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

Hillenkoetter's Tenure as Director of Central Intelligence

                           

360. Memorandum From Allen W. Dulles to Mathias F. Correa and William H. Jackson

New York, January 21, 1949.

//Source: Central Intelligence Agency Records, Job 80-M01009A, Box 1, Folder 12. No classification marking.

Attached is a copy of a letter/1/ from Bob Blum which is self-explanatory.

/1/Document 359.

I have examined a copy of the Eberstadt report on intelligence and do not feel that Hillenkoetter's reference to a divergence of views on administration is well founded. It is true that the chapter on intelligence in Volume II of the Eberstadt report (the chapter prepared largely by John Bross) indicated over-administration and too much administrative interference in certain operational matters. Here we reached approximately the same conclusions.

The Eberstadt report states in Section V(c):

"The present size of the Administrative Division seems excessive, particularly in light of requirements for an administrative staff in each of the offices in some of which security requires a large degree of independence. On the other hand, an organization as large as CIA requires a substantial amount of housekeeping, telephone service, maintenance of personnel records, etc. The problem is complicated by the fact that accommodations to house CIA centrally are not available and could only be constructed at a substantial cost and with considerable publicity. A certain amount of decentralization of CIA may be desirable for security reasons. CIA is spread amongst twenty-two separate buildings, including warehouses, all of which must be maintained and serviced separately. Moreover, CIA maintains a large number of field stations of one sort or another in various parts of the United States and abroad which are supplied by the Administrative Division. Reduction of the administrative overhead is possible and desirable. There is some evidence of interference by administrative functionaries in matters of primarily operational concern. A certain amount of such interference is inevitable due to the fact that a Director will tend to entrust the enforcement of budgetary controls to his immediate administrative representatives. Too much interference of this sort is undesirable, but this is an administrative problem that must be solved internally."

AWD/2/

/2/Printed from a copy that bears these typed initials.

361. Letter From Robert Blum of the Office of the Secretary of Defense to Allen W. Dulles

Washington, February 7, 1949.

//Source: Central Intelligence Agency Records, Job 80-M01009A, Box 1, Folder 12. No classification marking. Copies were sent to Jackson and Correa.

DEAR ALLEN: Since our telephone conversation this morning, I have checked further regarding the procedure being employed in handling the Survey Group Report.

There still seems to be some uncertainty on the subject which will not be clarified at least until after the meeting of the IAC Standing Committee on Wednesday.

Mr. Souers included the following paragraph in his covering memorandum/1/ when he distributed the Report to the National Security Council and IAC members:

/1/Souers' memoranda to the NSC members and to Hillenkoetter, January 24, are in National Archives and Records Administration, RG 273, Records of the National Security Council, NSC 50.

"The Director of Central Intelligence is being requested to submit, for concurrent consideration by the Council, comments on the conclusions and recommendations in the enclosed Report, together with the views, in appropriate matters, of the members of the Intelligence Advisory Committee."

I am told that General Irwin has stated that he will not agree to having the Director of Central Intelligence coordinate his comments except in those cases where his comments can be reconciled with those of the other agencies. As representative of the Army, he will submit independent comments wherever he feels this is necessary.

I have talked with Park Armstrong who feels very strongly on the subject. He accepts the principle of joint, reconciled comments only insofar as they deal with the IAC. He will insist on submitting separate comments (whether directly to Souers or through Acheson is not yet clear) on the subject of CIA and internal State Department problems. Armstrong's representative at the Standing Committee meeting on Wednesday will have formal instructions to state this policy and, in general, to try to clarify the entire procedure.

In view of the above, I suggest that you take no further action at least until after the Standing Committee meeting on Wednesday when the situation should become somewhat clearer.

Sincerely yours,

Bob

362. Letter From Allen W. Dulles to Robert Blum of the Office of the Secretary of Defense

New York, February 8, 1949.

//Source: Central Intelligence Agency Records, Job 80-M01009A, Box 1, Folder 12. No classification marking.

DEAR BOB: Many thanks for your letter of 7 February 1949./1/ I agree that we should take no further action with respect to the matter of handling the report until we have further details. If the position of General Irwin, Park Armstrong, etc. is accepted, there would certainly be no reason for us to raise our voice on the subject.

/1/Document 361.

I enclose for your files signed receipt from Matt Correa for copy No. 21 and I enclose my own receipt for copy No. 22.

Also enclosed is a copy of a letter/2/ I just received from Justice Jackson with regard to Gisevius. It is possible that he may call on you as I gave him your room and telephone number in the Pentagon.

/2/Not found.

With best regards.

Sincerely,

A.W. Dulles/3/

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

363. Memorandum From the Chief of the Intelligence Coordinating and Planning Staff (Childs) to Director of Central Intelligence Hillenkoetter

Washington, February 8, 1949.

//Source: National Archives and Records Administration, RG 59, Records of the Department of State, Records of the Bureau of Intelligence and Research: Lot 62 D 42, Box 7385, Dulles, Correa, Jackson Report and NSC 50. Confidential. The words "but Eyes Only!" have been added by hand after the classification.

SUBJECT
"Coordination of Intelligence"

1. With reference to the recurring statements throughout the Dulles Report that the IAC Agencies should more actively participate in CIA's production of intelligence estimates, we think that complaints by State are justified that it is not being consulted in the production of Intelligence Memoranda, when the subject is obviously within the field of State's dominant interest. Furthermore, the Air Force received no prior notification on two recent papers/1/ produced in ORE--"Reinforcing the Israeli Air Force," and "Uncontrolled International Air Traffic". Obviously these were both within the field of dominant interest of the Air Force.

/1/Neither found.

2. NSCID No. 3 paragraph 1c (5) states that CIA and the Agencies shall for purposes of coordination, exchange information on projects and plans for the production of staff intelligence, and paragraph 1e (4) states that the DCI shall request and receive such special estimates, etc., etc. prepared by the individual departments in their fields of dominant interest, etc., etc.

3. In October we discussed this with Messrs. Babbitt and Borel when State first brought up the subject of not participating, and of not being consulted orally when the subject of the IM was obviously within their field of dominant interest. (See October memoranda.)/2/ Again State brought up this complaint at the end of December, so we again, in a memo of January 72 referred this matter to Mr. Babbitt. All State wants is to be consulted orally or advised of the subject under consideration. We think it would be no hardship, and not at all difficult for ORE to advise State, or Air, or any IAC member of the subject under consideration, even if it is so urgent that there is not time for actual participation by the IAC Agency. DCI 3/1 covers the way this should be done under normal procedures, under urgent procedures, and under exceptional circumstances. We think ORE should follow these instructions.

/2/Not further identified.

4. State says that it very recently began to receive mimeographed slips about the subject that is to be considered, but that these slips usually reach it after the dead-line specified therein. It would be better pleased if it could be given prompt oral information on the subject to avoid future confusion like the recent case of Manganese (?)./3/

/3/The reference is not clear but it may be two Central Intelligence Agency memoranda of December 1948 suggesting that the USSR would reduce manganese exports to the United States, leading to a serious shortfall in U.S. supplies (memorandum from Hillenkoetter to the President, December 10, 1948; Truman Library, Papers of Harry S. Truman, President's Secretary's Files) and Intelligence Memorandum No. 99, dated December 22, 1948. (National Archives and Records Administration, RG 218, Records of the Joint Chiefs of Staff, Leahy Files)

5. ORE claims that State never meets its dead-lines, but we think that should not be used as an excuse for CIA not doing its part in accord-ance with the established regulations. Furthermore, we wonder if 100% of the IM's are so urgent that the subject matter cannot be at least orally given to State before production is completed.

6. We also think that the "Review of the World Situation" which is now published regularly for the National Security Council would carry a lot more weight and be more in accordance with the laws and regulations if it were coordinated at least orally in advance of publication. Formerly, there was an irregular dead-line making such a procedure too difficult, but now that it has a fixed date of publication each month, we should think that the IAC members could participate in this publication also.

7. The feeling that CIA has a free hand in current and staff intelligence, we think has gone too far, because the basic law and regulation under which we function give to CIA the responsibility for only national intelligence, and the method for setting up national intelligence is participation by the various established intelligence agencies in the National Military Establishment and State. We think that CIA should stick to the rules of the game and not by-pass them. Then after we have no mote in our own eye, we can with justification get after the beam in the other fellow's.

Prescott Childs/4/

/4/Printed from a copy that bears this typed signature.

Comments:/5/

/5/The following "Comments" are a handwritten addendum, possibly in Childs' hand.

If there actually is the fullest flow to CIA from the IAC, CIA's files would be complete for hurry-up preparation of an Estimate requested by Ad. Leahy or Mr. Forrestal. They at least look upon CIA as the central agency for "intelligence."

Should be more oral coordination, at any rate, in almost everything and DCI will give instructions to this effect.

364. Memorandum From the Chief of the Intelligence Coordinating and Planning Staff (Childs) to Director of Central Intelligence Hillenkoetter

Washington, February 9, 1949.

//Source: Central Intelligence Agency Records, Job 86-B00269R, Box 5. Top Secret.

SUBJECT

Standing Committee Meeting of 9 February 1949

1. Herewith are some side-lights on the Standing Committee meeting this morning. As indicated in the attached memo,/1/ they agreed or concurred in most of the Conclusions and Recommendations./2/ They did not wish, however, to take up every item in the Report about the IAC. It is thought that the Navy will comment on some of the IAC references throughout the Report, but that the others will confine their comments largely to the Conclusions and Recommendations in the attached memo.

/1/Not found.

/2/The Conclusions and Recommendations of the Dulles Report; see Document 358. All of the page and paragraph references below are to the Conclusions and Recommendations of Chapters IV, Coordination of Intelligence Activities, and V, National Intelligence Estimates.

2. Whereas in many of the recommendations in the attached memo there is merely a statement of concurrence or agreement with the Report, there was, needless to say, discussion on most points, as the meeting lasted three hours. Here follow some of the side-lights on the recommendations.

3. On page 63, paragraph 3: Some thought the DCI should do what he wishes about bringing the FBI into the IAC. Navy and State seem to have the only positive feeling on this, and the others have "no objections." They all, more or less, agreed that the FBI would probably not accept an invitation to become a permanent member, and/or would probably not attend meetings. They feel sure that Mr. Hoover would not come, and that anyone he designated to come might carry the ball to the detriment of pure intelligence discussions among the intelligence agencies.

On page 63, paragraph 5: The Navy is still holding out for its Board of Directors theory about the IAC and will advocate that in its reply. No one else agrees to this theory, although they all favor more active participation by the IAC in substantive intelligence.

On page 81, paragraph 4: All members of the Standing Committee vehemently said that CIA is not doing this and should do it. The general consensus of opinion seemed to be that CIA should follow the JIC procedure, whereby papers would be submitted to the IAC and if they were approved no discussion would be necessary, but if there were a dissent, they would be reconsidered and a discussion would be held with a view toward dissolving this dissent. Then the new paper would be re-submitted, with or without a dissent, depending upon a result of the discussions. It was even suggested that the Standing Committee would do this approval of estimates as well as its policy work!!! Also some thought if it were not resolved on lower levels this would go to the IAC members themselves at a meeting for discussion. But no one would really commit himself, other than saying this should be done, and they would not permit an inclusion in the recommendations to the IAC that it was not being done at present. Furthermore, about "assuming collective responsibility," the Army and the Air Force think that they do this only in a limited way as it pertains to their own affairs, not as it pertains to the whole estimate.

There was such a diversity of views on this one paragraph that we tried to get them all to say that they would submit their individual comments, but they would not commit themselves even on this point.

In connection with the discussion and approval of estimates, State was vehemently opposed to the things which CIA is producing without consulting the IAC Agencies, and the Army was not pleased either. See my memo of February 8/3/ about Coordination of Intelligence," i.e., CIA as well as the agencies really working under NSCID No. 3 and DCI 3/1 and 3/2, and not by-passing them.

/3/Document 363.

On page 81, paragraph 5: None of them agrees that General Irwin's statements at the IAC meeting the other day provided arrangements for handling "crisis situations." Booth wants you to march right into the Secretary of State with a club and tell him to give you his "Eyes Only" telegrams and, incidentally, to give them to Booth's office also!!!

On page 81, paragraph 6: The Standing Committee thought this was a desirable feature and would be a boost for CIA if it were issued by the NSC to the various departments. They agree, however, that a horse may be led to water but cannot be made to drink.

PC

365. Letter From Robert Blum of the Office of the Secretary of Defense to Allen W. Dulles

Washington, February 11, 1949.

//Source: Central Intelligence Agency Records, Job 80-M01009A, Box 1, Folder 12. Confidential. Copies were sent to Jackson and Correa.

DEAR ALLEN: I am sure that you would like to hear from time to time about further developments in the handling of the report.

The IAC Standing Committee met on Wednesday,/1/ at which time it was decided to submit a coordinated IAC reply on certain recommendations in the report. It was also agreed to submit separate views on other recommendations in the report. There was discussion of the various questions involved and some agreement was reached as to the comment to be submitted. This might be roughly summarized as follows:

/1/February 9.

1. The Director of CIA will submit separately whatever comments he wishes.

2. The IAC will submit joint comments on the following questions:

a. There should be a closer relationship between the IAC and JIC (general agreement on this recommendation)

b. CIA should establish a closer relationship with the Secretary of State and the Secretary of Defense (general agreement)

c. The FBI should be added to the membership of the IAC (general agreement)

d. The concept of the IAC is sound, but the IAC should be more active (agreement except for Navy dissent on grounds yet unspecified)

e. The IAC should assume collective responsibility for national intelligence estimates (general agreement by all Standing Committee Members except CIA, whose position is still in doubt)

f. Provision should be made for handling estimates in crisis situations (same as under "e" above)

g. Joint Staff and Atomic Energy representation on the IAC should not be terminated (general agreement to dissent on this point)

3. It was agreed to submit separate comments on the following points:

a. The performance by the Director of CIA of his responsibility to coordinate intelligence activities (apparently State holds that he should "crack the whip" whereas the military people held that he should not and could not do so insofar as the Military Establishment is concerned)

b. The preparation by CIA of separate, independent reports and estimates

That is a summary of the discussion in the IAC Standing Committee meeting. There is to be an IAC meeting next Friday, at which, presumably, decisions on the above questions will be reached.

It is obvious that comments limited to the above points will not get to the heart of the matter, as the IAC is avoiding commenting on all those recommendations which concern internal CIA organization as well as the competence of CIA direction. The State Department, in particular, is well aware of this drawback and is proposing to submit independently of the above a general departmental comment on the entire report over the Secretary's signature. The report has not yet been studied by Acheson and Webb, but has met with a very favorable reception among all those in the State Department who have seen it (this includes Kennan, Armstrong and Humelsine, who is Head of the Secretariat). In order to elicit overall comments from the other departments, Mr. Souers may be asked (probably by Mr. Ohly) specifically to request individual departmental comments on the entire report, separate from the IAC comments. Incidentally, Webb, the new Under Secretary of State, called Mr. Souers earlier this week to express his disapproval of the procedure whereby comments were being channeled through Hillenkoetter and to tell him that the State Department was proposing to submit separate comments to the National Security Council.

I think that about summarizes the present position. You can see that the procedure is a confused one, although I believe it can be prevented from getting out of hand. It is my estimate that the NSC will probably meet to review the situation toward the end of the month, and I think that, at that time, Forrestal and Acheson should be asked to come back to the NSC with formal recommendations on action to be taken. I hope that the members of the Survey Group will be asked to attend the initial NSC meeting when the report and comments are discussed.

Sincerely yours,

Bob

P.S. Gisevius came to see me yesterday and spoke to me of the importance of properly exploiting the captured German documents which are here and in St. Louis. I promised to inquire just what was being done with them, and we are planning to meet again next week.

366. Memorandum by the Office of Reports and Estimates, Central Intelligence Agency

Washington, February 14, 1949.

//Source: Central Intelligence Agency Records, Job 86-B00269R, Box 15. Top Secret. Transmitted to the Director of Central Intelligence by the Assistant Director for Reports and Estimates, Theodore Babbitt, under a memorandum of February 14. The February 14 memorandum and the full text of the comments are in the Supplement. (Central Intelligence Agency Records, Job 86-B00269R, Box 5)

COMMENTS ON THE DULLES COMMITTEE REPORT TO THE NATIONAL SECURITY COUNCIL ON THE CENTRALINTELLIGENCE AGENCY AND NATIONAL ORGANIZATION FOR INTELLIGENCE

I. General Statement

1. The Objectives of ORE in Reviewing the Dulles Report.

In reviewing the Dulles Report, the Office of Reports and Estimates has as its basic objective, not self-justification or the denial of admitted shortcomings, but a genuinely constructive effort to shed the light of practical working experience upon the problem of improving the production of the intelligence upon which United States policy should be based.

ORE has, therefore, proceeded to examine the recommendations contained in the Dulles Report, has pointed out certain impractical aspects, and has indicated how the recommendations might be most effectively implemented. ORE considers that its intimate acquaintance with the actual problems involved in the production of national intelligence enable it, with the help of the detached perspective of the Dulles Report, to suggest concrete means for carrying out the principles underlying the Report.

2. ORE Reaction to the Report as a Whole.

The Dulles Report is an admirable effort to re-direct CIA to fundamentals and first principles in the production of national intelligence; it proposes in effect a return to the concepts developed at the close of the war during two years of earnest and intense discussion among the most experienced intelligence personnel in Washington. The observations of the Committee appear accurate, and its objectives are sound; but its conclusions are in many respects faulty, and the recommendations for their attainment are in many cases impracticable. Although the proposals bearing on this Office lack, perhaps by intent, both precision and detail, ORE believes that sound administration of the suggested organization, combined with strong NSC direction to the IAC agencies to make their facilities available to CIA, could bring about improved intelligence production.

The Report's greatest weakness stems from the Committee's restricted concepts of the extent to which the departmental intelligence activities needed to be investigated in order to appraise their relationship to the operations of CIA. Although the Committee claimed to appreciate the danger of considering CIA activities alone and frankly stated that some correctives were needed outside CIA, specific recommendations were addressed only to CIA and an indefensible share of responsibility for CIA's admitted shortcomings was attributed to the Director. The resulting Report contains many acute observations but it also embodies recommendations which could not by themselves bring about the desired results.

3. Summary of ORE Recommendations.

On the basis of the detailed comments (to be found in Section II) on the conclusions and recommendations of the Dulles Report, ORE makes the following summary recommendations.

(1) NSCID #1 and NSCID #3/1/ should be revised to:

/1/Documents 432 and 426.

(a) redefine CIA's intelligence production responsibilities as set forth in Section II, paragraph 1 b;

(b) define those intelligence categories, in fields of common interest, which should be produced centrally by CIA;

(c) clarify and define departmental intelligence responsibilities to CIA;

(d) require departmental intelligence agencies to grant priority to the production of intelligence required by CIA; and

(e) clarify IAC coordination procedures on CIA estimates as recommended in Section II, paragraph 4.

(2) Reorganization of ORE may be required to provide for the production of national intelligence estimates, as distinguished from central research in intelligence fields of common concern. Such reorganization should not be attempted, however, until the action in paragraph (1) above has been completed. ORE should not be divided into two separate CIA Offices for the purpose of separating the two types of intelligence production unless the need for such action is proved and demonstrated.

(3) ORE agrees that ICAPS should be responsible solely to CIA and not to the departmental agencies its members are supposed to represent. It strongly recommends, however, that ICAPS should not be reconstituted along the lines suggested in the Report, but should be replaced by a working staff acting for a Council, composed of the DCI and his Assist-ant Directors, and established to deal with intelligence problems of concern to two or more offices of CIA. The Assistant Directors concerned should attend all meetings of the IAC standing committee.

(4) ORE has not desire to operate the CIA library nor to assume the functions of the Foreign Documents Branch, as long as such services continue to be conducted in support of ORE. It is recommended, therefore, that these two functions remain where they are or be merged as a library service within OCD.

(5) ORE regards as one of its major responsibilities the furnishing of specific and long-range guidance to OO and OSO collection facilities, through the development of coordinated interdepartmental requirements for information. It recommends that this function should not be decentralized to OO and OSO.

(6) ORE direct working-level relations with NSC, JCS, and the State Department Policy Planning Staff should be authorized in order (a) to enable ORE to receive the guidance necessary for its production effort, and (b) to give more direct and effective intelligence support to policy and operational levels.

367. Memorandum From the Assistant Director for Policy Coordination (Wisner) to Director of Central Intelligence Hillenkoetter

Washington, February 14, 1949.

//Source: Central Intelligence Agency Records, Job 86-B00269R, Box 5. Top Secret. Another copy bearing a typed signature is reproduced in CIA Cold War Records: The CIA under Harry Truman, pp. 247-250.

SUBJECT
Observations upon the report of the Dulles-Jackson-Correa report to the National Security Council/1/

/1/Document 358.

1. I return to you herewith copy #17 of the report of the Dulles-Jackson-Correa committee to the National Security Council, dated 1 January 1949. Pursuant to your request, I am submitting to you in this memorandum my comments upon those portions of the report which pertain specifically to the Office of Policy Coordination, its activities and its relationships to various of the other offices of the Central Intelligence Agency. I understand that you have likewise solicited the comments of the chiefs of other offices and divisions of the Agency which are applicable to their respective areas of responsibility and I trust that my rather limited observations may be of some assistance to you in your overall consideration of this matter.

2. The most important feature of the report having direct application to OPC is the recommendation that the Office of Policy Coordination, the Office of Special Operations and the Contact Branch of the Office of Operations be integrated under a single overall direction in a new "Operations Division". I agree with this recommendation and with the reasoning which supports it and I further agree that any such new office should be established and should operate as a distinctly separate entity, having a considerable degree of autonomy within the Agency. The considerations which are marshalled in support of this conclusion and recommendation appear at pp. 94, 96, 97, 99, 100 and 131 through 134 in the report. It was my original conviction that a very close degree of coordination between the three activities mentioned was essential and inevitable and I believe that our experience to date has furnished many proofs of this basic premise.

The report itself takes cognizance of a technical difficulty in this regard which arises from the anomalous setup of the Office of Policy Coordination within the Central Intelligence Agency. This arrangement, which was originally ordained by the National Security Council, could doubtless be revised as a part of the very important readjustment which is the substance of this recommendation.

3. Of particular importance to the effective and secure operation of OPC--or of OSO or the proposed new "Operations Division"--is the recommendation that these covert operations have their own administrative support services. The arguments which support this recommendation are, I believe, conclusive and are set forth at pp. 10, 32, 116 and 136. The gist of these contentions is as follows.

The general administrative problems of these covert operating offices are unique because of their secrecy and consequent security requirements. They differ importantly from that part of the work of CIA which is concerned with the coordination of activities and the more or less overt work of research and analysis. The security of covert operations is inevitably prejudiced when overt and covert administrative units are placed together. Of equal importance is the fact that the unique character of secret operations renders inapplicable most ordinary rules of administration. One of the results of the moving of the administrative support from the direct authority of the officials responsible for secret operations is that administrative considerations are hard to guide and even control intelligence and operational policy. Any gains in overall efficiency which may appear to result from the centralization of all administrative services are much more than offset by the resultant losses in the efficiency, effectiveness and security of operations--and it is submitted that the latter should be the paramount consideration.

4. Although the comment at p. 37 in regard to the serious results of delay in obtaining security clearances is obvious, it is nevertheless of sufficient importance to warrant mention in this memorandum. While recognizing the essentiality of care and thoroughness in personnel investigations, it is imperative that a degree of flexibility be retained in the system of security clearances if the agency is to fulfill its responsibilities. In a limited number of cases, it will be necessary to request waivers on persons who have long and well known records of loyalty and responsibility in the public service. The seven way name check is no doubt desirable in all cases but the full investigation in cases of the kind mentioned should be allowed to go on after the individuals have entered upon their duties. Moreover, there must be a balancing of interests as between absolute security on the one hand and the necessity of obtaining talent, imagination, initiative and knowledge in certain fields.

5. A relatively small but nevertheless important point which I should like to raise for the record is that the report appears to suggest that the role of OPC is subordinate to that of OSO in the field of encouraging the defection of strategically placed personnel in the Soviet and satellite government services. It is our interpretation of our charter (NSC 10/2) that OPC is given this responsibility, but we fully recognize the special interests of both OSO and the Contact Branch of OO. You will recall the memorandum/2/ which was prepared by my office and concurred in by the other two branches, which outlined a proposed method of coordinated activity both within and without the Central Intelligence Agency in this increasingly important field. I hope that you will be able to reconsider your adverse decision in this matter in the interest of enabling the three interested branches to discharge their respective responsibilities in a coordinated and effective manner. (See recommendation #3 at p. 129.)

/2/Not found.

6. I should also like to make a comment for the record upon the observations of the committee at p. 123 about the insecurity of the present physical setup of the Washington Headquarters of OSO (and OPC). I agree that it is very prejudicial to the security of the personnel and contacts of these secret operations offices to be isolated in a conspicuously identifiable building, and that it would be vastly preferable for them to be covered in a large establishment having no previous OSS and CIA taint and having so many services and visitors that the identification of the staff members and their visitors would be rendered most difficult. I fully recognize that because of the drastic shortage of government housing space in Washington, this criticism is easier to make than to remedy, but I nevertheless believe that it should be made the subject of serious and continued consideration by all concerned. The problem is aggravated by the inability to date of the Services Branch to provide sufficient space for present OPC staff personnel even in Temporary L Building.

7. The observations of the committee at pp. 148 and 149 of the report concerning the repute of intelligence as a career within the armed services has an important bearing upon the work of the Central Intelligence Agency and OPC. Because of the important use which CIA should always make of military intelligence personnel, as well as the many relationships which CIA must have with the armed services in order to be an effective and useful agency, it would be to the interest of all concerned if steps could be taken to improve the lot and prospects of service intelligence personnel.

8. My final comment is made in connection with the recommendation of the committee that a so-called "Intelligence Officer" within the Department of State be created to serve as the principal liaison between that Department and the Central Intelligence Agency, including the Office of Policy Coordination. My reaction to this proposal would depend very largely upon the identity of the individual selected for this new position and the level at which he is placed in the hierarchy of the State Department. Unless this Intelligence Officer is situated at a very high policy level within the Department of State, the result would be very detrimental. Under no circumstances should the liaison between OPC and the Department of State be tied in with the research and intelligence staff of the Department.

Frank G. Wisner

368. Memorandum From Daniel DeBardeleben to the Acting Deputy Assistant Director for Special Operations, Central Intelligence Agency

Washington, February 17, 1949.

//Source: Central Intelligence Agency Records, Job 86-B00269R, Box 5. Top Secret. The addressee has not been further identified.

SUBJECT
The Dulles Report

Below are listed my comments on certain passages in the body of Chapter VIII, "The Collection of Secret Intelligence," and my remarks concerning the conclusions and recommendations which appear at the end of the chapter.

1. It is recommended that representatives of State, War and Navy be assigned to ICS in order more effectively to direct our activities in the collection of intelligence and more helpfully to evaluate the information which we collect. Both in direction and evaluation we can reasonably expect to receive greater assistance from the user agencies. Several schemes have been tried in the past to stimulate more detailed direction and more conscientious evaluation. Regrettably there still remains much to be desired and this proposal may be the answer to the problem. British MI-6 has for a long time followed such a general principle with, I understand, gratifying results. Certainly this possibility should be explored to the fullest.

2. It is recommended that administrative services be an integral part of the OSO organization for several obvious reasons. I agree.

3. It is true that no plan for rotation of personnel on a world-wide basis has yet been worked out. It is doubtful whether this organization should ever attempt wholesale rotation of operating personnel between continental areas except in those unusual cases where individuals have equal qualifications for work in more than one area. Our present rotation plan of encouraging our people to remain at their present posts as long as possible, consistent with cover, is entirely sound during this formative stage of our existence. Consistent with cover, the longer an individual can remain in his area of assignment, the more valuable he becomes to us. This fact will be more greatly emphasized as we succeed in placing our representatives under unofficial cover where they can remain as a part of the community for indefinite lengths of time without arousing curiosity and suspicion. Rotation in OSO must be very carefully considered to the end that we will not deprive ourselves of the knowledge and experience of our representatives concerning various areas simply to adopt an appealing policy of world-wide rotation. The latter would require starting from scratch in new jobs which would greatly retard the accomplishments of this organization.

4. It is recommended that OSO, OPC and Contacts Branch, all covert activities, be combined in one covert office and placed under a responsible head. There seems to be much to recommend such an organization provided the peculiar demands of these three offices be provided for and no attempt be made to perform centrally certain functions for the three offices which are in no sense common to them.

5. It is recommended that closer coordination be effected in occupied areas between OSO and to clandestine operations of the occupying authority. Such coordination is highly desirable and I believe is gradually improving. [2 lines of source text not declassified]

6. It is recommended that procedures for handling defectors be worked out with the concurrence of the interested agencies. Such a procedure is very important and is now in the process of being determined through the work of two committees--one dealing with the problem of defectors abroad, the other considering the handling of defectors in the United States. The work of these two committees will eventually be drawn together and overall policy and procedures will result.

7. It is pointed out that contact between agents and our official representatives abroad should be avoided. Such avoidance is OSO policy and steps are continuously being taken to observe and follow strictly such policy; however, there will always be certain cases where this policy must be violated and a calculated risk taken. There is no way in which the conduct of espionage can be made entirely safe. It should be our endeavor to avoid unnecessary risks.

8. It is pointed out that cover for OSO, CIA here in Washington is unsatisfactory. The conditions as to housing and the admission by employees of OSO that they are CIA are undesirable, but there appears to be no immediate solution. When the activities of OSO were placed in a separate office in CIA it was assumed that CIA would provide cover for OSO. This assumption seemed reasonable at the time because it was expected that CIA would be recognized by the public and the other departments of the Government as primarily a research organization performing centrally an overt function for the Government; however, because of unfortunate publicity, CIA is rather recognized as a clandestine organization with the result that OSO is regrettably providing cover for the overt activities of CIA. It does seem desirable to have OSO quartered in a large building where other activities are conducted and where OSO personnel are not singled out. Further, it would be advantageous to adopt some cover name for OSO and its allied activities which would not bring to mind espionage and clandestine activity.

9. It is recommended that the CE activities of OSO be expanded and that closer cooperation with FBI be realized. This is an entirely sound recommendation and every possible effort will be made to accomplish such ends.

Conclusions and Recommendations/1/

/1/This refers to the Conclusions and Recommendations of Chapter VIII of the Dulles Report. (National Archives and Records Administration, RG 59, Records of the Executive Secretariat, NSC Files: Lot 66 D 148, Box 1555) See the Supplement.

(1) Referred to above.

(2) Referred to above.

(3) Referred to above.

(4) In process.

(5) Every effort is presently being made to increase the use of unofficial cover for our representatives abroad. [13 lines of source text not declassified]

(6) Referred to above.

(7) Referred to above.

(8) No comment.

(9) Agree. It seems reasonable that OSO should enjoy the privilege of disseminating its product in a fashion comparable to the procedures followed by other collectors.

(10) Accomplished.

(11) Agree--highly important.

DDeB

369. Memorandum From the Assistant Director for Reports and Estimates (Babbitt) to Director of Central Intelligence Hillenkoetter

Washington, February 17, 1949.

//Source: Central Intelligence Agency Historical Files, HS/HC-100, Item 17. Confidential. The source text is a transcript made for the CIA Historian on October 1, 1953. This memorandum draws heavily on a February 16 memorandum from Ludwell L. Montague to Babbitt. (Ibid., HS/HC-450, Item 30) See the Supplement.

SUBJECT
"Coordination of Intelligence"

REFERENCE
Memorandum, 8 February 1949, to Director from Chief, ICAPS/1/

/1/Document 363.

1. Reference memorandum lends considerable weight to the recommendations concerning the functions of ICAPS contained in ORE's comments on the Dulles Report./2/ It should be pointed out that ICAPS, in reference memorandum, is representing the point of view of OIR and is passing on this point of view to the Director without consultation with the interested Office in CIA, to-wit: ORE.

/2/Document 366.

2. Reference memorandum refers, first, to intelligence memoranda, and second, to the monthly Review of the World Situation. In regard to the IM's, as the Director is well aware, requests for these reports come in from a variety of sources but in almost all cases it can be said that the normal procedure is "Urgent" because of the short time factor permitted. ORE is currently informing OIR of the subject of each IM as expeditiously as possible. Such notices of the subject matter and scope of reference cannot be done by telephone for security reasons in a vast majority of cases. Delays in communication being what they are, it is quite true that OIR frequently gets its information after the report is prepared and sometimes even after it has been forwarded to the Director. Attempts are being made, whenever possible, to give advance information to OIR as well as to the other IAC agencies concerned.

3. Paragraph 5 of reference memorandum more than implies that ORE is not "doing its part in accordance with the established regulations." In spite of the fact that the regulations prescribe a cumbersome and time-consuming procedure, ORE is endeavoring to comply with them as fully as possible. It is obvious that the observance of the "normal" coordination process, or even the "urgent" one, would in many cases place the Director in the position of having to reply to a request from an officer of Cabinet rank that while CIA had the information requested, it was unable to forward it until the departments had been consulted.

4. The reference, paragraph 6, implicitly recommends that the CIA Series/3/ be subjected to the same processes of coordination as are required in the case of the ORE Series./4/ The basis of this recommendation is indicated in paragraph 7 which says:

/3/Reference is to a monthly CIA publication entitled Review of the World Situation as it Relates to the Security of the United States, which was regularly considered at NSC meetings during 1947-1950. The first issue, which carried the designation "CIA 1," was prepared for the NSC's first meeting on September 26, 1947. See the Supplement for selected issues.

/4/Reference is to intelligence estimates and coordinated intelligence reports, which at that time were identified by a series designator that included the prefix "ORE," e.g., ORE 3-48, ORE 1-49, etc.

. . . the basic law and regulation under which we function give to CIA the responsibility for only national intelligence, and the method of setting up national intelligence is participation by the various established intelligence agencies. . . .

CIA is also specifically authorized by "regulation" to produce current intelligence in NSCID #3, paragraph 1b(2).

5. The concept of national intelligence indicated in the foregoing quotation is obviously taken from the Dulles Report, where, I believe, it finds official expression for the first time. It is entitled to respectful consideration, but is, in my opinion, the most controversial aspect of the Dulles Report and certainly has not yet the force of "basic law and regulation."

6. This controversial concept equates "national intelligence" to "coordinated intelligence" in terms that make "coordinated intelligence" mean nothing more than "joint intelligence." In the minds of those who took part in the early post-war discussions and conferences on the subject, the central intelligence organization to be set up was to produce, as "strategic and national policy intelligence," something above and beyond joint intelligence. "Strategic and national policy intelligence" (now called "national intelligence" for short) was understood in terms of the function such intelligence was intended to serve, not in terms of a particular method of production. The essential idea with respect to the production of such intelligence was expressed in the term "final synthesis": it was to be an authoritative final evaluation and synthesis of all available intelligence, free from the influence of departmental bias. A process of "coordination" was retained, not because joint intelligence was the end in view, but as a means of discovering and noting any departmental position substantially different from the essentially independent final analysis and interpretation of CIA.

7. This clear concept has been somewhat lost sight of since June 1946. It is still valid, however, and is consonant with the existing "basic law and regulation." Moreover, the Dulles-ICAPS concept finds no explicit support in the existing law and regulations.

8. The law says only that CIA shall "correlate and evaluate intelligence relating to the national security." It makes no stipulation with respect to "coordination": it is CIA that is to correlate and evaluate, language originally used to express the concept of independent final analysis and interpretation set forth above.

9. NSCID No. 1 defines "national intelligence" in terms of the national security (its function), not in terms of "coordination" or any other process of production. It specifies that, insofar as is practicable, CIA shall not duplicate departmental research, but shall make use of departmental facilities and production. It says nothing whatever about any coordination of interpretation.

10. NSCID No. 3 describes "national intelligence" as "integrated" (not "coordinated") departmental intelligence. This distinction appears to be deliberate and points toward the original concept ("final synthesis") rather than the Dulles-ICAPS concept of CIA's function. Coordination is referred to only with respect to the procurement of departmental contributions for CIA consideration, not with respect to any process of joint interpretation.

11. DCI 3/1, intended to "facilitate departmental participation in the preparation of national intelligence," is the highest law or regulation pertinent to the subject and the reference. In view of the preceding demonstration, its relevant provisions must be regarded as a matter of current policy rather than of compliance with the law or with NSC direction. DCI 3/1 prescribes various procedures for obtaining departmental contributions to and concurrence or dissent on "national intelligence reports and estimates" (the SR/5/ and ORE Series). It specifically provides that coordination is not required with respect to current intelligence.

/5/Situation Reports, a series of periodic reports on individual countries.

12. DCI 3/1, dated 8 July 1949, was contemporary with the tenth number in the CIA Series (CIA 7-48). It was specifically understood at that time that the procedures prescribed therein with respect to the ORE Series were not intended to apply to the CIA Series, which, by mutual agreement with the departmental agencies, was already accepted, for these purposes, as current intelligence.

13. This agreement was not reached on any basis of abstract consideration, but as a result of practical experience. Initially we undertook to coordinate items in the CIA Series as though they were items in the ORE Series. CIA-1 (September 1947) was so coordinated, at a cost in time and effort, to the agencies as well as to ourselves, far in excess of any resultant benefit. CIA-2 was not coordinated, for absolute lack of any time in which to do so. I do not recall precisely when the agencies begged off. They may well have been prompted to do so by their relief on those occasions when coordination proved impossible to accomplish for want of time. In any case, I do recall distinctly that agreement to regard the CIA Series as current intelligence was reached on agency initiative and was as much for the relief of agency analysts as for our benefit. If any agency representative now wants to resume coordination, he is presumably arguing in the abstract without appreciation of the practical consequences of his proposal.

14. This observation has particular application in the case of the Department of State. One obstacle to the efficient coordination of any appreciation of global scope, such as items in the CIA Series, is the lack of any unit in the IAC agencies comparable to the Global Survey Group, ORE. To coordinate with us in such a case OIR has to employ a team of half a dozen area specialists. Each such specialist is inclined to demand that his area be treated as though it were the sole subject of consideration. The net result is vexatious delay and diversion of effort for ORE and a much greater loss in man-hours for OIR, without substantial effect upon the tenor of the estimate.

15. The Series is presently prepared with cognizance of departmental views as conveyed to us through various media and in discussions relative to estimates in the ORE Series. Specific prior consultation with departmental specialists would consume their time and ours without contributing materially to the preparation of the initial draft. Moreover, experience shows that the comment elicited in the process of coordinating a draft of such scope and character as an item in the CIA Series is essentially editorial in character and without significant substantive effect.

16. It is, of course, quite feasible to coordinate items in the CIA Series as though they were items in the ORE Series, but it can be done only at considerable cost in loss of timeliness and in terms of man-hours expended, without commensurate gain. Under present procedures, which include elaborate coordination within ORE, it is necessary to write in terms of the situation existing ten days in advance of the publication date. The imposition of external coordination would require allowance of at least an additional week, very definitely impairing the timeliness of the appreciation as of its date of publication. (In this connection, ICAPS should be advised that there is not, and cannot be, in real life any such thing as a meaningful oral coordination.) Moreover, in view of the fact that the Global Survey Group is already experiencing difficulty in giving proper attention to its many and various commitments, the additional consumption of time (approximately one man-week) would require the provision of an additional member to the Group. If consultation and coordination with the departmental agencies (including consultation with half a dozen area specialists in OIR) is the controlling consideration, the best procedure would be to set up a permanent interdepartmental committee to produce the monthly review for the Security Council.

17. The issue is, in essence, whether the CIA Series is intended or desired to be (as we suppose) a responsible synthesis and interpretation of the developing global situation, written with cognizance of departmental views, but with independent judgment, or merely a routine joint intelligence periodical.

18. It is recommended that no action be taken on reference memorandum pending a basic policy decision by the National Security Council with respect to the Dulles Report.

Theodore Babbitt/6/

/6/Printed from a copy that bears this typed signature.

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