MEMORANDUM FOR: COMMISSIONERS

FROM: Kevin Scheid / Gordon Lederman

SUBJECT: Comparison of Harman and Goss Legislation

The two bills share some important reform concepts, but are fundamentally
different in their approaches to intelligence reform. Where Harman would manage
through a Director of National Intelligence separate from the CIA, but closely linked to
the Department of Defense; Goss would manage the Community through CIA, making it
"central" to intelligence again as it was believed to be earlier in the Community's history.
Both approaches do not distinguish between national agencies and departmental agencies
as the staff recommendations to the Commission have done. The bills reflect the fact that
the oversight committees have a vested interest in maintaining as much jurisdiction as
possible over any agency, bureau or office that performs an intelligence function.

Harmon Bill (HR4104: Intelligence Transformation Act of 2004)

Rep. Harman's bill would create a Director of National Intelligence (DNI) separate from
the director of CIA. A Deputy DCI, who would also be an Undersecretary of Defense for
Intelligence, would serve as the second high ranking official in the Community and
therefore subordinate CIA to a Defense official. The basic structure of the Community
would remain unchanged (i.e., NSA, NGA, and NRO remain in Defense), but reporting
to the DNI would be "Tasking Directors" that would be imbedded within each agency to
ensure that the DNI's priorities were addressed. The bill places emphasis on connecting
the Community "virtually" through investments in IT and communications infrastructure.
Further, the DNI would have the authority to manage daily tasking, to create mission-
based centers, enhanced budgetary control, greater authority to select the leadership of
the Community, enhanced acquisition oversight, improved security authorities, and sole
authority for standards, policies and procedures for access to sensitive information.

Assessment: This bill reflects a compromise with the Armed Services Committee, which
has defeated most reform efforts in the past. HPSCI is overshadowed by the HASC and
each attempt to improve community management in the past has been undermined by the
HASC in order to preserve the Defense Department's equities. The HPSCI minority staff
has drafted this legislation to appease the HASC while attempting to achieve some
positive reforms in the Community. They have argued that reform is more important
than turf and that moving the DNI into the Defense camp is a small price to pay for
achieving some important intelligence management reforms.

Goss Bill (HR 4584: Directing Community Integration Act)

Chairman Goss' bill would strengthen the current DCI position, and put the "Central"
back into Central Intelligence Agency. This approach would make the CIA the executive
office of the DCI with its current positions of CFO, General Counsel and Inspector
General becoming the Community's CFO, GC, and IG. The Executive Director of the
CIA would take on community management responsibilities. The Deputy Director for
Operations - the head of CIA HUMINT - would take on responsibilities for all collection
operations, HUMINT, SIGINT, and IMINT. The bill would also create within the CIA
eight Associate DCIs for Community management across functions (operations, space,
analysis, military support, etc.) and five Assistant DCIs for intelligence missions
(counterterrorism, counterintelligence, counternarcotics, etc.).

Assessment: Similar approaches have been espoused by many retired CIA officers in the
past, such as former DDCI Dick Kerr. These approaches seek to return CIA to its central
position held in prior years over all the intelligence disciplines, such as human, signals
and imagery intelligence. This is a bygone era. For example, CIA used to wield a great
deal of influence over the imagery intelligence business through its control of the
National Photographic Interpretation Center, NPIC. NPIC was removed from CIA and
merged with the Defense Mapping Agency in 1995 largely removing CIA from the
business. CIA used to have influence over the development of signals collection
satellites through its control of acquisition and personnel at the National Reconnaissance
Office, the NRO. NRO personnel are now administered separately from the CIA, the
Director of NRO has been dual hatted as an Assistant Secretary of Defense for Space and
CIA has lost almost all its influence over the organization. NSA has consolidated signals
intelligence over the past decade, again leaving the CIA with diminished influence over
SIGINT.

This legislation does not change these fundamental realignments that have occurred
during the past decade and would create a new layer of staffs (thirteen staffs or more) to
assert primacy over intelligence capabilities that have been firmly consolidated by the
Department of Defense. While its motivation is admirable - the integration of
intelligence capabilities - it does not fundamentally change the relationship between the
NSA, NGA, and NRO to the Secretary of Defense thereby further institutionalizing the
struggle between the DCI and the Secretary over primacy over national intelligence.

Legislation's Relationship to Commission Recommendations

What has been briefed to the Commission by the staff takes a third path, and perhaps a
middle-of-the-road approach to reform. We would divide the Community into "national"
agencies - CIA, NSA, NGA, NRO - and departmental agencies - DIA, INR, IA&IP, etc.
By consolidating the national agencies under the DCI you bring all the intelligence
disciplines into one management structure so that the impediments of horizontal
integration (security, IT protocols, personnel policies, etc.) can be transcended and the
capabilities networked. By building a network you gain the speed, agility and analytic
insight into transnational threats that we have failed to achieve in the current management
arrangement.

The President can institute reforms through Executive Order coincident with his
appointment of a new DCI; and/or the Administration could influence the
September/October conference action on the Intelligence Authorization Act. The
Commission's recommendations will significantly influence the upcoming debate.