T2 B4 Mellon Letter Fdr- Entire Contents- Letter From Christopher Mellon Re Intelligence Community Structure 596

United States Senate WASHINGTON, DC 20510

November 17, 2003

The Honorable Lee Hamilton Vice Chairman National Commission on Terrorist Attacks Upon the United States 301 7th Street, S.W. '"' Room 5125 Washington, D.C. 20407 Dear Mr. Vice Chairman: This letter responds to your request for my views regarding the recent testimony of John Deutch before the National Commission on Terrorist Attacks Upon the United States. I believe my thoughts are fully consistent with those of my employer, but in this instance I need to be clear that I am only responding as a concerned citizen. Process At the outset, I believe it is important to acknowledge that substantial progress can be achieved without fundamental changes in the structure of the Intelligence Community or the authority of its leaders. While the experiences of private sector organizations are not always applicable to government institutions, I have no doubt that tremendous gains can be achieved through "business process re-engineering." For example, the Community Management Staff does not have a mechanism for independently and comprehensively modeling and assessing the numerous multi-billion dollar platform and sensor programs that DoD and the Intelligence Community purchase every year. Stunning, but true. The Senate Select Committee on Intelligence is pressing the Secretary of Defense and the DCI to develop such a capability through the language contained in report Section 335 of the Intelligence Authorization Act for fiscal year 2004. It remains to be seen,

The Honorable Lee Hamilton November 17, 2003 Page Two however, whether the bureaucracy can be moved. This is but one of many opportunities to develop tighter and more effective linkages between DoD and the 1C in strategic planning (e.g. via the Quadrennial Defense Review, the Defense Planning Guidance, and the NFIP and JMIP budget builds). Further, beyond budget and policy formulation, new processes for managing, collecting, analyzing and disseminating information can produce a high return on investment. Examples in these domains include a more sophisticated and aggressive use of open source information (there is a fairly stunning classified example at DIA that merits your attention) and more sophisticated leverage of US personnel overseas. Finally, developing an independent cadre to staff the DCI, instead of relying on detailees from the agencies he is charged with monitoring, is a simple step that would produce significant benefits. One has only to consider a Secretary of Defense staffed primarily by service personnel to perceive the importance of this initiative. Structure and Authority While significant headway can be made without major changes in the structure of the Intelligence Community, it is also true that new structures and authorities, coupled with able and aggressive leadership, can dramatically improve efficiency and effectiveness. In many respects the organizational issues confronting the 1C are analogous to those confronting the JCS prior to the Goldwater-Nichols Act. As you know, the fundamental problem confronting the Department of Defense prior to Goldwater-Nichols was excessive Service control over military operations, policies and budgets. In response, Congress strengthened the then flaccid integrating mechanisms in DoD, specifically the Chairman of the Joint Chiefs and the Commanders of the Combatant Commands. The difference in military performance before Goldwater Nichols (e.g. Desert 1, Lebanon, and Grenada), and after (Panama, Haiti, and Iraq) is stark and clear. In fact, I am convinced that the Goldwater-Nichols Act did more to enhance national security than any weapons systems ever procured by the Department of Defense.

The Honorable Lee Hamilton November 17, 2003 Page Three

Although the Goldwater-Nichols reorganization is not a precise template for restructuring the Intelligence Community, the problems are fundamentally similar: towering vertical structures (NSA, CIA, DIA, NRO, NIMA, the service intel components) and relatively weak integrating mechanisms (the DCI and CMS). Any reorganization proposal needs to address this fundamental problem. In that regard, I would suggest that the Intelligence Community's lack of responsiveness to the DCI's declaration of war on Al Queda was in part a result of the DCI's weak community management authorities and inability to move the system. A strengthened DCI could more effectively manage the Intelligence Community, leading to performance improvements comparable to those achieved by the military in the wake of the Goldwater-Nichols Act. Implementation A conservative, incremental approach would involve the creation of a permanent cadre to staff the DCI much as the SecDef has an OSD staff. This simple change coupled with aggressive business process reengineering and "year of execution budget authority" for the DCI over NFIP programs, would significantly strengthen the DCI's ability to manage the Intelligence Community and respond to new threats and opportunities. A more aggressive and far-reaching plan would have to address the fundamental changes that have occurred since the current structure was established by the National Security Act of 1947. Specifically, it would recognize that the once useful distinction between home and abroad has become not only irrelevant, but dysfunctional. This is not to suggest any need to reduce the protections afforded US persons under the Constitution, merely that globalization and the development of cyberspace, combined with the rise of apocalyptic terrorists groups empowered by lethal new technologies, require a different, more agile structure that is not impeded by outmoded geographic distinctions. In that regard, Dr. Deutch's suggestion that both foreign and domestic intelligence be consolidated under the DCI makes a great deal of sense functionally, although its political viability is uncertain. Achievement of a model along these lines - or for that matter any substantial reorganization - will require meticulous research by the

The Honorable Lee Hamilton November 17, 2003 Page Four Congressional oversight committee's, a substantial hearing record - and/or a renewed interest on the part of the Administration. At the end of the day, incremental steps will be better than none, and a more aggressive reorganization will probably have to wait until a consensus can be built not only on the Intelligence Authorization Committees, but with the Armed Services Committees as well. Hopefully your Commission will be able to prompt movement on these critical but sorely neglected issues. If nothing else, the conservative, incremental steps outlined above should represent a minimum expectation for reform. I have deliberately kept my remarks brief and at a very high level, but I am more than happy to further discuss these matters with any member of the Commission or its staff. Please do not hesitate to contact me at any time.

Sincere!

Christopher K. Mellon Minority Staff Director, SSCI 202-518-7060