The so-called “black” budget — which refers to classified government spending on military procurement, operations, and intelligence — is not merely secret. It is actually deceptive and misleading, since it produces a distortion in the amount and the presentation of the published budget.

The amount of money that is purportedly appropriated for the US Air Force, for example, does not all go to the Air Force, the Senate Armed Services Committee recently observed.

“Each year, a significant portion of the Air Force budget contains funds that are passed on to, and managed by, other organizations within the Department of Defense. This portion of the budget, called ‘pass-through,’ cannot be altered or managed by the Air Force. It resides within the Air Force budget for the purposes of the President’s budget request and apportionment, but is then transferred out of the Service’s control,” according to a Senate report on the 2019 defense bill (S.Rept. 115-262).

Although the report does not say so, the Air Force budget may also include pass-through funding for the Central Intelligence Agency, which of course is not even part of the Department of Defense, as well as for other non-Air Force intelligence functions.

“In fiscal year 2018, the Air Force pass-through budget amounted to approximately $22.0 billion, or just less than half of the total Air Force procurement budget. The committee believes that the current Air Force pass-through budgeting process provides a misleading picture of the Air Force’s actual investment budget.”

The Senate therefore recommended that such “pass-through” funds be removed from the Air Force budget and included in Defense-wide appropriations.

But in the House-Senate conference on the FY2019 defense bill, this move was blocked and so the deceptive status quo will continue to prevail.

Earlier this month, the Director of National Intelligence and the Pentagon Comptroller wrote to Congress to present their views on the Senate provision. A copy of their letter, which presumably objected to the proposed move, has been requested but not yet released.

The logic of the Senate proposal was explained by Mackenzie Eaglen of the American Enterprise Institute in “Time to Get the Black Out of the Blue,” Real Clear Defense, June 13.

The National Reconnaissance Office (NRO) has modified its classification policies in favor of heightened secrecy, withholding budget records that were previously considered releasable and redesignating certain unclassified budget information as classified.

NRO is the U.S. intelligence agency that builds and operates the nation’s intelligence satellites.

Since 2006, and for most of the past decade, the NRO has released unclassified portions of its budget justification documents in response to requests under the Freedom of Information Act.

But in a January 23, 2017 letter, the NRO said it would no longer release that unclassified budget information, which it now deems classified.

“The NRO has determined that a series of unclassified items in the [FY 2016 budget justification] document in the aggregate reveals associations or relationships not otherwise revealed in the unclassified items individually; thus, in the aggregate, this information meets the standard for classification under E.O. 13526 Section 1.7(e),” wrote Patricia B. Cameresi, NRO FOIA Public Liaison, in her FOIA denial letter.

As a purely technical matter, the latter claim is probably a misreading of the Executive Order, which states in Section 1.7(e):

“Compilations of items of information that are individually unclassified may be classified if the compiled information reveals an additional association or relationship that:  (1) meets the standards for classification under this order; and (2) is not otherwise revealed in the individual items of information.”

Properly understood, the fact that various unclassified items reveal additional information in the aggregate does not mean that those items meet the standard for classification. That requires a separate determination which, in any case, is discretionary. Classifying compilations of unclassified budget information is a threshold which was never crossed in the past and which has not been explicitly justified by NRO here.

The NRO also invoked a statutory exemption in 10 USC 424, which says that NRO (along with DIA and NGA) cannot be compelled to disclose “any function” at all.

The upshot is that the NRO is abandoning the budget disclosure practices of the past decade, and is positioning itself to withhold anything and everything that it prefers not to release.

An administrative appeal of the NRO FOIA denial was filed yesterday.