Background. The Director of the NRO is responsible for reporting to both the Secretary of Defense and the Director of Central Intelligence (DCI). He is the head of a major component of the Intelligence Community that is also an agency of DoD. At the same time, he serves as the Assistant Secretary of the Air Force for Space. This tri-cornered arrangement has resulted in some of the greatest historical strength of the NRO because it has allowed the NRO Director to draw on the resources and benefit from the advocacy of the two major forces in the Intelligence Community and the Department of Defense.

It has also been however, the source of some of the current tensions regarding the NRO because of the ambiguity in command and accountability that is the natural consequence of the arrangement. Further, some would argue that the uncertain situation in which the NRO finds itself today--with requirements rising and budgets flat or falling--can be traced in part to that ambiguity and the resulting inadequacy of the Secretary of Defense-DCI relationship as a means for dispute resolution. On the other hand, one prominent witness testified to the Commission that the Secretary of Defense and the DCI were appropriately "stuck with" the problem of running the NRO and simply had to make it work no matter how difficult it was, simply because of the NRO's importance to national security.

The current Secretary of Defense-DCI relationship regarding the NRO is significantly different than it was before 1990. This is due primarily to dynamic changes that have affected the NRO's traditional missions and its relationship with the various agencies it supports, and to Congressional actions that were taken in the 1990s.

1960 - 1970: The Drift Toward DoD. The relationship between the Secretary of Defense and the DCI regarding the NRO was originally described in four agreements that were consummated in the 1960s by a series of Deputy Secretaries of Defense and DCIs. According to the NRO General Counsel, these four agreements are all considered by the NRO to still be in effect, although a series of Executive Orders and Congressional amendments to the National Security Act of 1947 have had a significant impact on the relationship.

The first agreement is dated September 6, 1961 and was focused on the creation of a National Reconnaissance Program (NRP) within the Department of Defense to include all overt and covert satellite and over-flight reconnaissance projects. The agreement also recorded the creation of the NRO to manage the NRP under the joint direction of the Under Secretary of the Air Force and the CIA's Deputy Director for Plans who were to see to the implementation of NRO decisions within their respective organizations. The NRO was to respond to collection requirements and priorities established by the United States Intelligence Board (USIB). The NRO "Directors" were to establish procedures to ensure that "the particular talents, experience and capabilities" of DoD and the CIA were used fully and effectively in the NRP. Major NRP program elements and operations were to be subject to regular review by a National Security Council group.

The second agreement was signed by the parties on May 2, 1962 and contained policy guidance to ensure that, as had been urged in the prior agreement, "the particular talents, experience and capabilities" of DoD and the CIA were used fully and effectively in the NRP. It provided that there would be an NRO Director designated by the DCI and Secretary of Defense and responsible directly to them both for the management and conduct of the NRP. Further, personnel from DoD and CIA were to be assigned on a full-time basis to the NRO to take advantage of available capabilities and resources and DoD and CIA were to provide funds for the projects for which each had responsibility. The agreement also established technical and financial management, security and operational policies for the NRO Director to follow in sorting out the DoD and CIA interests in the NRP. It also stated that operational control of individual NRP projects would be assigned to the DoD or CIA by the NRO Director in accordance with policy guidance from the Secretary of Defense and the DCI. Finally, the second agreement provided that the NRO Director would be responsible for future NRP planning, but that all such planning would be coordinated with the DCI because of the DCI's major responsibility for all intelligence programs.

The third agreement was dated March 13, 1963 and stated that it superseded the May 2, 1962 agreement. This agreement began to shift NRO management authority to DoD. Again in the name of ensuring effective utilization of DoD and CIA capabilities, it announced that the Secretary of Defense was the Executive Agent for the NRP. To carry out this responsibility, the Secretary was to establish the NRO as a separate operating agency within DoD. The NRO Director was to be appointed by the Secretary, with the concurrence of the DCI, and a Deputy NRO Director was to be appointed by the DCI, with the concurrence of the Secretary. The NRO Director was to receive guidance from the Secretary and collection requirements and priorities from the USIB. The NRO Director was responsible for the management of the NRP, "subject to the direction, authority and control" of the Secretary of Defense. NRO budget requests were to be presented and substantiated by the NRO Director to the Secretary and DCI, the Bureau of the Budget and Congressional committees. The NRO Director was to report directly to the Secretary of Defense, while keeping the DCI currently informed.

The fourth agreement was completed on August 11, 1965 and was the most comprehensive. It furthered the swing of authority over the NRO to DoD and the Secretary of Defense. The agreement repeated that the Secretary was to establish the NRO as a separate agency of DoD, but made clear that he had "ultimate responsibility" for its management and operation. It also eliminated the requirement for DCI concurrence in the Secretary's selection of the NRO Director. The DCI retained authority for appointing the Deputy NRO Director, but with the concurrence of the Secretary. The agreement also provided that the Secretary had "the final power" to approve the NRP budget and established the Secretary as the final decision-maker on all NRP issues. It also created an NRP Executive Committee (EXCOM) that consisted of the Deputy Secretary of Defense, DCI and the Assistant to the President for Science and Technology. The EXCOM was empowered to "guide and participate in the formulation of the NRP" in both budget and operational detail, but the Secretary of Defense was to be responsible to decide any EXCOM disagreement on any issue. The NRO was to be staffed to reflect the best talent available from CIA, DoD and other agencies, and this staff was to "maintain no allegiance to the originating agency." Collection requirements and priorities were still to be provided by the USIB.

The Commission heard testimony that there was extreme turbulence in the DCI/Secretary of Defense relationship in the early days of the NRO. These early disagreements were centered around which agencies would be responsible for building and operating NRO systems rather than budgetary issues.

1970 - 1978: A Swing Back to the DCI. In November 1971, President Nixon issued a memorandum that increased the responsibility and authority of the DCI regarding the entire NFIP budget. This resulted, in early 1972, in the revision of a National Security Council Intelligence Directive (NSCID) that implemented the policy decisions contained in the presidential memorandum. The NSCID called for the DCI to chair and staff all intelligence committees and advisory boards, establish and reconcile all intelligence requirements and priorities, and submit a consolidated intelligence program and budget to the Office of Management and Budget. A few months later, the Intelligence Community Staff was created by DCI Richard Helms to support these additional functions.

In February 1973, James Schlesinger was confirmed as DCI. He had accepted the assignment based on a pledge from President Nixon that he would chair all of the intelligence committees, including the NRO EXCOM, as was now prescribed by the revised NSCID. With the DCI as EXCOM Chairman, the Deputy Secretary of Defense ceased attending meetings--he outranked the DCI at the time, and the Assistant Secretary of Defense for Intelligence began to attend in his place. President Nixon, meanwhile, dismissed the Science Advisor and dissolved the President's Science Advisory Council. This eliminated the NRO EXCOM's direct link to the President.

President Gerald Ford issued Executive Order 11905 in February 1976 to provide a public description of the structure and activities of the Intelligence Community. That Order stated that the NRO, euphemistically identified as an office within DoD that collected intelligence through reconnaissance programs, was part of the Intelligence Community. It also established a Committee on Foreign Intelligence (CFI), which was composed of the DCI as Chairman, the Deputy Secretary of Defense for Intelligence and the Deputy Assistant to the President for National Security Affair. The CFI reported to the National Security Council and was responsible for reprogramming NFIP funds and setting priorities for collection and production of national intelligence. As a result, the NRO EXCOM was disbanded. Control of NRP funds was now in the hands of the DCI instead of the Secretary of Defense.

The Ford Order also charged DoD with, among other things, directing, funding and operating national, defense and military intelligence and reconnaissance activities. The NRO was not specifically mentioned since its existence was still classified at this time.

Also in the mid-1970s, Congress created substantial additional Congressional oversight mechanisms as a result of its investigations of excesses by the Intelligence Community. In May 1976, the U.S. Senate established the Senate Select Committee on Intelligence (SSCI). In July 1977, the U.S. House of Representatives established the House Permanent Select Committee on Intelligence. As a result, Congressional staffs became heavily involved in review of the NRP and its current and proposed programs.

In January 1978, President Jimmy Carter issued Executive Order 12036, which replaced the Ford Order. It abolished the CFI and gave "full and exclusive authority" over the preparation of the NFIP budget to the DCI. The Order also established the Policy Review Committee to assess the NFIP budget and U.S. Intelligence priorities.

By the end of 1978, the NRO Director was reporting to the DCI on matters of NRP funding and requirements, and to the Secretary of Defense on operational matters associated with strategic and tactical overhead reconnaissance. The DCI continued, as had been the case from the outset, to delegate to the NRO the special acquisition authority that the National Security Act of 1947 had provided to the CIA. Congressional involvement in the NRP had increased to the point that it began to direct the initiation of specific new programs.

Fiscal Year 1997 Intelligence Authorization Act: Restriking the Balance. Between 1978 and 1997, the formal written framework for the Secretary of Defense-DCI relationship remained unchanged. During that time, however, a disparity developed between the specified and the actual authorities of the DCI regarding the Intelligence Community. In 1992, Congress had enacted amendments to the National Security Act that provided a statutory basis for many of the DCI responsibilities that had been adopted previously by Executive Order. As noted in the March 1996 report of the Aspin-Brown Commission on the Roles and Capabilities of the Intelligence Community, however:

Thus, the Secretary of Defense retained substantial real authority over the activities of the NRO, despite the titular responsibilities of the DCI. In recognition of this fact, the Aspin-Brown Commission recommended strengthening the authorities of the DCI, including his authorities over the NRO.

Acting on recommendations of the 1996 Aspin-Brown Commission Report, Congress enacted provisions of law that substantially changed the overall relationship between the Secretary of Defense and the DCI regarding the NRO and the other DoD agencies that are part of the Intelligence Community. These provisions, particularly Section 807 of the Fiscal Year 1997 Intelligence Authorization Act, were designed to enhance the authority of the DCI to influence the budget, personnel and activities of the Intelligence Community.

Specifically, the DCI was given specific statutory responsibility to develop the annual National Foreign Intelligence Program budget and also to participate in the development by the Secretary of Defense of the annual budgets for the Joint Military Intelligence Program (JMIP) and the Tactical Intelligence and Related Activities Program. In addition, the DCI was given statutory authority to approve any reprogramming of funds within the NFIP and to be consulted with regard to reprogramming within the JMIP by the Secretary of Defense.

However, the DCI's actual authority to manage the NFIP budget continues to be limited substantially by his lack of authority to be involved in the execution of that budget after it is approved by Congress. In addition, Section 104 (d)(2) of the National Security Act, which was added by the FY 1992 Intelligence Authorization Act, limits the DCI's ability to move funds or personnel within the NFIP to situations where the transfer is to an activity that is a higher priority intelligence activity, is based on unforeseen requirements, is not to the CIA Reserve for Contingencies or from the Federal Bureau of Investigation, and the head of the entity that contains the affected element or elements does not object. Section 105 of the FY 2001 Intelligence Authorization Act provides that only the head of an agency has authority to object to a transfer of funds within the National Foreign Intelligence Program, except that the Deputy Secretary of Defense may object for DoD agencies and the DCI's authority to transfer funds may be delegated to the Deputy Director of Central Intelligence for Community Management.

Other Authorities Affecting the Secretary of Defense-DCI Relationship Regarding the NRO. The NRO is a member of the "Intelligence Community" as that term is defined in the National Security Act and Executive Order 12333. Section 105 of the National Security Act includes the NRO--along with NSA, NIMA, and DIA--among the entities that the Secretary of Defense is responsible for drawing upon to accomplish the NFIP. Under that Section, the Secretary is required to act through the NRO to ensure, consistent with the statutory responsibilities and authorities of the DCI, "the continued operation of an effective unified organization for the research and development, acquisition, and operation of overhead reconnaissance systems necessary to satisfy all elements of the intelligence community." Also, under Section 106, the Secretary is required to seek DCI concurrence in the recommendation to the President of an NRO Director and to advise the President if the DCI does not concur.

The Act also provides that the DCI is to consult with the Secretary of Defense and the Chairman of the Joints Chiefs of Staff in the development of an annual evaluation of the performance and responsiveness of the NRO, DIA, and NIMA in meeting their national missions. This Report is to be submitted to the National Security Council's Committee on Foreign Intelligence, which was also created by the 1997 amendments to the National Security Act, and to the Intelligence, Appropriations and Armed Services Committees of Congress.

As explained earlier, Executive Order 12333, "United States Intelligence Activities," was promulgated in 1981, prior to the 1992 public acknowledgment of the NRO's existence and the 1997 FY 1997 Intelligence Authorization Act amendments. The Order provides that the Secretary of Defense will direct, operate, control and provide fiscal management for, among other things, national reconnaissance entities. It also alludes to the NRO euphemistically in the category of "Offices for the collection of specialized intelligence through reconnaissance programs" in a section entitled "Intelligence Components Utilized by the Secretary of Defense." According to the Executive Order, such offices are responsible for carrying out consolidated reconnaissance programs, responding to tasking in accordance with procedures established by the DCI and delegating authority to other departments and agencies for research, development, procurement, and operations of designated means of collection.

The transition of the relationship regarding the NRO from a hierarchical one in 1961 to 1976 to a consensus-based relationship since 1976 probably was inevitable considering the general turbulence in the Intelligence Community during the 1970s and the increasing Congressional oversight of the NRP since 1976. There was considerably less stress on the relationship during periods of generally higher Intelligence Community and DoD funding, although this also was probably due to the close personal relationship between the Secretary of Defense and DCI during the same periods.

There has been no direct White House role in NRO activities since the President's Science Advisor was removed from the process in the 1970s. Some White House Science Advisors are no longer as well versed in national security issues as was formerly the case. In the absence of such focused expertise and interest, NRO issues have tended to be relegated to the lower working levels of the NSC. The Commission heard testimony that, because the President's interest in the NRO cannot be presumed, the Secretary of Defense and DCI have even more reason to attend to their relationship concerning the NRO.

No matter what form the Secretary of Defense-DCI relationship regarding the NRO should take, it is not self-executing and requires the active participation of both in order to best effect the basic mission of the NRO. This basic point was made again and again to the Commission by past and present senior officials. Because the work of the NRO continues even during periods of Secretary of Defense or DCI lack of interest or participation in the relationship, the result is that successively lower levels of officials may be left to "manage" the NRO on behalf of the two principals. Friction among the NRO and other agencies has developed in such periods. Two former senior officials who served in different Administrations, strongly believed that the NRO should be the subject of at least a weekly discussion between the Secretary of Defense and the DCI.