For Official Use Only

November 25, 2002

MEMORANDUM FOR: DEPUTY DIRECTOR OF CENTRAL INTELLIGENCE

FOR COMMUNITY MANAGEMENT

FROM: Kevin Scheid

SUBJECT: Thoughts on the Future of Intelligence

As part of your discussions with Mr. Gingrich in his assessment of the future of the
national security mechanisms of the government, you requested that I provide you with some
thoughts on the future of US intelligence and to brainstorm the "big picture." I believe that
changes to intelligence could be cast in the context of an overhaul of the larger national security
apparatus - the organizations and departments that conduct diplomacy, defense, economic
security, energy security, homeland security, and the international aspects of law enforcement.
Intelligence is a support function to this apparatus and could be restructured in the context of a
larger reevaluation that Mr. Gingrich suggests to the President.

International Environment and the National Security Apparatus

The changing international environment has been studied, assessed and reviewed by
commissions ad nauseam. You have been involved in at least three reviews over the past 12 to
18 months within the Intelligence Community alone: QICR, Global Trends 2015, and the NIC
assessment preformed for NSPD-5. A clear theme that arises from all these reviews is that the
threats we face today are no longer tied to a specific geographic location, as was the case during
the Cold War (i.e., the USSR, Eastern Europe, and China), but are now global - international
terrorism, weapons proliferation, cyber attacks, narcotics trafficking, human trafficking, resource
scarcity, and infectious disease. The globalization of the threat should compel us to think
differently about how we conduct US national security in the future and the role of national
intelligence.

The Departments of State, Defense, Treasury, Commerce, Energy, and Justice form the
major components of our national security apparatus. As the war on terrorism and our efforts
with Iraq have demonstrated, our national security departments and agencies are becoming
increasingly interdependent. Diplomacy, national defense, economic security, energy security,
homeland security and international aspects of law enforcement are now closely inter-related and
cannot act independent of each other to execute a successful strategy.

This apparatus rests upon the support efforts of intelligence, counterintelligence, global
communications, R&D, information technology, and physical security. Among these,
intelligence serves all the policy agencies and is relatively well defined as a support function.
On the other hand, counterintelligence is relatively poorly managed across the National Security '"""**"-

For Official Use Only

 For Official Use Only

apparatus. The establishment of a new position of National Counterintelligence Executive will

help to coordinate policies and practices. Other support functions, such as global
communications, research and development, information technology, and physical security are
not coordinated across the national security apparatus and are performed by each of the
individual departments - Defense (including intelligence R&D), Energy, Treasury, and State.
This lack of national coordinate is costly, causes duplication of efforts, and requires unnecessary
bureaucracy.

Support Functions of National Security

To address this situation, we could look at these support functions across the government
in a more holistic manner (see attached chart). To do so, the President could designate "National
Security Executive Agents" to oversee and rationalize the government's activities for
intelligence, Counterintelligence, communications, R&D, information technology, and physical
security. It would be their job to assess existing programs, consolidate efforts across the national
security departments, set funding priorities, and oversee the execution of programs. They would
report to the National Security Council. It would follow, that the DCI would be the designated
"NSEA" for Intelligence and within this context his responsibilities could be clarified and his
authorities over aspects of national intelligence altered or strengthened.

There are several models that could be considered to rationalize these responsibilities for
the DCI.

. A Robust CIA: This alternative would focus the DCI's efforts on building up a
robust, independent CIA that would have as its sole missions: HUMINT, analysis and
advanced research and development into new sources and methods. It would end the
community management role of the DCI and place the Secretary of Defense as the
lead agent for managing NSA, NIMA, NRO, DIA, and the service intelligence units.
The secretary would delegate these responsibilities to the new undersecretary of
defense for intelligence. In this scenario the DCI would be the head of the CIA and
be a customer of the USD Intelligence for technical intelligence. The NFIP would go
away as a budget aggregation. The disadvantage of this approach is that it places the
DCI in a dependent relationship on the Defense Department in regards to technical
collection (EVENT, SIGINT, and MASINT).

In this alternative CIA could have the following characteristics:

- An expanded clandestine HUMINT capability worldwide, including more out-of-

embassy efforts.

- An expanded covert action infrastructure, worldwide, aimed at terrorism and rapid r\.

analytic cells

For Official Use Only

 For Official Use Only

- Build FBIS into a foreign and domestic foreign language center of excellence

- Increased advanced R&D for the development of advanced sources and methods
of intelligence collection
&

- Spin off all other elements of the 1C to their respective departments

Merging CIA and Components of NRO, NSA: This alternative would seek to
expand CIA be reorganizing the clandestine functions of NRO and NSA into CIA
while leaving the bulk of the technical intelligence activities of these agencies to the
Department of Defense and the new Undersecretary of Defense for Intelligence. This
would include:

- All special technology efforts at the NRO, while the "commodity" systems of
IMINT and SIGINT directorates would continue under the Department of
Defense.

- Special Collection Sites and other special collection efforts from NSA as well as
other clandestine SIGINT activities, particularly those that are currently done in
cooperation with CIA in order to access CIA's unique authorities.

National Intelligence Enterprise (Scowcroft Recommendation): This alternative,

spelled out in the NSPD-5 report, would realign the responsibility, authority and
accountability for national intelligence directly under the DCI with CIA, NSA,
NIMA, NRO and Special Navy all reporting directly to the DCI. The Secretary of
Defense would administer TIARA, JMIP, DIA, and the service intelligence units.
The advantage of this alternative is that it clarifies roles and responsibilities, removes
the bifurcated management arrangement that currently exists and leaves under one
official all the basic intelligence disciplines: HUMINT, IMINT, SIGINT, MASINT,
and analysis.

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

For Official Use Only