A Message from the Inspector General
Central Intelligence Agency

Inasmuch as this is my last "message from the IG," I have decided to depart from my usual practice of highlighting the work of the office over the past six months, and instead offer a few personal observations -- first about the Agency itself and then about the evolution of the Office of Inspector General over the past two and a half years.

Overall, at this juncture, I think the Agency is in good shape. Whatever uncertainty of purpose may have existed following the end of the Cold War has long since disappeared. The focus on the Soviet Union has given way to a diverse set of targets and issues that are in some ways more challenging to attack and analyze. Yet, the Agency continues to have significant success against them. Agency managers and employees understand what they are about. For the most part, they are deeply engaged in their work. Whenever events around the world require it, they do what it takes -- often at great personal sacrifice -- to get the job done. Despite the demands placed upon the workforce, employee surveys taken by our office over the last three years generally show high morale compared with the recent past and with the federal government as a whole.

The Agency has also become less insular in recent years, both in terms of relating to its customers and seeking to involve the outside world in its work. It has also made significant progress towards openness and explaining itself to the public. All of this is to the good.

In important ways, the future also looks bright. The Agency continues to attract top-notch recruits. Even in an era of stiff competition from the private sector, interest in employment with the Agency remains high, allowing us to be quite selective in those we bring aboard. Retention is more of a problem, but the Agency's attrition rate still compares favorably with the private sector.

I also believe the Agency has set the right course for itself. To my mind, the Strategic Direction promulgated two years ago by the DCI focused on the right issues and set the right goals. It provided a reasonably clear road map for managers and employees alike in terms of where the Agency was heading. In the interim, much has been done to advance the Agency towards these objectives, but much remains to be done.

Not surprisingly, what remains to be done will be difficult to achieve, requiring management commitment and adequate resourcing over a long period of time. While I believe this is possible, it will require the DCI, whoever he or she might be, to make decisions that are apt to be unpopular. Unless the difficult issues are tackled, however, I worry that the Agency could see its usefulness diminish over time. And no one who works here wants that.

Putting the situation in simple terms, the Agency, whose mission is to collect and analyze information, finds itself in the middle of an information revolution that churns on relentlessly in the private sector. There are more sources of information becoming available than ever before, and more ways of sorting and manipulating it. We are not in the situation we were in during the Cold War when often we were "the only game in town" in terms of understanding what was happening in the Soviet Union and other countries that were effectively closed to the outside world. Unless the Agency can continue to add value to what customers are increasingly able to do for themselves, their reliance upon the Agency's output is going to diminish. Customers will undoubtedly continue to take what we produce (after all, it is free to them), but unless we are able to provide unique and important information from clandestine sources, and unless we can gather, sort, and analyze information in a way that provides customers with timely and unique information and insights bearing on the problems they face, our ability to influence the decision-making process is apt to erode over time.

I believe the continued ability of the Agency to add value will be largely a function of its ability to harness the technological advances being made in the private sector to its tasks, which cannot be done without involving knowledgeable outsiders in its work and without substantial and continuing investment in its infrastructure.

With the creation of In-Q-Tel, the first significant step was taken to involve knowledgeable outsiders in the Agency's work, but this effort is still in its infancy and the probability of success uncertain. When I was staff director for the Aspin/Brown Commission several years ago, I came to realize that the world of information technology does not relate very well to the world of intelligence. It thrives on transparency; we thrive on secrecy. It does not want to be tied up by government contracts and classification stamps; we know nothing else. A way thus must be found to identify and harness the capabilities of this world to the Agency's purposes without (for them) the downsides. That is why I believe In-Q-Tel simply has to succeed. Agency managers and overseers must find a way to make it work.

Connecting with the world of information technology will mean little, however, if the funds are not available to invest in the technologies that would make a difference to us from the standpoint of collection, analysis, and administration. Given the budget levels envisioned for the near term, however, I am not confident that the Agency will have the wherewithal to carry on at its current level of activity, much less keep itself at the forefront of technological change. It does seem clear, though, if we continue doing all of the things we are currently doing in the way we are currently doing them, there will not be enough money left over to sustain the level of investment that will be needed.

The time may soon be approaching when a DCI will have to seek more money for the Agency either from within the National Foreign Intelligence Program (NFIP) budget or by appealing to the Administration and Congress. But making the case for a greater share of the appropriations pie will be difficult if the Agency cannot demonstrate that it has done all it can on its own to manage and conserve its resources. And, at this juncture, I think it is a long way from being able to do so.

The principal obstacle in my view is the relative lack of centralized management and control over resources. While the creation of a Chief Financial Officer (CFO) and Chief Information Officer (CIO) as part of the Agency's Strategic Direction were important steps in bringing a more corporate approach to financial management, procurement, and information services, the directorates retain a great deal of autonomy in terms of how they invest and control their resources. Moreover, in many cases, the data needed by the CFO and CIO to manage "corporately" simply haven't been there. It is often impossible to know where money is and how it is actually being spent. While steps are being taken to address this situation, e.g., budget restructuring, freeing up obligated-but-unexpended funds, the lack of uniform and reliable data continues to hamper progress.

It won't be easy but I think additional funds could be identified and freed up for investment and other mission-critical purposes if management truly put its mind to it.

A key aspect of such an effort would be taking a hard look at personnel costs as well as the costs of the Agency's personnel policies. For example, the Agency lacks a uniform job classification system which allows "grade creep," and thus personal services costs, to escalate quickly relative to the rest of government. It has a relatively unstructured assignment process which seems tilted more towards satisfying the preferences of employees than mission needs. It has a personnel evaluation process that defies any effort to weed out poor performers. While this is not an uncommon phenomenon in the federal government, one would expect more rigor given the sensitivity of the Agency's mission. While early-out authority has been a useful tool for retiring employees whose skills are no longer needed and reducing personnel costs, the Agency still has a workforce that is not altogether matched to its needs. While it has special authorities that seemingly could be used to shape its workforce, it has shied away from using them for fear of criticism, lawsuits, and/or adverse Congressional reaction.

Iin my view, there are also possible savings -- and not inconsequential ones -- to be found in what the Agency now spends on employees as well as what it now requires of employees. For example, the Agency provides certain benefits to employees that are not available to federal employees generally, e.g., domestic relocation expenses upon retirement, as well as "perks" intended to promote their "quality of life," e.g., summer jobs for the children of employees, medical services, three-month "transition" programs to prepare employees for retirement, personal counseling and training, and day-care facilities. I'm not suggesting all of these things be eliminated, but they should be looked at objectively in light of the Agency's current fiscal needs. Similarly, the numerous requirements placed upon employees for security or suitability reasons, e.g., recurring polygraph examinations, psychological testing, annual financial disclosures, medical examinations for new employees and travelers, and annual security training, also ought to be reconsidered. While these requirements may still make sense for the clandestine service or employees otherwise posted overseas, continuing to apply them indiscriminately to the Agency population as a whole (many of whom never leave the Washington area) seems debatable to me. While I have no doubt that taking steps to deal with any of these topics would be overwhelmingly unpopular, the fiscal health of the Agency has reached the point that I believe they should be put on the table.

Money could also be saved if managers paid greater attention to conserving resources and getting more "bang-for-the-buck." Although significant progress has been made in reducing administrative costs in some areas, my impression is that the emphasis of most managers is on getting the job done; the costs of doing so are secondary if they are considered at all. Rarely does the OIG see managers looking for cost savings or efficiencies in their operations, and there is too little concern about the quality of goods and services that the Agency is contracting for. What is prized and rewarded is accomplishing the mission, not saving money along the way. I don't see these things as mutually exclusive.

But even if greater efficiency could be brought to the Agency's operations, it would still be necessary for the Agency to look hard at what it is doing and whether it needs to keep doing it. For example, do we need to continue doing this or that kind of collection when the costs are high and the payoff small? Can we at least scale back unproductive efforts? Do we need to continue to publish analysis on country x or topic y when there is little interest on the outside? Are some areas being overemphasized at the expense of others? Can we afford to eliminate management layers in certain components? Are we continuing to spend money on cumbersome, outdated administrative systems and controls? Are we spending too much on security measures that have relatively little payoff?

These are tough questions. And, frankly, based upon my time here, I don't think the existing corporate structure provides an adequate mechanism for addressing them. There is no office within the Agency, for example, currently dedicated to planning for the future. There is a small program analysis and evaluation staff within the CFO's office, but with nowhere near the capability that is needed to assess cross-directorate or cross-program needs and tradeoffs. The staff in the immediate office of the DCI is there to ensure the demands of the schedule are met, not to support the DCI as head of the Agency. For this, the DCI relies on the Executive Director to coordinate the positions of the directorates on various issues and to arrive at a "corporate" position for the DCI's approval. The immediate staff of the Executive Director, in turn, is composed of people on rotation from the directorates who often have no or little experience in the particular area they are asked to handle. Moreover, they typically return to their respective directorates at the end of two or three years which limits their ability to track the implementation over time of decisions that are taken. While it is not my intent to disparage the efforts of those who currently hold these positions, the system they administer is not a strong one.

The staffing arrangements are somewhat better in the offices of the CFO and CIO, but neither office is in a position to dictate to the directorates. They can recommend actions to the Executive Director, but if the directorates should disagree with them, the Executive Director is left with choosing between what a directorate says it needs to do, and what the CFO's or CIO's staff says it needs to do in the broader, corporate interest; and maintaining harmony with the directorates often looms as large as satisfying the broader corporate interest.

Whatever may have been the justification in the past, I think the Agency can no longer afford a decentralized approach to resource management. It needs to find efficiencies, set priorities, and capitalize on its investments; and a decentralized approach makes each of these objectives more difficult.

For an organization that has operated without effective top-down corporate management for over half a century, this transition will not be easy. But I am heartened to find that many senior managers have come to the same conclusion I have. When faced with the need to find additional funds within the Agency's budget to carry out their respective missions, they realize it cannot be done under the current decentralized system. I think it's important that others see it as well. As an agency, we need to regard a corporate approach to resource management not as a threat to the directorates but as a benefit to them.

One way of going about this would be to replace the existing Executive Director and his staff with an "Office of the Director" and staff it principally with permanent, rather than rotational, positions. The Chief of Staff to the Director would serve as an administrative focal point, ensuring that the issues coming to the Director for decision had been appropriately staffed and all the relevant viewpoints represented. In addition to the various offices that support the DCI in his external role (e.g., OCA, PAS), the "Office of the Director" would include a CFO, CIO, and COO (Chief Operating Officer), each of whom would report to the Director. The CFO would be the Agency focal point for resource management; the CIO, for the acquisition and administration of information services; and the COO, for long-term planning and improving the efficiency and effectiveness of the Agency's business operations (i.e., collection, analysis, covert action) across the board. I would give each of these senior officials authority to develop policy and procedure in their respective areas of responsibility (coordinating with the others as appropriate) and oversee the implementation of such policy within the directorates. The Chief of Staff would ensure that appropriate coordination had occurred within the Office of the Director and that the views of affected components were reflected in any decision memoranda going to the DCI. Policy approval would rest with the DCI or DDCI.

This is merely one way of doing it. There are any number of organizational constructs that would provide stronger corporate management than the Agency has today. Typically, though, DCIs are so swamped with other demands of their office that they shy away from taking on the bureaucratic arrangements within the Agency, especially if they see any effort to change them as meeting resistance from the Agency bureaucracy. While their reluctance is understandable, until a DCI as well as the Agency bureaucracy itself discerns the urgency in doing so, I see the road to the future as long and winding.

Finally, I want to make a few parting comments about the evolution of the Office of Inspector General over the last two and a half years.

I think we have become more professional. Whether recruiting auditors, investigators, or inspectors, we are able to attract top-notch people for both career and rotational positions. We also are paying greater attention to their development once on board, so that they receive the training and career experiences they need to make them the kind of professionals our mission demands.

I also think our work has greater relevance. We spend a great deal of time deciding where to put our discretionary resources to illuminate the problems that the Agency itself is facing. We also spend more time working with management to come up with recommendations that are feasible and desirable. While there are occasional differences that cannot be reconciled, the vast majority of our recommendations are agreed to and acted upon.

I think our work is on a sounder footing. We now have an Agency Regulation that not only reflects our statutory authorities and responsibilities but sets out our operating policies and procedures. These policies and procedures, in turn, help ensure fairness and thoroughness in every aspect of our work.

We are doing things more quickly than we used to. The backlog of pending investigations has been sharply reduced in the last three years, and we are now able to obtain declinations from the Justice Department in potential criminal cases more quickly, enabling us to handle cases administratively. Audits and inspections are being issued on an average of five months from start-up, a marked improvement over the past. When the situation demands it, we drop what we're doing to satisfy higher priority requests. The investigation of the bombing of the Chinese Embassy in Belgrade, for example, was furnished to the DCI exactly three weeks from the day he asked for it.

We are also more flexible. If the situation we are looking at changes in midstream, we adjust. On occasion, we have abandoned projects altogether rather than continuing on when it no longer made sense. If we become aware of problems that need addressing immediately, we advise management forthwith. If corrective action is taken, we either drop the issue from consideration or recognize the corrective action taken in our report.

In sum, I believe the OIG has matured over the last two and a half years and its capabilities have been strengthened -- not because of me but because of those who have served the OIG with integrity and dedication during this period. The OIG is not an easy place to work. The functions assigned to it necessarily create tension and conflict which our employees have to contend with day after day. And yet it is a place where people come in to work every morning with one objective in mind -- doing the right thing for the Agency and its employees. They have no other ax to grind; no other agenda to pursue. We are not perfect, by any means. We make mistakes like anyone else. But we try our best to gather the facts relevant to the issue at hand and evaluate them fairly and objectively, letting the chips fall where they may. We may not always get it right but what we produce at least has the virtue of being an honest opinion.

During my tenure as IG, we issued approximately 25 inspection reports, conducted 65 audits, and resolved several hundred investigative matters. We also issued a number of "special assessments" which did not precisely fit the mold of an inspection, audit, or investigation.

I'm particularly proud of the investigations we did of the Deutch case, the Agency's involvement in the bombing of the Chinese Embassy in Belgrade, and of allegations that a particular covert action had exceeded its mandate. I also think our inspections of the DO divisions and the health of certain types of analysis within the DI were particularly illuminating. I'm also pleased that we reinstituted the practice of auditing field stations and were able to identify several places where the Agency could save money. I also believe our special assessments of the Agency's relations with the national labs and the alleged politicization of a National Intelligence Estimate were models of IG work.

Obviously, what any IG is able to accomplish depends upon the efforts of a great many people. It has been a distinct honor and privilege for me to have led this group over the last two and a half years. My time here has been a satisfying conclusion to a government career that has lasted almost thirty years. While each of the jobs I've held has been different, all have had one thing in common: they have been like endless relay races where you are continually running towards the finish line but never reach it. While the baton is in your hands, you do the best you can to make headway. Then you pass it off to someone else for the next lap who will hopefully build upon your progress. My experience as Inspector General has been no different. While I would like to think we made headway while the baton was in my hands, the finish line remains nowhere in sight.