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November 25, 2002

M EM ORANDUM FOR: DEPUTY DIRECTOR O F CENTRAL INTELLIGENCEFO R COM M UNITY M ANAGEM ENT

FRO M: Kevin ScheidSUBJECT: Thoughts on the Future of Intelligence

As part of you r discussions with Mr. Ging rich in his assessment of the future of thenational security mech anisms of the government, you requested that I provide you with somethoughts on the future of US intelligence and to brainstorm th e "big picture." I believe thatchanges to intelligence could be cast in the context of an overhaul of the larger nation al securityapparatus - the organizations and departments that conduct diplomacy, defense, economicsecurity, energy secu rity, hom eland security, and the international aspects of law enforcement.Intelligence is a support function to this apparatus and could b e restructured in the context of alarger reevaluation that M r. Gingrich suggests to the President.International Environment and the National Security Apparatus

The changing international environment has been studied, assessed and reviewed bycommissions ad nauseam. Y ou have been invo lved in at least three reviews over th e past 12 to18 months within the Intel ligence C om mu nity alone: QICR, Global Trends 2015, and the NICassessment preformed fo r NSPD-5. A clear theme that arises from al l these reviews is that th ethreats w e face today are no longer tied to a specific geograph ic location, as was the case durin gth e Cold W ar (i.e., th e USSR, Eastern Europe, and China), but are now global - internationalterrorism, weapons proliferation, cyber attacks, narcotics trafficking, hum an trafficking, resourcescarcity, and infectious disease. The globalization o f the threat should compel us to thinkdifferently about how we conduct US national security in the future and the role of nationalintell igence.

The Departments of State, Defense, Treasury, Commerce, Energy, and Justice form themajor com pone nts of our national security apparatus. As the war on terrorism and our effortswith Iraq have demonstrated, our national security departments and agencies are becomingincreasingly interdependent. Diplomacy, national defense, economic security, energy security,homeland security and international aspects of law enforcement are now closely inter-related andcannot ac t independent of each other to execute a successful strategy.

This apparatus rests upon th e support efforts of intelligence, counterintelligence, globalcommunicat ions, R&D, information technology, and phy sical securi ty. Am ong these,intelligence serves all the policy agencies and is relat ively well def ined as a support function.On the other hand, counterintel ligence is relatively poorly managed across the National Security '"""**"-

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apparatus. The establishment of a new position of National Coun terintelligence E xecutive willhelp to coordinate policies and practices. Other sup port functions, such as globalcommunicat ions , research and developm ent, inform ation technology, and phy sical security arenot coordinated across th e national security apparatus and are performed by each of theindividual departments - Defense (including intelligence R&D), Energy, Treasury, and State.This lack of national coordinate is costly, causes dup lication of efforts, and requires unnecessarybureaucracy.Support Functions of National Security

To address this situation, we could look at these support functions across th e governmentin a more holistic man ner (see attached chart). To do so, the President could designate "NationalSecurity Executive Agents" to oversee and rationalize th e government's activities fo rintelligence, Counterintelligence, com mu nication s, R&D, inform ation technology, and physicalsecurity. It would be their job to assess existing programs, consolidate efforts across th e nationalsecurity departments, set funding priorities, and oversee the execution of programs. They wouldreport to the National Security Cou ncil. It would follow, that the DC I would be the designated"NSEA" for Intelligence and within this context his responsibilities could be cla rified and hisauthorities over aspects of national intellige nce altered or strengthened.

There are several models that could be considered to rationalize these res ponsibilities fo rth e DCI.. A Robust CIA: This alternative would focus th e D C I ' s efforts on building u p arobust, inde penden t CIA that would hav e as its sole missions: HUMINT, analysis andadvanced research and development into new sources and methods. It would end thecommuni ty ma nagem ent role of the DCI a nd place the Secretary of Defense as thelead agent for managing NSA, NIMA, N R O , DIA, and the service intelligence units.

The secretary would delegate these responsibilities to the new undersecretary ofdefense for intelligence. In this scenario the DC I would be the head of the CIA andbe a customer of the USD Intelligence fo r technical intelligence. The NFIP would goaway as a budget aggregation. The disadvan tage o f this approach is that it places th eDC I in a dependent relationship on the Defense D epartm ent in regards to technicalcollection (EVENT, SIGINT, and MASINT).In this alternative C IA could have th e following characteristics:

- An expanded clandestine HUMINT capabil i ty worldwide, including more out-of-embassy efforts.- An expanded covert action infrastructure, worldwide, aimed at terrorism and rapid r\.

analytic cells

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- Bui ld FBIS into a foreign and domestic foreign language center of excellence- Increased advanced R&D for the development of advanced sources and methodsof intellige nce collection&- Spin off all other elements of the 1C to their respective departmentsMerging CIA and Components of N R O , NSA : This alternative wo uld seek toexpand C IA be reorganizing the clandestine funct ions of NRO and NSA into CIAwhile leaving th e bulk of the technical intelligence activities of these agencies to theDep artment of Defen se and the new Und ersecretary of Defense for Intelligence. Thiswould include:- All special technology efforts at the NRO, whi le the "commodity" systems ofIMINT an d SIGINT directorates would continue under th e Department ofDefense.- Special C ollection Sites and other special collection efforts from N S A a s wel l asother clandestine SIGINT activities, particula rly those that a re currently done incooperation with CIA in order to access C I A ' s uniq ue authorit ies.National Intel l igence Enterprise (Scowcroft Recommendation): This alternative,spelled out in the NSPD-5 report, would realign the responsibility, authority andaccountability for national intelligence directly under the D C I with CIA, NSA,NIMA, NRO and Special Nav y al l reporting directly to the DCI. The Secretary ofDefense would adm inister TIARA, JMIP, DIA, and the service intelligence units.The advan tage o f this alternative is that it clarifies roles and responsibilities, removesth e bifurcated manag ement arrangemen t that currently exists and leaves und er oneofficial all the basic intelligence disciplines: HUMINT, IMINT, SIGINT, MASINT,an d analysis .

[Additional work needs to be done to flesh out these alternatives for intelligence.]

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