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Chapter 3

An Overview of the CIA

SECTION II: Origins of the Agency
and Seeds of Secret Operations

          By the end of world war II it was abundantly clear that the U.S. must have a central intelligence authority. The mistakes which were made, more by omission than by commission, by the intelligence community during the war were serious. This country could never again afford the luxury of overlooking the need for reliable intelligence. The witch hunt that took place right after the war in an attempt to fix the blame for the disaster at Pearl Harbor was indicative of the depth of the problem. After the war, it became clear to many that we had seriously overestimated the strength of the Japanese and that we had as a result seriously overrated the task that confronted the Russians in moving their eastern armies across Manchuria against the Japanese at the end of the war.

          In addition to these rather obvious criticisms, there was the fact of the atomic bomb. It had been developed in great secrecy under the Manhattan Project; but once it had been demonstrated at Hiroshima and Nagasaki, it was no longer a secret. Scientists all over the world would be attempting to solve the bomb's problems, knowing now that it was entirely feasible and practical, and their own intelligence and spy networks would be trying to steal the secrets of the bomb from the United States. This put another serious burden upon the intelligence community.

          Not long after the cessation of hostilities, the first measures toward the establishment of a central intelligence authority were announced. Less than six months after the end of the war the President set up the Central Intelligence Group. The New York Times on January 23, 1946, reported that President Truman established a National Intelligence Authority composed of the Secretaries of State, War, and Navy. It was to be headed by a Director of Central Intelligence. The DCI would have at his disposal the staffs and organizations of all government intelligence units, including those overseas, and would undertake "such services of common concern as the National Intelligence Authority determines can be more efficiently accomplished centrally". This provision would enable the Director to operate his own staff for top secret and high priority missions, while utilizing the production of all other Agency staff operations for general intelligence production.

          The plan was devised by the Joint Chiefs of Staff as a modification of one submitted by Major General William J. Donovan at the time of the dissolution of the OSS. It deviated from Donovan's suggestion in several important particulars, however. First, it placed the Central Intelligence Group and its Director under the jurisdiction of the Secretarial triumvirate. In the accepted plan this triumvirate retained authority over the Central Intelligence Group instead of placing the Group directly under the President. Second, it provided that operating funds for the organization would be obtained from the Departments of State, War, and Navy rather than directly from Congress as had been provided for by Donovan's plan. As a consequence, the Group was responsible not to Congress but to the Cabinet members making up the top authority. In his directive, the President ordered that "all Federal and foreign intelligence activities be planned, developed, and coordinated so as to assure the most effective accomplishment of the intelligence mission related to the National Security."

          Thus, less than six months after the end of World War II, the battle lines for a major internal war had been drawn.

          Most of the problems and the failures of the past twenty-five years can be attributed directly to inadequate and improper decisions made during these struggles within the Government during this immediate postwar period and to the impact they have had upon the welfare of this country since that time.

          On one side were the tradition experienced planners who believed in the power of this great nation, all who felt that our future course lay in the increase of our own strength and of the beneficent impact of this strength upon the rest of the world. These men believed in the American way of life and in the ability of our economy to cope with world competition and of American diplomacy to plan our course of action wisely and to carry out effective national policy. They further believed in the capabilities of American military might to back up our diplomats and businessmen. To put it bluntly, these men were not afraid of the Communist bogeyman. They respected Communism for what it was, and they respected the power and strength of the Russian people. At the same time, they were willing and ready to plan for a common world future and an undivided world at peace.

          The other side, however, wished to create a sort of Maginot Line of intelligence people around the world, separating the Communist world from the Free World. Then they would peer out at the rest of the world through a veil of secrecy plugged in to data inputs of the intelligence gathering sources wherever they were and supported by a military machine in a defense posture, ready for "reaction" at all times. In essence, this latter point of view of foreign policy operations is passive and reactive, implemented not by plan but only by response to the initiatives of others.

          This is well stated by Allen Dulles in his book, The Craft of Intelligence: "The military threat in the nuclear missile age is well understood, and we are rightly spending billions to counter it. We must similarly deal with all aspects of the invisible war, Krushchev's wars of liberation, the subversive threats orchestrated by the Soviet Communist party with all its ramifications and fronts, supported by espionage. The last thing we can afford to do today is to put our Intelligence in chains. Its protective and information role is indispensable in an era of unique and continuing danger." The key word, "counter", appears in the first sentence.

          This final and summary paragraph of the old master's book is the best sample of the intelligence team's view of how to live in the modern nuclear age. They would have us establish the most extensive and expensive intelligence network possible and then develop a feedback capability that would automatically counter every threat they saw.

          Although Allen Dulles does not say it in his book, his concept of Intelligence is about 10 percent real Intelligence and 90 percent clandestine operations. In other words, he would have us busy all around the world all of the time countering "all aspects of the invisible war". By this he means intervening in the internal affairs of other nations with or without their knowledge and permission. (This leads to a serious danger, which will be treated at some length later.) It is what the United States has been doing in an increasing crescendo of events, beginning with such actions as the involvement in Berlin and Iran in the 1940s and culminating in the terrible disaster of Vietnam that began as a major intelligence operation, went on into the clandestine operations stage, then got out of hand and had to become an overt activity during the Johnson era.

          Traditionally, the foreign policy of the nation has been planned, and to the extent possible, has been openly arrived at. On those occasions when diplomacy has failed, the armed might of this country has been exploited overtly to back up foreign policy, or in the last resort to accomplish what diplomacy has been unable to do, by going to war. In the view of foreign policy action and the role of Intelligence as stated by Allen Dulles, however, intelligence would be the device used to set foreign policy actions in motion to "counter... all aspects of the invisible war." If this is not clear, he emphasizes, "The military threat in the nuclear missile age is well understood, and we are rightly spending billions to counter it." The idea is that intelligence is the catalytic element that triggers response and that this response will be covert, operational, and military as required.

          With the advent of a strong Intelligence community and with the ascendancy of that voice in the higher echelons of the Government, the Government has slowly but positively moved from an active course of following plans and policies to the easier and more expedient course of the counterpuncher. The Government has become increasingly adept at reaction and response. A simple review of what this Government really found itself doing in the Congo or in Laos or Tibet during the sixties would be enough to clarify and support the argument that the Government responded to action inputs and "did something", instead of turning to plans and national objectives, which it did not have. Further support of this thesis that the Government has been weaned away from plans and policy in favor of the easier response mechanism activated by intelligence is apparent in even a cursory look at the degradation of the roles of the once prestigious Departments of State and Defense. Lately, the Army has found new worlds to conquer under the cloak of the Green Berets who operate with the CIA. Even the Air Force welcomes the utilization of the once proud B-52 strategic bomber in a function that is totally degrading -- the blind bombardment of Indochina's forests and wastelands on the assumption that there are worthwhile targets on the Ho Chi Minh trail. The only reason State and Defense can give for what they have permitted themselves to become engaged in is that "the intelligence reports" say the "enemy" is there. No one asks, What is the national objective in Indochina? No one has a national plan for Indochina. We have become counterpunchers without a game plan, and we have become that because we take our cues from raw intelligence data.

          In our form of government this is a fairly recent approach. In 1929, when Secretary of State Stimson said, "Gentlemen do not read other people's mail," he was voicing the conditions of another era. We have come a long way since the days of 1929, and nations do read each other's mail because it is easier to do now than it used to be and because the dangers that exist today are much closer to home. We need to know as much as it is possible to learn about Russian capabilities and Russian intent. Total destruction is only about forty-five minutes away.

          But there was another reason Stimson made that statement. In an open society we do not develop the same wiles that are necessary in a world in which everyone reads everyone else's mail. Therefore, if you are going to defend yourself by reading the other man's mail, you had better know what he means by what he has written in his letters. He knows you are reading his mail, and he will bluff you right out of the game. And what is more important, we must carry out our own policies in such a way that he cannot keep us from our own goals.

          It is this point that looms larger when a government such as ours carries out its foreign and military affairs on a response basis. Such action over a period of time denies us all initiative and leadership and virtually precludes the possibility of bluff or skillful design. One cannot very well bluff or use surprise when he has been set in the pattern of response for twenty-five years. In military terms, the employment of proper tactics and strategy must be tempered by surprise when needed. In the great contest that has been going on between the major powers today, one can see that our course in response to such things as "Communist-inspired subversive insurgency" has cost us hundreds of billions of dollars and tens of thousands of lives; it has cost the same Communists we proclaim we are "countering" almost nothing. The response method of anything is a trap. The most frustrating and debilitating thing about it is that we have no objectives, no goals. We simply have an inertial drift into whatever direction the men in the Kremlin lure us. It is important to realize that if the highest echelons in government become preoccupied and preempted by intelligence inputs, voluminous reports, and other briefings, they do not have the chance to get planning done to weigh alternatives and to see that policies are effective.

          General Donovan and Allen Dulles made a career of trying to have the Director of Central Intelligence assigned to the immediate Office of the President for just the reason outlined above. They wanted to be placed in the dominant position in this Government. They knew that with modern techniques, with modern communications and effective controls, all supported by money and equipment wherever needed, Intelligence was capable of running the Government and its foreign affairs. The Kissinger example is a case in point. This was the danger that the legislators saw in Donovan's early proposal. It is why the President, acting on his own authority, placed the Director under the jurisdiction of the three Secretaries.

          To emphasize his intent and to make sure that it would work his way, President Truman directed that "operating funds for the organization would be obtained from the Departments of State, War, and Navy instead of directly from Congress." The Donovan plan had proposed the opposite. If the DCI was required to get his money each year through these other departments, he would be subservient to them and he would carry out their wishes.

          These were the surface reasons for this decision. The real reason for this relegation of the DCI to a subordinate position was to prevent the Director and his organization from participating in clandestine operations without the express direction and authority of the Secretaries and the White House. As we have noted, President Truman planned for the CIA to be the "quiet intelligence arm of the President". He and those of his Administration never intended that it become an autonomous operational agency in the clandestine field.

          Because of the general secrecy that surrounds such things, this debate did not become public. The establishment of a "National Intelligence Authority" by Truman was considered an interim arrangement. The day after he set up the group, the President announced the appointment of Rear Admiral Sidney Souers as the first Director of Central Intelligence. At the same time, the President established a precedent that has continued to this day, by designating Admiral William D. Leahy to represent him as a member of the National Intelligence Authority. Before his appointment to his new job, Admiral Souers had been the deputy chief of the Office of Naval Intelligence.

          It was learned concurrently that President Truman had ordered that "all federal and foreign intelligence activities be planned, developed and coordinated so as to assure the most effective accomplishment of the intelligence mission related to the national security."[1]

          The President's directive contained further instructions to the Director of Central Intelligence. They were:

  1. Accomplish the correlation and evaluation of intelligence relating to national security and provide for appropriate dissemination within the government of the resulting strategic and national intelligence.

  2. Plan for the coordination of such of the activities of the intelligence agencies of all departments as relate to the National Security and recommend to the National Intelligence Authority the establishment of such overall policies and objectives as will assure the most effective accomplishment of the national intelligence mission.

          A few weeks later, The New York Times published an article by Hanson Baldwin, its Military Affairs columnist, saying: "The establishment of a National intelligence Authority is a very important move. It is more important than the proposed merger of the War and Navy Departments. In all parts of the world today intelligence is most emphatically the first line of defense." This is an interesting use of this term "first line of defense". It appears many times later in the writings and speeches of such men as Allen Dulles and General Donovan. To them, intelligence was not limited to information. It was very much an operational organization and function.

          Baldwin went on to say that the new Intelligence Authority under Admiral Souers "will at most just collate and analyze intelligence. Later on it may take over the job of collection of intelligence, and later its agents will supplement the normal intelligence sources of the military services." He added, "The State Department's new Intelligence service under Colonel Alfred McCormick will continue but will probably be somewhat more restricted in scope than it has been." Both of these statements were prophetic and indicate that Baldwin had obtained his information from Donovan-Dulles sources. It was the "party line" that Intelligence would take over the task of collection, whether Congress and the Administration had that function in the law or not.

          In the heat of this major behind-the-scenes power play, there was bound to be an explosion. It is quite possible that this development, which occurred during the first week of March 1946, did not carry with it at that time the same significance that it does in retrospect. On the first day of March 1946, General Donovan gave an impassioned and hard-hitting speech before the Overseas Press Club in New York City. He stated that there had been numerous times when faulty and inaccurate intelligence had done great damage to this country's prosecution of the war. But the main burden of his speech concerned the new intelligence Authority. He said that experience had shown that we could obtain tested knowledge only through a coordinated, centralized, civilian directed intelligence service independent of other departments of the Government. Here he was taking a direct slap at General MacArthur and the JCS as well as at the Administration. He agreed that the new Central Intelligence Group established by the President was an advance over anything we had previously had in peacetime, but it lacked civilian control and independence.

          Donovan voiced displeasure over any intelligence setup that did not dominate the scene. While Admiral Souers was setting up his new organization, Congress was working on the National Defense Act. The public was interested in and aroused over the provisions of this Act as it pertained to a new Department of Defense. The big word at that time was "unification". Feeling had run strong during World War II that the military services should have been more unified. It was claimed that they would have been more efficient, and there might have been less confusion and waste. At the same time, there were a number of advocates of an independent Air Force. Up to that time, the Air Force had always been a part of the Army. What was called unification at that time seems more like separation today, because the new law, when it was enacted, established a separate Army and Navy and a new Air Force. As we know them today they are still far from unified. In the heat of all this discussion, there was little public airing of the provision for the Central Intelligence Agency.

          Those were troubled and confused times. The war was less than one year past, and people who looked back at it forgot all of the worldwide campaigns and remembered only the shock and terror of the atomic explosions at Hiroshima and Nagasaki. With fear of the unknown always more deadly than fear of a conventional shooting war, there was no chance to relax from the tensions of world struggle, safe in the knowledge that another war could not start up at any time, as we had believed after World War I. On the contrary, the threat of atomic warfare, even though it might be sometime in the future, was so terrifying that many felt the potential danger of nuclear weapons in the hands of the Soviet Union represented a graver peril than all the battles of World War II. As a result, with the war only six months behind them, Congress and the Administration turned to the serious problems of defense.

          Thus, on the same day that General Donovan had spoken to the Overseas Press Club, Secretary of State James Byrnes also addressed that group. It is most revealing to look back at the major differences between the two speeches. Addressing this group as the official spokesman of the administration, he said that there was one thing that was very important: "The question is what can we do to make certain that there will never be another war?" Then, citing problems of the war, he went on, "Our relief and our gratitude for victory are mixed with uncertainty. Our goal now is permanent peace, and certainly we seek it even more anxiously than we sought victory. The difficulty is that the path to permanent peace is not so easy to see and to follow as was the path to victory." He said that "because we know that no nation can make peace by itself, we have pinned our hopes to the banner of the U.S." Byrnes added, "If we are going to do our part to maintain peace in the world, we must maintain our power to do so. We must make it clear that we will stand united with the other great states in defense of the charter of the UN. If we are to be a great power, we must act as a great power, not only in order to insure our own security but in order to preserve the peace of the world." Continuing, he said, "It is not in accord with our traditions to maintain a large professional standing army, but we must be able and ready to provide an armed contingent that may be required on short notice. We must have a trained citizenry ready to supplement those of the armed contingents." After making these statements, Byrnes added a very interesting comment that has special significance and applicability today. He said, "Our tradition as a peaceloving, law-abiding democratic people should be an assurance that our forces will not be used except as they may be called into action by the Security Council, and cannot be employed in war without the consent of Congress. We need not fear their misuse unless we distrust the representatives of the people."

          In view of what has transpired in the Vietnam war, Byrnes' last statement takes on special meaning. As he continued his speech he made another most interesting remark: "So far as the United States is concerned, we will gang up against no state. We will do nothing to break the world into exclusive blocks or spheres of influence in this atomic age. We will not seek to divide a world which is one and indivisible." This "oneworld" view, this idea that no nation should do that which would destroy hopes for world unity and harmony, was the official policy of the Administration at that time. It was the national policy of a people dedicated to the proposition that this country was strong and able enough to stand upon its own feet and make its own way in the world. It was a positive and active policy that would plan for the future; yet only five days later another speech of another kind did more to turn the minds of the world, and especially of the United States, and to blight our future than any other speech in the following quarter-century.

          It is startling and most significant to recall that the then leader of the Loyal Opposition in the British House of Commons, Sir Winston Churchill, only five days after Secretary Byrnes' speech made a speech that was just the opposite. He declared: "Beware... the time may be short... from Staten in the Baltic to Truest in the Adriatic, an Iron Curtain has descended across the continent."

          In this famous Iron Curtain speech Churchill, like many others, was driving the tip of the wedge between the great powers of the world, while at almost the same time the Secretary of State had said, "We will do nothing to break the world into exclusive blocks or spheres of influence in the atomic age. We will not seek to divide a world which is one and indivisible." Here again was the classic contest. The active overt planner, Byrnes, versus the passive covert reactivist, Churchill.

          These were not simply the comments of one man. They were typical, and they were indicative of the thinking and of the intentions of the official, elected leaders of the United States right after the end of World War II, and of their deep-seated opposition. Great forces were working to divide the world -- to set up one half as Communist, and the other half Free World and anti-Communist. There was the inertial drift that was transferring the initiative to the Kremlin.

          The source of most of our problems of the past twenty-five years and certainly of the grave problems that beset our country today, lies in this schism between those who believed in the traditional school of national planning and overt diplomacy and those who believed in a passive role of reaction to a general enemy (Communism). This latter school would operate in response to intelligence inputs, without plans and without national objectives, would hide everything it did in secrecy, and would justify its actions in all instances as being anti-Communist. On the other hand, there were those who believed that the United States was the new leader of the world and that its responsibility to its own people and to those of the rest of the world lay in making a better world for all mankind along the lines of the example of the United States' tradition. At its best, this represented the dreams of free men for liberty and individual freedom under law and justice.

          The maintenance of such a world and the expansion of such conditions to other parts of the world would require planning and great effort. The original concept of the Marshall Plan was an example of the best that such endeavors can accomplish in the face of Communist threats and opposition. Communism was met head on in Europe right after World War II and was defeated in France and Italy without resort to war and without response mechanisms. Communism was beaten by superior U.S. planning and policy. However, this kind of international effort requires dedicated leadership and great effort. One of the most difficult things for any government to do is develop and carry out long-range plans. That takes a certain inspired vision and rare leadership that is not often available.

          On the other hand, it is easier and more typical to react and respond to outside pressures than to act in accordance with approved plans. In a modern government vested with immense capacity and advanced communications, it can be made to look more effective to set up and operate from a feedback system that will respond almost automatically to inputs, most of which are derived from a new style comprehensive intelligence information system fed by bits of data from everything including agents to satellite photography and other sophisticated sensors. The government in this case defines a threat, real or imagined, and responds to each data input from the threat and the danger.

          This is what has been developed, and at this stage of the system this has become the normal course. Therefore, since it was all but inevitable that there would be a power struggle of some kind between the two great power centers on earth, even without declared hostility, the intelligence community proponents said that it would be easier to begin our national defense posture by delineating the source of all concern and danger, i.e. world communism, and then to draw lines for a never-ending battle, sometimes called the Cold War. The line so constructed was, in the beginning, the Iron Curtain. Although one might expect that the battles would be waged by our forces on their side of the curtain, and the skirmishes by their forces would be on our side, it has not turned out that way. The battles that have been fought since 1947 for the most part have been fought on our side of the Iron Curtain. It had to happen this way because the intelligence community has gained the initiative, and the response technique will not work on the other side. This was the great contest and although the principals on both sides of the argument, which was of such vital concern to the foreign policy and defense posture of this country, might deny it, this was the basis for the contention that the Central Intelligence Group should be assigned to a position subordinate to the Secretaries of State and Defense and under their direction.

          These two pressure groups have vied for power repeatedly since 1946. It is entirely possible that the leak of the "Anderson Papers" in December 1971, and January 1972, was current evidence of an outbreak of this continuing struggle. Henry Kissinger is the titular head of the intelligence community's clandestine operations reaction faction. His appearance as a one-man power center is simply due to the fact that he fronts for the Secret Team and the secret intelligence community. Thus, he vies with the Secretary of State, the Attorney General, and certain others in the "traditionalist" group, who would like to see a return to national planning, strong diplomacy, and moves toward peace through successful conferences between the United States and other countries of the world.

          The traditionalists had finally found a long-awaited opportunity to exploit Kissinger's weakened position in the India-Pakistani War, to expose him. Such events will occur repeatedly with the ebb and flow of power between these two positions.

          As we continue with the development of the CIA and the ST in the following chapters, we shall see many more examples of the "active" versus "passive" contest.


  1. Note that from the beginning the Agency was considered a coordination center, and that it was not empowered to be a collection agency. The original plan was that the agency simply coordinate all of the intelligence that was readily available from other government departments. As the agency grew during the following twenty-five years, it expanded its role bit by bit from this first limited charter, and it did so by its own zeal and initiative, not by law or direction.

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