up to the NSC when it is not satisfied.

Secretary Royall said that he doesn't want any Army representative to have anything to do with this activity. He felt it was no concern of the military in peacetime.

Secretary Forrestal pointed out that the military were in the middle of the activities [less than 1 line of source text not declassified].

Secretary Royall felt that they shouldn't have been unless they were called in. In wartime the military should run it. He felt that the military should stay out of the political field, which includes this activity.

Mr. Lovett noted that the Army is already in political activities regarding bases and other questions.

Secretary Royall said that the military only presented their views to State on this subject. He thought the military should give advice only.

Mr. Lovett said that no Department, and certainly not State, should have any part in the conduct of the covert operations. State, however, must be consulted and he thought that there would probably also be some military aspects.

Secretary Forrestal said that there were two practical aspects regarding obtaining necessary funds. First, it is not clearly legal for CIA to conduct these activities. Secondly, they must be tied into the State Department.

Mr. Lovett said that, if funds are to be obtained, the NSC must move quickly. He suggested that the proposal should be altered to delete the right of appeal. Instead, all authority would be vested in the head of CIA who would have an advisory panel which could report directly to the NSC if they disagreed with Admiral Hillenkoetter.

Admiral Hillenkoetter suggested, and Mr. Lovett agreed, that this panel might be modeled on the Intelligence Advisory Committee. Admiral Hillenkoetter noted, however, that the relations of this new panel with IAC would have to be carefully defined.

Mr. Lovett said that it was hard for the NSC to define the specific organization. He suggested, therefore, that the Council refer NSC 10 back to the Staff to prepare a new paper, reflecting the approach discussed in the meeting. He felt this paper should bring in the views of Secretary Royall and Admiral Hillenkoetter.

The National Security Council:/3/

/3/The paragraph that follows constitutes NSC Action No. 56. (National Archives and Records Administration, RG 273, Records of the National Security Council, Record of Actions, Box 55)

Referred NSC 10 back to the NSC Staff for the preparation of a substitute report reflecting the discussion at the meeting.

[Here follows discussion of agenda items 2-8, preparations for demolition of oil facilities in the Middle East, handling of SANACC papers submitted for consideration by the NSC, U.S. position regarding the use of military power in Greece, NSC status of projects, U.S. position with respect to Soviet-directed world communism, policy on atomic warfare, and trade with Eastern Europe.]

284. National Security Council Memorandum

Washington, June 4, 1948.

//Source: National Archives and Records Administration, RG 273, Records of the National Security Council, NSC 10/2. Top Secret. No drafting information appears on the source text but it was probably prepared by the NSC staff on the basis of the discussion at the preceding day's meeting of the Council.

PRINCIPLES TENTATIVELY APPROVED BY THE NATIONAL SECURITY COUNCIL

1. Responsibility for both secret intelligence and secret operations, including covert psychological activities, should be placed in a new special services unit to be created in CIA.

2. This unit should have a considerable measure of autonomy within CIA.

3. A highly qualified person recruited from inside or outside the present ranks of CIA and approved by the National Security Council should be appointed to head the new unit in CIA.

4. Provision should be made so that the chief of the newly created unit has access to and receives policy guidance from the Department of State and from the Office of the Secretary of Defense to the extent that military questions are involved.

5. It is understood that this is a provisional arrangement subject to review at a later date.

285. Memorandum From the Assistant Executive Secretary of the National Security Council (Lay) to Director of Central Intelligence Hillenkoetter

Washington, June 7, 1948.

//Source: National Archives and Records Administration, RG 273, Records of the National Security Council, NSC 10/2. Top Secret.

Attached is the proposed NSC Directive which is based upon your paper of June 4, 1948 on the establishment of an Office of Special Serv-ices./1/

/1/Not printed. (Ibid.) See the Supplement.

As indicated in our phone conversation this morning, the attached will be discussed at an NSC Staff meeting at 10:00 a.m. tomorrow in Room 224, Old State Building.

James S. Lay, Jr./2/

/2/Printed from a copy that bears this typed signature.

Attachment/3/

/3/Although there were editorial changes and some rearrangement of paragraphs, this draft closely follows the text of the CIA draft mentioned in the covering memorandum and footnote 1 above. The major difference between the two versions is that the NSC reworking broadens the authority of the Operations Advisory Committee and gives its members a right of appeal to the NSC in disputes with the Director of Central Intelligence.

PROPOSED NSC DIRECTIVE

1. The National Security Council, taking cognizance of the vicious psychological efforts and covert operations of the USSR, its satellite countries and Communist groups to discredit and defeat the aims and activities of the United States and other Western powers, has determined that, in the interests of world peace and US national security, the overt foreign activities of the US Government must be supplemented by covert operations.

2. The Central Intelligence Agency provides the legal structure within which all covert activities can be conducted and it is already charged under NSC 4-A with the conduct of covert psychological operations abroad. In addition, the Central Intelligence Agency is already charged by the National Security Council with conducting espionage and counter-espionage operations abroad. These latter operations are by their very nature closely related to covert operations. It therefore seems desirable, for legal as well as operational reasons, not to create a new agency for covert operations, but to place the responsibility for this mission within the legal structure of the Central Intelligency Agency and closely relate it to espionage and counter-espionage operations under the overall control of the Director of Central Intelligence.

3. Therefore, under the authority of Section 102(d)(5) of the National Security Act of 1947, the National Security Council hereby directs that:

a. Responsibility for the conduct of covert operations, including covert psychological operations conducted pursuant to NSC 4-A, in peacetime and for planning for such operations in time of war or national emergency, shall be placed in a new Office of Special Services to be created within the Central Intelligence Agency.

b. The Office of Special Services shall have, for security reasons, a considerable measure of autonomy within the Central Intelligence Agency.

c. A highly qualified person recruited from either inside or outside the Central Intelligence Agency, nominated by the Director of Central Intelligence and approved by the National Security Council, shall be appointed to head the Office of Special Services.

d. The Director of Central Intelligence shall be responsible for ensuring that:

(1) Covert operations are consistent with US foreign and military policies and with overt activities, and that plans for wartime covert operations are consistent with and complement Joint Chiefs of Staff approved plans for military operations.

(2) Appropriate agencies of the US Government, both at home and abroad (including diplomatic and military representatives in each area), are kept informed of such operations which will directly affect them.

e. To assist the Director of Central Intelligence in discharging the responsibilities in d above, there shall be established an Operations Advisory Committee composed of one representative of the Secretary of State and one representative of the Secretary of Defense. These representatives may have such assistants and staffs as are required by them. The functions of this Committee shall be:

(1) To furnish authoritative policy guidance on covert operations to the Director of Central Intelligence.

(2) To assist the Director of Central Intelligence in the preparation of all plans for such operations. Where disagreement arises between the Director of Central Intelligence and one or more members of the Operations Advisory Committee over such plans, the matter shall be forwarded to the National Security Council for decision.

f. Supplemental funds for the conduct of the proposed operations for fiscal year 1949 shall be immediately requested. Thereafter operational funds for these purposes will be included in normal Central Intelligence Agency Budget requests.

4. As used in this directive, "covert operations" are understood to be all activities (excluding armed conflict by recognized military forces, espionage and counter-espionage) which are conducted or sponsored by this Government against hostile foreign states or groups or in support of friendly foreign states or groups but which are so planned and executed that any US Government responsibility for them is not evident to unauthorized persons and if uncovered the US Government can plausibly disclaim any responsibility for them. Specifically, such operations shall include any covert activities related to propaganda; preventive direct action, including sabotage, anti-sabotage, demolition and evacuation measures; subversion against hostile states, including assistance to underground resistance movements, guerrillas and refugee liberation groups; and support of indigenous anti-communist elements in threatened countries of the free world.

5. This Directive supersedes the directive contained in NSC 4-A, which is hereby cancelled.

286. Memorandum From the Director of the Policy Planning Staff (Kennan) to the Under Secretary of State (Lovett)

Washington, June 8, 1948.

//Source: National Archives and Records Administration, RG 59, Records of the Department of State, Policy Planning Staff Files 1947-53: Lot 64 D 563, Box 719, Pol & Psych Warfare. Top Secret. The source text contains the handwritten annotation, "Contents presented orally 6/8/48."

The Staff of the National Security Council has under discussion the attached paper/1/ relating to secret operations. It is our understanding that the paper represents the results of discussions which took place at a full Council meeting on June 3.

/1/This memorandum has two attachments, Documents 284 and 285.

This is a project which I believe emanates largely from the initiative of the Policy Planning Staff, which has been trying for several months to help devise some means by which this Government could conduct political warfare as an integral part of its foreign policy.

The proposal embodied in the attached paper does not appear to us to meet this need, and we feel that the arrangements which it envisages might easily operate to cause embarrassment to this Government.

It is our view that these things, if they are to be done at all, must be done under the intimate direction and control of this Department. If this cannot be arranged (and I understand the difficulties which stand in the way), I think it would be better to withdraw this paper entirely and to give up at this time the idea of attempting to conduct political warfare.

This is a heavy decision to take, because our policy in Europe, in particular, will remain severely hampered in application unless it is supplemented in this way. But two of the most important elements of our European policy: namely, the administration of the ERP, and the control of policy with respect to Germany, have already passed largely out of the hands of this Department; and rather than have a third major factor of European policy handled elsewhere in the Government, I think it would be better not to have it handled at all.

I therefore ask permission to inform Mr. Souers that the State Department wishes to withdraw this paper./2/

/2/There is no indication in the source text whether the recommendations were approved or disapproved.

I further recommend that this Department request the cancellation of NSC 4, which is not operating satisfactorily.

Should you not wish the enclosed paper to be withdrawn from the agenda of the NSC, I would appreciate it if you would let me know whether there are any modifications of it you would wish to have made before it comes before the Council for final approval.

George F. Kennan

287. Letter From Director of Central Intelligence Hillenkoetter to the Assistant Executive Secretary of the National Security Council (Lay)

Washington, June 9, 1948.

//Source: Central Intelligence Agency Historical Files, HS/HC-807, Item 25. Top Secret. The source text is a copy transcribed for the CIA Historian on March 26, 1953. Also reproduced in CIA Cold War Records: The CIA under Harry Truman, pp. 203-205.

Dear Jimmy: The attached represents our general thinking about the new draft./1/ I should like to suggest that, since State evidently will not go along with CIA operating this political warfare thing in any sane or sound manner, we go back to the original concept that State proposed. Let State run it and let it have no connection at all with us. It seems to me that this is the only thing that will satisfy State in any way and rather than try to keep a makeshift in running order, subject to countless restrictions which can only lead to continued bickering and argument, I think maybe the best idea is to go back and make the OSP work for State alone.

/1/Reference is to a draft NSC directive of June 8 not found but referred to in the enclosure.

I am sending this letter for your own information and, of course, for Admiral Souers and have made it separate in order that it need not be forwarded with our comments on the last draft.

Sincerely,

R. H. Hillenkoetter/2/
Rear Admiral, USN

/2/Printed from a copy that indicates Hillenkoetter signed the original.

Attachment/3/

/3/Top Secret. The source text is a copy transcribed for the CIA Historian on March 26, 1953.

Memorandum From Director of Central Intelligence Hillenkoetter to the Assistant Executive Secretary of the National Security Council (Lay)

Washington, June 9, 1948.

SUBJECT
Proposed NSC Directive

1. The draft directive of 8 June 1948 is considered much weaker and less satisfactory than that of last Friday, 4 June./4/ Further, the latest draft is much more inconsistent and much less organizationally sound than the 4 June paper.

/4/See Document 285.

2. For example, in para. 2 of the draft of 8 June, reasons are stated why the new office should be placed under the Central Intelligence Agency--then along in para. 3c are stated a number of restrictions on what can and cannot be done, all of such restrictions leading to confusion and chaos. Suppose the Director of Central Intelligence is out of town, then does the work of the Special Projects stop, does it "free wheel", or does it work with the Acting Director of Central Intelligence? All of this remains in doubt by the statement "the head of the Office of Special Projects shall report directly to the Director of Central Intelligence." In the present set-up of the Central Intelligence Agency, the head of any branch can see the Director of Central Intelligence any time desired--the door is always open. It would seem that a new branch should come in, in a similar manner. The need for special measures, security or otherwise, exists as much for our present Office of Special Operations as it would for the new Office of Special Projects, and the present set-up does not seem to hamper the Office of Special Operations, nor can I see why a similar set-up should hamper the Office of Special Projects.

3. Also, what is meant by "to the maximum degree consistent with efficiency, the Office of Special Projects shall operate independently of other components of Central Intelligence Agency"? Does this mean that the Office of Special Projects will have its own administrative staff, its own budget staff, its own communications net, its own services, etc. and etc? And, who is to decide what is the "maximum degree consistent with efficiency"--the Director of Central Intelligence, the Chief of Office of Special Projects, the National Security Council, or who? This paragraph cannot be accepted as is. I should much prefer the working of the corresponding paragraph (3b) in the draft of 4 June.

4. It would seem that either the National Security Council has confidence in the operation of the Office of Special Projects by the Central Intelligence Agency or it has not. If such confidence exists, then the Central Intelligence Agency should be directed to operate the new office subject to a general declaration of policy by the National Security Council. If such confidence does not exist, then the Central Intelligence Agency should not be expected or directed to operate the Office of Special Operations in any manner.

R. H. Hillenkoetter/5/
Rear Admiral, USN

/5/Printed from a copy that indicates Hillenkoetter signed the original.

288. Note by the Executive Secretary (Souers) to the National Security Council

NSC 10/1

Washington, June 15, 1948.

//Source: National Archives and Records Administration, RG 273, Records of the National Security Council NSC 10/2. Top Secret. Addressed to the Secretaries of State, Defense, Army, Navy, and Air Force and the Chairman of the National Security Resources Board. The typed date on the cover sheet of June 18 has been changed by hand to June 15.

OFFICE OF SPECIAL PROJECTS

Reference: NSC 10

At its 12th meeting the National Security Council referred NSC 10 back to the NSC Staff for the preparation of a substitute report reflecting the discussion at that meeting./1/

/1/See Document 283.

Pursuant to the above action, the enclosed draft National Security Council Directive, prepared by the NSC Staff as a substitute for NSC 10, is submitted for consideration by the National Security Council at its 13th meeting to be held on Thursday, June 17, 1948.

Sidney W. Souers/2/

/2/Printed from a copy that bears this typed signature.

Enclosure/3/

/3/Top Secret. The draft directive closely resembles an earlier version, dated June 10, which was sent to the NSC Consultants for comment in a June 11 memorandum from James S. Lay, Jr., the Assistant Executive Secretary. (National Archives and Records Administration, RG 273, Records of the National Security Council, NSC 10/2) See the Supplement.

PROPOSED NATIONAL SECURITY COUNCIL DIRECTIVE

1. The National Security Council, taking cognizance of the vicious covert activities of the USSR, its satellite countries and Communist groups to discredit and defeat the aims and activities of the United States and other Western powers, has determined that, in the interests of world peace and US national security, the overt foreign activities of the US Government must be supplemented by covert operations.

2. The Central Intelligence Agency is charged by the National Security Council with conducting espionage and counter-espionage operations abroad. It therefore seems desirable, for operational reasons, not to create a new agency for covert operations, but in time of peace to place the responsibility for them within the structure of the Central Intelligence Agency and correlate them with espionage and counter-espionage operations under the overall control of the Director of Central Intelligence.

3. Therefore, under the authority of Section 102(d)(5) of the National Security Act of 1947, the National Security Council hereby directs that in time of peace:

a. A new Office of Special Projects shall be created within the Central Intelligence Agency, and under the policy guidance of an Operations Advisory Committee to be established shall plan and conduct covert operations; and in coordination with the Joint Chiefs of Staff shall plan and prepare for the conduct of such operations in wartime.

b. A highly qualified person, nominated by the Secretary of State, acceptable to the Director of Central Intelligence and approved by the National Security Council, shall be appointed as Chief of the Office of Special Projects.

c. The Chief of the Office of Special Projects shall report directly to the Director of Central Intelligence. For purposes of security and of flexibility of operations, and to the maximum degree consistent with efficiency, the Office of Special Projects shall operate independently of other components of Central Intelligence Agency.

d. There shall be established an Operations Advisory Committee composed of one representative of the Secretary of State and one representative of the Secretary of Defense. These representatives shall be provided assistants and staffs as necessary by their respective Secretaries. The functions of this Committee shall be:

(1) To furnish authoritative policy guidance on covert operations to the Director of Central Intelligence.

(2) To assist in the preparation of all plans for such operations. In disagreements arising between the Director of Central Intelligence and a member of the Operations Advisory Committee over such plans, the matter shall be referred to the National Security Council for decision.

e. The Director of Central Intelligence shall be responsible for:

(1) Ensuring through the Operations Advisory Committee that covert operations are planned and conducted in a manner consistent with US foreign and military policies and with overt activities, and that plans for wartime covert operations are also drawn up with the assistance of a representative of the Joint Chiefs of Staff and are accepted by the latter as being consistent with and complementary to approved plans for wartime military operations.

(2) Informing, through appropriate channels, agencies of the US Government, both at home and abroad (including diplomatic and military representatives in each area), of such operations as will affect them.

f. Covert operations pertaining to economic warfare will be conducted by the Office of Special Projects under the guidance of the departments and agencies responsible for the planning of economic warfare.

g. Supplemental funds for the conduct of the proposed operations for fiscal year 1949 shall be immediately requested. Thereafter operational funds for these purposes shall be included in normal Central Intelligence Agency Budget requests.

4. Covert operations, in time of war or emergency when the President directs, shall be conducted under appropriate arrangements to be recommended by the Office of Special Projects in collaboration with the Joint Chiefs of Staff and approved by the National Security Council.

5. As used in this directive, "covert operations" are understood to be all activities (except as noted herein) which are conducted or sponsored by this Government against hostile foreign states or groups or in support of friendly foreign states or groups but which are so planned and executed that any US Government responsibility for them is not evident to unauthorized persons and that if uncovered the US Government can plausibly disclaim any responsibility for them. Specifically, such operations shall include any covert activities related to: propaganda; economic warfare; preventive direct action, including sabotage, anti-sabotage, demolition and evacuation measures; subversion against hostile states, including assistance to underground resistance movements, guerrillas and refugee liberations groups, and support of indigenous anti-communist elements in threatened countries of the free world. Such operations shall not include armed conflict by recognized military forces, espionage, counter-espionage, and cover and deception for military operations.

6. This Directive supersedes the directive contained in NSC 4-A, which is hereby cancelled.

289. Memorandum From the Director of the Policy Planning Staff (Kennan) to the Under Secretary of State (Lovett) and Secretary of State Marshall

Washington, June 16, 1948.

//Source: National Archives and Records Administration, RG 59, Records of the Department of State, Policy Planning Staff Files 1947-53: Lot 64 D 563, Box 719, Pol & Psych Warfare. Top Secret.

Attached is the draft of NSC 10/1/1/ on the subject of covert activities. It has been drawn up to meet the requirements contained in the 4-point statement approved by the NSC on June 4, 1948./2/

/1/See the enclosure to Document 288.

/2/Document 284.

Since this paper was prepared on the basis of a top-level NSC decision, it has not been circulated in the Department for clearance.

I do not think that this arrangement will meet the more important needs of this Government for the conduct of political warfare, as urged by John Foster Dulles, Anne O'Hare McCormick and many other people. It draws too sharp a distinction between operations and planning. It is too remote from the conduct of foreign policy. And we will not be likely to find a suitable person to head it.

Nevertheless, I think we had better accept the paper. My reasons are these:

(a) It is probably the best arrangement we can get at this time.

(b) It is important that some funds be obtained from Congress this year for minor activities of this nature.

(c) We will at least know where we stand in these matters.

You will note that as the paper is now drafted, it would be up to the Secretary of State to nominate the person to be appointed Chief of the Office of Special Projects under the Director of Central Intelligence.

George F. Kennan/3/

/3/Printed from a copy that bears this typed signature.

Continue with Document 290