WWS 401a: Intelligence Reform in the Post-Cold War Era

Professor Diane C. Snyder


John Maris
January 6, 1997

On my honor, I did not violate the honor code in the preparation of this paper.



For a variety of reasons, reform of the U. S. intelligence community has recently been on the public policy agenda. Perhaps the primary reason is that intelligence is a national security operation: in the wake of the upheavals in the former Warsaw Pact nations, it is inevitable that all national security operations should come under scrutiny. It has been politically expedient for public figures to characterize these upheavals as an American "victory" in the Cold War. Whatever the merits of this claim, the public, and consequently their representatives, have begun to look forward to reaping the spoils of victory. This "peace dividend" is usually sought in reduced expenditures on national security functions. The upshot for the intelligence community has been that budgetary reductions are expected. This has been even more emphasized as a result of the current public preoccupation with balancing the federal budget.

The idea of a peace dividend is not the only reason that intelligence reform is being discussed (and accomplished). Many new perceived national security threats have begun to worry the American populace. In particular, the myth of American invulnerability to terrorism has been exploded, and drug prices are down, indicating increased trafficking success. It is newsworthy events that catch the public eye and that spur Congressmen to action events like the Ames and Nicholson cases and the Oklahoma City bombing.

In spite of these new issues, the case for intelligence community reform is still being phrased in terms of intelligence community reduction. According to John Hedle , this is an inevitable trend in any institutional reform effort. It is also an unfortunate trend. The objective in intelligence reform should be to find ways to improve our intelligence effort, with cost reductions being a secondary benefit coming through increased efficiency. Under no circumstances should our national security beimperiled: reductions in the intelligence budgets will certainly harm the effectiveness of the intelligence effort and intelligence is vital to the national security.

The question of the proper size of the U.S. intelligence effort will not be addressed here. Rather, taking the present size of the intelligence effort as a given, an attempt will be made to show that it could be arranged more efficiently and intelligence made more effective overall. It will also be outside the scope of this discussion to determine the appropriate targets for intelligence in the post-Cold War environment. However, it is assumed that a reformed intelligence community will have to be very flexible and dynamic in responding to new developments and threats to the nation's security.

Stated briefly, the focus of this essay will be the organizational structure of the intelligence community and its components. A brief history of organizational theory (centered on organizational theory for public administration) will be paralleled by a description of the unguided organizational evolution of the intelligence community. Following this path will allow a clear presentation of the current organizational problems of the intelligence community and place these problems in context. Finally, an application of modern organizational theories to these problems will suggest avenues for reform and improvement, avenues that are already largely being investigated within the intelligence community.

Before continuing, it should be noted that although several other possible approaches to the problem of organizational reform will not be discussed, they have been considered. A budget-centered approach has been discarded for two reasons. The first is that, as noted above, the contemporary tendency to view reform as reduction leads to a distorted reform process which sacrifices concerns of effectiveness to the altar of frugality. The other reason that a budget-centered approach has been rejected is that the information necessary to perform such a review is not available to the public. The second approach that has been discarded is the comparative approach. Although it seems intuitively sensible to look at other countries for examples as to intelligence community reform, the comparative approach is not productive. U.S. intelligence is on a completely different scale to any other existing intelligence effort. Furthermore, the governmental environment in which the U.S. intelligence community operates is far different to that in other countries. For instance, the British civil service is vastly different (in particular, it is much more closed to the public and much less politicized) from the American bureaucracy; Mossad is simply not placed under the same restraints that the CIA faces in terms of covert action and other activities. Ultimately, U.S. intelligence is too unique for comparisons to be fruitful.


The complexity of the evolution of organizational theory will mean that any distilled version will suffer from a lack of completeness. It seems that no two academics can agree on a formula for following the progress of this patchwork social science. Nonetheless, several main strands can be followed. In the context of reform of the intelligence community, an effort will be made to identify theories as they relate to inter- organizational relations as well as intra-organizational relations.

The Progressives

The main focus of progressive organizational theory was the building of state capacity. As the government expanded, so the problem of control of the bureaucracy reared its ugly head. The progressives had two answers to the problem of control: better personnel and better organization.

In the area of personnel improvement, the progressives wanted to purify the public service and end the spoils system which had dominated the executive branch for so long. This purification took the form of the creation of a merit-based, tenured and systematically classified civil service. The civil service was supposed to be a force of expert "means-selectors" who would take formulated policy and select the best means of execution. This sharp division between policy-makers and bureaucrats was conceived of as an "arc of transfer" between policy, and planning and execution. Typically, the result was that agencies were granted broad open charters by the legislature and their expertise and professionalism was trusted. This is very much the case with the intelligence agencies today particularly the CIA. The 1947 National Security Act which charters the CIA includes an open clause which has been interpreted to allow the CIA to conduct covert action operations, and in general, "the CIA's mission was only loosely defined." Although more restrictions have been placed on the CIA, especially since the mid-1970's, the majority of the restrictions are embodied in easily changed Presidential directives, rather than in Congressional legislation. Overall, in spite of rules regarding acceptable sources and restricting domestic activities, the CIA is very free to act and set its own goals, with NSC and Presidential approval.

In terms of organization, the progressives espoused what has now come to be known as classical organizational theory. This is probably the sort of organizational theory that is familiar to most readers. Although they usually cited Weber, the progressives may have oversimplified his theory of bureaucracy. Fundamentally, classical organization theory seeks control from the top. The main principles were unity of command (one boss), line-staff distinctions (managers separate from line-workers), narrow spans of control (each manager oversees a limited number of workers), and functional and scalar principles (branches organized by production function to achieve economies of scale). The result of the application of these principles is a pyramidal organizational structure that has very steep sides (i.e. the ratio of managers to workers is typically quite high).

Overall, the progressives did not stray very far from the basics of Weber's sociological treatises on bureaucracy. They followed his "legal-rational" pattern of setting up authority. It is this classical organizational theory that still springs to the popular mind when asked to consider questions of organizational reform. Its drawbacks are many and varied and will be discussed below. At this point, however, it is worth mentioning one in particular. With its reliance on hierarchical pyramidal structures, classical organizational theory "largely ignor[es] the inter-organizational arena." This drawback alone makes classical organizational theory almost useless for our purposes, and yet it is still the underlying postulate of many contemporary reform proposals.

Post-Second World War Theory

The next evolutionary step taken by organizational theory is probably the most radical. The inherent problems of classical organizational theory were beginning to undergo analysis even before World War II.

The problems of hierarchy were mentioned in passing above. These problems received a great deal of attention in the early post-war period leading to a trend away from hierarchical structures (see section on Contemporary Organizational Theory). Ultimately they are problems of accountability and responsibility. It is the foundation of fairness and justice that those who are responsible must be held accountable. This axiom applies equally to organizational theory. In a narrow, tall, pyramidal hierarchy it is hard to keep responsibility and accountability together. Accountability gravitates toward the top managers will be held accountable for performance. Responsibility heads down the chain of command as the executives become increasingly isolated from the substantive activity of their agencies. The problems of asymmetrical information (subordinates have more information than their bosses), moral hazard (subordinates know they will not be held accountable for poor performance so they perform poorly), shirking, and outright subversion become serious. Classical organizational theory failed to account for these tendencies. These unforeseen pathologies in complex hierarchies spurred a move away from classical organizational theory (see section on Problematic Internal Institutional Pathologies for intelligence-specific examples).

In 1938 Chester Barnard first put forward his analysis of organizations. In greatly simplified terms, his leap was to recognize the inseparability of the formal and informal organization. The formal organization is the thing that appears on the organizational chart. The informal organization is the collection of contacts between members that are not in their job description: personal friendships, conversations over lunch, office gossip, etc. This theory has been endlessly expanded upon and amplified in the post-war period.

Other concepts have been added to the accepted "knowledge" of the field. The idea of democratic administration put forward by Simon and Waldo started a long trend toward increased employee participation. Barnard's work has been expanded upon by the "human relations" theory of organization. This analytical setting has been first and most profoundly expressed in Philip Selznick's seminal Leadership in Administration. Drawing on the above-mentioned ideas of moral hazard and asymmetric information, Selznick put forward the idea of organizational "institutionalization." He argued that as organizations age, they develop characters and institutional goals, mostly centered around survival and aggrandizement of the organization "to institutionalize is to infuse with value beyond the technical requirements of the task at hand." Another way to put it is that people in organizations come to believe that good only comes from the modern organization so they pursue the health of the modern organization. Ultimately this can have negative consequences. It is Selznick's conception of "institutionalization" that underpins Halperin's assessment of the national security process which shall be discussed further below.

Contemporary Organizational Theory

Given all these criticisms of the classical organizational theory of the progressives, it is no wonder that contemporary organizational theory looks markedly different. There are many trends in current organizational theory, but an effort has been made to present only those with relevance for the intelligence community. Many of these trends are the natural ends of the process of evolution described above. Worker ownership or, at least, increased participation has been recognized as a good solution to the problems inherent in hierarchical structures. The erosion of the line-staff distinction has led to improved communication even within formally hierarchical organizations. Managers now often actively manipulate the informal organization to improve morale and productivity. One result has been the total quality management movement. Other innovations such as the Japanese quality control circle have been introduced worldwide to increase worker participation.

Attempts have also been made to address the theoretical criticisms of hierarchy by suggesting new forms of organizational structure. These suggestions do not discount the importance of the informal organization. Rather, they seek to encompass recent advances in organizational theory and bring the formal and informal organizations closer together. Perhaps the most interesting concept has been that of the matrix form organization. First conceptualized in the 1950's, advanced versions of this blueprint still dominate the most recent efforts in organizational theory.

The basic idea of the matrix plan is to eliminate vertical flows of information and replace them with horizontal flows. The line-staff distinction disappears entirely because the managerial element is almost completely removed. Senior management still exists, but primarily to evaluate workers and set organizational goals. Middle management is eliminated entirely. All work is performed by independent, self-sufficient project teams or clusters. By discarding the hierarchical scheme, the problems of hierarchy are solved. Of course, in practice, matrix organizations have generated their own problems.

One other recent trend is towards marketization of organizations. So-called network or hollow organizations are the ultimate end of this trend. Network organizations consist only of senior management and contract out for all their production needs. Former line divisions are set up as independent contractors who compete for management's contracts. Much of current organizational theory is a composite of these two theoretical ideas, that of the matrix organization and that of marketization.

One of the main findings of this project has been that radical reorganization of the form suggested by contemporary organizational theory is not suited to the reform of the U. S. intelligence community. There are many reasons for this. One obstacle to thorough structural reorganization is the size of the intelligence community. It would surely prove impossible to disintegrate the massive hierarchical structures in place in the intelligence community. Agencies like the NSA are simply too large to accommodate significant structural change particularly of the nature suggested by contemporary organizational theory. It would not be wise to institute the sort of "organized chaos" that competitive companies have adopted at the scale that would be necessary in this case.

Another obstacle is the need for secrecy in intelligence work. This will be discussed below. At this point, suffice it to say that it would be very difficult to create matrix structures or embrace marketization under the stringent security conditions required by a successful intelligence operation. Further problems would be encountered due to the decentralized nature of the intelligence community. Without a single managing body, it is next to impossible to initiate top-down reform of an organization. In fact, it is somewhat misleading to call the intelligence community an organization at all. It has some characteristics of an organization (such as a titular head), but many more characteristics of a collective of separate organizations.

That said, there is still much in contemporary organizational theory that can be applied to reform of the intelligence community. There are elements of matrix structures already present in the community and these structures are growing and developing as we speak. Although this will be examined below, at this point it should be noted that contemporary organizational theory suggests that this trend toward task force creation and multidisciplinary projects is a positive one. There is also room for the marketization of intelligence work, in the arena of community interactions with industry and academia. This will also be discussed further below.

Furthermore, contemporary organizational theory generally emphasizes the need for organizations to be dynamic and "time-based," the idea being that "under conditions of rapid environmental change, successful organizations adopt less formal, more decentralized . . . structures." Many advocates of technology-based organizations see adaptability and flexibility as the sole basis for any useful organizational structure. Dr. Daniher's project for the creation of an information "web" to counteract the stovepipe effect (through which intelligence work is carried out in isolated function-based "stovepipes," generating a poor flow of information) certainly would meet with approval from the advocates of technology-based organizations.


The end of the Second World War represented a unique opportunity for reform of the U.S. government bureaucracy. This fact was recognized at the time. It has been claimed that the post-World War II government reorganization effort was the last great attempt at centralization of the bureaucracy. Although this was a government-wide effort, there were two major characteristic innovations. The first was the dramatic expansion of the Executive Office of the President (EOP). The second was the unification of the military services under the Department of Defense (DoD). Since the CIA was created as a part of the EOP, and since the bulk of intelligence community work is performed within the DoD, these two innovations are obviously of fundamental concern to any analysis of the evolution of the intelligence community.

The National Security Act of 1947 created the DoD and the NSC as well as the CIA. The CIA was formally constituted as a part of the newly expanded EOP. The idea of the enlarged EOP was to give the President more centralized control over the executive branch. The CIA would presumably give him a strong tool to use in national security decisions, a tool that would not be influenced by a military perspective. However, the CIA was to be governed by the NSC a body including the new Secretary of Defense. Ultimately, the CIA was able to wrest operational and planning control away from all external bodies and only reported to the NSC for "rubber-stamping." In other words, the CIA, in spite of its position within the EOP, was relatively autonomous, even at an early stage. The main reason that the CIA did not fit under the centralizing theme of the Truman reorganization effort is that the redesigners of government had not properly absorbed the most recent of organizational theoretical innovations.(See Appendix A for details).

When the CIA was created its hierarchical structure was not specifically mandated but developed anyway. A number of institutional problems crept up that were not anticipated, mostly to do with evaluation of personnel. The nature of intelligence work is such that personnel evaluations are very difficult to make. This led to the gradual creation of evaluation systems such as the project system, production folders and "publish or perish." The incentives for analysts and operatives was to do more, irrespective of the need for or direction of their activities. These are the sorts of institutional pathologies that were mentioned above in the discussion of the problems of hierarchy. The problems of asymmetric information and moral hazard explain the existence of such unnecessary projects. It is in the interest of a subordinate to appear busy and productive. He will create an unnecessary mission and recommend it because he knows that ultimately he will not be held responsible for this waste of public funds his boss will (this is moral hazard). His boss will approve the project because he does not have as much information on the need for it as his subordinate does (this is asymmetric information). A revitalized organizational structure could eliminate the incentives toward random production of clandestine operations and analytical works. As noted below, progress is being made in the direction of this revitalization, with the introduction of multidisciplinary teams and surge-capacity task forces to work on special projects.

As the intelligence community evolved, efforts have been made to improve oversight and control. Typically, Congressional interest in reform and oversight has been "a sporadic response to constituent pressures or to widely publicized failures." However, these failures have been plentiful since intelligence is such a tricky business, and reform efforts have been made both toward greater accountability and greater coordination. The most dramatic and effective effort at control has been the permanent House and Senate oversight committees. Since their reorganization after the Rockefeller, Church and Pike reports, the committees have been able to exert a great degree of control over the intelligence community. They have even developed the informal capability to influence covert action decisions that they are told about, by pressuring the President. Although this is rarely done, it demonstrates the extent to which the committees really do act as a strong constraint on the actions of the intelligence community. The creation of a politically appointed DDCI is another step toward greater control. The Intelligence Oversight Board and Presidential Foreign Intelligence Advisory Board have both been mandated to oversee intelligence by executive order. Unfortunately their performance has been uniformly poor according to many observers, even being described as "a part time hobby for itinerant dignitaries." A statutory Inspector General's office was also set up, although the CIA was the last government agency to get one. These efforts to improve accountability have certainly brought change to the intelligence community. It is in the area of coordination that greater changes are needed.


The CIA is not supposed to be a policy-making body, but rather a policy decision- making support agency. In his role as community coordinator, the DCI is also not supposed to be involved in policy-making, even though he may be working with components of policy-making departments (e.g. the State Department's INR). Although the nature of administrative and institutional behavior means that intelligence agencies frequently seek particular policy choices that they perceive to be in their interest, this is not by design. Since intelligence agencies do not set policy explicitly, suggestions for reform are usually phrased in terms of control and accountability. The idea is that the intelligence agencies, if properly controlled, will carry out policy decisions faithfully and hence will only "fail" if the set policy is wrong. This "arc of transfer" (see above) view, espoused by most of the recent reform commissions, is oversimplistic. The real nature of the interactions between the intelligence and policy communities is much closer even in the case of the CIA which is supposed to be independent. Even though the process of "role absorption" is well instituted at the CIA, this does not mean that the CIA does not have its own organizational imperatives. The CIA is not as independent as it has traditionally thought of itself as being it is impossible to work closely with policy- makers and provide them with a useful product without getting to know the individuals very well and being somewhat influenced by their positions. Indeed, the entire foreign policy establishment has a set of shared images that can be very difficult to change (the case of Sam Adams and the Vietnamese Order of Battle is instructive here ). However, the case should not be overstated. Repeated actions of the CIA and the DCI in his community-head role show that they both can act very independently (as DCI Deutch did in the aftermath of the September 1996 bombings of Iraq). What should be taken from this discussion is that the relationship between intelligence producers and intelligence consumers should not be thought of as entirely separated, with intelligence professionals isolated from the policy opinions of their customers. Instead, it should be recognized that intelligence work is not performed in a vacuum.

Even though the realities of inter-organizational relations must be respected, that does not mean that control over the intelligence community as a whole cannot be imposed. The point is that top-down control can never achieve full accountability, as shown by our critique of hierarchies. Other reforms besides those imposing top-down control are needed if the intelligence community is to be improved.

The President is not as "in control" as his position in at the top of the organizational chart might lead us to believe. There are many reasons for this. Although the politicization of the upper echelons of government agencies is not to be interpreted in a solely negative manner (as is often the case), political appointments must frequently be made to please various constituencies (including the agencies themselves). This has been particularly true under Clinton, "who is driven by an especially strong obligation to represent diverse interests in his appointments." The recent phenomenon of non-partisan political appointments is testament to this fact (e.g. the appointment of William Cohen as Secretary of Defense). Furthermore, political appointees are usually not around long enough to gain the requisite expertise to really control their agency and they consequently are often "co-opted" by their agency. All of this tends to undermine the control of the President over the Executive branch in general. This has certainly been the case with the intelligence community the relationship between the President and his DCI has varied considerably over the years.

Secrecy and Control

One of the foremost obstacles to achieving accountability in the intelligence agencies is the need for secrecy in the agencies. Since 1950 the intelligence community has officially operated under the "need-to-know" principle. The need for secrecy is the key restriction on external oversight of the intelligence community. In a deliberate understatement, Shulsky notes that "a tension exists between secrecy and effective control." Of course, the agencies themselves have an interest in preventing external control, and to this end they have an interest in advocating the continued and even increased need for secrecy. This is something all the intelligence agencies have done throughout their histories and probably accounts for the widespread dislike of William Colby amongst intelligence professionals. One of the first ways that the intelligence community could be improved is in a redefinition and limitation of the need for secrecy.

Due to the stringent secrecy requirements, internal controls become vitally important to maintaining and improving intelligence community accountability. The present highly hierarchical closed structures which underpin the intelligence agencies tend to diffuse accountability and make abuses and failures more likely. Tall hierarchical structures tend to distort information that passes up and down, resist innovation and change (administrative inertia), increase the gap between authority and responsibility and set up barriers to employee involvement, retention and recruitment. The traditional governmental solution to regain internal control has been to add layers of managers to oversee workers. It should be obvious from our discussion that this "thickening" only worsens the problems listed.

The secrecy imperative also worsens communication and cooperation within the community. Daniher has suggested how a "system of stovepipes" has resulted in which information does not flow freely and new sub-institutions are created with their own organizational imperatives. A dissolution of the stovepipe system would obviously be a desirable improvement of the intelligence community (see above for his networking solution to the stovepipe problem).

A further problem is that secrecy and hierarchies have in the past been deliberately manipulated to blur accountability. The Iran-Contra affair would be a good example of this process. Decisions made in secret under conditions of blurred accountability tend to be poor decisions, especially in the area of covert action. These conditions tend to increase the likelihood of approval (since nobody feels responsible) and eliminates the possibly useful inputs of people left out of the secret process.

Problematic Internal Institutional Pathologies

The environment of secrecy also fosters some unusual organizational pathologies not mentioned in our earlier, more general discussion. Glenn Hastedt has outlined several organizational doctrines of intelligence which tend to lead to poor performance. One is the tendency to rely on raw data in presentations to policy-makers. The desire to impress policy-makers with the sophistication of collection leads agency-members to want to present "facts" rather empirical analysis. A second problem is that is it hard for analysts to know when to forecast and when to predict in a presentation to a policy-maker on a specific question it can be hard to know whether to present a forecasted likelihood or a "yes or no" prediction. A third is that intelligence professionals often share unwarranted assumptions particularly about U.S. policy. As Hastedt explains,

"[t]he logic of intelligence estimating is to reduce the number of policy options by clarifying the issues, assumptions, and consequences behind various courses of action. The logic of policymaking is to keep options open as long as possible. One way to do this is to keep secrets from intelligence agencies . . . [thus forcing them] to expend resources on discovering policymaker's values."

Morton Halperin has pointed out that the valuable opinions of intelligence professionals have occasionally been ignored because decision-makers knew that the intelligence producers did not have all available information at their disposal. This had severe repercussions when it led to the discounting of CIA advice that would have argued against the Bay of Pigs invasion.

Other pathologies that Hastedt outlines include intelligence to please, the jigsaw theory (the search for that one definitive piece of evidence), the partiality for the production of current intelligence and the proclivity for consensus-building rather than the presentation of opposing views. These pathologies stem from the natural psychology of the analyst in any field. As the presumptive "expert" a strong unified voice is desirable, even when convictions may not be that strong. Graham Allison has referred to this pathology as "groupthink." Dynamic and rejuvenated organizational structures can work to overcome these pathologies. In particular, the creation of multidisciplinary task forces and the introduction of peer-evaluation systems can eliminate "groupthink" and restrict the use of unprofessional intelligence techniques by forcing intelligence producers to live up to the standards of their professional peers (as opposed to the standards of consumers who know little about intelligence work).

Internal pathologies can result in intelligence "failures." Therefore, it is not surprising that many solutions have been suggested. Most promisingly, Abram Shulsky has discussed the notions of competitive analysis and institutionalized devil's advocacy, along with intellectual reform in the field of intelligence analysis. Project-based competitive analysis, with two teams working on the same project, has not proven popular with intelligence professionals. It also is far from efficient. However, the existence of intelligence agencies with overlapping missions should provide an adequate degree of competitive analysis. Institutionalized devil's advocacy is also impractical the term itself is probably oxymoronic. However, the idea can be tied into intellectual reform in analysis, if analysts can be trained to be even more independent and uncompromising.

Inter-organizational Pathologies

In all governmental activities, control of a successful and important agency brings political power and leverage. In intelligence, "knowledge is power" in the most literal sense. In the intelligence community, the military intelligence agencies (DIA and the four service intelligence arms) control the most resources and the most public and political support. The military's "iron triangle" strength extends into the intelligence field.

However, the tools of organizational theory allow us to understand how it is that the military agencies can be influenced at all by the DCI. According to Thomas the size and institutional strength of military intelligence is mitigated by three factors. The first is the internal division between the military agencies themselves. The four services and the DIA do not cooperate closely and cannot present a united front on most issues open to debate within the intelligence community (as Halperin suggests they would like to do ). The second factor is that intelligence is considered something of a backwater by military careerists, meaning that military intelligence personnel do not always meet the highest standards. This fact inevitably also has a negative impact on inter-organizational relations within the intelligence community, with military intelligence officers being seen as "poorer cousins." A revamping of career paths within the Department of Defense could eliminate this problem. The third and final factor is the symbolic position of the DCI at the center of the intelligence community. Whatever its relative resources, the CIA does have a claim to power because of its charter as the "central" agency in the intelligence community. It is these three factors that explain how the DCI has been able to achieve the limited influence over military intelligence that he does have.

Nonetheless, the general pattern of inter-organizational pathologies in the intelligence community is one of limited cooperation (see Appendix B). Information and resources have not been properly shared in the past and the problem persists to the present day. For instance, a recent report on intelligence work being done in the Commerce Department found that "[n]either Commerce nor Defense fully shares its evidence in the consultation process." The result of the evolution of the intelligence community has been such that the DCI has had to negotiate for support in his intelligence mission. In order to resolve the "two-bosses" problem (see Appendix B for a more complete discussion) given a lack of formal authority, the recent DCIs have resorted to the creation of committee after committee to control the intelligence community. The problem with committees is that in a committee, a member is present primarily as a representative of his home agency. Ultimately, rather than seeking creative solution to community problems, the committee member seeks to retain his department's power of veto over any decision. This produces a drive for centralization in the agency in order to produce a unified voice to protect the interests of the agency at the community committee level (this is suggested by Halperin as noted above). This unified voice seeks "legitimized facts" that are used to protect agency interests. Unsurprisingly, biased "legitimized" facts are not helpful in coordinating a complex organ like the intelligence community. These pathologies fit perfectly with our model of institutional behavior as defined by Selznick.

External Controls

External controls on the intelligence community do exist. There is some judicial control of the intelligence communityand the evidence suggests that the courts will continue to get involved. Some scholars even believe that judicial intervention today represents a viable restraint on intelligence community activities. However, the doctrine of judicial restraint undermines control and this deference is certainly visible in the intelligence arena. For instance, the Foreign Intelligence Surveillance Act court apparently refuses intelligence personnel no warrant they request. Some degree of control exists anyhow Friedrich's law tells us that blanket oversight is not necessary and so the court's existence might make intelligence professional drop their more unrealistic projects before they even come to the court.

Other external controls do exist. The CIA Inspector General's office, with its close ties to the OMB, provides an avenue for problems to be brought to light and resolved. Of course, the Inspector General faces his own "two-bosses" problem (see Appendix B for a discussion of the "two-bosses" problem with relation to the DCI and Secretary of Defense). He is technically subordinate to the DCI but responsible for overseeing the CIA independently. However, the political nature of the Inspector General's appointment does free him from most pressure from the DCI and by most accounts the Inspector General has provided an excellent avenue for semi-external control of the CIA. Although there is a statutory Department of Defense Inspector General, the other intelligence components of the community do not have politically-appointed Inspectors General. The IC21: Intelligence Community in the 21st Century report suggested that the CIA Inspector General might be made Inspector General for the community as a whole.

Public oversight of the intelligence agencies is a weak link, primarily because of the secrecy issue. Media access to the intelligence community is very limited. Of course, whistleblowers and leakers do provide the media with the means to exert limited oversight of the community, but these opportunities are few and far between. The oversight of interest groups is also negligible within the intelligence community. Dr. Loch Johnson has cogently argued that as long as other oversight mechanisms operate well, public oversight of the intelligence community is not necessary.

The final, and perhaps the most important, element of external oversight is the Congress. The oversight committees in the House and Senate generally do a good job of oversight, but the list of institutional restraints on their activities is endless. Doctor Loch Johnson has suggested that what is really needed is a way to make the American public aware of the value of Congressional oversight. If the public appreciated the importance of oversight, politicians would have an incentive to make it work. Friedrich's law applies again here the existence of the mere possibility of investigative oversight acts as a restraint upon the intelligence community. Congress also has a second means of control: Attempts have been made to use the legislative power of Congress as an instrument of control by micromanaging intelligence. The best example of this in the intelligence community was the late seventies effort at micromanagement of the FBI. Congress, through its oversight committees also can exercise the power of the purse over the intelligence community. On covert projects lasting longer than one year, the oversight committees can eliminate funding at the end of the first year if they do not like what they see. Another example of a Congressional control was the Freedom of Information Act. The mandatory release of information could act as a restraining factor on more hare- brained schemes the knowledge that everything would become public sooner or later might thus act as a control. Unfortunately, the FOIA does not work well with the intelligence community because of exemptions granted in Executive Order 12356.


The most important finding of this project is that dramatic overhaul of the organizational structures of the intelligence community is neither necessary nor advisable. That said, the above discussion does suggest several areas in which the intelligence could be improved.

The discussion of the problems of pyramidal hierarchy was framed in terms of the increasing separation of responsibility and accountability. As noted above, the imposition of a complete matrix structure on the intelligence community would be deleterious, as well as nigh-on impossible. Nonetheless, to achieve the dynamism necessary in the post- Cold War era, the current multidisciplinary task force efforts should be encouraged and expanded upon. The IC21: Intelligence Community in the 21st Century report goes to great lengths to point out the necessity of maintaining an adequate "surge" capability within the intelligence community. Indeed, this need is reflected in legislation passed in the fall of 1996 commissioning a report on a new Surge Augmentation Program. The new Surge Augmentation Program would set up an Intelligence Reserve Corps consisting of experts from industry and academia who could be called on provide specialized information in crisis situations. This is a form of marketization of the intelligence process which fits comfortably with the latest thought in organizational theory.

The second key to minimizing the gap between authority and responsibility (besides matrix formation/marketization) is to reduce the layering within the agencies. Avoiding so-called "thickening" allows for greater employee participation and helps to erode the line-staff distinction. Where hierarchies are necessary, it is recognized that flatter organizations are better equipped to deal with change and adversity. For the intelligence community, this means that reform efforts should not add new layers of management in the hopes of improving control.

A further integration of the intelligence community would be desirable, both from the standpoint of improved control, and from the standpoint of effective surge capability. The Aspin-Brown commission has sensibly suggested that standardization of personnel practices, training and security protocols would allow the DCI to access the entire expertise of the community in the case of a crisis. The commission goes on to advocate the use of rotational assignments. This can be understood as a manipulation of the informal organization to knit the community closer together. Further suggestions toward the fostering of a community spirit might include community-wide social or service activities. Increasing social contacts will have the result of drawing the community together.

Overall, though, a conservative position on organizational reform of the intelligence community is the most prudent position. The individual agencies (to a greater or lesser degree) have developed the capability for self evaluation. For instance, a recent strategic plan put forward by the Directorate of Intelligence in the CIA recognizes the need for greater outreach to "academic and business experts," a "greater emphasis on informal, multidisciplinary teams," "greater flexibility," and increased cooperation within the CIA and the intelligence community. Fundamentally, these precepts embody almost completely the recommendations made above. As long as the intelligence agencies continue to strive to improve themselves, reformers should continue to "tinker around the edges."


The Post-War Governmental Reorganization and its Effect on the Development of the Intelligence Community

Two governmental commissions were responsible for shaping the reorganization effort: The 1937 Brownlow Commission and the first Hoover Commission (1947-49). As discussed above, the first criticisms of classical organization theory were made by Chester Barnard and Herbert Simon in the late thirties and early forties. The Brownlow Commission can be forgiven for failing to take into account the latest currents in organizational theory. The same does not apply to the first Hoover Commission. Both of these reports to the Congress unquestioningly accepted classical organization theory. The first Hoover Commission failed to take into account the literature on administrative behavior and bounded rationality that was emerging. The consequences of this failure for the intelligence community are manifold.

The first problem is that, as pointed out above, classical organizational theory does not discuss inter-organizational relations. The "result is that inter-organizational relations tend to be mediated by a process of exchange and bargaining rather than by the imposition of hierarchical authority." The first Hoover Commission's recommendations were incorporated into the 1949 amendment of the National Security Act. The result of this analytical deficiency was that inter-organizational relations within the DoD and within the new intelligence community were forced to evolve along a negotiated, reciprocal approach, as opposed to a predefined systematic relationship. Although today the Secretary of Defense is an incredibly powerful governmental figure, in 1947, when the office was created, this was not at all the case. The reorganizers feared that the new Secretary would not be able to assert authority over the heads of the individual services. Since the new Secretary of Defense needed all the power that the military would give up, the reorganizers were unwilling to give the DCI much authority, lest his power undermine that of the already weak Secretary. The result was that the DCI was left with almost no authority within the intelligence community that he was ostensibly supposed to direct. He was left to bargain with the other players in the arena for the support he needed to produce national intelligence, particularly with the Secretary of Defense.

By ignoring Simon's theory of administrative behavior, the reformers failed to predict the attitudes that the military services and the DoD would take with respect to the new DCI. Morton Halperin, in his excellent Bureaucratic Politics and Foreign Policy, essentially applies the organizational theories about administrative behavior and institutionalization (see above) to the national security policy establishment. He identifies the role that the "essence" of organizations plays in determining their actions. For Halperin, the "essence" of the military services is their respective combat mission. The services take stands on issues in order to increase their effectiveness in performing this mission. The result, for the intelligence community, is that the military services have been extremely unwilling to allow their intelligence capabilities to be used for other than tactical military purposes. The DCI, from the inception of the office, has had difficulty in accessing military intelligence for the purpose of producing national intelligence. This is particularly disappointing in view of the fact that the military services themselves should be huge beneficiaries of the production of quality national intelligence. Instead, their focus has been on developing real-time warrior systems. Good national intelligence results in good foreign policy and good foreign policy is the best national security weapon of all.

As the evolution of the intelligence community progressed, the early patterns continued to be followed. The importance of personalities in this evolution is also marked. Early DCIs were either too weak or too disinterested to really pursue the goal of community cooperation. Most efforts to improve cooperation were complete failures. One idea was to create a Deputy DCI who would run the CIA on a day-to-day basis, allowing the DCI to pursue his coordination role. The 1996-97 Intelligence Authorization Act actually created a new DDCI for Community Management.

The Hoover commissions, that were so instrumental in the 1947 and 1949 government reorganization creating the CIA, negatively affected the internal constitution of the new CIA because of its lacking the most recent analytical tools. The Commission, and consequently the National Security Act, completely failed to anticipate the effect that secrecy would have on the new body. When the NSC sanctioned covert action the problem of control of the CIA was magnified. The problem of secrecy is dealt with in the section on current organizational problems. The point to note here is that the Hoover Commission's absolute faith in internal hierarchical control was ill-founded. As a result of this faith, adequate external control mechanisms (such as formalized Congressional oversight, statutory Inspectors General, etc.) were not set up. This was to prove deleterious later when egregious abuses of power were revealed within the CIA (and the FBI).


The "Two-Bosses" Problem and the Authority of the DCI

One way to phrase the problem of coordination is to look at it as an instance of the "two-bosses problem." In order to maintain perfect hierarchical accountability, each worker should be at the end of a single chain of command this eliminates contradictory orders and competing duties and loyalties. In intelligence, the two fundamental branches (national intelligence under the NFIP budget and military intelligence under the JMIP and TIARA budgets) are under two separate bosses (the DCI and the SECDEF). The problem of control and accountability arises because national and military intelligence overlap significantly (as do their respective budgets). Even where the military intelligence work is being produced for tactical purposes, under the TIARA budget, the product might also be useful for national intelligence purposes. Rather than collect the information twice (e.g. two photographs of the same area), workers who produce overlapping intelligence are placed partially under the control of the SECDEF and partly under the control of the DCI. A good example of this would be the NSA or NIMA. Both the SECDEF and the DCI and their subordinates can task these agencies with collection, even though they are formally a part of the Department of Defense. Consequently, these overlapping workers have the "two- bosses" problem. When resources are strained or scarce, the worker must decide which boss to obey and which to take more lightly. Typically in the intelligence community, conflicting orders or competing interests are resolved in favor of the SECDEF because he is more powerful. The result is that the DCI cannot get the cooperation he needs to fulfill his national intelligence mission while at the same time maintaining optimal efficiency within the community. Military (defense-wide and tactical) intelligence needs are not compromised, at the expense of national intelligence. Separating the national and military intelligence programs completely would improve authority and accountability but would introduce duplication and reduce efficiency. The DCI would get all the support for national intelligence that he needs, but at the expense of cost-effectiveness. Separating national and military intelligence would demonstrate the trade-off between more authority for the DCI in national intelligence and efficiency.



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