America's Intelligence System: Part I –
Bloated and Ineffective

by Jim Grichar (aka Exx-Gman)

This is Part I of a three-part essay on America's intelligence system. This first part deals with what it is and how it has failed. Part II will discuss the specific reasons for its failure. Part III will describe how it is morphing into an instrument of a police state and, given that we are currently stuck with a protection racket government, how we should cut the intelligence budget down to size.

America's intelligence system has grown into a multi-agency bureaucracy that has failed in its primary mission – to provide warnings of impending attacks on the United States or serious threats to U.S. national security – on numerous occasions over the last fifty years. Despite the end of the Cold War, this mammoth system was trimmed down only marginally during the 1990's, and now, despite its failure to predict the 9/11 attacks on the United States by Al Qaeda, the public is being conned into spending more on this failed system. Worst of all, it is being turned into an American version of the former Soviet Union's Committee for State Security (the KGB), an apparatus that our leaders will use to destroy our rights to life, liberty, and property, all in the name of protecting us from Islamic terrorists.

What American Intelligence Does

The U.S. intelligence budget today is massive by any standard, and it is designed more for an empire than for the defense of our nation from enemies foreign and domestic. Educated public guesses as to the total intelligence budget of the United States run at about $40 billion per year. And how is this pie divided among those agencies, or members, of what is called the intelligence community?

According to a recent article in USA Today, at least $7.5 billion of that goes to the National Security Agency (NSA), which is responsible for signals intelligence, including the collection and decoding of telephone and radio messages thought to be necessary to preserving U.S. security. NSA's focus has been on intercepting foreign communications; it supposedly does not spy on American conversations within the country or on Americans overseas.

The second big agency feeding off the intelligence community's $40 billion budget is the National Reconnaissance Office (NRO). Its annual budget is probably in the range of $7 – 10 billion per year. The NRO designs, buys, and operates America's spy-in-the-sky satellites that take pictures of potential adversary's military assets and activities. It probably also designs, buys, and operates satellites that can provide warnings of missile launches. Both the NSA and the NRO are essentially run by the military, although they provide products to other agencies in the intelligence community.

The military also spends more money – probably another $10 billion per year – on its own intelligence collection system. It has its own human spies collecting information on military matters. Like the CIA, it does its own analysis and reporting, and it is in the covert action business (i.e., paramilitary and other actions taken to influence or destabilize other countries when the U.S. has not formally declared war). These functions are carried out mainly through the Defense Intelligence Agency (DIA, the military's answer to the CIA, was started by Robert Strange McNamara after the CIA's Bay of Pigs fiasco) and the specific intelligence components of each of the four military services. More recently, in 1986 the Congress created the Special Operations Command (SOCOM), a high level Pentagon unit designed to support, manage and coordinate the activities of such groups as the Delta Force, the Navy Seals, the Green Berets, and other classified covert-action type components.

Next on the list of intelligence organizations is the Central Intelligence Agency (CIA), with a budget of roughly $4 – 6 billion, if not more. CIA is supposed to integrate and analyze information from all sources to produce a coordinated analysis (that is, the results are "agreed to" by other departments and agencies so that one view is sent to the president) of important foreign intelligence questions that affect U.S. national security. CIA uses spies to gather additional information on foreign governments and apparently is also still involved in covert action, given the news that its operatives are involved in the war on terrorism around the world. Recent press accounts of a CIA unmanned aircraft firing a missile to kill some Al Qaeda terrorists in Yemen – including one that was an American citizen – are further indications that CIA is back in the business of conducting paramilitary operations (much likely to the chagrin of the power-hungry Donald Rumsfeld and his Pentagon lickspittles).

Other organizations, such as the State Department's Bureau of Intelligence and Research (I&R), and the FBI's national security apparatus, which is supposed to hunt down spies and terrorists within the U.S., also spend money on the intelligence mission.

While this massive outlay on intelligence might have been justified during the Cold War (the threat of thermonuclear annihilation certainly existed), the current threat climate, even including that from Islamic terrorists, should lead most people to question the size of the intelligence budget and how it is being spent. Even more important is the fact that major intelligence failures have occurred over the years, and this should cause citizens to demand, at the minimum, a thorough review, housecleaning and downsizing, redesign, and reorganization of the intelligence community.

What Should Intelligence Do?

The rationale for producing intelligence – collecting information, analyzing it, and then disseminating it to those who can make decisions based upon it – is basically an exercise in applying the economics of information. Gathering, analyzing and disseminating better information should help reduce costs associated with an activity. In this case, intelligence should have improved the national security of the United States and allowed us to avoid wars and spend less on defense. (Note that covert actions – political and military assassinations, including those designed to get rid of terrorists, and other activities designed to destabilize other countries – are not, in the strict sense of the term, intelligence activities.) Thus, intelligence activities should more than pay for themselves.

During the Cold War, properly used and focused intelligence should have enabled the United States to minimize military outlays by reducing unnecessary and wasteful defense spending. Used properly, intelligence should have helped focus U.S. defense resources on those programs most likely to deter an adversary, and, if necessary, to win a conflict. While a significant part of the intelligence budget was apparently used this way, it is obvious that our political leaders were also interested in building a worldwide American empire based upon a vast and overwhelming military superiority used to influence events around the world. While Americans were protected from the Soviet Union and China during the Cold War, it is obvious that they paid an extremely high and excessive price for that protection.

Intelligence Failures

Despite this massive outlay on intelligence, the U.S. has had numerous, significant, and almost continuous intelligence failures since World War II. While no one bats 1.000, the scope and extent of such a large government operation is bound to produce many serious failures. At the risk of being pedantic, I offer the reader this lengthy list of failures that includes, but is certainly not limited to: 1) failure to predict the Soviet acquisition of the atomic bomb, the Iron Curtain, and the Berlin blockade; 2) failure to predict China's entry into the Korean War; 3) the CIA's MK-Ultra project, in which U.S. Army scientist Frank Olson was given LSD unwittingly and Olson's subsequent (according to information made public by the CIA) suicide; 4) failure to predict the Soviet space effort, starting with Sputnik and the failure to point out that there was no U.S. missile gap vis-a-vis the Soviet Union. You can arguably add the May 1960 Soviet downing of Francis Gary Powers in a CIA U-2 to this failure; 5) failure to predict the Berlin Wall; 6) various CIA-backed coups designed to prop up U.S.-friendly dictators in Latin America and elsewhere, that, although sometimes initially successful, always came back to haunt the U.S.; 7) the Bay of Pigs fiasco, a CIA covert action designed to overthrow Fidel Castro and his budding communist regime; 8) failure to predict the Cuban missile crisis, which brought the U.S. to the brink of thermonuclear war; 9) the failure to predict the Soviet invasion of Czechoslovakia in 1968; 10) failure to predict the Arab oil embargo in 1973, which followed the Egyptian attempt to recover the Sinai peninsula it lost to Israel in the 1967 war, an event that almost brought the U.S. and the Soviet Union to a thermonuclear confrontation; 11) failure to predict the abdication of the Shah of Iran in 1979, his replacement with an Islamic cleric-run regime, the taking of American hostages from the U.S. embassy in Tehran, and the subsequent oil crisis; 12) the failure of the Delta Force to rescue those hostages from Iran; 13) failure to predict the Soviet invasion of Afghanistan in late 1979; 14) failure to predict and prevent the bombing of the U.S. Marine barracks in Beirut in 1983; 15) failure to predict the economic and political collapse of the Soviet economy during the 1980's, which led the U.S. to spend billions of dollars on unnecessary defense spending; 16) an apparent failure to predict that Saddam Hussein would invade Kuwait; 17) failure to predict the bombing of the World Trade Center in 1993, bombings of U.S. embassies in Africa, bombing of the U.S.S. Cole in 2000, and the terrorist destruction of the World Trade Center and attack on the Pentagon on September 11, 2001; and, 18) failure to prevent numerous Americans from spying on the U.S. for Russia, China, and assorted other countries.

Intelligence insiders and apologists will admit that intelligence operations are risky by their nature, they will generally claim that America's intelligence apparatus helped the U.S. win the Cold War and had countless other successes that cannot be revealed. What these insiders will never admit is that the intelligence establishment had an inordinately high failure rate given the mammoth resources at its disposal. No private firm could have survived such a high failure rate; it would have gone bankrupt or been subject to a takeover and reorganization.

Next: Part II: Why It Has Failed

November 21, 2002

Jim Grichar (aka Exx-Gman) [send him mail] was an economist with the federal government. He writes to "un-spin" the federal government’s attempt to con the public, whether through its own public relations organs or via the usual stooges and dupes in the mainstream media.

Copyright © 2002 LewRockwell.com