1995 Congressional Hearings
Intelligence and Security

DCI Testimony 6/21/95

Open Testimony before the SSCI by Director of Central Intelligence, John M. Deutch, on 21 June 1995

This is the written statement submitted for the record to the Senate Select Committee on Intelligence on June 21, 1995 by DCI John Deutch.

Good afternoon Mr. Chairman and Members of the Committee. I appreciate this opportunity to appear before you today to report on a number of issues that you asked me to pursue subsequent to my confirmation.

I want to begin by stating that my general assessment of my first six weeks as DCI is positive. I believe we are well along in the process of installing the new leadership team for the Intelligence Community and CIA. I have also spent a good deal of time in the last month or so to begin the process of improving morale and meeting with as many people as possible in CIA and in the Intelligence Community. These meetings have helped me determine and put into place a series of actions to address important outstanding issues.

At my confirmation hearing, Mr. Chairman, you enumerated a list of key issues in your closing remarks, and asked that I report back to you in 30 days or so. With your concurrence, I would now propose simply to go down the list of topics and give you a status report on what I have learned, what I have decided, and what I am continuing to study.

DCI Authorities

The first issue you raised is the question of any needed changes to DCI authorities. This is, as you know, a complex topic-and one that engages the equities of a number of Executive Branch departments. To sort through these equities and to frame my study of this issue, I have settled on three questions that I believe encompass the significant points.

The first question centers on whether the DCI has sufficient budget authorities to assure the preparation and execution of an effective national intelligence program. In this regard, I have been struck by the relative lack of executive authority that the DCI has over the elements of the Intelligence Community and the budget for the National Foreign Intelligence Program (NFIP).

Existing statutes give the DCI the authority to develop and approve the budgets that make up the NFIP. In practice, though, the DCI shares these authorities with the Secretaries of the Departments that host intelligence programs. The DCI, in consequence, has great influence over the composition and execution of the NFIP, but little direct authority, except for the CIA Program and the Community Management Account. This is due in part to an inevitable tension between vesting authority in line managers of the various agencies as opposed to vesting authority in functional management of intelligence that cuts across Departments and disciplines. On this question, I would note, though, that the present process works fairly well with the Department of Defense, but not well with respect to other agencies that are part of the NFIP.

The second question in my analysis concerns the degree to which the DCI should have line authority over the NFIPs program managers. Among these managers, the DCI at present appoints only the Executive Director for CIA and the Executive Director for Intelligence Community Affairs (the DCI has a voice, but not appointment authority, for certain other positions). The fact is that most NFIP program managers wear dual organizational hats and report through dual chains of command. This situation is in some respects analogous to the budget relationship I just discussed.

The final question I have formulated is somewhat narrower and focuses on the issue of whether the DCI should have expanded authority to reprogram NFIP funds within and between programs. Current authorities enable such transfers, but only with approvals from the Office of Management and Budget, the Congressional oversight committees, and, notably, the Departments that are affected.

I am confident that my understanding of the authorities issue-as reflected in these three questions-is relatively complete. I am not prepared as yet, however, to recommend solutions or options to pursue. I will say that I believe that arguable options range from maintenance of the status quo through significant changes in existing authorities-with several middle avenues also possible. On the question of budget authorities, for example, a solution could range from keeping existing arrangements intact to requesting the creation of a separately appropriated intelligence budget. Options between these extremes might include ideas such as fencing the intelligence budget within the Defense appropriation.

I would note here that my experience as Deputy Secretary of Defense tells me that there are strong arguments against certain steps at the outer boundaries of change. For that reason, I do not advocate them now. I would want to consider very carefully the effects that any new budget arrangements would have on intelligence consumers-creation of a separate budget, for example, would place such consumers at a considerable distance from intelligence resource decisions, thereby decreasing their voice in intelligence investment strategies. I do think, though, that my analysis does illustrate that the authority of the DCI over intelligence is limited.

Congressional Notification

I turn now to the second issue you asked me to address, which involves improvements in the Intelligence Community's fulfillment of its obligations to keep Congress fully and currently informed. Mr. Chairman, I want to begin by reiterating the commitment on this point that I made to the Congress in my confirmation hearing-a commitment echoed by George Tenet in his own confirmation hearing last week. Notification issues go to the heart of our relationship with the Congress and intelligence satisfaction of this obligation must be seen as a fundamental requirement. Both the Deputy Director of Central Intelligence and I want to be sure that this matter routinely receives management attention at the highest level.

There is no question in my mind that notification problems, as evidenced by the Guatemala case, demand such attention. It is clear to me that whatever action I take must affect both institutional understanding-culture or mindset, if you will-and institutional procedures. I have asked for, and will shortly receive, recommendations on steps to address shortcomings in both areas. I should say here that thinking on this problem has been greatly aided by work set in motion earlier this spring by Admiral Studeman in his capacity as Acting DCI.

On the basis of that work, I will issue a specific policy statement that underscores accountability and I will then follow that up with changes in education, training, and procedures. Those changes will certainly include a requirement for written regulations and instructions illustrated by examples-as well as a clearly delineated process to identify notification issues. It is also evident to me that requirements for much better documentation-and far more easily retrievable records-will have to be a part of the solution to this problem.

I will act on the recommendations that reach my desk expeditiously. I do not mean to indicate, though, that nothing is being done pending my decisions. I can report, in fact, that improvement is already occurring. For the last two to three months, CIA has been carrying out an expanded notification process that has provided substantial information to the oversight committees through the staff directors. I believe this process has been valuable and has certainly given us a foundation on which to build. In sum, what is needed here is to establish procedures to follow the rules, not to change the rules.


The third issue you asked me to address is the need for reorganization within the Intelligence Community. Again, this is an area where I have begun to lay out my views, and have not reached final conclusions about what Community reorganization may be desirable. Nonetheless, I have taken initial steps that will lead to long term change that I believe will improve the performance and efficiency of the Community. I discussed some of my views with you during my confirmation hearings-particularly my intention to unify the management of imagery efforts and move towards integrating the management of Defense and intelligence space programs.

On the issue of imagery, in consultation with the Secretary of Defense I have settled on terms of reference for a study that will determine the most effective way to manage imagery collection, processing, exploitation, analysis, and distribution. A steering group for this study-led by Admiral Bill Owens, Vice Chairman of the Joint Chiefs of Staff and Keith Hall, my Executive Director for the Intelligence Community-has just begun its work and will provide material for decisions later this year that I will make in concert with the Secretary of Defense.

On the issue of integrating management of the Defense and Intelligence space programs, the Secretary of Defense and I will soon sign a directive establishing a Joint Space Management Board. This Board will be composed of senior officials from the Defense and Intelligence Communities. It will be charged with coordinating the direction of military and intelligence space system acquisition efforts.

In addition to these steps, I am putting into place, as Co-chairman of the Security Policy Board, interagency working groups to examine questions related to information warfare. I wish to better understand, for example, any organizational implications of measures needed to ensure the security of commercial and governmental telecommunications and computer networks.

I would also note that there are several external reviews underway that bear on intelligence mission, structure, and organization. We will cooperate with these efforts, including, for example, the work that this Committee is undertaking to examine the critical issues facing intelligence. We are also responding to IC 21-the similar inquiry being conducted by the Permanent Select Committee on Intelligence in the House. Finally on this point, we are continuing to stay in touch with the work of the Aspin Commission.

Mr. Chairman, I would pause here to note once again my sadness at the death of Chairman Aspin and to regret that the Commission can no longer benefit from his insights. I am convinced, though, that the Commission's report will prove to be a fitting memorial to Mr. Aspin and I will ensure that we continue to cooperate with its inquiries-I have made this a particular responsibility of Admiral Blair, the Associate DCI for Military Support. I expect, Mr. Chairman, that our work with the Aspin Commission, as well as the various Congressional efforts, will lead to significant additional thinking and recommendations on organizational issues.

Changes in Personnel

The fourth issue you asked me to address concerns changes in personnel. My remarks on this point will be brief as I know that you are already aware of the senior appointments I made in my first days in office. Most of the changes I expected to make are now complete and, as I said at the beginning, I think the new team is functioning smoothly. With respect to additional changes that are forthcoming, I expect to appoint new Deputy Directors for Operations and Intelligence in the near future and a new Deputy for Science and Technology later in the year. I am not yet ready to announce these appointments, but I will say that I am pleased by the efforts of the search committee I asked to identify candidates for the DDO slot. I have spoken frequently with John McMahon, who is chairing this effort, and I expect the group to wrap up its work shortly. I will also say that what I have learned about counterintelligence in the course of my first month at the Agency has led me to conclude that greater managerial focus is needed in this area, and I will be back to report to you in short order on changes I propose to make.

Personnel Policies and Practices

Personnel concerns are also the focus of the fifth issue you asked me to report on- specifically, the issue of how to manage personnel matters in this downsizing era in a way that leaves the Intelligence Community with the resources necessary to accomplish its mission.

In commenting on this issue, I would like to say that I believe that strengthening the personnel system in the Intelligence Community, and in CIA in particular, is perhaps the single most important action that can be taken to strengthen US intelligence capability in the long run. In strengthening this system, it is also vitally important that we ensure that the workplace permits every individual to advance according to performance without regard to gender or race. I have invested-and will continue to invest-a great deal of my time and effort in this area.

We need a modern personnel system focused on recruiting and retaining the most qualified individuals. This system must include all aspects of the personnel development process- from recruitment through professional development through retirement. It is also clear to me that downsizing will continue and we will need to make adjustments to our personnel policies to enable a system that will provide the mix of skills and head room required to accomplish the intelligence mission.

To deal with such issues at CIA, I have established a Human Resources Oversight Council that is chaired by Nora Slatkin, the Agency's Executive Director. This group, which also includes the Agency's senior managers, will oversee, integrate, and direct human resources planning, policies, and practices. I have given the Council a broad charter, but I anticipate in the near term that its work will focus on six key areas:

CIA, of course, is but one element of the Intelligence Community. Each of the Community's organizations faces similar issues of planning and personnel management. A Community task force led by Christopher Jehn, former Assistant Secretary of Defense, has been examining the matter of personnel reform since early spring, and is now finalizing its recommendations. These recommendations will address key elements of personnel and performance management and career development in the context of a revised human resource system-a system that applies common practices and policies Community-wide where possible.

I look forward to receiving the task force's report and studying its recommendations. I expect that its work, together with the ongoing effort of CIA's Human Resources Council, will provide the basis for decisions that will increase personnel accountability at all levels of management and give us the tools and better understanding necessary to deal with skills mix and other problems.

Chemical/Biological Agent Exposure in DESERT STORM

The sixth issue you asked me to address concerns a reassessment of the possibility that US forces were exposed to chemical or biological agents during DESERT STORM.

Since my confirmation hearings, both CIA and the Defense Department have continued their separate inquiries into this matter. To date, nothing has surfaced in CIA's independent review to change the view that there was no standard chemical or biological weapons use. However, CIA's Office of Scientific and Weapons Research is continuing to focus on intelligence data relevant to whether troops were exposed to chemical or biological weapons. Again, my understanding is that, to date, CIA has found no intelligence evidence of low-level exposure that is deemed convincing. On this point, I should also note that the Defense Department has been very cooperative with the Agency's analytic efforts. We are continuing those efforts, Mr. Chairman, and I remain aware that on this matter the absence of evidence cannot be accepted absolutely.

Although I have nothing new to report on this subject, I do want to say that we continue to look for information that will shed light on the cause of Gulf War illnesses that are afflicting some veterans of that conflict. I would also note that I welcome the establishment of an independent external advisory panel announced by the President to examine all aspects of the efforts the government is making to treat those individuals who are ill, and to examine all possible causes of their affliction.


The seventh issue you asked me to discuss involves actions taken in response to events in Guatemala. We have been seized by the issues raised by Guatemala and its implications, Mr. Chairman, but I ask that you allow me to defer a complete report pending completion of the review being carried out by CIA's Inspector General, a report that I do not expect to receive for four to six weeks. In particular, I do not wish to reach conclusions or consider possible disciplinary action until I have studied the IG's report, which I am assured will be complete and thorough.

On the Guatemala case in general, I will say that I am especially concerned by the four following allegations:

I will review these allegations in the light of CIAs IG report and in the light of similar reports being prepared by other elements of the Intelligence Community. In determining what transpired and what remedial action is warranted, I also expect to consider findings in the inquiry being conducted by the Office of the Secretary of Defense (that I commissioned when I was Deputy Secretary) as well as the inquiry being conducted by the Intelligence Oversight Board.

There are two broad areas on which I believe I can comment briefly. The first is the general issue of Congressional notification, and I have already discussed-earlier in this statement-steps to improve notification procedures and practices. The second area concerns the question of human rights abuses and guidelines for dealing with potential problems. Here, I can say that our policy is to carefully review and monitor operational relationships for potential human rights abuses and examine each on a case-by-case basis. We have undertaken a comprehensive review of existing guidelines that deal with assets who raise issues involving human rights. I have asked for new guidelines that offer clear guidance on this subject beyond previous directives. I will provide a copy of these guidelines to the Committee as soon as they are issued.

Intelligence and Law Enforcement

The final issue on which you asked for a report is the question of improving intelligence coordination with law enforcement.

To begin, I want to say that, as I indicated in my confirmation hearing, I consider this an extremely important issue and I am committed to improving coordination in the areas of international terrorism, drugs, and crime. To that end, I have met with the Attorney General, the Deputy Attorney General, and the Director of the FBI to discuss efforts underway to enhance cooperation between the Intelligence and Law Enforcement Communities. I will meet with the Attorney General monthly to continue that cooperation. In addition, several other steps are ongoing to improve coordination with law enforcement organizations. These include:

I have also asked my General Counsel to serve as the focal point within the Intelligence Community on cooperation with law enforcement and, in particular, to assume responsibility for coordinating policy on this matter among the DCI's Crime and Narcotics Center, the Counterterrorist Center, the Nonproliferation Center, and the Counterintelligence Center.

I believe that these efforts will provide the mechanisms needed to address issues as they arise. I also believe that their combined effect will be a clearer understanding of the Intelligence Community's role and responsibilities with respect to law enforcement.

Mr. Chairman , this concludes my formal statement on the issues you asked me to address. I thank you for your time and I would be pleased to answer your questions.