1996 Congressional Hearings
Intelligence and Security

S. HRG. 104-510









Printed for the use of the Select Committee on Intelligence


25-223 CC WASHINGTON : 1996

For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-052904-2


Chairman SPECTER. Director Deutch, I know you are well aware of the fact that if any of the questions go beyond what you feel comfortable with, we can reserve them for a closed session. But I think it appropriate to comment for the record, that we're aware, on this side of the podium, of that limitation.

But I now want to take up with you the questions of the National Reconnaissance -- the NRO -- and the concerns about the NRO having so much more money available than this committee and the Congress generally understood them to have. This ties into the overall issue as to how much secrecy is necessary for the U.S. Intelligence Community.

Not too long ago, the Senate passed, by a slim margin, an amendment to make public the total figure of the Intelligence Community. That was changed in a conference report. I believe that you have testified, or, perhaps let me just ask you, what is your view about the propriety of making public the bottom-line figure of what the appropriations are for the U.S. Intelligence Community?

Director DEUTCH. Mr. Chairman, I am well aware of this debate, and it's happened in the past. I am looking forward to the recommendation of Harold Brown's panel on this question. I think a group of outside Americans of great probity, including some members of Congress, have served on that commission. My intent would


be to allow my thinking to be influenced on what their recommendation is on this point.

I believe that they will be making a recommendation, and I'm inclined to go with it. We should know what their recommendation is here on March lst, when their report is made public. So, if I could, sir, I would say to you that that is going to heavily influence my position.

Chairman SPECTER. Well, you have some thinking on the subject at the moment, don't you, Doctor Deutch?

Director DEUTCH. I have testified on the subject. I think the way I have testified on the subject is that I do not believe that there is any great loss by making the top line of the Defense Department's budget public. But there has been some heated questioning from members of your committee about the ability to hold the line there and not have additional information of subcategories of the budget also made public. At that point, I think that one would run very serious risks of revealing sources and methods, which would not be helpful for the country's national interests.

So the top line, yes; below that, no. The overall budget.

Chairman SPECTER. The overall budget for the U.S. Intelligence Community?

Director DEUTCH. Yes, sir. Yes. And then going below that, no; has been what I've testified to in the past. I've received very heated questions from a member of this committee about whether that's plausible that one could maintain such a position, but I would leave that to Congress' judgment.

Chairman SPECTER. Well, why do you say that a disclosure of figures for the national Intelligence Community would be involved in sources and methods? We have a very serious issue with the NRO, and it is illustrative of the problem of secrecy, and if there is a reason for secrecy, then we ought to observe it. But I believe we're going to have to do more than simply generalize on sources and methods. But perhaps the best way to approach this subject within the confines of our time restrictions today, is to talk about the NRO. Is there any reason why the public should not know how much the National Reconnaissance Organization had in its account that was excessive?

Director DEUTCH. Mr. Chairman, first of all I could not agree with you more that secrecy is not -- cannot be used as a cover for poor management and for poor financial management in particular. But there is a very good reason why the National Reconnaissance Office budget has been maintained secret from year to year, and that is by tracking that budget over time it would be possible, depending upon what level ofdetail, but even in the top line, the number of National Reconnaissance satellites that are launched. That is not a subject which I think should be publicly known -- the number or types of satellites that are launched. So I want to absolutely associate myself with you and with the members of this committee, the minority member especially, that financial -- lack of financial quality management is not permissible because a program is secret. But I also believe that going below the top line will begin to -- getting finer and finer in detail -- give information about the kinds of intelligence efforts that we have underway that will not benefit our national security.


Chairman SPECTER. Well, that's a marvelous answer, Dr. Deutch, fit for the Manchester debates in New Hampshire or the ones coming up in Arizona. But I don't think you've come near my question. My question is, is there any reason to conceal the excessive amounts the NRO had? Now, I'm not talking to you about mismanagement --

Director DEUTCH. The excessive amounts --

Chairman SPECTER. Excuse me, excuse me. I'm not talking to you about mismanagement and I'm not talking to you about their overall budget, which might give some insights into the numbers of satellites launched, which I want to pursue with you because I don't see a necessary connection. Let me candidly state to you that too often when we get into these discussions we come up with sources and methods and we come up with items about satellites launched and we come up with generalized national security issues. But we have seen, in a free society, when the facts and figures are on the table, there are many people who take a look at it. It's available under the Freedom of Information Act so that citizens can take a look at it. It's available for investigative reporting. It's more available for congressional inquiry. There's simply not enough inspectors general or members of oversight committees or directors, even as competent as directors are, to take a look at all of this.

Now, coming back to my question, how they had excessive funds, the NRO did. Is there any reason why the American people should not know the figure of the excessive funds? There's been a lot in the newspapers. Any reason why we shouldn't tell the American people how much excessive funds the NRO had?

Director DEUTCH. The reason that one should not do that, Mr. Chairman, is that by itself-by itself that single figure does not place in perspective what the size of the program is and how that program is financed and how that event occurred, as inappropriate as it was.

Chairman SPECTER. But you're saying that --

Director DEUTCH. So that the American people will not have the correct impression of the National Reconnaissance Office from only revealing that single figure. That figure has to be seen in context to understand how it happened, where the money built up, what has been done about it, because it has been, by the Department of Defense and by myself, put back and given back to Congress when it was not needed and placed back in a program where it was needed. And to give you more --

Chairman SPECTER. Director Deutch, I don't want to interrupt you unduly, but we're not getting to the point.

Director DEUTCH. Yes, sir?

Chairman SPECTER. We're not on the point about what you've done or what the Department of Defense has done. I'm on the point as to why the American people shouldn't know what the excessive amount was. Now, you've said the total budget of the NRO ought not to be known because it might have some indication as to the number of satellites sent off. I don't know why that is, and we'll come back to it. But then I say, "How about the number in itself?" And you say, "Well, we shouldn't disclose that because without


knowing what the overall budget of the NRO was we shouldn't say what the excess was." I don't understand that answer at all.

But suppose it were a trillion dollars, suppose that it is so excessive -- which I believe it to be -- and has independent standing all by itself -- I haven't asked you yet what the figure is and I haven't decided whether I'm going to ask you what the figure is --

Director DEUTCH. I'm thinking.

Chairman SPECTER [continuing]. Because I want to hear for the record what your reasons are that the total figure ought not to be announced. Now, if you say you shouldn't announce it because you can't -- it doesn't have any understanding in the absence of knowing what their budget is, and then you can't tell us the budget because of the perhaps disclosures of satellite launchings, what you're saying is you can't say anything.

Director DEUTCH. Mr. Chairman, I will be very candid with you. I think you can't tell a story with one sentence. You can't just say that

Chairman SPECTER. We haven't asked you to do that.

Director DEUTCH. My point is, Mr. Chairman, that that number by itself will provide a misleading impression to the American people. Your judgment has to be do you want to tell them everything about the National Reconnaissance Office, not just one isolated fact, I must say, a fact which is very damaging and not something that I condone. But the question is do you give a full impression or one number? And I would argue to you, you have to make the decision to give them a full story, but one number alone is misleading. That's my position --

Chairman SPECTER. What's the damage to national security if someone knows how many satellites have been launched?


Director DEUTCH. I think that there is an answer that I would want to give to that in a classified setting. But let me tell you that knowledge of where satellites are and how many there are allow people to take actions to deny or deceive those satellite operations. So there's great merit to not having people know the nature of the satellites, where they are, or how many there are, because --

Chairman SPECTER. Well, the nature and where they are is totally different from how many there are.

Director DEUTCH. No, but the point is all three variables are important.

Chairman SPECTER. Well, the budget doesn't necessarily tell you where they are. It tells you -- how does it even tell you how many there are?

Director DEUTCH. Estimates can be made, and it is the variations in the budget that will tell you about launch rates and the like. Again, it depends on how much you know.

Chairman SPECTER. Well, how likely is it that somebody is going to figure it out? And how likely is it that this is going to harm national security, compared to a live example of the NRO having flagrantly excessive amounts of money which have been accumulated because of our rules on secrecy? Dr. Deutch, my red light is on, and I'm going to stop. But I think that you and the Intelligence Community and this committee has got to do a much better job in coming to grips with the hard reasons for this security, if they exist.


And if they exist, I'm prepared to help you defend them. But I don't see that they exist. I don't think that they have been articulated or explained. As you know, in this hearing, there was a suggestion that we ought to have the NRO people in here because the consequences of having the NRO secrete a tremendous sum of money are minimal. Has there been any shake-up in the leadership of the NRO so far?

Director DEUTCH. No.

Chairman SPECTER. What has happened -- well, I'll get into this in the next round -- as to what has happened in the NRO. But one of the therapeutic qualities of the hearing process is for oversight hearings to come in, bring people in, and say what happened and why did it happen and explain about it on C-SPAN, and then other people who might have similar inclinations might want to avoid explaining it on C-SPAN. When the light shines in, it's the best therapy of all about having it avoided. I personally am very dissatisfied with what little the public knows about the NRO. I even wonder how much I know about the NRO. I won't go so far as to say that I wonder how much you know about the NRO, but I would go so far as to say that we found out the NRO didn't know very much about the NRO.

Director DEUTCH. Well, I should tell you, sir, that I am very concerned about what I knew about the NRO, because I would have expected to have been told more, either as Deputy Secretary of Defense or as Director of Central Intelligence. I think --

Chairman SPECTER. Well, did the NRO itself even know how much money it had squirreled away?

Director DEUTCH. Well, they certainly knew the size of these accounts. They certainly did, as was reported to Congress, on every occasion they reported to Congress. The problem was that they did not propose actions consistent with these large balances. Let's remember, these balances were reported every year to Congress. The issue was, did they draw significance, when they were asking for new appropriation, to the existence of these large balances, these excessive balances --

Chairman SPECTER. How about to the DCI? They were reported to the DCI, too, weren't they?

Director DEUTCH. They absolutely were, and they should have been reported to the Deputy Secretary of Defense. They were not.

Chairman SPECTER. They weren't reported to the Deputy Secretary of Defense?

Director DEUTCH. Let me put it to you differently. We certainly did not see them. We did not act on them.

Chairman SPECTER. Well, they had good reason not to report them to the Deputy Secretary of Defense.

Senator Kerrey, your turn.

Vice Chairman KERREY. Well, Director Deutch, actually I have an interest in getting to a couple of the witnesses that are going to follow you. I would -- I would concur in much of what the Chairman has just said. I do, myself, believe not only the top line, but several of the other lines of the budget, not only could but should, for the purpose of giving taxpayer-citizens confidence that their money is being well spent. And indeed, I've spoken with you and I've spoken to the citizens at home about the remarkable success


of the CORONA Project. Now that we know what CORONA has done, it's easy for us to see what the connection between those electro-optical -- those early electro-optical efforts and the policy-maker's ability to be able, for example, to conclude that preemptory nuclear attacks were unnecessary; that the Soviet nuclear program was smaller than what we had initially thought; in other words, that there is a connection between the intelligence and our efforts; and that, very often, those connections aren't seen, as a consequence of the secrecy that unquestionably is needed in many cases.

But, I do think, and particularly in the post-cold war era, that increasingly we're going to have to justify these expenditures to taxpayers. I think it's getting harder and harder to do it. The stories about the NRO have largely used phrases such as "slush fund" and "money wasted," and so forth. We know that money wasn't spent. We know that -- in fact, repeatedly over the past couple of years, there have been public disclosures of instances where the efforts of the NRO, whether it's the identification of the North Korean nuclear program or the identification of Saddam Hussein's violation of the sanctions -- violation of the Security Council's agreement, or providing our diplomats with the information that they needed to get a good agreement at Dayton; that time and time again -- or, for that matter, whether it's providing you with the information that you need and that others need to come to us and say in an open session, "Here's what we think the threats are." So I may -- I think that the -- that the look at this CORONA Project in an open way has, at least for me, enabled me to do a better job of going home and saying, "OK, this is open now. Look at what it did for the period of time in the 1960's and 1970's when it was operating. Look what it did for your safety and your security. Look at the lives that it saved. Look at the dollars that it saved." And so forth. You can show it in an open fashion, and it gives people confidence.

Whereas in an environment of excessive secrecy, and I just think that it's very difficult to make the case, and you're not making the case, that the overall budget should be withheld from the American people. I think it's increasingly dffficult to withhold other lines. If we have a case to make that sources and methods need to be protected, I'm a hundred percent with you. Let's protect sources and methods. Let's not reveal something that's going to make it counterproductive and difficult for us to carry out the missions of your agencies or other intelligence agencies.

Mr. Deutch, I don't want you to respond to it right now because I do want to get to the other witnesses, and I know that you would like to leave as well. But I am very much concerned about your views, and I've gotten them privately and would like to get them on the record prior to the recommendations of the Brown Commission as to what additional powers you think that you need. I do think that President Clinton has provided the Nation with an historic opportunity, given your relationship with the secretary of Defense, given your understanding and knowledge of the technology, I think the President has given the country an historic opportunity to change our laws so that in the future, given that we are a nation of laws not of people, not of personalities, that if we change our


laws today, that we might be able to provide future DCI's with the kind of authority and power that they need in order to be able to do the sorts of things that you identify need to be done in your testimony.

Director DEUTCH. Senator Kerrey, I look forward to that discussion with you and other members of the committee.

I'd like to say something to you and to Senator Specter. I am perfectly happy to enter into a discussion about how much of these activities should become declassified, these financial programs. That is an absolutely legitimate question for you to pose. As usual, Mr. Chairman and Senator, you make your case on this very well, and I will be happy to discuss that with you. Perhaps we should move more in that direction, and I look forward to continuing discussions on this point of how much of the program should become unclassified.

I also appreciate, Senator, your remarks about the NRO. They have done tremendous things for the country. The only thing you left off your list is they also have shown ethnic cleansing in Bosnia from their efforts from satellite photography. So it's a great organization. But I look forward to discussing with you and the Chairman how far one should go here. I take your point, Mr. Chairman and Senator.