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[] Economist zum Scheitern und zur möglichen Reform der US-Geheimdienste,

April 20-26, 2002

America's intelligence services

Time For A Rethink

Just when they are most needed, America's spies are in a mess. But
reform  will happen only if George Bush wants it

WASHINGTON, DC -- Imagine a huge $30-billion conglomerate. It operates
in  one of the few businesses that might genuinely be described as
cut-throat.  Its competitors have changed dramatically, and so have its
products and  technologies. But its structure is the same as when it was
founded, in  1947. Nobody leads this colossus (there is just an honorary
chairman) and  everyone exploits it. Demoralised and bureaucratic, it
has just endured  its biggest-ever loss. The response: the firm has been
given even more  money, and nobody has been sacked.

Soon, the intelligence committees from the two houses of Congress will 
begin a special joint review of America's spies. The joint chairmen, 
Congressman Porter Goss and Senator Bob Graham, both insist that reform
is  possible. But structural change depends on the administration, and
George  Bush has already backed George Tenet, the Director of Central
Intelligence  (DCI), who staggeringly refuses to admit that September
11th was a  failure. "Failure", says Mr Tenet, "means no focus, no
attention, no  discipline and those were not present in what either we
or the FBI did  here and around the world."

The best protection for the intelligence services is that so few people 
understand what they do. Most Americans associate espionage with the 
Central Intelligence Agency and the DCI, the most conspicuous creations
of  the 1947 National Security Act. In fact, the "intelligence
community"  contains 13 federal organisations, and the CIA accounts for
only around a  tenth of the intelligence budget of $30 billion. Most of
the real money  goes to high-tech military agencies, such as the
National Reconnaissance  Office (NRO), which runs the satellites, and
the National Imagery and  Mapping Agency (NIMA). The biggest, the
National Security Agency (NSA),  once so secret that it was referred to
as No Such Agency, employs 30,000  eavesdroppers. By contrast, the CIA's
Directorate of Operations its human  spying bit has only around 4,000

Some critics argue that the true cost of intelligence-gathering is
closer  to $50 billion, and the number of agencies dealing with the
subject is  closer to 45 (or even 100). They count in various bits of
the FBI (which  oversees counter-intelligence at home), parts of the new
Office of  Homeland Security, and sundry military and diplomatic
organisations.  Generally speaking, the system gets more convoluted the
lower down you go,  eventually becoming a blur of incompatible computer
systems, different  chains of command and an obtuse budgeting system.

Above all, there is the question of responsibility. Mr Tenet, as DCI,
is  both boss of the CIA and also director of all America's 
intelligence-gathering. He has a "community management staff" to assist 
him, but his real clout is small. Most of the intelligence budget is 
controlled by proper departments, whose bosses sit in the cabinet. Jim 
Woolsey, a former DCI, recalls that his predecessor, Bob Gates, warned
him  that his position was like the king's in medieval France: the
nobles all  swear fealty to you, but do not fear you.

Blown to pieces

Many people think this tangled structure (see chart) caused the
failures  around September 11th. Others point to mismanagement, culture
and even the  American way of life. Who is right?

The mismanagement school of critics, which wants Mr Tenet's head, can
only  be buttressed by the pig-headed refusal of the seventh floor at
Langley to  admit to any failure. The excuses proffered vary. Some pass
the buck  around the labyrinth: CIA people point out that it was the
FBI's job to  trail terrorists at home. Others point to the list of
atrocities that have  been averted, which is fair enough, though at
least one of the examples,  the capture of a bomber with Los Angeles
airport as his target, owed more  to an observant customs official than
to good intelligence.

Al-Qaeda, America's spymasters tried to claim, was peculiarly difficult
to  infiltrate, since it was open only to kinsmen of members. That
notion was  blown apart by the appearance of John Walker Lindh, a
Californian airhead,  in Osama bin Laden's trenches. As one former CIA
boss puts it, "Al-Qaeda  was an evangelical organisation: it wanted
members. We never suggested any."

Enough. By any reasonable definition, the fact that 19 terrorists could 
slaughter 3,000 people should count as a monumental failure of 
intelligence the worst since Pearl Harbour. Besides, as one senior Bush 
adviser argues, "it is not as if there were not enough clues to be
picked  up for our $30 billion a year." The World Trade Centre was a
known target;  al-Qaeda people had plotted to fly aircraft into
buildings before; a  suspect had been picked up having flying lessons;
and so on.

Those who point to gross mismanagement are, however, currently less 
influential than the "culture" critics. According to these, Mr Tenet is 
less culpable than symptomatic of an intelligence community that has
been  in steady decline, held back by political correctness and an
over-reliance  on technology. Crucially, this explanation fits the
political agenda of  both the spies and the Bush administration.

Reined-in and risk-averse

Some trace the decline to the 1970s, when, after a series of scandals,
the  CIA was reined in by Congress. Many Republicans prefer to start
with Bill  Clinton, who, they claim, was unwilling to wage war on
terrorism. In 1996,  in the wake of the murder of a Guatemalan by a CIA
informant, officers  were told to contact Langley before "establishing a
relationship with an  individual who has committed serious crimes or
human-rights abuses or  other repugnant acts." Nobody has been turned
down under these guidelines.  But they cannot have encouraged CIA people
to make friends with, say,  drug-smugglers.

The idea that the Directorate of Operations became risk-averse has been 
widely promoted by frustrated ex-case-officers. In "See No Evil"
(Crown,  2002), Robert Baer recalls how in Tajikistan in the early 1990s
he asked  for Dari and Pushtun speakers to interrogate Afghan refugees.
He was first  told that the CIA no longer collected data on Afghanistan,
then offered a  four-person sexual-harassment briefing team. Even
defenders of the spy  system admit it has a job-for-life mentality. John
Gannon, a CIA analyst  who has just moved to the private sector, says
that he has fired more  people in the past eight months than during his
entire career in the service.

Yet daredevilry has never been more needed. During the cold war, an 
intelligence system that relied on intercepting Soviet military signals 
and picking up diplomatic gossip made sense. Now there are no ponderous 
tank divisions to track; and you are unlikely to meet your opposite
number  from al-Qaeda at the Brazilian ambassador's cocktail party.

In last July's Atlantic Monthly, Reuel Marc Gerecht, who worked for the 
agency in the Middle East, labelled America's counter-terrorism effort
in  the Arab world "a myth". An active spy describes coverage of Iran
as  "embarrassing" (America has not had an embassy there since 1979). A
Bush  adviser furiously says that "the White House has discovered more
about  madrassas [fundamentalist Islamic schools] in the papers during
the past  three months than we got from the intelligence system in the
previous six  years."

The sheer lack of American knowledge about some areas of the world has
led  to a form of poker game between its allies. For instance, European 
intelligence services that know the Arab world have been keen to
balance  information that Israel "spoonfeeds" to America. (All the
spies, however,  grudgingly admire Israel's masterly exposure of an
Iranian-financed  attempt to smuggle weapons to the Palestinians, which
ensured Iran's  insertion in the "axis of evil" speech and Mr Arafat's
temporary  excommunication by Mr Bush.)

There are "cultural" problems at home, too. America has no equivalent
of  MI5, Britain's domestic intelligence agency. The FBI is a
law-enforcement  agency: it looks for people breaking the law and
arrests them.  Intelligence-gathering is based on watching people,
regardless of whether  they break the law, and arresting them is often

Needless to say, there is not much love lost between the FBI and the
CIA.  Indeed, turf-consciousness spreads throughout the many domestic
agencies  that should play some part in intelligence-collection: witness
the lousy  sharing of information about the September 11th hijackers
between the FBI,  the Immigration and Naturalisation Service and local
cops. The  coordinating Office of Homeland Security (see article) has
had little impact.

No James Bonds

Many spooks think the most important cultural barrier is a startlingly 
simple one: Americans do not like spying. There is no local equivalent
of  James Bond; in fiction, spies are mostly portrayed as right-wing
lunatics  or bungling fools. Americans are less interested in going
overseas than  other people are, and they stick out more when they do.
Even during the  CIA's mythical heyday during the cold war, nearly all
its best agents were  freedom- or cash-loving traitors who offered their
services without  prompting. And the agency has never been that good on
the Islamic world.

More important, at home Americans value privacy more than most other 
people. They hate the security cameras that Europeans tolerate. They
have  opposed attempts to share knowledge about, say, suspicious
movements of  foreigners. One former CIA chief speculates that you could
call September  11th "the failure of the ideology of the open society".

Some of these cultural shortcomings are now being addressed. Rules
about  recruiting dubious people have been relaxed. Some of the language
gaps are  being closed. The CIA alone has received more than 60,000 job 
applications. Many spies think that this will be enough.

That seems wrong in at least two fundamental ways. First, the current 
obsession with human intelligence downplays the importance of its 
technological equivalent. Here, though America unquestionably leads the 
world, a variety of technical problems still need to be fixed.

The NSA, for instance, has far too many old, incompatible computer 
systems, and finds it difficult to eavesdrop on fibre-optic cables.
There  is a row about whether the NRO should buy ever bigger, ever more
expensive  satellites, as the defence industry wants, or whether
surveillance could  be better achieved by smaller systems, not all of
them space-based. At  NIMA, there is the challenge of making imagery
systems three-dimensional.

General William Odom, a former head of the NSA, says the intelligence 
community has received as much new technology as big companies like
IBM,  but has undergone none of the structural reforms of the sort seen
in the  private sector. The technical agencies are also struggling to
deal with  the huge amount of "open-source" information now available.
At present,  the technology often works best as a retrospective tool
rather than a  forward-looking one. After September 11th, all sorts of
details were  tracked down in America's digital vaults, but only once
people knew the  names to look for.

Telling the satellites and phone-taps where to look is also getting
ever  harder. Mr Gannon points back to 1998. Before the year began, he
allocated  the CIA's analytic resources to the priorities that had been
established  with the White House. In fact, more than 50% of the actual
crises that  year occurred in "lower-priority areas", and many of the
biggest ones,  such as the global financial crisis, the Kosovo war and
India's nuclear  test, were unanticipated.

Technology aside, the view that more manpower will make up the 
intelligence deficit is wrong for another reason. Structural problems 
often underlie the cultural ones. At the micro level, analysts are
moved  around too quickly. Mr Gerecht suggests that the best way to
improve human  intelligence rapidly would be to move spies out of the
embassies. Above  all, there is the question of who controls what. When
the CIA's spy  satellites missed India's nuclear test, this was surely
because the  satellites were run by generals interested in tanks.

The chief spook and his enemies

"Reforming" America's intelligence services is not simply a matter of 
getting better people and giving them more money and a slightly freer 
hand. The structure needs modernising from top to bottom.

Like anybody who has been copiously rewarded for doing bad work,
America's  intelligence services seem strangely caught between paranoia
and  arrogance. Staff at the CIA's Counter-Terrorist Centre joke that
the only  way they can spend the hundreds of millions of dollars they
now have is to  upgrade themselves on trips from business class to first
class. Mr Tenet  seems to have ridden the storm, and has even collected
the odd plaudit for  the spies' current work in Afghanistan.

His supporters point out that the former Senate intelligence staffer is 
more than just a political hack. His five-year reign has brought 
stability, and he has both the president's ear and political nous (he 
named the CIA's headquarters after Mr Bush's father). Moreover, Mr
Tenet,  who is said even by his detractors to be adept at covering his
back,  warned the Bush administration several times during the summer
about the  possibility of a bin Laden attack. Cynical spies point out
that, had he  been sacked, Mr Tenet might have contradicted the Bush
administration's  claim that it has always been more vigilant than its
predecessor something  that does not seem to have been true before
September 11th.

Recently, a commission chaired by Brent Scowcroft, a former national 
security adviser, came up with a proposal to put the three main
technical  agencies (NSA, NRO and NIMA) under Mr Tenet's control. The
first reaction  of the defence secretary, Donald Rumsfeld, was to squash
this. It was not  just a matter of turf-protection: military men point
out that the vast  majority of signals intercepts and imaging will
always be for the  Pentagon. On the other hand, the current system
plainly puts the  intelligence services second.

Few in Washington expect radicalism from the new joint congressional 
committee. Congressman Goss is a former CIA man; so is the staff
director  of the inquiry, who also used to work for Mr Tenet in his
Senate committee  days. More generally, Senator Graham talks gloomily
about intelligence  reform running into an iron triangle of the
executive agency, its  departmental backer and outside interests.

The idea of a cumbersome bureaucracy limping on simply because nobody
can  face reforming it is depressingly unAmerican. The grounds for hope
begin  with some of the people involved. Messrs Graham and Goss are
generally  respected by their peers. Ask either man how he might
redesign the  intelligence system, if he had a free hand, and both come
up with radical  solutions. Others whisper that Mr Rumsfeld, who is
known to be appalled by  the chaos, might be willing to support dramatic
reform providing there was  a comprehensive plan. Even Mr Tenet has a
vested interest in reform: at  present, he risks a place in history as
the captain who did not go down  with his sinking ship.

Wholesale reform would be relatively easy to enforce. Most changes
could  be brought about by an executive order from the president. Mr
Tenet also  has far more room to be brutal: spies' jobs are
theoretically less well  protected than those of other bureaucrats.

Out of Langley

What should be done? Given the fact that nothing has really changed for
50  years, the list is long. Two big jobs, however, stick out. The first
is  that the intelligence community needs a proper chief executive not
another  token tsar, but one with real budgetary power over the
technical military  agencies (and with far more power over who runs
them). As a corollary,  this new über-DCI should be taken out of
Langley, and a separate person  should run the CIA. One reason why
reform has always failed is that it has  usually been seen in the
Defence Department as a power-grab by the CIA.

One difficult question is how much of the actual analysis needs to be 
centred around this new DCI. Some duplication is inevitable every
general  wants to have his own intelligence analysis. And the sheer
number of  agencies may be less of a problem than the fact that most of
them act as  vertical "stovepipes" an insane idea for a community that
is supposed to  be collecting information. Congress should be less
interested in how much  money is being spent at NIMA than in how much is
being spent fighting  bioterrorism.

The other priority is to break down the artificial barrier between 
intelligence-gathering at home and abroad. Any thought of increased 
surveillance at home will annoy Americans and increase their worries
about  civil liberties. That is why it will need political bravery from
Mr Bush.  But September 11th illustrated the shortcomings of a
50-year-old  intelligence system. Senator Graham argues that it is basic
Darwinism: "If  you don't understand changes in your habitat, you will

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