Intelligence Community Reorganization: Potential Effects on DOD Intelligence Agencies

CRS Report for Congress
Intelligence Community Reorganization:
Potential Effects on DOD Intelligence Agencies
Updated February 11, 2005
Richard A. Best, Jr.
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

Intelligence Community Reorganization:
Potential Effects on DOD Intelligence Agencies
Although the Central Intelligence Agency (CIA) is the best known member of
the Intelligence Community, the bulk of the nation’s intelligence effort is undertaken
by the intelligence agencies of the Department of Defense (DOD). In particular, the
National Security Agency (NSA), the National Reconnaissance Office (NRO), and
the National Geospatial-Intelligence Agency (NGA) (formerly known as the National
Imagery and Mapping Agency (NIMA)) are major collectors of information for DOD
and non-DOD consumers and absorb a large percentage of the annual intelligence
budget. (The Defense Intelligence Agency (DIA), albeit a large and important
component of the Intelligence Community, is more directly focused on DOD
Some Members of Congress and independent commissions, most recently the
National Commission on Terrorist Attacks Upon the United States, the 9/11
Commission, have argued that a lack of coordination among intelligence agencies
contributed to the failure to provide warning of the terrorist attacks of September
2001. In response, in December 2004 Congress passed intelligence reform
legislation (P.L. 108-458) that modifies the existing organization of the Intelligence
Community and establishes more centralized leadership under a newly created
Director of National Intelligence (DNI).
As the legislation was being debated in the fall of 2004, attention focused on the
extent of the budgetary and administrative authorities to be assigned to the DNI.
Significant concerns were expressed by DOD officials, some Members of Congress,
and various outside observers that providing the DNI with greater authority and
control of intelligence agencies in DOD could jeopardize the increasingly close
relationship between these agencies and the operating military forces.
The conference committee on intelligence reform legislation (S. 2845)
addressed these concerns with language that gave the DNI substantial authorities over
intelligence budgets, but not operational control over their activities. The final
version of the legislation also provided that the details of budgetary authorities to be
exercised by the DNI and other cabinet officers be worked out in accordance with
guidelines to be issued by the President after the DNI is appointed.
This report will be updated as circumstances warrant.

Intelligence Agencies of the Department of Defense.......................2
Defense Intelligence Agency.....................................2
The National Reconnaissance Office...............................2
The National Security Agency....................................2
The National Geospatial-Intelligence Agency........................2
Intelligence Elements of the Military Services.......................3
National Intelligence Missions of Defense Agencies: The Role of the DCI.....3
National Intelligence Missions of Defense Agencies: The Role of the
Secretary of Defense...........................................4
Impetus for Reform ................................................6
Concerns About Reorganization Proposals .........................9
Potential Implications of New Approaches.............................11
P.L. 108-458, the Intelligence Reform and Terrorism Prevention Act
of 2004.....................................................13

Intelligence Community Reorganization:
Potential Effects on
DOD Intelligence Agencies
Although the Central Intelligence Agency (CIA) is the best known component
of the U.S. Intelligence Community, the intelligence agencies of the Department of
Defense (DOD) account for the bulk of intelligence spending and intelligence
personnel. The National Security Agency (NSA), the National Reconnaissance
Office (NRO), the National Geospatial-Intelligence Agency (NGA), the Defense
Intelligence Agency (DIA), and the intelligence elements of the four military services
work around the world to collect and analyze information for consumers in the White
House, federal agencies, the Congress, and DOD itself, including military units
down to tactical levels. Collectively, their budgets are far larger than that of CIA
because they are major collectors of electronic intelligence, that relies on multiple
intercept sites, and reconnaissance satellites. They employ many more personnel
(military and civilian) and, at least in terms of quantity, produce far more intelligence
reports and analyses than the CIA.1
Until the passage of recent legislation, the Director of Central Intelligence (DCI)
has had the statutory authority to establish priorities for collection and analysis for
all national intelligence agencies and to forward an annual intelligence budget to the
President, but he has not had control of the execution of budgets (beyond that of the
CIA) nor could he transfer funds or personnel from one agency to another over the
objection of Cabinet officers.
For some years there were proposals to give the DCI greater authority to manage
the activities of all intelligence agencies, including those in DOD. Many observers
suggested that earlier proposals were not enacted because of concerns by DOD and
some Members of the Armed Services Committees that such an initiative would
weaken the ability of the Secretary of Defense to manage resources considered
essential to carrying out DOD’s statutory missions.
In the wake of the September 11, 2001 attacks and flawed estimates about
weapons of mass destruction (WMD) in Iraq, there were renewed calls for
intelligence “reform” or reorganization to remedy perceived shortcomings in the
performance of intelligence agencies. Some Members of Congress argued that there
was a need to establish a Director of National Intelligence (DNI) or National
Intelligence Director (NID), or to enhance the authorities of the DCI with the goal of

1 The intelligence efforts of the State, Commerce, Homeland Security, and Energy
Departments and the Federal Bureau of Investigation (FBI) are much smaller and focused
on analysis; they do not acquire or operate extensive and expensive technical collection

ensuring better coordination. Similar recommendations were strongly urged by the
National Commission on Terrorist Attacks Upon the United States (the 9/11
Commission). President Bush announced his support for creating the position of
National Intelligence Director on August 2, 2004. After lengthy consideration, the
Intelligence Reform and Terrorism Prevention Act of 2004 (hereafter, the
“Intelligence Reform Act,” P.L. 108-458) was signed on December 17, 2004. The
act abolished the position of DCI, establishing in its stead the DNI and a separate
Director of the CIA.
This report will briefly describe the intelligence agencies of the Defense
Department, address their roles in the Intelligence Community and within DOD, and
note the role of the recently established position of Under Secretary of Defense for
Intelligence (USD(I)). It will look at current approaches to intelligence
reorganization and discuss the possible implications of adopting them.
Intelligence Agencies of
the Department of Defense
Defense Intelligence Agency
Established in 1961, DIA manages the Defense Attache System and other
human intelligence (humint) collection efforts. In addition, DIA is responsible for
the analysis of information from all sources in response to requirements established
by the DNI, by the Office of the Secretary of Defense (OSD), and other DOD
officials. DIA provides analytical support to senior defense officials, to the Joint
Chiefs of Staff, combatant commanders, and joint task forces worldwide.
The National Reconnaissance Office
Established in 1960, the NRO designs, builds, and operates the reconnaissance
satellites that collect images of the earth’s surface and signals information. While the
NRO is a DOD agency, it is staffed by both DOD and CIA personnel.
The National Security Agency
Established in 1952, NSA has two primary missions — developing codes to
protect the security of official U.S. communications and providing signals
intelligence (sigint). NSA collects, processes, and analyzes foreign signals in order
to support national policymakers and the operational forces.
The National Geospatial-Intelligence Agency
The NGA, established in 1996 and originally known as the National Imagery
and Mapping Agency (NIMA), provides geospatial intelligence — imagery, imagery
intelligence, and geospatial data and information to DOD users and other officials
responsible for national security. Geospatial information includes topographic,
hydrographic, and other data referenced to precise locations on the earth’s surface.

Intelligence Elements of the Military Services
The Army, Navy, Air Force, and Marine Corps have their own intelligence
components that are, in general, not intelligence collection agencies, but process and
analyze data, and disseminate intelligence to their respective operating forces.
National Intelligence Missions of Defense Agencies:
The Role of the DCI
Three of these agencies — the NRO, NSA, and the NGA — have significant
responsibilities for collecting intelligence of concern to agencies outside DOD.
These three agencies more directly support national-level decisionmakers than do the
intelligence organizations of the four military services and even DIA. Their efforts
are described as “national,” as opposed to departmental or tactical. Senior
policymakers often have significantly different intelligence needs than military
consumers, although there is considerable overlap. For instance, national
policymakers are directly concerned with implications of nuclear test programs in
countries that are of no immediate concern to military commanders, whereas the
latter could be focused on tactical threats to operations long underway that are not the
focus of high-level policymakers.
“National intelligence” is the term used for intelligence that is of concern to
more than one department or agency and provides the basis for national security
policymaking. Beginning in the 1960's, a generation of arms control agreements
between the U.S. and the Soviet Union was based on satellite imagery that allowed
U.S. policymakers to be confident of their estimates of Soviet military capabilities.
More recently, national systems have permitted policymakers to monitor such crucial
developments as transfers of WMDs, ethnic cleansing in various countries, and
indications of narcotics traffic.
Inasmuch as national systems are expensive, and therefore not available in
unlimited quantities, procedures have been developed to sort out priorities for
coverage. The DCI had statutory authority to develop collection and analysis
priorities in response to National Security Council (NSC) guidance. Generally,
priorities have been sorted out by inter-agency committees working through the
DCI’s Community Management Staff of the Intelligence Community and the
Assistant DCI for Collection, to be implemented by national-level agencies,
including NSA, the NRO, and the NGA.2
The efforts of NSA, the NRO, and the NGA have been funded as parts of the3
National Foreign Intelligence Program (NFIP) the annual budget for which the DCI

2 50 USC 403-4(d).
3 NFIP is defined at 50 USC401a(6). Funding for CIA and DIA is also provided through the
NFIP. By P.L. 108-458 (Section 1074) the NFIP becomes the National Intelligence Program

annually develops and presents to the President.4 The DCI also has had authority to
transfer funds and (for periods up to a year) personnel among NFIP programs with
the approval of the Director of the Office of Management and Budget and affected
agency heads. The Secretary of Defense was required to obtain the concurrence of
the DCI before recommending individuals for appointment as head of the NRO,
NSA, and the NGA. If the DCI did not concur, the Secretary of Defense might still
recommend an individual to the President, but he had to include in the
recommendation a statement that the DCI did not concur.5
The 2004 Intelligence Reform Act provides that the DNI will be responsible for
developing and determining the NIP budget and gives him/her authority to manage
appropriations by directing the allotment or allocation of such funds with prior notice
to agency heads. The DNI also has authority to reprogram funds under certain
conditions and if the transfer out of any one department or agency is less than $150
million in a single year and is less than 5 percent of the amounts available to the
agency or department. The DNI will also have certain limited authorities to transfer
intelligence personnel from one agency to another.
National Intelligence Missions of Defense Agencies:
The Role of the Secretary of Defense
In addition to responding to tasking in support of national policymakers, all
defense agencies are closely involved in directly supporting operating military forces.
The Secretary of Defense has statutory responsibilities for the effective functioning
of national intelligence agencies in DOD.6 In addition, statutes require that the
agencies be prepared to participate in joint training exercises, and establish uniform
reporting systems to strengthen their readiness to support operating forces with
respect to a war or threat to national security.7
The Defense Department’s view of the central role of intelligence is evident in
its most recent planning document, Joint Vision 2020:
The evolution of information technology will increasingly permit us to integrate
the traditional forms of information operations with sophisticated all-source
intelligence, surveillance, and reconnaissance in a fully synchronized information
campaign. The development of a concept labeled the global information grid
will provide the network-centric environment required to achieve this goal. The
grid will be the globally interconnected, end-to-end set of information

4 50 USC 403-3(c)(1)(A).
5 50 USC 403-6(a). In the case of appointments of an individual as Director of DIA, the
Secretary of Defense had to consult with the DCI but did not have to note any unwillingness
by the DCI to concur in the appointment. 50 USC 403-6(b).
6 50 USC 403-5.
7 10 USC 193.

capabilities, associated processes, and people to manage and provide information8
on demand to warfighters, policy makers, and support personnel.
National intelligence is now an essential part of DOD’s planning and operational
capabilities and, since the Persian Gulf War, has become thoroughly integrated into
combat operations. One media account of the role of national-level agencies during
recent hostilities in Iraq concluded:
As with imagery and early-warning [satellite] constellations, space-based signals
intelligence was far more responsive to tactical users in Operation Iraqi Freedom
than in earlier campaigns. National Security Agency teams and related Air Force
cryptologic units were forward-deployed to the theater of operations to assist
tactical commanders in accessing and interpreting signals intelligence from
orbital and air-breathing sources.
The need to integrate intelligence resources has also become more important
inasmuch as
The distinction between strategic and tactical ISR [intelligence, surveillance, and
reconnaissance] systems gradually has melted away as military requirements
shifted from the nuclear and conventional threat posed by Russia to more diverse9
dangers arising from rogue states and terrorists.
Propelled largely by the need for precise locating data to target precision-guided
munitions (PGMs), intelligence from national sources has been woven into military
operations at all echelons. Senior DOD officials and military leaders emphasize their
reliance on this stream of information and argue that the national agencies need to be
more responsive to their direction.
Some observers have long argued that the focus on support to military
operations by national agencies has led to reduced support for national-level
policymakers at the State Department and the NSC. For instance, it has been
suggested that this emphasis on supporting the military was a contributing factor in
the Intelligence Community’s failure to provide advance notice of the Indian nuclear
test in May1998, at a time when U.S. reconnaissance satellites were primarily tasked10
with the support of U.S. military forces operating in the Persian Gulf region.
In recent years, DOD’s intelligence effort was coordinated, loosely according
to some observers, by the Assistant Secretary of Defense for Command, Control,
Communications, and Intelligence (ASD C3I). In 2002, Secretary of Defense Donald
Rumsfeld sought congressional authorization to establish a more senior position, that
of Under Secretary of Defense for Intelligence (USD(I)); a provision was included
to that effect in the Defense Authorization Act for FY2003 (P.L. 107-314, section


8 Department of Defense, Joint Chiefs of Staff, Joint Vision 2020, pp. 9, 10-11.
9 Loren Thompson, “Satellites Over Iraq: A Report Card on Space-based ISR during
Operation Iraqi Freedom,” ISR: Intelligence, Surveillance, & Reconnaissance Journal,
March 2004, pp. 20, 18.
10 See Jeremiah News Conference, CIA Press Release, June 2, 1998.

In March 2003, Stephen A. Cambone, who had previously served as Deputy
Undersecretary of Defense for Policy, was appointed to the position and his
appointment was confirmed by the Senate. His responsibilities include coordinating
DOD intelligence, and intelligence-related policy, plans, programs, requirements and
resource allocations. He is to “exercise authority, direction, and control” over DIA,
NGA, the NRO, NSA, and other agencies.11 He had served as a single point of
contact between DOD and the DCI on intelligence resource and policy issues.12
A significant responsibility of the Secretary of Defense is ensuring that the
national intelligence programs of the NIP and the joint military and tactical
intelligence programs (known as the Joint Military Intelligence Program (JMIP) and
Tactical Intelligence and Related Activities (TIARA)) are mutually supportive and
not duplicative.13 In recent years the various sets of programs have been brought into
closer alignment to support national policymakers concerned with details of tactical
intelligence and military commanders who need information from national systems
such as satellites.
Impetus for Reform
In the aftermath of the attacks of September 11, 2001, a number of observers as
well as the Joint Inquiry of the two congressional intelligence committees and the
9/11 Commission, concluded that the organization and management of the
Intelligence Community was inadequate and that, as a result, the DCI was unable to
ensure that crucial information about the 9/11 plot was shared with analysts who
might have been able to identify the threat in advance. The 9/11 Commission took
note of
... some of the limitations of the DCI’s authority over the direction and priorities
of the intelligence community, especially its elements within the Department of
Defense. The DCI has to direct agencies without controlling them. He does not
receive an appropriation for their activities, and therefore does not control their
purse strings. He has little insight into how they spend their resources. Congress
attempted to strengthen the DCI’s authority in 1996 by creating the positions of
deputy DCI for community management and assistant DCIs for collection,
analysis and production, and administration. But the authority of these positions14

is limited, and the vision of central management clearly has not been realized.
11 Paul Wolfowitz, Deputy Secretary of Defense, Memorandum for Secretaries of the
Military Departments et al., Implementation Guidance on Restructuring Defense Intelligence
— and Related Matters, May 8, 2003.
12 The Office of the Undersecretary of Defense for Intelligence, consisting of some 120
officials, has no analytical role within the Intelligence Community. All source analysis
within DOD is the responsibility of DIA and the intelligence organizations of the military
13 For background on this issue, see CRS Report RL32508, Intelligence, Surveillance and
Reconnaissance (ISR) Programs: Congressional Oversight Issues.
14 9/11 Commission Report, p. 357.

The Joint Inquiry of the two intelligence committees concluded that the DCI was
unable to establish a comprehensive intelligence effort against Al Qaeda even when
the extent of the threat had become evident to the DCI at least by 1998. It reported:
Following the August 1998 bombings of two U.S. embassies, the DCI placed Bin
Ladin’s terrorist network among the Intelligence Community’s highest priorities.
The DCI raised the status of the threat further still when he announced to CIA
senior managers in December 1998:
We are at war [with Bin Ladin].... I want no resources or people spared in this
effort, either inside the CIA or the [Intelligence] Community.
These were strong words. Rather than having a galvanizing effect, however, the
Joint Inquiry record suggests that the Intelligence Community continued to be
fragmented without a comprehensive strategy for combating Bin Ladin. The Joint
Inquiry concluded that the DCI was either unable or unwilling to enforce consistent
priorities and marshal resources across the Community.15
Simply put, the Joint Inquiry argued that, although DCI George Tenet put the
Intelligence Community on a war footing against Al Qaeda, his writ did not run
beyond the CIA to other parts of the Intelligence Community, including the major
Pentagon agencies. Accordingly, the Joint Inquiry and the 9/11 Commission as well
as others have urged that there should be a single senior official, having the title
Director of National Intelligence or National Intelligence Director, responsible for
managing the entire Intelligence Community, including NSA, the NRO, and the NGA
along with the CIA and other intelligence entities.
Management and budgetary authority has been seen as needed to control
national intelligence agencies of the Community. The Joint Inquiry recommended
the creation of a statutory Director of National Intelligence with “the full range of
management, budgetary and personnel responsibilities needed to make the entire U.S.
Intelligence Community operate as a coherent whole.” These responsibilities would
include “establishment and enforcement of consistent priorities for the collection,
analysis, and dissemination of intelligence throughout the Intelligence Community.”
The DNI would have responsibilities for the “review, approval, modification, and
primary management and oversight of the execution of Intelligence Community
budgets... .”16
The 9/11 Commission recommended that a National Intelligence Director
“manage the national intelligence program and oversee the agencies that contribute
to it.” The NID would:

15 U.S. Congress, 107th Congress, 2d session, Senate Select Committee on Intelligence and
House of Representatives Permanent Select Committee on Intelligence, Joint Inquiry into
Intelligence Community Activities Before and After the Terrorist Attacks of September 11,

2001, S.Rept. 107-351, H.Rept. 107-792, December 2002, p. 236.

16 Joint Inquiry, Report, p.33. The recommendations were published separately on
December 10, 2002.

submit a unified budget for national intelligence that reflects priorities chosen by
the National Security Council.... He or she would receive an appropriation for
national intelligence and apportion the funds to the appropriate agencies, in line
with that budget, and with authority to reprogram funds among the national
intelligence agencies to meet any new priority (as counterterrorism was in the
1990s). The National Intelligence Director should approve and submit
nominations to the president of the individuals who would lead the CIA, DIA,
FBI Intelligence Office, NSA, NGA, NRO, Information Analysis and
Infrastructure Protection Directorate of the Department of Homeland Security,17
and other national intelligence capabilities.
A number of bills were introduced designed create to a single director of the
Intelligence Community.18 In some approaches, this individual would have
operational control of all intelligence agencies, including those in DOD. Other
approaches envision the person filling the USD(I) position simultaneously serving
as a Deputy of the DNI/NID. Other versions do not precisely define the extent of the
DNI’s authorities.
On August 2, 2004 President Bush announced his intention to seek changes in
the National Security Act to establish a National Intelligence Director, appointed by
the President with the advice and consent of the Senate, who “will oversee and
coordinate the foreign and domestic activities of the intelligence [community].”19
The President indicated that the CIA will be managed by a separate director. The
Administration plan apparently did not envision the NID having the authority to
control the budgets of the various agencies nor would the NID singlehandedly submit
nominations for agency head positions to the President.20
Subsequently, congressional attention focused on two bills dealing with
intelligence reorganization — H.R. 10, introduced by Representative Hastert, and S.
2845, sponsored by Senators Collins and Lieberman. After extensive floor
consideration and amendments, S. 2845 was passed by the Senate on October 6th;
H.R. 10 was passed by the House on October 8th. Both bills would have established
a NID with authorities more extensive than those assigned to the DCI by current
legislation, but there were significant differences in the area of budgetary authority
as well as in regard to other issues.21 As is noted below (“Recent Developments”),
it proved difficult for the resulting Conference Committee to reach agreement on the
language adopted by the two chambers.

17 9/11 Commission Report, pp. 411, 412. The Report added that DOD’s “military
intelligence programs (JMIP) and the tactical intelligence and related activities program
(TIARA) — would remain part of that department’s responsibility.” (P. 412.)
18 For details on specific legislative proposals, see CRS Report RL32506, The Position of
Director of National Intelligence: Issues for Congress.
19 U.S., President George W. Bush, Remarks by the President on Intelligence Reform,
August 2, 2004.
20 See Andrew Card, White House Briefing, August 2, 2004, Federal News Service.
21 For further information on specific provisions, see CRS Report RL32601, Comparison
of 9/11 Commission Recommended Intelligence Reforms, S. 2845, S. 2774, H.R. 5024,
Administration Proposal, H.R. 10, Current Law.

Concerns About Reorganization Proposals
Whereas there appears to be no question that a failure to fully correlate
information in the possession of intelligence and law enforcement agencies hindered
the effort to uncover the 9/11 plot before it occurred, some observers argue that the
main obstacle prior to 9/11 was the regulatory framework that created a “wall”
between foreign intelligence and law enforcement analysts — and not organizational
arrangements per se. From their perspective, the problem in large measure involved
the CIA and the FBI and, among DOD agencies, primarily NSA which had to work
within the constraints of the “wall” in regard to surveillance of U.S. persons. The
9/11 Commission criticized NSA’s “almost obsessive protection of sources and
methods, and its focus on foreign intelligence, and its avoidance of anything
domestic....”22 It is noteworthy, nevertheless, that the 9/11 Commission’s list of ten
missed opportunities for stopping the plot does not cite a misstep by NSA or any
other DOD agency.23
Criticisms of proposals to establish a DNI/NID centered on the possibility (or
likelihood) that they would undermine the authority of the Secretary of Defense over
agencies that are closely integrated into the operational capabilities of the military
services. Writing in June 2004, former DCI Robert Gates argued that:
More than 80 percent of foreign intelligence dollars are spent by agencies under
the control of the secretary of defense. Virtually all of those agencies have
tactical, combat-related tasks to perform for the Pentagon and the military
services, in addition to the roles they play under the guidance of the director of
central intelligence. In the real world of Washington bureaucratic and
Congressional politics, there is no way the secretary of defense or the armed
services committees of Congress are simply going to hand those agencies over
to an intelligence czar sitting in the White House. Indeed, for the last decade,
intelligence authority has been quietly leaching from the C.I.A. and to the24
Pentagon, not the other way around.
Bruce Berkowitz, who has worked with the Hoover Institution and the RAND
Corporation and is currently serving as a DOD consultant, has written:
Proposals to yank intelligence organizations out of the Defense Department also
overlook the role they play in combat operations today. The ability to feed
electronic data to units on the battlefield through digital pipelines is essential for
the kind of network-style warfare that has proved so effective in Iraq and
Afghanistan. Combat forces use more of this data than anyone else. It seems
odd that anyone would want to drag several intelligence organizations out of the
Defense Department simply to create a new mega-organization whose main25
mission would be ... supporting the Defense Department.

22 9/11 Commission Report, p. 88.
23 Ibid., pp. 355-356.
24 Robert M. Gates, “Racing to Ruin the C.I.A.,” New York Times, June 8, 2004, p. 25.
25 Bruce Berkowitz, “Intelligence Reform: Less is More,” Hoover Digest, Spring 2004.

Another longtime observers of U.S. intelligence agencies, Richard Betts of
Columbia University, wrote in mid-2004: “Trying to wrest the National Security
Agency and like agencies from the Defense Department ... would leave Capitol Hill
and Pennsylvania Avenue awash in blood.... The military services will never accept
dependence on other departments for performance of their core functions, which
include tactical intelligence collection, and politicians will not override military
protests that their combat effectiveness is being put at risk.”26
Such views were undoubtedly shared by some current and former DOD
officials. In April 2004, months prior to the President’s August 2nd announcement,
USD(I) Cambone testified that “we early concluded that the relationship between
intelligence and operations was growing closer — so close, in fact, that it was
beginning to become increasingly difficult to separate the two....” Expressing
skepticism about plans to increase the role of the DCI or create a DNI, Cambone
argued that, “...absent the [current] deep and abiding relationship between the DCI
and the Secretary of Defense, it is easy to see the ways in which seams would begin
to grow up between organizations and in which the Department of Defense would not
be benefi[t]ted and in fact, the intelligence community as a whole be hurt by that
split. So sustaining the existing relationship, we think, is essential.”27
Cambone’s testimony echoed testimony offered in 1996 by John P. White, then
the Deputy Secretary of Defense in the Clinton Administration, in regard to earlier
legislation to reorganize the Intelligence Community: “Confusing the clear lines of
authority that currently exist would make it more difficult for DOD intelligence
elements to perform their most important mission — support to the warfighter. In
the drive to create a strong Intelligence Community, we must not damage the
integration of military intelligence within the Defense Community.”28
Concerns within DOD persisted. On October 21, 2004 General Richard Myers,
the Chairman of the Joint Chiefs of Staff, wrote to the Representative Hunter,
Chairman of the House Armed Services Committee, maintaining that:
... the budgets of the combat support agencies [including NSA, NRO and NGA]
should come up from the agencies through the Secretary of Defense to the
National Intelligence Director, ensuring that required warfighting capabilities are
accommodated and rationalized and ensuring that the Secretary meets his
obligations. For appropriations, it is likewise important that the appropriations
are passed from the National Intelligence Director through the [Defense]
Department to the combat support agencies.

26 Richard K. Betts, “The New Politics of Intelligence: Will Reforms Work This Time?,”
Foreign Affairs, May/June 2004, p. 6.
27 Testimony of Stephen Cambone, Under Secretary of Defense for Intelligence, Defense
Department, before the Strategic Forces Subcommittee, Senate Armed Services Committee,
April 7, 2004, FDCH Political Transcripts.
28 Statement of Dr. John P. White, Deputy Secretary of Defense, before the House National
Security Committee on Intelligence Community Reform, 11 July 1996, in U.S. Congress,th

104 Congress, 2d session, House of Representatives, Committee on National Security, H.R.

3237 — the Intelligence Community Act, Hearing, H.N.S.C. No. 104-9, July 11, 1996, p. 10.

Potential Implications of New Approaches
Consideration of legislation to establish a DNI/NID focused on the extent of this
official’s authorities to coordinate all intelligence agencies, but some observers
asserted that, separate from organizational issues, more significant steps had already
been taken to improve sharing of information. Implying that organizational issues
were not necessarily the key factor, they assert that the Intelligence Community’s
failure “to connect the dots” before the 9/11 attacks resulted in large measure from
barriers to communications between foreign intelligence agencies (such as the CIA)29
and law enforcement agencies (especially the FBI). These barriers were in many
cases purposefully erected in regulations in order to ensure that foreign intelligence
agencies would not be used to target U.S. persons (as had occurred on earlier
occasions when intelligence agencies zealously investigated groups and individuals
opposed to the Vietnam War).
After 9/11, Congress adjusted these barriers through provisions in the USA-
Patriot Act of 2001 (P.L. 107-56) and other legislation. The USA Patriot Act
authorized the sharing of law enforcement and foreign intelligence information. In
addition, the Homeland Security Act (P.L. 107-296) provided that the Intelligence
Analysis and Infrastructure Protection component of the Department of Homeland
Security (DHS) would receive and analyze foreign intelligence and law enforcement
information relating to terrorist threats to the U.S. Subsequently, the Bush
Administration established the Terrorist Threat Integration Center (TTIC) to perform30
integrative analytical functions. Such initiatives have arguably torn down (or at
least significantly lowered) the “wall” between foreign intelligence and law
enforcement that may have contributed to the failure to detect the 9/11 plot in
advance. These developments, according to some observers, affect the need for
enhancing the powers of a proposed DNI/NID.
Ongoing technological innovations are also, according to some observers,
working to remove long-established barriers. The phenomenon of “stovepiping”
whereby imagery, humint, or sigint would be collected by separate agencies in the
field and forwarded to respective Washington-area headquarters to be processed and
analyzed before being made available to users has received much criticism.
Stovepiping, in essence, means the control of information by collection agencies.
Inevitably, processing, transmission and forwarding lead to delays and impede the
effort to bring all available data to bear on the intelligence needs of all levels of
The dangers of “stovepiping” are now widely recognized. DIA Director Lowell
Jacoby testified to the two intelligence committee’s Joint Inquiry:

29 See, for instance, Statement of Mary Jo White, former United States Attorney for the
Southern District of New York, before the Joint Intelligence Committees, October 8, 2002;
Joint Inquiry Report, pp. 363-368; 9/11 Commission Report, pp. 78-80.
30 See CRS Report RS21283, Homeland Security: Intelligence Support, updated February

23, 2004.

... the more widely information is shared, the more likely its hidden meaning will
be revealed. Information considered irrelevant noise by one set of analysts may
provide critical clues or reveal significant relationships when subjected to
analytic scrutiny by another. This process is critical for the terrorism issue where31
evidence is particularly scant, often separated by space and time.
Well before 9/11, the Defense Department was taking advantage of new
technologies to provide intelligence support to its forces. Real-time intelligence has
been especially important in the use of precision munitions, allowing targeting of
specific targets while minimizing casualties. Defense intelligence agencies are
acquiring capabilities to collect comprehensive data, to provide instantaneous
transmission, data storage, and immediate retrieval at all echelons. In many cases
processing and analysis is undertaken at sites within the U.S., even Washington-area
headquarters (a process known as “reachback”), and can be directly accessed by
military units around the world to support ongoing tactical operations.
Observers, such as Berkowitz, have suggested that, rather than undertaking
revision of complex statutes, efforts should be focused on generating “the political
will needed to make all intelligence organizations implement a truly common set of
security standards that balance the importance of keeping secrets with the importance
of sharing information.”32 Berkowitz notes that Executive Order 12333, which
serves a charter document for the Intelligence Community, is over 20 years old and
needs revision, an effort that, in his view, “would be a faster, more effective vehicle
for intelligence reform than a commission report or legislation. Such an order could
also resolve the security barriers and other hurdles that currently keep intelligence
agencies from working together more effectively.”
In October 2002 testimony before the Joint Inquiry, DIA Director Jacoby argued
that a crucial need is “to create a new paradigm wherein ‘ownership’ of information
belong[s] with the analysts and not the collectors.” Jacoby argued that the
government should follow industry’s practice in adopting a standard for data storage
that permit retrieval from multiple users at different agencies:
If we are to achieve an end state characterized by the ability to rapidly share and
integrate information, we must move toward a common data framework and set
of standards that will allow interoperability — at the data, not system, level....
And, the sooner the better, not just for a limited group of intelligence producers
and subsets of data; it shouldn’t be an elective option. Interoperability at the data
level is an absolutely necessary attribute of a transformed intelligence
environment because it enables horizontal integration of information from all33
sources — not just intelligence — at all levels of classification.
Many observers believe that stovepiping can be gradually overcome because of
the availability of technology for rapid dissemination of operational data and the
press of operational requirements as occurred during Operation Iraqi Freedom.

31 Rear Admiral Lowell E. Jacoby, USN, Statement for the Record for the Joint 9/11 Inquiry,

1 October 2002, p. 4.

32 Berkowitz, “Intelligence Reform.”
33 Jacoby, p. 8.

Outside observers argue that technological capabilities now permit increasing
information sharing with reliable security protection.34
The effort to promote wider sharing of information is widely supported, but
there remain obstacles. Singling out NSA, the Senate Intelligence Community
warned in 2003 of continuing resistance to such innovations:
The Committee has become increasingly concerned in recent years about
bureaucratic and cultural obstacles to effective information and data sharing...
Cutting-edge analytical tools, many of which are already in use in the private
sector, increasingly involve large-scale, multi-database analysis and pattern
recognition. Using such approaches within the Intelligence Community,
however, cannot proceed far without a significant revision of current orthodoxy35
as to information ‘ownership’ and control.
The Intelligence Authorization Act for FY2004 (P.L. 108-177, section 317)
established a pilot program to assess the feasibility of permitting analysts throughout
the Intelligence Community to access and analyze intelligence from the databases of
other elements of the Community. In particular, the provision was intended to permit
analysts in CIA and DIA to access sigint contained in NSA databases, but not
published in formal NSA reports.
The 9/11 Commission, taking note of this ongoing process, urged that it be
accelerated. It recommended that the President lead a “government-wide effort to36
bring the major national security institutions into the information revolution.” The
Commission indicated a role for the NID and the Secretary of Homeland Security,
backed by the Office of Management and Budget, to set common standards for
information in the Intelligence Community, other public agencies, and relevant parts
of the private sector. The Commission did not specifically address the issue within
DOD. Provisions were, however, ultimately included in P.L. 108-458 directing the
DNI to establish uniform security standards, common information technology
standards, and policies and procedures to resolve conflicts between the need to share
intelligence and the need to protect intelligence sources and methods.
P.L. 108-458, the Intelligence Reform and Terrorism
Prevention Act of 2004
The role of the NID/DNI received considerable attention during floor
consideration of intelligence reform legislation in September and October 2004.

34 See Markle Foundation, Task Force on National Security in the Information Age,
Creating a Trusted Information Network for Homeland Security, December 2003.
35 U.S. Congress, 108th Congress, 1st session, Senate, Select Committee on Intelligence,
Authorizing Appropriations for Fiscal Year 2004 for Intelligence and Intelligence-Related
Activities of the United States Government, the Community Management Account, and the
Central Intelligence Agency Retirement and Disability System, S.Rept. 108-44, May 8, 2003,
p. 24.
36 9/11 Commission Report, p. 418.

Some Members sought to provide greater authority to the position, others preferred
more limited changes to current authorities. On September 29, the Senate voted to
table an amendment (No. 3706) that would give the NID authority, “to supervise,
direct, and control the operations” of the major DOD intelligence agencies as well
as the CIA, but ultimately the Senate bill sought to create a stronger NID/DNI than
was reflected in the House bill.37 The ensuing conference reportedly had difficulty
in reaching agreement on the issue, but many of the media accounts of discussions
did not provide precise treatments of the arguments.
After further consideration, the conference version of S. 2845 was passed by the
House on December 7and by the Senate the following day. The legislation was
approved by the President on December 17, 2004. In the signing the bill, President
Bush stated:
It will be the DNI’s responsibility to determine the annual budgets for all
national intelligence agencies and offices and to direct how these funds are spent.
These authorities vested in a single official who reports directly to me will make
all our intelligence efforts better coordinated, more efficient, and more
The new law will preserve the existing chain of command and leave all our
intelligence agencies, organizations, and offices in their current departments.
Our military commanders will continue to have quick access to the intelligence
they need to achieve victory on the battlefield.
Provisions regarding the budgetary authorities of the DNI and other senior
officials were complex and reflected the fact that significantly different views remain.
The conference report for S. 2845 authorized the DNI to
!provide guidance for National Intelligence Program budget to heads
of departments containing intelligence organizations;
!“develop and determine” an annual consolidated National
Intelligence Program budget;
!present National Intelligence Program budget to the President for
approval (together with dissenting comments from heads of
departments containing intelligence organizations);
!participate in the development by the Secretary of Defense of the
annual budgets for DOD-wide and tactical military intelligence
!ensure the “effective execution” of annual intelligence budgets;

37 As passed by the Senate, S. 2845 provided that the NID would “manage and oversee
appropriations for the National Intelligence Program” (section 112). This would encompass
execution of funds, reprogramming of funds, and the transfer of funds and personnel. The
Senate bill also contained extensive acquisition and fiscal authorities for the NID to develop
and implement program management plans for major intelligence systems (section 162).
The version of S. 2845 as passed by the House would assign the NID the responsibility to
“facilitate the management and execution of funds appropriated for the National Intelligence
Program” (section 102A).

!direct the allotment or allocation of appropriations through the heads
of departments containing intelligence agencies or organization
!provide “exclusive direction” to the Office of Management and
Budget (OMB) regarding apportionment and subsequent allocations
of appropriated funds;
!transfer or reprogram funds from one program in the National
Intelligence Program to another (with OMB approval and subject to
other restrictions);
!transfer personnel from one intelligence agency to another for up to
two years (under certain conditions).38
Taken together, these authorities will provide the DNI with significantly greater
budgetary authorities than possessed by the DCI. In particular, provisions
authorizing the DNI to direct allocations and allotments of appropriated funds gives
the DNI significant leverage in the acquisition and program management efforts of
intelligence agencies in DOD.39 Some Members believed that this leverage would
amount to a degree of control inconsistent with the Secretary of Defense’s
responsibilities for managing intelligence agencies in DOD that also support the
combat forces. Although the proposed language clearly establishes extensive
budgetary authorities for the DNI, other factors such as the role of the personalities
of the respective officials, the priorities of the incumbent administration, and the
influence of congressional guidance will also have significant influences.
Moreover, the final version of the legislation includes a provision (Section
1018) that requires the President to issue guidelines to ensure the effective
implementation of authorities granted to the DNI, the Director of the OMB, and
cabinet heads “in a manner that maintains, consistent with the provisions of this act,
the statutory responsibilities of the head of the departments of the United States
Government with respect to such departments.” The guidelines are to be issued
within 120 days of the appointment of the first DNI. Some observers suggest that this
provision provides an opportunity for renewed consideration of the issues that made
passage of P.L. 108-458 difficult.40
Media accounts indicate that another key issue was day-to-day operational
control of the collection assets of intelligence agencies in DOD. Some observers
suggest, however, that this issue is not clear-cut. The legislation gives the DNI
authority to apportion funds and the apportionment process affects the timing and
rate of the flow of funds. Nevertheless, the authority to apportion and allocate

38 S. 2845, version of November 20, 2004, published by Congressional Quarterly.
39 Appropriated funds are not available to agencies until they are “apportioned” by the
Office of Management and Budget (OMB) to government agencies in response to an agency
request; an apportionment may be further subdivided by an agency into allotments,
suballotments, and allocations. (See Office of Management and Budget, Circular No. A-11,
Section 20-3.) Heretofore OMB has apportioned funds to DOD intelligence agencies at the
request of the Secretary of Defense; the draft legislation now under consideration provides
that such requests would be initiated by the DNI.
40 See the separate comments of Representatives Hunter and Hoekstra, Congressional
Record, December 20, 2004, pp. E2207-E2210.

appropriated funds does not automatically translate into the authority to direct day-to-
day operations. There are already well-established distinctions between
responsibilities for acquisition programs on the one hand, and responsibilities for
operational command on the other. The military departments (the Departments of the
Army, Navy and Air Force) have major responsibilities for the acquisition of systems
to be used by the operating forces, but ongoing operations are controlled by the
unified commands (e.g. Central Command, European Command, Pacific Command)
at the direction of the Secretary of Defense and the President. Analogously, the DNI
would have responsibilities for acquisition of systems that are part of the National
Intelligence Program; the heads of defense intelligence agencies would be
responsible to the Secretary of Defense for operating the systems.
Day-to-day tasking of the national systems operated by intelligence agencies in
DOD has been coordinated among “consumers” from throughout the Government,
including DOD, the State Department, the While House, etc.. The DCI has long had
authority to coordinate such tasking in response to NSC guidance.41 For geospatial
imagery, for example, the Source Operations and Management Directorate of NGA
routinely meets with representatives of agencies outside DOD to coordinate
production priorities. NGA acknowledges that authority to establish priorities
derives from the authorities of the DCI rather than solely from those of the Defense
Department.42 Similar arrangements exist in regard to other intelligence disciplines,
such as signals intelligence.
The Intelligence Reform Act also established a Joint Intelligence Community
Council (JICC) composed of the Secretaries of State and Defense and other senior
officials, to advise the DNI on establishing requirements, developing budgets,
financial management, and monitoring and evaluating the performance of intelligence
agencies. The statute also provides for the submission of advice or opinion of
individual members of the JICC to the President along with the recommendations of
the DNI.43
Past relationships among defense agencies, the Office of the Secretary of
Defense, and the Intelligence Community Management Staff have been complex; the
new legislation establishes a DNI with stronger budgetary authorities than possessed
by the DCI. Nevertheless, the requirement for close coordination between the DNI
and DOD agencies will remain. Given the need for agencies to meet different needs
of different parts of the Government, observers believe that this new relationship will
also be complicated and that considerable time will be required to develop
coordinative procedures.

41 Derived from the DCI’s authority under 50 USC 403-3(c) and section 1.5(m) of E.O.

12333 as amended by E.O. 13355 signed on September 1, 2004.

42 See comments of Robert Cardillo, quoted by Joe Francica, “Exclusive Interview-Robert
Cardillo, Director, Source Operations and Management, National Geospatial Intelligence
Agency,” Directions, July 29, 2004 ( .
43 S. 2845, version of November 20, 2004, Section 1031.