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RESEARCH BRIEF NUMBER 5, SEPTEMBER 2001

EUROPEAN UNION CENTER OF CALIFORNIA

Reshaping National Intelligence for an Age of Information Gregory F. Treverton

The world of intelligence has been transformed by the end of the Cold War and the onset of the information age and needs to be reshaped from the ground up. This is the central argument made by Gregory F. Treverton in Reshaping National Intelligence for an Age of Information (Cambridge University Press, 2001). The tragic attacks of September 11 underscore that conclusion. The book describes intelligence gathering and analysis as conducted during the Cold War, explains why and how these processes must change in its aftermath, and provides a practical agenda for launching that reconstruction. During the Cold War, western intelligence agencies had one principal target (the Soviet Union and its allies), a narrow group of customers (government political and military officials), and a finite pool of information from sources owned (satellites) or managed (spies) by the intelligence agencies. All of these premises have been overturned or cast into question. There are now many targets and many possible missions, a wider world of potential intelligence customers, and an overabundance of information through which to sift. The task for the intelligence community is therefore not simply to convert old capacity to new purposes; it is to change fundamentally how the business of intelligence is conducted.

RESEARCH BRI EF

RESHAPING NATIONAL INTELLIGENCE FOR AN

AGE OF INFORMATION

The old and new worlds of intelligence met on September 11 when terrorists attacked the World Trade Center and the Pentagon. Terrorism is an old world problem in new world circumstances. T he new world is much more open, with vast amo unts of informati on, much of which is neither owned by intelligence agencies nor can be regarded as reliable­for example, that stew o f fac t, fiction and disinformatio n known as the Web. T his new openn ess needs to be put at the heart of redirecting the intelligence business from a focus on its old stock-in trade, secrets, to a new focus on the synthesis of info rmation . Additionally, this new environment dictates that intelligence agencies must convincingly justi fY their actions to national publi cs as a w hole, and not simply rely on secretly reporting to selective committees of national legislatures .

T hese changes are necessary because of the openness that characterizes the "age of informati on."Terrorists, however, are not part of that new openness. They do not advertise their plans, so intelligence's special sources remain impo rtant­espionage or hu man intelligence (HUMINT), intercepted cOITU11Un.ications or other signals (S IG INT), and photos or other images (IMINT).Yet even to grapple with terrorism , methods from the old world need to be reshaped by the circumstances of the new. For example, the C IA needs to conduct espionage in a very new way - outside the official cove r of embassies, m ore patiently and in a m ore targeted fashi on. Even then, it will be hard pressed to penetrate a terrorist cell in South Asia or the Middle East. I t will need fri ends o r allies, not all of who m will be states, and it will need to share information with them in ways that do not have much precedent. Those new "sharers" will be partners, and sources, and customers of the reshaped intelligence cOITUnunity.

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CORE ARGUMENTS

We still have an inadequate vocabulary to describe the "post-Cold War world ." In part that is because so much is changing at once. To begin with, the very nature of threa ts to those states previously forming the western alliance has changed. T he world remains a dangero us place, as the recent terrorist attacks remind us, but those threats are not in a class with those previously posed by the Soviet Union. T he new threats are "snakes," not "dragons," to use the phrase of former Director of Central Intelligence, R . Jam es Woolsey. And while not as awe-inspiring as the threat of nuclear annihilation, these snakes are more likely to bite than was the Soviet dragon.

In military terms, the United States is the world 's sole remaining superpower in the sense that it alone has the whole panoply of military instruments, the capacity to combine those arms in complex, joint operations, and the ability to project those operations over long dis tances. But American military predominance gives rise to a paradox: because the United States is so predomi­nant in conventio nal war, it is not likely to fi ght another one. O nly a fool, or a desperate man, would repeat Saddam Hussein 's mistake by taking on the United States and its allies where they are strong; future foes will instead try to fi nd where western states are weak. T hey will not confront western power symmetrically. R ather, they will reach fo r asymmetric strategies and tac ti cs, in which weapons of mass destruction, especially chemical and biological weapons, may well loom large.

At the same time that the nature of the threat is changing, so too is the nature of the target. Global processes are slowly underm.ining the hegemony of the territorial state, w hich has been the dominant fac t of international politics since the Treaty ofWestphali a in 1648. The transition from the territorial state to w hat m.ight be called the "market state" has been going on for at least a century. That transition, however, was obscured by last century's preoccupati on with particular, and particularly fearsome, territorial states- Germany, Japan and

the Soviet Union. Attention to this transition may conti nue to be muted, but the underlying changes will not be reversed.

Many of these changes reduce the capacity of the state to respond, on its own, to external threats, including terrorism. Critical levers that used to be in the hands of governments are passing to the private sector, with the result that some private fi rms are now considerably more powerful than som e governments. Official government aid to developing countries now is trivial in comparison with private capital fl ows. Each of the ten largest companies in the world has total annual receipts larger than the GNP of 150 of the 185 members of the United N ations, including countries such as Portugal, Israel and M alaysia. M ore subj ectively, I would venture to say that at least fi fty non-governn1ental organizations (N GOs) now enjoy greater legitimacy than fi fty UN member nations.

T he circumstances of the market state are transforming the role of government, as the market respects neither the borders nor the icons of the traditional state. Consider that, fro m 1983 through 1988, the rati o of private to public flow s of capital to the poorer countries averaged just under 1- to-2; between 1989 and1 995, this ratio switched to almost 5-to-1. Later, just before the Asian economic debacle of 1997 to 1998, it approached 10-to-1. It is hardly surprising, then, that the role of government has changed so dramatically. T he government of the territorial state was a "doer;" students of public administration and later public policy learned that governments' choices were to "make, buy or regulate." For tomorrow's public managers, o n the other hand, the choice will be "cajole, incentivize or facilitate"­a very differe nt task (o ne rendered in punchier prose as "carrots, sticks and sermons") .

Even in the era of the market state, however, governments continue to possess important assets. T hese include infrastructure, legitimacy, and the power to convene coalitions of the willing. Sometimes these will be groups made up

of private organizations that otherwise would not or could not talk to each other. At other times these groups will be composed of other public authorities. Despite the legitimacy provided by international law and UN resolutions, it ultimately required a coalition of willing states to impose peace on Saddam H ussein's Iraq, decency on the Bosnian Serbs, and minimal orderliness to Zaire's succession.

Another important asset of government is information-that is, intelligence. But adapting intelligence agencies to the new realities outlined above will require a shift in mind-set that can hardly be overstated. In the United States, for example, the intelli­gence agencies have only slowly come to the realization that they work for Congress as well as the executive. They will not come easily to the idea that they work with, and sometimes for, C ARE and Amnesty International as well.

THREATS NEW AND OLD

For some of these emerging developments, the old-fashioned language of threat is appropriate. That is plainly the case for terrorism. If terrorists have not used atomic or biological terror thus far, that has been because "conventional" explosives have been lethal enough for their purposes. But, despite these continuities, there are important distinctions that must be drawn between traditional threats and the new problems facing civilization at the start of the twenty-first century.

To begin with, the new terrorism seems to differ from the old in motivation. That change was hinted at by the first World Trade Center bombing in 1993. Previous terrorists could be frightful but typically were rational (at least in the instrumental sense of the term): they used terror in pursuit of political objectives. They wanted something. They therefore had to reveal their role, opening the possibility of retaliation against them or their state sponsors . By contrast, these new enemies seem to have no political objectives we can satisfY or spurn. They want revenge for

acts of ours that they cannot describe and that we would not recognize. They are apocalyptic, and this changes the calculus of detection and deterrence.

GLOBALIZATION AND "THREATS WITHOUT

TH REATEN ERS"

In addition, for many other results of global processes even the old language of threat is misleading, and the old concepts do not suffice. In part this is because these concepts were developed to address the concerns of the territorially-defined state associated with Westphalia. The territorial state has long been subject to external stress, but some of these pressures are now becoming intense. Sources of these strains include:

Globalization and economic inequality. The trend towards economic globalization both integrates and disintegrates. Globalization integrates in that national borders and distances matter less. At the same time, though, in a world where human capital is really the only national endowment that matters, countries that opt out of the global economy and people with fewer skills are left behind. Thus, the gap between the haves and have-nots-a disintegrating force-is growing, not just between rich and poor nations but within nations, including the rich ones.

The communications revolution. The information revolution is the key enabler of economic globalization. It was the information revolution that undid the Soviet Union; planning and brute force could produce roads and dams but could not induce innovation in computer chips. It is continuing to undermine the ability of governments to control information. A generation ago it was feared that computers would abet dictators; Big Brother seemed closer at hand. N ow, the opposite seems true.

R ising belief in the non-material. People seek to differentiate "us" from "them" in religion, ethnicity or other ways . In that sense, the tragedy of the former Yugoslavia and the revival of Islam so visible around the world look Eke two sides of the same coin; what motivates the American militia

movement does not seem very different. Perhaps partly in abenation from processes of global integration, people seek some form of transcendental association.

Changing demographics. Over time, enormous disparities in growth rates between the Northern and Southern hemispheres will sharpen emigration pressures. They also create youth "bulges"-that is, cohorts, especially of young men, much too large to be integrated into the job force. Those bulges may be sources of dissatisfaction, and therefore of instability, in key developing countries like Egypt, Pakistan and Turkey, and they can be sources of recruits for terrorism.

Environmental concerns. Like demographic shifts, these are typically chronic, not acute: from one year to the next an environulental indicator may simply worsen gradually, almost imperceptibly, then come to a sharp crisis once some tipping-point is reached. Imagine what two nuclear meltdowns, two Chernobyls, within a year would do to the international agenda-or to the intelligence agenda.

These developments lead to a new environment wherein societies can face threats without threateners. These threats result from the cumulative effects of actions taken for other reasons than hostile intent. Those who burn the Amazon rain forests, those who migrate, those who spread pandemics-indeed, even international drug traffickers-do not necessarily wish our societies harm. They simply want to survive or to get rich . But, collectively, their pursuit of self-interest becomes a threat to our security.

These new hazards differ sharply from the Cold War's nominal threat. They may imperil our collective health or environment, for example, rather than immediately jeopardizing our national survival. But the dangers posed by these developments, though less dram atic than nuclear annihilation, are no less real. As a group, these new threats tend to be:

Chronic and long-term, not acute and short-term. Human beings are best equipped to deal with acute threats, like war, not with chronic problems

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whose causes are today but whose consequences are tomorrow or the day after. By contrast, threats without threateners are like bridges whose maintenance can be deferred from year to year w ithout visible effect until , all of a sudden, they are on the verge of falling down.

Not necessarily "zero sum " in the manner of traditional threats. In war, one state 's loss usually is another's gain. By contrast, ac ti on against environmental degradation can produce gains for all. But there will still be competition over who pays and how much.

Possibly irrellersible. The effects of wars are generally reversible witrun a generati on o r two. Societies recover. N ot so, perhaps, for global warming, whose effects might be permanent, or for some pandemics, like AIDS, that might rob societies of several genera tions ofl eaders.

Typically less susceptible to unilateral approaches than traditional security issues. For all the Cold War alliances, Am eri cans still felt many of the levers of their securi ty were in their ow n hands. T hat seems less so fo r many of the " new" issues . C o ntaining migratio n, limiting enviro nmental degradation, and combating terrorism inherently require cooperation with other states.

Beyond the traditional domain of gOllernment. National security during the Cold War was a government monopoly. The threat was political and military, and most of those levers were in the hands of goverlUnent, parti cularly the fe deral government. That is much less so of the newer challenges, for w ruch many of the levers are in the hands of companies or private citizens.

N either 50 "cheap" nor so ~trlifying as traditional security threats. The C old War's nuclear danger was unifYing for mass publics. At the sam e time, for most citizens, responding to the Soviet threat merely meant paying taxes; their daily lives were not otherwise much affected . T hat is not so for many o f the new dange rs. For a " new old" issue like terror ism , the critical debate ahead is how much Ameri cans and others will need to change their daily lives-

from how they travel, to whether they register with their local poli ce, to how often their persons are searched.

ESPIONAGE IN THE INFORMATION AGE :

PUZZLES AND MYSTERIES

One starting point for analyzing the implications posed by the new information environment for intelligence agencies is to distinguish among the many operations they undertake: espionage, liaison, covert action, and counterintelligence. Of these, espionage-persuading foreigners with money, ideology, or other inducements to provide information secretly about their politics and institutions- is most valued for solving immediate, tactical "puzzles." What is O sama Bin Laden planning? Puzzles have particular solutions, if only we had access to the necessary secret information. And solving puzzles was the intelligence community's stock-in-trade during the Cold War. How many missiles does the Soviet Union have? H ow accurate are they? What is Iraq's order of battle?

Secrets are 1T1Ost valuable with regard to enduring puzzles, ones that will still matter tomorrow if they are not solved today. A foreigner's negotiating position is a perishable secret; after today's round the U.S. negotiator will know it. By contrast, the order of battle for the Iraqi military is an enduring puzzle: whatever we know about it today, another piece of the puzzle will always be welcome tomorrow. Spying, however, is a target-o f-opportuni ty enterprise. What spies may hea r or steal today, or be able to communicate to their case officers today, they may not hear or see or be able to get o ut tomorrow. Worse, the crisis moments when information from spies is most valuable to us may be precisely when they are most exposed, w hen to communicate with them is to run the greatest risk of disclosing their connection with us.

Different from a puzzle is a mystery, w ruch is a question that cannot be answered with certainty even in principle. M exico's inflation rate trus year is a mystery. Interrogating M exico's president in detail would not answer it , because he does not know the answer. No one does;

the mystery is real. During the Cold War, the puzzles were more important than they are now (how many missiles does the USSR have?), but there were plenty of mysteries then too (will the Soviets close access to Berlin?). Indeed, Ameri can intelligence agencies probably made a mistake in making puzzle-solving their principal Cold War business. Today's chaotic world likewise throws up plenty of puzzles to be solved (did the C hinese sell M - ll missiles to Pakistan?).Yet most of the critical questions facing fo reign policy makers are mysteries. Will N orth Korea keep its part of the nuclear bargain? Will C hina's C ommunist Party cede primacy? Will Iraq misbehave again?

Coll ecting secrets remains crucial to solving foreign policy puzzles. For the mysteries, however, information collected secretly may be helpful, but it is seldom as critical as it was to solving Cold War puzzles. Then, information was scarce; now it is overwhelming. T hen, hi nts of Kremlin politics had to be guessed from pieces of previous puzzles that had been solved; now, Russia's politi cians talk as much as any others. When I was running the national intelligence estimates (NIE) process for the United States government, I was preoccupied with mysteries . At trus distance, I cannot recall a single spy report that shaped or affected my view of a parti cul ar mystery. Indeed, in those closed coun tries that were moving toward mo re open politi cs, such as Russia, spies often reported what was later available in the Financial Times. And sometimes the Times scooped the spies!

Plainly, neither the Uni ted States nor its western allies are likely to forswear espionage given the continuing threats posed by terrorists, rogue states, and other secretive foes . But the potential gains from espionage need to be balanced against the continuing risks inherent in the enterprise. T hese risks are not merely embarrassment for the government if its spies are discovered, as was the case when France ejected five C IA officers in 1995. T he stakes can be much higher, as when, from 1984 until the early 1990s, C IA operatives in Guatemala engaged in acts that violated national and intern ational

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RESEARCH BRIEF

law and prevailing moral, ethical , and human rights standards. The potential for such abuses is built into secret relationships. If the United States is to conduct espionage with less risk of costly errors and embarrassments, it needs a completely overhauled clandestine service-one that is dramatically smaller, more tightly targeted, and that for the m ost part operates independently of American embassies abroad.

POLICY IMPLICATIONS

Plainly, the changed world requires a fundam ental reshaping of intelligence. H ere I will fo cus on policy implications for the U.S. government, although parallel suggestions could be applicable elsewhere.

Restructuring the Clandestine Service T he required reshaping of the C IA's

spy-masters, the clandestine service, goes well beyond w hat is imaginable in today's political climate. Indeed, today's first answer- m ore money-is exactly what is /'lot required . First , espionage should be narrowed to focus on potential foes near U.S. troops deployed abroad, the governments of a small number of potentially destabilizing rogue states, and closed groups that threaten to engage in terrorist activities against the United States . In the post-Cold War world , far-flung clandestine activities across the globe can no longer be justified. T he risks associated with clandestine operations warrant their use only when the informatio n obtained covertly would significa ntly enhance natio nal security.

Second, this streamlining implies that the C IA should no lo nger have stations everywhere around the globe. T here is m erit to the counter-argument, that tomorrow's untidy w orld m akes it impossible to predict w here the United States w ill want to act, and so some infrastructu re fo r spying should be sustained almost everywhere. T he argument is particularly strong when supporting military operations. Since we cannot predict where future military engagem ents will occur, however, the risks of such a far-flung presence outweigh the po tential gains. To sustain C IA operations in countries that otherwise would not be priorities

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for espionage is to insure that there will be more nasty flaps over spies and spymasters , as in France and Guatemala, for too little gain.

Third, the narrowed targeting of the clandestine service means it should be tasked separately from, and more narrowly than, the rest of the intelligence community. It should fo cus only on those high-value secrets that cannot be collected another way. The value of those secrets can, to be sure, only be assessed in light of what is available openly. But the task for the clandestine service is obtaining the critical secrets.

Fourth, this reshaped clandestine service would have few stations abroad, and those would mostly be limited to liaison activiti es (that is, sharing information and working with foreign intelligence and police services) . Instead, it would operate from the United States and through case officers abroad outside embassies and under non-official cover. The argument for operating without diplomatic cover is twofold. The first argument concerns the changed targets of espionage. During the Cold War, when the C IA's targets were Soviet offi cials anywhere and offi cials and politicians from the local country, the diplomatic cocktail party circuit was not a bad place to troll for recruits. But terrorists or Colombian drug cartel leaders are not likely to be frequent guests on the embassy circuit. Second , operating under diplomatic " cover" has by now becom e paper-thin; what it m ostly suppli es is diplomati c immunity, thus lowering the risk to CIA spy-masters should they be caught by local counter-intelligence offi cials. Given the new targets of espionage, criminal prosecution is the least of the threats faced by such operatives .

Networks, Not Stovepipes What about the larger picture­

intelligence gathered through all the techniques available to modern intelligence agencies, and not simply their clandestine operations? In the circumstances of the C old War, there was a certain logic to the way the intelligence community was organized. In the United States, intelligence was

structured according to the different ways it was collected- the N ational Security Agency (NSA) for intercepting signals, the C IA's clandestine service for spying, and so on. Each of these different " INTs," or "stovepipes" in the language of insiders, could concentrate on the distinct contribution it made to understanding the Soviet Union. In the process, though, those INT s became formidable baronies in their own right.

With the Cold War over, however, this structure no longer m akes sense. N o business would organize this way. In the new environment, there are many targets and many consumers (though there are some consistent alignments among targets, customers and collectors). In these circumstances, a firm would organize around lines of business, establishing a distributed network or a loose confederati on in which different parts of intelligence would endeavor to build very close links to the customers each served . The existing Director of Central Intelligence (DCI) centers-for counter-terrorism , counter-narcotics, and the like-are a suggestive model. T hey organize around a problem or line of policy. They prim.arily integrate within the world of intelligence, though they do provide a focal point for connecting to policy. And the distributed network would be "virtual," not bricks and mortar, because w hile some problems, like N orth Korea or terrorism, will be enduring, others will rise and recede quickly.

Splitting the Analytic Franchise The purposes of intelligence in

the era of the market state suggest two organizational principles. The first is to distinguish between tactical puzzle solving and mystery framing. The second is the need to move much further in decentralizing intelligence in order to get closer to its consumers-a process that needs to be pushed to the point that it begins to erase the line separating intelligence and policy.

Tactical puzzles, in which secrets truly matter, are both fewer and more varied today than during the Cold War but they remain important. For solving

these puzzles, analysts need to be much closer to the collectors of secrets-close enough to redirect the collectors' efforts if necessary. At the other end of the intelligence pipeline, getting policy officials to pay attention is generally not a problem.

The franchise of intelligence's mystery framers is more tenuous. These analysts may indeed need access to secrets, but their crucial partnerships are more Likely to be with colleagues outside of the intelligence coml11.unity and outside of government, in the academy and think-tanks, in NGOs and private business. But for these experts to have any chance of influenc­ing their policy counterparts, they must be close enough to policy officers to understand their mind-sets and agendas.

Former Sen. Daniel Patrick Moynihan once wondered if a CIA that couldn't notice the signs of impending Soviet collapse deserved to exist. While that case offers many cau tionary lessons, the greatest is about how the intelligence and policy communities relate to one another. Questions that go unasked by policy makers are not likely to be answered by intelligence officers. Likewise, if intelligence does provide answers without being asked, those answers are unlikely to be heard. Perhaps the CIA should be not abolished but

dispersed, its analytic pieces assigned to State, Treasury, ConU11erce and elsewhere around official Washington.

New Partners for Intelligence The last challenge for intelligence

agencies in an era of market states will be to reach out to new partners, even when dealing with such difficult targets as terrorism. It will mean conceiving of intelligence strategically, as a means of helping others to see a set of issues the way the United States does and so facilitating the building of coalitions. The U.S. intelligence community has, in principle, been grudging in sharing its take, allowing a few trusted friends to see some of the crown jewels only if they had something to contribute in return. [n practice, however, the U.S. has been creative in sharing intelligence with, for instance, partners in UN peacekeeping operations.

In the new world of the market state, a world that is not fully open everywhere but that is not very closed anywhere, humanitarian NGOs will know more about many African countries than the CIA, and oil companies will be as expert as intelligence agencies on Indonesia. Indeed, one telling question will be the degree to which the intelligence conU11.Unity can be broadened to serve shared international

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Number 2, September 2000, The Myth of the Global Corporation, Louis W Pauly

purposes, given its very national origins. After all, intelligence has trarutionally been thought of as a way to get a leg up on other nations, not to bring them into coalitions of the willing. But the campaign against terrorism will bring together both the willing and the reluctant. Countries and groups that are no friends of the United States may be brought into an anti-terrorism coalition, and intelligence cooperation­including laying out the case against particular terrorists-will be part and parcel of assembling and sustaining such a coalition. In time, such a coalition might give real force to an international norm against terrorism. The strains on intelligence agencies posed by such an endeavor will be great. But the alternative is worse: an increasingly anachronistic framework for dealing with national intelligence in an era of unprecedented challenges.

Gregory F Trellerton is senior policy analyst at RAND and senior fellow at the Pacific Council on Intemational Policy, a Vf,.tst Coast leadership forum.

Reshaping National Intelligence for an Age of Information is available from Cambridge University Press; for more information, see http: //www.cup.org.

Number 3, December 2000, Fences and Neighbors: The Political Geography of Imm igration Control, Jeannette Money

Number 4,June 2001, Markets and Moral R egulation: Cultural Change and the Single Market, Paulette Kurzer

The opinions expressed in Research Briifs are those of the authors, and do not necessarily represent the views of the European Union Center of California or its affiliates.

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