Pressure Builds for Bush to Overhaul Spy Agencies

In what is one of the most critical national security issues facing the new Administration, President-elect George Bush already is coming under pressure to overhaul the U.S. intelligence Establishment.

An unusual bipartisan consensus is building for Bush to reform and adapt the CIA, his old stamping ground, to the rapidly changing world of espionage--and to a rapidly changing world.

The issue, however, is no longer strong oversight of the agency. Nor is it recovering credibility after the battering the CIA took during the Iran-Contra scandal. Director William H. Webster has dealt judiciously, if slowly, with both problems, according to congressional sources.

What is at stake, according to both insiders and outside critics, is capability.

“There is increasing recognition that the capabilities that we have now will not fully enable us to meet future challenges, threats and opportunities,” said Roy Godson, an intelligence specialist and Georgetown University government professor.

“In the mid-1980s,” Godson said, “we had begun to address the apparent weaknesses. But because of Iran-Contra and the death of (former CIA Director William J.) Casey, policy-makers were distracted by the leadership shuffle and the investigations.

“In recent months, the CIA has initiated important reforms. But much remains to be done and many inside the community are good at fending off bureaucratic change.”

The changes at issue involve making decisive choices between:

- More visible covert actions, ranging from paramilitary aid to misinformation campaigns, versus the overt collection and analysis of information on which the White House and State Department base foreign policy choices.

- Expensive technological advances, such as spy satellites, versus human spies.

- Trying to cover the entire world versus making selective choices.

The intelligence community long has debated what its priorities should be. But this time around, analysts say, a real crunch is approaching because of an unprecedented financial squeeze. In other words, the CIA and other U.S. intelligence outlets now must get more intelligence for less money.

Although all branches of government will be squeezed, the intelligence community may believe that it is more affected than others because of disproportionate increases in the past.

During the Reagan Administration’s first five years, the intelligence budget increased up to 25% annually, according to intelligence experts.

“And it wasn’t always money well spent as (the intelligence community) didn’t understand what the problems were,” said one independent analyst.

Budget Cutbacks

Budget cutbacks mandated by the Gramm-Rudman Bill to reduce the federal deficit are almost certain to cramp the CIA’s style in particular, congressional intelligence specialists predict.

The cutbacks are likely to be painful. The financial squeeze comes at a time when the costs to cover technological advances and new areas in need of surveillance and analysis are rapidly multiplying.

One estimate, for example, put the price of the spy satellite launched into space by the Atlantis shuttle last week at well over four times the total budget for the CIA’s covert actions.

New national security issues--most notably international terrorism, which did not even have a special section until 1981--have become an ever more costly priority. Monitoring recent arms control pacts also will absorb vast sums.

Areas of Neglect

Other areas of recent neglect need to be beefed up, specifically counterintelligence after the discovery of more than 60 Americans working as spies for foreign governments in various U.S. intelligence agencies over the last decade.

In effect, congressional and independent analysts say, the Bush Administration will have little choice but to streamline the major U.S. intelligence outlets which, besides the CIA, include its most frequent competitor, the Defense Intelligence Agency, and the ultra-secret National Security Agency, the State Department’s Intelligence and Research Bureau and the FBI.

CIA officials concede that funding limits will necessitate change. But current and former officials as well as outside experts differ deeply over what those changes will be.

Some intelligence critics have suggested more selective intelligence rather than costly comprehensive coverage.

The danger, however, is that potential hot spots will not be identified. The United States could get caught short--as it was before the 1979 Iranian revolution, despite a major intelligence presence.

Cutting back on intelligence in less important geostrategic areas is also dangerous because of the potential rippling effect that local events can have throughout a region, analysts say.

The risk from resource reductions is apparent in the case of Lebanon, where intelligence operatives and operations were drastically reduced after a wave of suicide bombings and hostage takings in the mid-1980s.

The result is that good information on nine U.S. hostages in a nation now partitioned de facto into Christian and Muslim zones is more unobtainable than ever. And the anarchy in Lebanon has had a major spillover effect on Israel, the closest U.S. ally in the Middle East, and elsewhere.

The sensitive selection process also could lead to in-house fighting, particularly within the CIA’s different branches.

Controversial, Costly

Covert action is now among the most controversial and costly operations. With several key regional conflicts, such as Afghanistan and Angola, headed toward some form of resolution, a former intelligence official suggested that paramilitary clandestine aid and activities might be the first to be affected.

“There are limits to what can be achieved by covert action in the 1990s,” said former CIA Director Stansfield Turner.

“It’s not like the 1950s. We’re much more restricted in what can be accomplished in terms of the big political actions.”

The CIA’s most secret section has gone through erratic highs and lows over the last two decades. In the late 1960s and 1970s, the CIA cut back dramatically on covert action.

“By the mid-1970s, it had all the hallmarks of a dying art form,” said a former senior official in charge of covert action. And, an intelligence analyst added, the Senate committee that investigated the CIA in 1975 and 1976 “concluded that covert action dominated the CIA and that the CIA in turn dominated the rest of the intelligence community. And they sought to impose restrictions on future covert action.”

Along the way, however, the United States began to recognize that it had lost an important capability. Networks of foreign contacts disintegrated. The database became weak.

“The whole infrastructure atrophied,” said an intelligence analyst.

In the late 1970s, the United States began to rebuild its covert action capabilities. The period was capped during the rein between 1981-87 of Director Casey who, in the words of one insider, “took covert action to an obscene extreme.” Casey was among those apparently deeply embroiled in the Iran-Contra episode.

Proponents of covert action, such as aid to Afghanistan’s moujahedeen or the Nicaraguan Contras, now argue that U.S. foreign policy is impotent without the muscle to translate words into action. “The Soviet Union would not now be leaving Afghanistan if it weren’t for U.S. aid to the moujahedeen ,” said one.

Primary Function

Yet members of the overt side of intelligence argue that their day-to-day intelligence collection and analysis has been, in fact, the CIA’s primary function since it was established four decades ago.

The overt and covert branches already have a longstanding rivalry. Streamlining could have further, and perhaps even nasty, side effects, specifically demoralizing staff and sparking heated debate, insiders concede.

The second issue over which debate is building pits advocates of technological wizardry against proponents of human intelligence.

More sophisticated technology--from spy satellites and lasers to gadgetry--is urgently required, according to research and development specialists. The need is not only to keep up with the Soviets and to monitor arms control pacts but also to be able to detect new trends such as missile proliferation in Third World countries.

Yet technology is limited in providing intelligence on troublesome new national security issues, such as chemical warfare, terrorism and the growing narcotics trade.

Strengthening on-the-ground human intelligence resources, which were cut back in favor of technology in the 1970s, is now vital, according to members of the Washington-based Consortium for the Study of Intelligence.

Human spy craft has also been hurt in the 1980s by the hostage phenomenon, including the seizure of key American operatives in Tehran between 1979-81 and the 1984 abduction and subsequent death of CIA station chief William Buckley in Beirut. The CIA’s Mideast capabilities suffered another serious blow in the 1983 bombing of the U.S. Embassy in Beirut, which killed Robert C. Ames, the CIA’s senior Middle East analyst and the handful of other members of the Beirut station. “But there is no other way to find out about many of our most pressing problems,” said a former intelligence official. “You can’t penetrate a terrorist cell with a satellite.”

The third key issue around which debate is shaping up involves the focus of intelligence.

In the postwar era, intelligence gathering has been predicated on a bipolar world divided between the United States and the Soviet Union. As much as 50% of U.S. intelligence resources have traditionally been devoted to the Soviet Union.

Key intelligence officials now are calling for a change in priorities.

“The world scene has become a kaleidoscope of even more confusing and diverse pieces,” writes Anne Armstrong, chairman of the President’s Foreign Intelligence Advisory Board, in an upcoming issue of Washington Quarterly.

“In the relatively near future, such nations as China and Japan may once again play independent, active and unpredictable roles on the world scene.

“The result is that the intelligence community will find it harder and harder to maintain encyclopedic coverage of the whole world,” Armstrong predicts.

“Policy-makers will have to be more attentive to the management of the intelligence community and more explicit in determining the requirements it is to fulfill.”

Several insiders and outside critics already have called for the White House to step in and provide priorities. Indeed, the intelligence community has shown unprecedented openness in appealing for greater presidential intervention and guidance in intelligence.

“More interaction, feedback and direction as to strategy, priorities and requirements are critical to better performance,” CIA Deputy Director Robert M. Gates writes in an upcoming issue of Washington Quarterly.

With unusual candor, Gates concedes that: “Over the years, both the White House and the CIA have failed to maximize the opportunity for better intelligence support for the President and decision-making.

“The usefulness of the CIA to presidents in that area for which the CIA was primarily established . . . at times has suffered because of the self-imposed isolation by the CIA and the frequent lack of time and often opportunity on the part of presidents and their national security teams to play a central role in developing intelligence policy and strategy,” he says.

Because he served as CIA director for just under a year during the Ford Administration, intelligence analysts predict that Bush will give it greater attention than other presidents.

On foreign policy issues, congressional sources already are predicting that the CIA will have greater access to the President while the role of the National Security Council will be lower key.

Leadership Choice

A final issue on which Bush will have to make a decision in his first year is CIA leadership.

Some U.S. intelligence sources have suggested that Webster, who was reappointed director of the CIA last week, may not be the best man to oversee such delicate and possibly controversial reforms.

Although he is given credit for having learned the foreign intelligence operation since his appointment 18 months ago, some insiders believe that he is not yet knowledgeable enough on the CIA’s intricacies to make sensitive recommendations about cutbacks.

And, although he has stood up for the agency on key issues, such as reporting all covert actions to Congress within 48 hours, he has not yet won the full confidence of many special operations officers.

“Some people at the agency would like to see Webster go as they feel he is an albatross, the price the agency had to pay after Iran-Contra,” said a congressional intelligence specialist.

“They want to close that chapter, which he represents. But (Secretary of State-designate James A. Baker III) apparently prefers to have him stay on, to see how he plays. Webster will be an ally who is no threat and who in a way is beholden to Baker for his job.”

Webster’s position has been further weakened by the perception that he may be only a transition figure to be replaced within a year or two, or possibly even at the next congressional break in October.

One of Webster’s main rivals for the job reportedly was James R. Lilley, who was CIA station chief in Beijing when Bush was ambassador. Intelligence analysts have suggested that one of the reasons Lilley was not appointed to the CIA post was because he is now ambassador to South Korea, a post too sensitive to change in the midst of political tension.

Yet in what reflects the wide diversity of views within the agency, other insiders claim that carrying out major reforms will require an outsider’s detachment to be effective. They argue that Webster, who cleaned up the FBI after a period of controversy, is the logical choice.