Explaining Variation in US Intelligence Reform by Louis P

Altering the Deal: Explaining Variation in U.S. Intelligence Reform

by Louis P. Melancon

B.A. in Political Science, May 1995, University of Illinois, Urbana-Champaign M.S. of Strategic Intelligence, July 2003, National Intelligence University M.A. in Defence Studies, December 2007, King’s College London

A Dissertation submitted to

The Faculty of The Columbian College of Arts and Sciences of The George Washington University in partial fulfillment of the requirements for the degree of Doctor of Philosophy

January 10, 2019

James H. Lebovic Professor of Political Science and International Affairs

The Columbian College of Arts and Sciences of The George Washington University

certifies that Louis P. Melancon has passed the Final Examination for the degree of

Doctor of Philosophy as of November 5, 2018. This is the final and approved form of the dissertation.

Altering the Deal: Explaining Variation in U.S. Intelligence Reform

Louis P. Melancon

Dissertation Research Committee:

James H. Lebovic, Professor of Political Science and International Affairs, Dissertation Director

Steven J. Balla, Associate Professor of Political Science, Public Policy and Public Administration and International Affairs, Committee Member

Eric Grynaviski, Associate Professor of Political Science and International Affairs, Committee Member

iii

Acknowledgments

The author wishes to acknowledge a few groups of people:

1) His tireless and patient committee. They perservered through my stumbles to help

me complete this.

2) My wife Heather and children Eloise and Teddy. They helped me remember that

whoopee cushions are always funny.

3) My coaches and fencing sparing partners. They helped me forget the struggles of a

dissertation through the struggles of a one-on-one fight with swords.

4) The faculty and staff of the National Intelligence University. Who had to endure me

making sure they know that whoopee cushions are always funny.

Abstract of Dissertation

Altering the Deal: Explaining Variation in U.S. Intelligence Reform

Since the formalization of intelligence as a standalone function of the U.S.

government in 1947, there have been dozens of reform efforts. These efforts have

produced a variety of outcomes; although most failed to produce any changes, some made superficial changes, and a small handful had drastic impacts on how the government organizes for and generates intelligence. This research is intended to answer

this question: Why do some intelligence-reform efforts result in change but others fail?

The vast majority of the established literature on this topic either lacks a theoretical basis

or relies upon a biased status quo to explain the variation.

Most work on intelligence reform places failure squarely on bureaucratic

intransigence. Intelligence agencies prefer the status quo and can prevent change by holding an overwhelming information advantage. Yet information advantage is not fixed.

Reformers can shift informational asymmetries to their favor through the apt design of the reform itself. Reformers that generate new solutions rather than simply recycle

solutions, impose new definitions and terminology rather than use the intelligence

agencies own jargon, or talk about systemic issues rather than specific actions of the

intelligence agencies nullify the information advantage. When reformers take on two or

more of these approaches, the information advantage shifts to their advantage at the

expense of the intelligence agencies. When that happens, reformers can push reform

through and create change. The examples of the Rockefeller Commission, the Halloween

Day Massacre, and the Foreign Intelligence Surveillance Act of 1978 (FISA) all reflect

this dynamic. Failures of reform, such as the Maxwell Commission and the Church

Committee’s work on electronic surveillance, reflect reformers not taking on these

approaches and leaving the information advantage to the intelligence agencies. Put

simply, reformers that shift the dialogue of the reform by imposing new definitions,

propose new solutions, or examine the problems in broader contexts rather than individual actions, strip the tool of information advantage away from intelligence organizations, producing actual reform.

Table of Contents

Acknowledgments iv

Abstract of Dissertation v

List of Figures vii

List of Tables viii

Chapter 1: The Role of Information in Intelligence Reform 1

Chapter 2: Explaining Intelligence-Reform Outcomes 27

Chapter 3: Examining the Universe 63

Chapter 4: Information Advantage in Action 116

Chapter 5: Conclusions 148

Bibliography 163

Appendix A: Case Summaries 191

Appendix B: Counting Rules 208

Appendix C: Outside Coder Biographic Data 215

vii

List of Figures

Figure 1. Interests in Alignment 29

Figure 2. Agent’s Interest Drift 29

Figure 3. Oversight and Enforcement to Detect and Correct Agent Drift 30

Figure 4. Principal Interest Drift and the Irrelevance of Oversight and Enforcement 32

Figure 5. Matrix for Necessity and Sufficiency 80

viii

List of Tables

Table 1. Potential Cases 66

Table 2. Culled Universe With Assessed Outcomes 70

Table 3. Test for Time Necessity or Sufficiency 83

Table 4. Test for Visibility Necessity or Sufficiency 88

Table 5. Test for Relevancy Necessity or Sufficiency 89

Table 6. Test for Divided Government Necessity or Sufficiency 92

Table 7. Test for Unified Government Necessity or Sufficiency 93

Table 8. Test for Coalition Necessity or Sufficiency 96

Table 9. Test for Questioning Necessity or Sufficiency 99

Table 10. Test for Proposal Necessity or Sufficiency 102

Table 11. Test for Terminology Necessity or Sufficiency 103

Table 12. Consolidated Consistencies and Coverages of Conditions 107

Table 13. CHANGE Truth Table 111

Table 14. ~change Truth Table without ~term 113

Chapter 1: The Role of Information in Intelligence Reform

The U.S. government has attempted intelligence reform on several occasions.

Some of these attempts have led to real change—dramatically altering the intelligence functions and organizations by, for example, redefining oversight relationships. A few of these reform attempts led to only superficial adjustments, such as adding a new layer of management. Most attempts at intelligence reform, however, have simply fizzled out, producing no change at all (Jones, 2005; Neary, 2010). What explains this variation in outcomes? What variable is setting the conditions for change?

As with almost any problem, any variation in outcome could be the result of external stimuli or internal processes (Jervis, 1976, p. 35). This research claims that the set of conditions that are most consistent and that best explain a reform’s success or failure are internal to the reform—specifically, those that deal with information asymmetry. These conditions show that actors who seek reform are actually seeking to renegotiate the relationships between themselves and the intelligence organizations that they are seeking to reform. Unlike most of the literature on intelligence reform, this research is not very interested in explaining why the reforms start—or even why they sometimes are resolved suboptimally. This research asks a more modest question: Once a reform starts, why do changes (optimal or not) occur for some but not for others?

Though this is seemingly a fairly modest goal, the resulting explanation carries more power (based on the historical record) than do the suggestions from the literature that are purely focused on why an intelligence reform would start or on why its enacted solutions might not be optimal.

The existing (largely practical) literature is focused on why reforms start and on

1 external stimuli as an explanation for why some intelligence reforms create change and others do not. Some researchers have looked at events that impact national security, whereas others have considered domestic struggles between political parties. The existing theoretical studies have not fully discarded either argument, but they mainly rely on explanations in which a government’s internal processes—almost exclusively the bureaucratic status quo—determine suboptimal outcomes. Researchers have considered the key variables for intelligence reform to be the events that cause the reforms, the political environments at the time of the reforms, and organizations’ status quo preferences. Each of these explanations, however, has a mixed record in terms of explaining why change does (or does not) occur. Although some significant events have resulted in change, many others have produced no change. Some minor reform-initiating events have produced great change, and other minor events have produced nothing.

Some reforms have created change in times of divided government, and others have done so in times of unified government. Some changes have occurred despite a seemingly overwhelming coalition against change, and at other times, there has been a failure to produce change despite a seemingly overwhelming coalition in favor of it.

These explanations take a broad view on intelligence reforms, as they incorporate factors that are interesting for other questions (e.g., Why do intelligence reforms start?

Why are the results not efficient?), but in so doing, they lose explanatory power relative to the historical record. The basic question of this research (Why do some intelligence- reform efforts create change when others do not?) presents an opportunity to reexamine the problem and to thus gain previously unidentified insight. The small scope (inside the reform itself) and the loose assumptions are indicative of a new approach that is a close

2 fit to historical reality.

These extant works assume, often implicitly, that information advantage is always held by the agents—who, in this case, form the majority of those who oppose reform.

This is a fundamental aspect of the principal–agent dilemma, and intelligence organizations that are subject to reform are firmly part of this dilemma; in fact, as the agents, they hold the information advantage. This research takes a novel and opposite stance in that it treats information asymmetry as a variable, not a constant. The default value of this variable is that the agent holds the advantage, but when the value is manipulated differently (as in times of renegotiation), a different result occurs. Those who seek to change intelligence organizations must choose how they conduct their reforms, and this choice determines who has the information advantage. When those who seek to create change turn a reform into a renegotiation of a relationship, then the intelligence organizations lose the information advantage and become vulnerable to change. When a reform is not shaped in this way (i.e., when those who seek reform simply work within the framework of their regular relationships with the intelligence organizations), however, the intelligence organizations retain the information advantage and can thus resist change.

Unlike other explanations, the one that rests on shifting information advantage fits well with the historical record. When conditions are such that change is expected but does not appear, certain behaviors consistently preserve the information advantage of those who seek to prevent change. Regardless of whether other potential conditions, such as the nature of the reform-initiating event, indicate that change should occur, if the information advantage shifts away from those who seek to prevent change, then change

3 occurs.

This reliance on information asymmetry stems from the fact that intelligence reform should be considered a principal–agent problem, just as the regular relationship between an intelligence customer and an intelligence organization is a principal–agent problem. Intelligence reform, however, is sometimes considered to be merely the enactment of oversight and enforcement mechanisms within a regular, established relationship—such that the information asymmetry favors the agents (i.e., the intelligence organizations). The reform takes place within that relationship. In this traditional consideration of the principal–agent problem, the agent, by default, has an information advantage over the principal due to simply the nature of the agreement:

Specifically, the agent has some capability that the principal does not wish to permanently acquire (Perrow, 1972, 1986). If the agent’s and principal’s interests begin to misalign, the agent may use information advantage to pursue their interests at the expense of the principal; thus, the principal should bring the agent back in line through enforcement (Holmstrom, 1979; Shavell, 1979).

The behaviors of both the researchers of the past studies and most of those who seek to change intelligence organizations through reform rest on the assumption that reform is necessary because the intelligence organizations are serving their own interests rather than the interests of their principals (the ones who provide the resources to perform the function in the first place). In this line of thinking, relationships are first formed to meet the principals’ needs, but intelligence organizations’ actions show that they have little regard for the principals’ original desires. The actors use their resources to further their own interests, which no longer match those of the principals (Spence &

Zeckhauser, 1978).

That is the standard model of the dilemma; this research diverges by suggesting a special case in which the principal’s interests actually change. In this version, the agent does not fail to provide what the principal originally asked for; rather, the principal now needs something different. It could be that the principal’s original desire was flawed or that it was a good fit for a particular moment in time but is now less useful. Instead of the intelligence organizations using resources for their own interests, the principal’s interests have changed, and the agents are expending resources on out-of-date requirements. The problem is that agents, as their interests shift, do not keep up with what the principals need.

On its face, then, the contracted relationship is no longer valid, and either a new contract or (more accurately) a serious renegotiation of the current relationship is needed. What, then, would that new relationship look like? What, exactly, does the new product look like? Which resources would be needed to make it come into being? These are all questions that agents, having lost their information advantage, can no longer answer. Their information advantage stemmed from fully understanding the previous requirement. Indeed, the agents must shift their interests, which also requires additional costs. The principals thus begin to hold the information advantage (Pauly, 1974).

Do principals understand their situations? If those seeking change do not realize that a renegotiation of the relationships needs to take place, then they rely on the old relationships, which are now defined by the ability to punish and incentivize behaviors.

This approach is flawed in two ways. First, the punishments and incentives are based on a relationship that is already outdated and on methods for correcting behaviors to

5 achieve a goal that is no longer desired. The second is that the information advantage in this relationship is held by those who seek to preserve the status quo. With their advantage, the agents can demonstrate that what they have produced is, in fact, aligned with what was contracted. How can they be punished—or the relationship changed—if they are providing exactly what was asked of them? This has the effect of diffusing blame and derailing changes, thus preserving the status quo.

The side that holds the information advantage thus can achieve results close to its preferred solution. If those who seek change recognize that they need to renegotiate a relationship, then their behaviors shift information advantage in their favor. If they do not, however, then they surrender that advantage to those who seek to maintain the status quo. The behaviors of those who seek change thus determine the resolution of the sought-after reform: They can either seize or surrender the information advantage based on whether they pursue renegotiation or merely leverage an existing relationship. These actions can be observed and measured. When those who seek change try to renegotiate their relationships, change occurs. Otherwise, their efforts fail.

There are many ways to refer to those who seek change, including reformer, principal, and proposer. This last of these, proposer, is used primarily in this research when discussing specific cases (unless the proper names of specific individuals or organizations are used). Proposers are actors who seek change by proposing a change to a relationship. The problem with the term reformer is that it suggests that a successful result, but the historical record shows that most attempted reforms fail, so that term should be avoided, as it cannot encompass a significant proportion of the universe of cases. The term principal, though accurate (as this is a discussion of a hierarchical

6 relationship), detracts from the stated goal: change. However, this term is valuable for its strong theoretical basis, so in this study, it is used essentially interchangeably with proposer, particularly with regard to abstract or theoretical aspects.

Likewise, there are multiple ways to refer to the other actors in a reform: the reformed, the agent, or the responder. The term reformed has the connotation that a change in behavior actually occurs. However, considering that the overwhelming majority of reform efforts produce no change, this would not be an accurate or useful choice. Agent is a convoluted term, as those who oppose change are sometimes peers of the proposers who side with the proposers on other elements; these are true agents to the proposer. However, all agents respond to the proposer’s suggested changes. To that end, responder and agent are used somewhat interchangeably in this study: responder when talking in the specific (without a proper noun) and agent when discussing reforms in a more theoretical manner (normally, when paired with principal).

Importance of the Topic

Understanding the outcomes of intelligence-reform efforts are of interest for several reasons, but for the purposes of this research, the primary motivator is that states are in constant negotiation and interaction with other states (Schelling, 1963). Some of these other states are threats that pose a risk to the security of the state, and some sense- making must occur to determine whether these threat perceptions are correct (Jervis,

1976). Intelligence organizations provide one method for states to achieve this sense- making; the intelligence function should provide a decision advantage through the

7 revelation of private information about the actors with whom a state engages (Bok,

1989; Warner, 2009b) This revelation of private information should clarify the state’s perception and thus allow for better decision-making (Bendor & Hammond, 1992).

These intelligence organizations thus are crucial for classifying threats based on their risk, which then allows for policy decisions to be made regarding how to control those threats or mitigate those risks (Wallander & Keohane, 2002, p. 25).

If a government—in one example, the U.S. government—determines that the mechanisms it has developed for sense-making are not sufficient to interpret its signals for interactions in the world, then it should make the necessary changes to those mechanisms (Johnson, 1992; Waltz, 1993). However, the historical record shows that, more often than not, the U.S. government has failed to make these changes. To make sense of this historical record, potential explanations can be broken down into two bins: external stimuli and internal processes (Jervis, 1976, p. 35). As this study’s testing shows, however, most of these potential explanations—though intuitive—only have strong explanatory power when applied to a case or two in isolation. When the larger universe is brought into play, the counterintuitive explanation fits better with the historical record. This chapter includes short versions of potential explanations from the existing literature, as well as a cursory look at two high-profile cases. The next chapter includes extended looks at the theoretical underpinnings of these potential explanations.

External Stimuli

If the purpose of intelligence is to help a state make sense of the world, then the

8 most obvious external stimulus to consider is a change in the state’s security situation.

Examples include a threat that has changed from passive to active, a perceived threat turning out to be harmless, or a previously unidentified threat arising. A state should be able to make changes to its sense-making capabilities and its intelligence organizations in response to a change in its security situation. This explanation provides great insight into why a reform begins, but it is not clear how well it explains how a reform ends.

For example, if a state suffers a surprise attack because it failed to properly identify a threat—for instance, the increasingly belligerent and expansive, pre-Pearl

Harbor Japanese Empire—it would be unsurprising, even expected, for sweeping changes to occur in intelligence organizations. Indeed, such changes are part of the founding myth of modern U.S. intelligence (Odom, 2008, p. 128). Similarly significant changes may have been expected after the Bay of Pigs fiasco, but they did not appear.

By this logic, in the absence of this external stimulus, massive changes should not be expected (and often do not occur). The Halloween Day Massacre and the Walter

“Beetle” Bedell Smith reforms of the 1950s, both of which lacked much of this external bump, still created huge changes, however. The historical record does not provide convincing evidence to support this explanation for why reforms turn out as they do— not only in these specific cases but in the broader record.

Crucially, threats from the outside world are not the only external stimuli that can impact intelligence reform. Though a country (the United States in this example) may have an internal political configuration on the international stage, the reformation of its state security organs means that domestic politics can also be considered an external stimulus for reform. The political parties’ struggle for domestic power explains why

9 change occurs or fails to occur (Putnam, 1988). This stimulus is wholly independent of the prior performance of the intelligence functions, and the intelligence organizations are merely pawns in the political elements’ posturing (Pillar, 2011). One element of a divided government could, for example, call for reform solely to embarrass the opposition, or a unified government could make reform happen simply because it does not have to expend political capital in fighting the opposition. This is an appealing explanation, especially for determining why a reform occurs; however, when compared to the historical record, it has mixed results. Unified governments have seen sweeping reforms such as the “Beetle” Smith reforms, as well as complete failures such as the

Doolittle and Clark Task Forces (Greenberg, 2005). Divided governments also have experienced their fair share of mixed results. Perhaps the best examples are three significant efforts from 1975: the Rockefeller Commission and the Church and Pike

Committees. In these efforts, each political party had one successful reform, each branch of government had one successful reform, and each chamber of Congress had an abysmal failure.

Internal Processes

If the external stimuli do not offer satisfactory explanations when held up against the historical record, then internal processes are the next area of focus. Putting aside issues of domestic partisan politics (which are external stimuli), there are political matters within the reform process. Specifically, there is the issue of the political coalitions that form around the reforms (Miller & Alexander, 2001; Schamis, 1999). As a reform unfolds, actors across the government have the opportunity to join the coalition

10 of proposers, join the coalition of responders, or stay on the sidelines. The side that can create the largest coalition, either by recruiting active allies or by convincing others to simply not become involved (thus denying allies to the other side) should be able to achieve its desired outcome: change for the proposer or preservation of the status quo for the responder. The techniques and justifications used in a coalition’s formation can include a sense of homophily, cost perceptions, and side payments (normally metaphorical side payments and not actual budgetary resourcing) that cement an alliance

(Korda & Eldridge, 2011; Shanahan et al., 2011). The specifics regarding how or why a coalition forms are not relevant to this research, however; what matters is that one coalition becomes larger than the other and thus overwhelms the smaller side simply due to its political mass, inexorably moving toward its goals.

However, as with the external-stimulus explanations, the historical record does not offer much support, as spectacular failures and successes have occurred among larger coalitions, whether they are proposers or responders. The Congressional Select

Committees on Iran-Contra formed a significant coalition for change, yet it was only able to generate changes in nonintelligence organizations, thus creating no actual impact in terms of the intelligence enterprise. The Bedell Smith reforms of the 1950s

(specifically, the reforms of signals intelligence) faced an essentially unified block of resistance, yet they were successful at creating a new organization to oversee a previously nonexistent federated architecture for signals intelligence (Aid, 2009;

Brownell, 1981; Hatch & Benson, 2000). The record, in other words, is mixed.

The information distribution can also occur within an internal process, such that information asymmetry shifts away from the responder. This is the proposed

11 explanation in this research, for which the motivating assumption of these other explanations (i.e., that the intelligence organizations hold a constant information advantage) does not hold (i.e., this value can shift to favor the proposers). This research instead treats information advantage as a variable that shifts between the two sides.

When the proposer does not allow the responder to keep its information advantage, change occurs. This happens when the proposer treats the reform as a renegotiation of the relationship between the parties, thus making the costs of this altered relationship into unknowns—at least to the responder.

There is already a hierarchical power asymmetry between proposer and responder

(Cohen, 2012), so an information asymmetry in favor of the responder helps to mitigate this power disparity and to thus maintain the status quo. When the information asymmetry shifts away from the responder, the nature of the dialogue between the two sides changes significantly. When that information asymmetry is taken away, the responder’s vulnerability to change dramatically increases, and the proposer’s changes are more likely to come into being.

The factors in the decisions regarding when and how a proposer sets those conditions are of great interest. It goes without saying that, throughout a reform, both proposers and the responders seek to gain the information advantage so as to best serve their preferred positions. The most critical point, however, is at the start of the effort.

The way in which the proposer begins the internal process—whether seeking renegotiation or simply exercising aspects of the existing relationship—sets the initial conditions of the information advantage, either allowing the proposer to retain it or shifting it to the responder. Regardless of the struggles that occur as the reform unfolds,

12 the proposers’ behaviors during these opening moments are what offer the best insight into (and predictors of) an intelligence reform’s failure or success.

The next chapter delves into the theoretical foundations for all of these explanations, and subsequent chapters discuss the observations and provide an analysis of the larger universe with regard to these explanations. First, however, it is useful to briefly examine two well-known cases.

A Tale of Two Reforms

As is discussed in more detail in the next chapter, intelligence studies was, until very recently, seen as a trivial field of study. Whether because of, or as a reflection of, this perceived triviality, the majority of researchers have focused on just two intelligence reforms: The National Security Act of 1947 (NSA 47) and the Intelligence

Reform and Terrorism Prevention Act of 2004 also known as IRTPA (Stuart, 2009;

Warner, 2006; Zegart, 2000, 2005). Though more interesting cases are examined in detail in a subsequent chapter, and though the wider universe of cases is used as a test bed for the four sets of explanations, the significance of these two cases in the literature warrants a cursory examination through two lenses: those of external stimuli and internal processes.

Starting with the dependent variable, the contrasts in outcomes are stark: NSA 47 generated change at the level of organizational first principles, but IRTPA created changes that were superficial at best. Still, a deeper analysis shows that IRTPA actually reinforced the status quo. The proposer in NSA 47 held onto the information advantage,

13 but the one in IRTPA surrendered the information advantage to the responder, as the proposer’s approach was renegotiation in the former and keeping to the existing relationship in the latter.

The outcome of NSA 47 for intelligence was not just the well-known creation of the Central Intelligence Agency (CIA) and of the U.S. Air Force, with its own intelligence arm (Sander, 1972; Stevenson, 2008; Zegart, 1999). NSA 47 altered how the intelligence function was conceptualized. The related discussions changed the thinking on intelligence from an individual-centric model (in which nonprofessional individuals used bespoke skills to solve problems) to an industrial-age, problem-centric model (in which individuals specialized in specific aspects of problem-solving).

When it began during the Revolutionary War, U.S. intelligence was not professionalized (Daigler, 2014; House of Representatives Committee on Expenditures in the Executive Department, 1947; Miller, 1989). Intelligence, at the time, was not a career in itself, it was instead a detour or side adventure in which an individual applied his or her unique skills in the course of a regular career—such as diplomacy or the military (Ransom, 1970). Some states still use this model today (Aning et al., 2013), as it is very simple: An individual receives a question, makes observations, analyzes what has been observed, and then provides an answer (Ballendorf, 1984; Harris & Sadler,

2003; House of Representatives Committee on Expenditures in the Executive

Department, 1947; Zacharias, 2014). The individual gets the question based on his or her unique abilities related to the question and then sees the problem through from start to finish.

NSA 47 threw that model out. Now, rather than placing a given problem in the

14 domain of single individual with unique skills, it is broken down into discrete segments, which are tackled by individuals who specialize in the particular aspects of hat problem

(Hulnick, 2006). Perhaps one individual gathers the information, a different individual conducts the analysis, and yet a third individual is responsible for the distribution of the analysis. This allows each individual to master a specific area and creates resiliency in the overall system by eliminating a critical point of failure and allowing expansion around a given problem (House of Representatives Committee on Expenditures in the

Executive Department, 1947; Mendels, 1972). The individual is matched to only part of the question based on his or her unique characteristics and then passes the problem on to another specialist.

Changing from an individual-centric model to a problem-centric model has significant implications for how organizations structure themselves to perform their functions, for how resources and personnel are distributed, for which actions are performed, and for which authorities are needed. This problem-centric focus is still used in U.S. intelligence, and it is a founding assumption in discussions regarding the function and meaning of intelligence (Elkins, 2014; Lowenthal, 2012). Adjusting an organization’s first principles from one model to another is a significant outcome.

Nothing so significant happened with the next example, however.

IRTPA is primarily known for spurring the creation of the director of national intelligence (DNI) position. Previously, the director of central intelligence (DCI) wore two hats—as the head of the CIA and as a community manager—and nominally directed the efforts of the larger intelligence community. However, the DCI had few actual ways in which to create change outside of the CIA. IRTPA abolished the DCI and, in its

15 place, created two positions: DNI and CIA director (Gentry, 2015; Warner, 2006).

However, the new DNI position did not have any new authority. Indeed, IRTPA explicitly hobbled the DNI’s ability to direct intelligence agencies, making the position even weaker than the DCI, bureaucratically. This has been a key factor in the judgment that the DNI has been a less than stellar performer in accomplishing its mission (Best,

2010; Gerstein, 2010; Javorsek & Schwitz, 2014; Tamanaha, 2009). Yes, a new organization was created, but it was a toothless administrative layer. In other words,

IRTPA buttressed the status quo.

There were other, less visible changes in IRTPA, such as the duplication of the

CIA’s capability in the DNI—still leaving the original capability within the CIA (Allen,

2013; EO 13354). However, these are also superficial changes, and despite their large number, they simply are not as seismic as those of NSA 47. Essentially all that occurred was the layering of a new administrative bureaucracy onto the existing structures;

IRTPA did not address any underlying problems; and even that new layer was constrained more than the structures that existed before the reform. What best explains why one reform made such an impact and the other did not?

The first external-stimulus explanation, which is based on threats, is uncertain in the case of NSA 47. Should the threat be considered the attack on Pearl Harbor in 1941 or the rise of the Soviet Union? The U.S. intelligence creation myth links the modernization of U.S. intelligence to the attack on Pearl Harbor (Betts, 2002; Cline,

1981). However, that belief is a bit of a stretch based on the comparison of pre–World

War II intelligence to the postwar environment (prior to NSA 47).

Intelligence, up to that point in time, was a secondary function for U.S.

16 government agencies, so the development of intelligence capabilities was directly linked to the fortunes of an agency’s primary function. As an example, in war, the intelligence elements of the armed services would expand and shrink in synch with the combat forces (Finnegan & Danysh, 1998; Miller, 1989). Of course, this behavior was not solely limited to the military, the Department of State cast off its telegram-interception capability in the interwar period with the justification that “Gentlemen do not read each other’s mail” (Yardley, 2013). A more reasonable explanation is that the change also offered budget savings in a time of fiscal constraint. Normally, after wars, such agencies begin large drawdowns, and their intelligence capabilities shrink alongside their other capabilities. The period after World War II was no exception to this trend (Williamson,

1993).

It is true that agencies tried new ways of organizing to conduct the intelligence function during the conflict; new organizations, such as the Office of Strategic Services, were created, and the problem-centric model was even used in some instances (Jeffreys-

Jones, 1989; Warner, 2002a). However, these were seen as necessities of the war, and with the end of conflict, they were no longer needed (Darling, 1990; Warner, 1996).

Without the temporary necessity of combat, organizations would not have been in such a rush to return to their prewar behaviors. There was a clear resource incentive for organizations to reduce their overall costs in terms of both capability and size (Feickert,

2013), but that incentive did not require a corresponding return to the prewar, individual-centric intelligence model. This, though, was the model that the government agencies were familiar with—a thus the one to which they gravitated as part of the postconflict drawdown (Darling, 1990; Leahy, 1945, p. 182).

It is difficult to tie the attack on Pearl Harbor to NSA 47 based on the observed behaviors. An explanation with closer proximity to the act is a more prosaic one: that

President Truman was simply dissatisfied with the intelligence support that individual government agencies were providing with regard to new threats (Hogan, 1998; Truman,

1987). This lends more credibility to the argument that the threat from the Soviet Union should be the event that caused the reform (Jeffery-Jones, 1997), as that threat was qualitatively differed from the Axis threat that had just been defeated in World War II.

The power asymmetry related to nuclear weapons was lopsided in favor of the United

States for another two years, and the Soviet Union was still exhausted from World War

II. Thus, there was little reason for the Soviet threat, by itself, to be the reason for the

United States to question and eventually discard its old organizational principles. The individual model that served so well from the Revolutionary War through World War II should have been seen as sufficient against the Soviet threat, as the Soviet Union was considered a less powerful foe than those previously encountered; the threat, in other words, offered no incentive to change. The threat explanation is thus a less-than- satisfying explanation for why the change occurred.

There is an undeniable link between the threat of terrorism (as embodied in the attacks of September 11, 2001) and IRTPA. The word terrorism is in the act’s name.

One would assume, then, that the outcome would be a significant change: The threat could not be denied due to the evidence of a highly visible, well-coordinated attack against multiple locations that appeared to paralyze the U.S. government for hours or more (National Commission on Terrorist Attacks Upon the United States, 2004).

However, the outcome was not great change; rather, it was an almost flawless victory

18 for those who sought to preserve the status quo, as the act produced only a new administrative layer with constrained authority. The threat explanation thus is less than satisfying.

Some scholars have argued that the superficial changes seen in IRTPA were merely to placate domestic audiences and not related to threat at all; intelligence reform was simply a political bargaining chip (Pillar, 2011). This leads to the second external- stimulus explanation of domestic political configuration and the placement of intelligence reform in the context of domestic governance. In both cases, the United

States was in a state of united government, with one political party controlling both the executive and legislative branches. Politically, this should have granted more leeway to the proposers, as they should not have had to worry about an opposition party seeking to gain points with a domestic audience by thwarting the in-power party’s efforts. Still, the outcomes of the cases are mixed. The domestic political configuration does not help determine why these outcomes were so different.

Moving to the internal-process explanations, in both cases, the larger coalitions were the ones that opposed change. NSA 47 saw a small core of individuals—some of whom were no longer in government, calling for change against the aligned agencies of the Army, the Navy, the Department of State, and the Federal Bureau of Investigation

(FBI). Aside from the Central Intelligence Group, which was in the process of being dismantled, these organizations comprised the entirety of the U.S. intelligence capability at the time (Darling, 1990). If the coalition explanation were supported, then these entities should have been able to not only derail the creation of the CIA but also return to their prewar treatment and configuration of the intelligence function. This was clearly

19 their preference, as they were moving toward that goal from the conclusion of World

War II through the negotiations surrounding NSA 47. Still, the outcome was the one that the larger coalition opposed.

The same was not true with IRTPA. Led by the Department of Defense, the larger coalition consisted of the intelligence elements of the Army, Navy, Marine Corps, Air

Force, Defense Intelligence Agency, National Imagery and Mapping Agency (which was soon afterward renamed the National Geospatial-Intelligence Agency), National

Reconnaissance Office, and National Security Agency (Allen, 2013). All told, that represented approximately 80% of the intelligence community, as measured by both resource dollars and personnel (Andrews & Lindeman, 2013; Elkins, 2014; Gellman &

Miller, 2013). Almost all the other elements of the IC, and even some subcommittees in the House of Representatives and the Senate, eventually joined this coalition (Allen,

2013), which was very successful in achieving its goals. Though lauded publicly as a revolution in intelligence, the final alterations were, at best, superficial. In reality, the

DNI’s ability to impact policy and the intelligence agencies’ actions was even more limited than the DCI’s ability had been. This buttressed the status quo against change, which was a huge success for the huge coalition. With these conflicting outcomes, the coalition-formation explanation of internal processes is not satisfactory.

What about information asymmetry in the internal processes? NSA 47 resulted in a new model of intelligence: a problem-centric model that was more suited to the industrial age than the individual-centric model in use prior to (and generally, during)

World War II. As mentioned earlier, some organizations in World War II did experiment with the problem-centric model; the Army is one example. The motivation

20 was relatively simple, however: expanding from just over 70 employees to more than

1,000 in a period of approximately 6 months required a different form of organization, simply to manage the hordes of workers (Mahnken, 2002; Military Intelligence

Division, 1946). Still, at the end of World War II, the pathway was toward demobilization and a return to the prewar situation in which a handful of individuals— albeit likely more than 70—worked individually. These organizations knew the costs of the individual-centric model, including how much and what types of resources were needed to make the model work. However, they had less information on the resource costs of the problem-centric model. Experiments occurring during the combat of World

War II would have revealed distorted costs, and there was no need to understand those costs, anyway, as the end of the war meant a return to prewar configurations anyway.

The proposers, though, framed the discussion around the problem-centric model

(House of Representatives Committee on Expenditures in the Executive Department,

1947; Leahy, 1945, p. 182). There was a mismatch in underlying assumptions. For the proposers, it was that the problem-centric model was the way of the future; the discussion was not a comparison of the individual- and problem-centric models but simply a comparison of ways in which the new model might be executed. The sides were renegotiating the relationship, not determining whether the old relationship was still of value. The responders assumed that the previously understood model was still in play; in other words, they believed that it was a discussion about comparing the models.

Each side was having a different discussion, but one side also had the hierarchical benefit of holding power, as it was the principal in the relationship. The loss of information advantage, combined with the location on the bottom of the hierarchical

21 power structure, meant that the responders were unable to argue against the change, even as the proposers—who now held both the information and power advantages— were able to make change happen.

In addition to having more difficulty derailing the proposed changes (as the responders did not know the true costs), the responders stepped into a rhetorical trap.

This is clearly seen in the impacts that NSA 47 had on the Department of State. The primary foundation of this department’s argument against an independent intelligence agency—the one that would eventually become the CIA—was that the Department of

State’s individual diplomats had the bespoke skill sets to best address the types of questions and problems that the president and other national-level decision-makers would generate. The diplomats were not only best positioned in locations overseas (so as to have access to information); they also had unique knowledge of their particular settings so that they could add the necessary context to their analyses (House of

Representatives Committee on Expenditures in the Executive Department, 1947). As individuals, they had superior capabilities and methods for the intelligence function. In this view, then, all aspects of problem-solving could and should reside within the individual diplomat.

If this reform discussion was set up as a contrast between the individual- and problem-centric models, this could have been a winning proposition. However, the proposers were asking different questions (e.g., about what and how resources would be arranged in executing this model and about what unique advantages certain organizations had within the problem-centric model) than the responders. Would organizations specialize in only certain aspects of problem-solving, thus depending on

22 other organizations for other problem-solving aspects related to a given question?

Alternatively, would organizations restructure themselves and their resource allocations to address all aspects of problem-solving internally? Perhaps, looking at the enterprise as a whole, there would be a mixture of these techniques? This is renegotiating by redefining the relationship between the principals and agents; this is a proposer securing an information advantage.

The Department of State’s position regarding the individual-centric model inadvertently meant that it backed itself into a corner. In the problem-centric model, an organization has to be able to conduct espionage or surveillance to collect information

(Johnson, 1986). That is significantly different from the situation in diplomacy, and the positioning that the Department of State advocated as its advantage suddenly no longer existed. Diplomats, after all, cannot (or should not) engage in espionage, as this creates unacceptable risk in their diplomatic functions; however, the reverse is not true, as someone conducting espionage may present as a diplomat. Contrasted to this is a diplomat’s specialized contextual knowledge, which was thus highlighted as a competitive advantage in the problem-solving process—an advantage that other intelligence organizations could rely on. The Department of State had trapped itself by attempting to show how well it could work in the old model, but the discussion was about the new model; it was answering the wrong question. In doing so, it inadvertently limited itself to just one facet of the problem-centric model: analysis (McCormack,

1946). To this day, that is the limit of the Department of State’s role in intelligence, and it is dependent on other agencies to collect information so that it can conduct in-depth analyses (Office of the Director of National Intelligence, 2009).

Without the information advantage, the responders simply did not know the true costs of the proposed changes. By default, then, the proposer was in a position of advantage, simply through the denial of information advantage to the responder. In the worst possible case for the responder, the information asymmetry was so lopsided that a misstep by one member of the responding coalition caused that organization to be pinned into a position that allowed the proposer to make bold changes that constrained the responder’s future activities and authority.

IRTPA offers the opposite example. Here, the proposer gave the information advantage to the responder at the beginning. Before hiring had even been complete on the first of the two investigations that investigated the attacks of 9/11, the proposers had already revealed to the responders that the solution involved establishing a DNI (Pillar,

2011). The relationship just needed some tweaking.

This was not the first time that such a suggestion had been made. It was first proposed in 1971 (Schlesinger, 1971; Warner, 2009a) and was repeated in all major (and many minor) reform efforts between 1971 and 2003. The responders were thus already well aware of the costs and benefits of such a solution. It became easy enough to marshal arguments against this new organization regarding ways in which it might detract from the status quo. The responders had all of the information advantage, and they used this to great effect to preserve their interests in the text of the statute.

Although IRTPA created the DNI, it also contained language that allowed the various intelligence organizations to disregard it and to push back against any directives that it might promulgate. All an intelligence organization had to do was to determine that a DNI directive would in some way interfere with the organization’s mission—

24 using its own interpretation (Allen, 2013). Previously, under the DCI, other intelligence agencies could politely decide to ignore requests, and the DCI had no real mechanism to enforce compliance (CIA, 2012; Collins, 2004; Lott, 2004; McLaughlin, 2004). With

IRTPA, however, the responders now had statutory language to support their choice to ignore requests; they could simply invoke section 1018 (Public Law 108-458). The status quo was thus reinforced—clearly leveraging of the responder’s information advantage. If the proposers had taken a different approach instead of simply tweaking the existing relationship, then the outcome may have been different.

This information-asymmetry explanation offers the most satisfactory explanation of the reform’s outcome. If the proposer holds the information advantage (or, at least, denies it to the responder), then the proposer is renegotiating the relationship, thus creating a special case in the principal–agent model. The responder in this situation lacks key information for making informed choices and thus is less capable of derailing or stopping changes. However, if the proposer does not create this special case—instead seeking simple changes to an existing relationship, the responder uses the information advantage to slow or stop any changes to the status quo. Renegotiation is key, as the behaviors associated with a proposed change shift the information advantage, thus making the responders vulnerable to change. These behaviors are best described as the proposers seeking to make a change at a high conceptual level rather than to merely punish the responders for their failure or to find a quick, already developed solution. In those situations in which the proposer treats the reform simply as a way to enact quick solutions, punish responders, or exercise established oversight and enforcement mechanisms from a flawed relationship, the information asymmetry stays with the

25 responders and allows them to stymie change.

Plan of the Research

The next chapter reviews the current state of the intelligence-studies literature, particularly that on intelligence reform and on the theory underpinning the proposed explanations. Following that, Chapter 3 contains hypotheses for these explanations and tests them against the universe of cases. Chapter 4 presents cases of interest that have emerged from the testing, thus providing a detailed look at how either party can seize the information advantage.

Chapter 2: Explaining Intelligence-Reform Outcomes

There is no shortage of intelligence literature, with hundreds of works to be

found. Some of these lay out the authors’ critiques of intelligence—often followed by

their suggestions to improve it.1 Others are simply autobiographical, sharing the sometimes dull but sometimes salacious tales of intelligence careers.2 A few are serious

historical works that seek to shed light on key moments from history.3 From the

perspectives of entertainment and simple historical knowledge, this body of literature is

excellent.

However, in terms of academically rigorous literature, the field of intelligence studies is rather barren. The intelligence area of study is not entirely devoid of quality academic literature, but several authors have noted it as being underserved (Gill &

Pythian, 2015; Glees, 2015; Richards, 2016). To be specific, there has been little leverage of works, either in intelligence studies or other fields, to create a foundation from which to expand intelligence knowledge. The result is a lack of knowledge accumulation

(Marrin, 2016). There is also the issue of the literature being almost exclusively United

States–focused, to the detriment of comparative studies; though this research also focuses on the U.S. experience, this is a weakness that should be acknowledged (Gustafson &

Davies, 2013). However, this does not mean that the wider body of literature is without

1 Some key examples of this type of work are Robert M. Clark’s Intelligence Analysis: A Target-Centric Approach, Erik J. Dahl’s Intelligence and Surprise Attack: Failure and Success from Pearl Harbor to 9/11 and Beyond, and Thomas Fingar’s Reducing Uncertainty: Intelligence Analysis and National Security. 2 Some key examples of this form of work are three infamous works: Duane R. Claridge’s A Spy for All Seasons, Frank Snepp’s Decent Interval, and John Stockwell’s In Search of Enemies. 3 Some key examples of these works are Joby Warrick’s The Triple Agent, Arthur Darling’s The Central Intelligence Agency: An Instrument of Government to 1950, and Michael Allen’s Blinking Red: Crisis and Compromise in American Intelligence After 9/11. The latter two works are cited heavily in this research

27 value for this research; the historical works, in particular, are invaluable. Rather, this simply means that, to establish a sufficient foundation for this research, a wider search— one that encompasses other fields—must be conducted.

The Principal–Agent Problem

Because the intelligence literature is so sparse and because this research is meant to avoid the failures of most works in this field, it is necessary to first examine the principal–agent model, which is the foundation for this research. At its heart, the principal–agent model envisions all interactions as being between a buyer of a good or service (the principal) and the seller of that good or service (the agent). Though the terms proposer and responder are substituted for principal and agent, respectively, in many areas within this research, the canonical terms are used in this portion for clarity’s sake.

The interactions in this model comprise a contract between the two parties; this contract defines what the agent does on behalf of the principal and what the principal does in return—normally, the provision of resources (Perrow, 1986; Pratt & Zeckhauser, 1985;

Ross, 1973). A problem with this contract is that the principal cannot truly know whether the result is in its best interests (Spence & Zeckhauser, 1971). The traditionally considered variables are well-developed in the literature, but intelligence reform is a special case in which some of the assumed characteristics do not apply.

Though it is a bit reductive, the focus of the model in this research is the alignment of interests between the principal and the agent. These interests may be perfectly or imperfectly aligned. The general assumption is that, at the start of the

relationship, there is perfect or nearly perfect alignment (as in Figure 1) but that, over

time, this drifts (leading to Figure 2).

Figure 1. Interests in Alignment

The standard assumption is that this drift is due to the agent’s interests drifting away from those of the principal (Miller, 2005). Note that, in Figure 2, this drift creates a gap; the agent is no longer performing as promised.

Figure 2. Agent’s Interest Drift

This raises a problem for the principal: How can the agent’s promised behavior be

verified to ensure that the gap is closed and that any aberrant behavior is corrected? The

first key mechanism here is oversight. As part of the contracted interaction, the principal

must (or should) observe what the agent is doing on its behalf. If such observations reveal

the proper actions, then the principal should know when the agent’s interests have drifted

out of alignment or are no longer serving the principal’s interests (Weingast, 1984). This,

of course, allows the principal to act. The enforcement mechanism is then crucial. This mechanism involves incentives, either positive or negative, that the principal and agent have agreed to—beyond whatever costs are associated with the base contract (Fehr &

Schmidt, 2004). These are actions that the principal can take to identify a misalignment

and then bring a wayward agent back into alignment, as shown in Figure 3. The gap that

first appeared in Figure 2 should be closed after enforcement has been enacted, thus

returning the relationship to the state shown in Figure 1.

Figure 3. Oversight and Enforcement to Detect and Correct Agent Drift

Both oversight and enforcement can have an interactive effect. Risk of

observation should have a chilling effect on agent’s behaviors and keep the principal’s and agent’s interests aligned, thus reducing the need for the enactment of negative incentivizing mechanisms. Likewise, positive incentivizing mechanisms can keep

interests aligned in a fashion that reduces the need for frequent oversight (Shavell, 1979).

This highlights a commonality of both oversight and enforcement: the cost issue.

Conducting oversight requires that the principal expend resources to ensure that the

interests remain aligned. Incentives also have an associated cost—not just in terms of

immediate real resources (in the case of positive incentives) but also long-term

opportunity costs (for negative incentives; Baker et al., 1994; Gibbons, 1998). A tension

arises as a result, as the cost that the principal decided to undertake to acquire the good or

service from the agent (rather than to self-produce) is challenged due to the increasing

costs of oversight and enforcement.

Underlying all of this is the assumption that the agent (not the principal) drifts

away due to interest alignment. This is an almost universally considered condition, with

very few scholars treating interest alignment as a variable and few allowing that the drift

can stem from the principal. This can actually happen, though, and in such situations, the

principal must begin a process of renegotiating the contract and working to identify what

the new product is; this includes determining whether and how oversight and

enforcement techniques can be transferred, or whether new methods are needed (Laffont

& Martimort, 2009, p. 70). Note that, in Figure 4, as in Figure 2, a gap exists between the

interests and the contracted good, but this time, it is on the opposite side, with the agent

disconnected. The oversight and enforcement mechanisms in such a case are inapplicable

to the new situation; they push the agent’s interests back to the original contracted

position instead of to the principal’s new position. However, the interests of the agent

were already in the initial position, which causes a disconnect with the desired outcome

of the newly aligned interests and the tool being used (the old enforcement techniques).

Figure 4. Principal Interest Drift Irrelevance of Oversight and Enforcement

This research takes the following position as an assumption and holds it constant:

In intelligence reform, the principal’s interests (not the agent’s) shift. However, this shift

alone does not explain the variation in outcomes. As this research proposes, the way in

which the principal approaches the realignment of interests—as either a true

renegotiation or the use of preexisting oversight and enforcement mechanisms based on

old interests—determines the rest of the variation. When principals recognize that their

interests have shifted, by virtue of this knowledge, they have gained an information

advantage and thus can behave in ways that secure this advantage. This is the critical point for information asymmetry, the control of which allows one side or the other to achieve a preferred outcome. Mismatches in the parties’ approaches to reform thus

32 become apparent: The oversight and enforcement mechanisms are established to detect and fix a specific gap, but this is not the gap that actually appears. Acknowledging a new gap means questioning and potentially abandoning the old tools.

This logically leads to another item that is constant in the existing literature but that this research treats as a variable: information asymmetry. In the majority of the extant literature, the agent, by default, holds an information advantage over the principal with regard to the good or service in question (Downs & Rocke, 1994; Miller, 2005;

Mitnick, 1980; Samuelson, 1984). After all, a principal undertakes a contract because the good or service was too costly to produce (or unavailable) organically. Having an agent is typically more cost-effective than developing the expertise needed to organically produce a good. Thus, by possessing the knowledge of the true cost, the agent holds an information advantage. A special case in the principal–agent model involves moral hazard, which refers to agents’ use of information advantage to further their own interests—which are, most researchers have assumed, drifting away from those of the principal (Lamber, 1983; Miller, 2005). However, if that assumption is loosened or even reversed, as in this research, then the information advantage can rest with either the principal or the agent.

When the principal’s interests have changed, a new, different good or service is desired. The agent may not fully understand exactly what the principal desires or the actual costs of the good or service. If the agent does not know this, however, then the information asymmetry does not favor the agent; instead, it favors the principal, even if the principal also does not know true cost (Waterman & Meier, 1998). This is the special case of adverse selection: There is information about cost (possibly principal private

33 information) beyond the agent’s knowledge, which causes the agent to agree to a contract that is detrimental to the agent’s interests—or, at least, suboptimal (Balakrishnan &

Koza, 1993; Jullien, 2000; Ruachaus, 2005).

This research makes one additional claim about information advantage: The principal does not have to have private information to gain this advantage, as it is enough to merely neutralize the agent’s information advantage. This is because intelligence reform has yet another special factor: monopoly. Most principal–agent research is based on the assumption that there is no natural monopoly—or that, if there is, the agent holds that monopoly (Laffont & Tirole, 1988); this is why moral hazard can become so important in most uses of the principal–agent model. In almost any scenario other than intelligence, this seems to fit: A patient who does not like a doctor’s diagnosis and who suspects that the proposed treatment is unnecessary and expensive can get a second opinion—just as the doctor can see other patients (Evans, 1980). A government becomes beholden to its armed forces’ expertise, as those agents have a monopoly on violence

(Feaver, 2003).

In intelligence, however, the monopoly resides in the principal. Although there are multiple principals within the U.S. government (e.g., Congress, the White House, and the Secretary of Defense, all of which exist within the government), the intelligence organizations cannot go outside the government to find new customers. This provides a new twist on the problem of establishing an equilibrium among relationships that could otherwise occur (Dixit et al., 1997). Technically, the intelligence organizations cannot move among these various principals; for instance, the Office of Naval Intelligence cannot cease supporting the Department of the Navy and instead begin supporting the

Department of Energy. The agent has only one principal with which to create a contract: the government entity that created the agent.4 The principal does not have the same

restriction; intelligence organizations are only one of many sense-making capabilities

available: The open media, think tanks, and academia provide alternative methods for

understanding the world (Betts, 1978; March, 1994).

This is important because it means that the dynamic between the principal and the agent is very unequal; this is, after all, a hierarchical relationship, with the agent on the short end of the power distribution (Hammer & Stern, 1980). For the agent, holding onto an information advantage mitigates this power asymmetry. If the principal can at least neutralize the information advantage by renegotiating the relationship, then the agent is at an extreme disadvantage, and the principal should be able to push changes through.

What, exactly, is pushed through, though? This requires a review of the intelligence literature.

What Is Intelligence?

Some researchers have claimed that intelligence studies, as a serious academic subfield, is lacking a set of foundational works (Marrin, 2016); this research supports that claim. It is worthwhile to demonstrate the validity of this claim, as it is one of the most powerful examples of particular importance in looking at information advantage. This

4 This research treats intelligence organizations and the government as unitary actors. Although some individuals have served other governments when providing intelligence information—including Aldrich Ames, Ana Montes, and Robert Hanssen—these are not agents as the term is defined here, as they were spies who infiltrated intelligence organizations on the orders of similar organizations in foreign states. These individuals’ parent agencies could not independently offer contracts with another government, and any dealings with other governments were on the terms that the principals negotiated.

example focuses on language and definitions. Language is a means through which to

transfer information; a common understanding of terms’ definitions thus has a significant

impact on the location of the information advantage (McKeown, 1993). How, then, is

intelligence defined in the literature? An examination of the intelligence literature shows

a reliance on (or only slight modifications to) the definition that Mark Lowenthal (2012)

proposed in his primer on intelligence studies:

Intelligence is the process by which specific types of information important to national security are requested, collected, analyzed, and provided to policymakers; the products of the process; the safeguarding of these processes and this information by counterintelligence activities; and the carrying out of operations as requested by lawful authorities. (p. 9)

It should be noted that Lowenthal did not create this definition, as essentially the same definition appears in military doctrine as far back as 1955 (Clark, 1955), but his formulation is the most recognized. It is quite descriptive, it clearly delineates the mechanical process by which intelligence is created (the intelligence cycle), and it provides value for scholars who wish to examine specific steps within that cycle. In terms of understanding the costs of conducting intelligence, Lowenthal’s definition undoubtedly indicates that those who perform the function (i.e., the intelligence organizations) have an information advantage, as this definition is focused purely on execution.

However, for almost any actor beyond an intelligence organization, this definition is not exceptionally useful. For instance, fails to explain why one would need or want intelligence or what the value proposition of intelligence would be. Lowenthal’s definition offers no real differentiation from general problem-solving or even from many types of decision-making processes. Compared to the wide range of problem-solving

frameworks that have been proposed over time (Boyd, 1987; Isaksen et al., 2000; Polya,

2014; Treffinger et al., 2006), nothing in the Lowenthal definition truly identifies

intelligence as distinct from general problem-solving. All such frameworks have

identified the essential basic steps: When faced with a problem, one collects pertinent information, analyzes data to develop solutions, and then provides the solutions.

Lowenthal adds matters of secrecy that come along with safeguarding and conducting this problem-solving at the behest of a legitimate power, but that alone does not make the

definition unique to intelligence; rather, it just suggests that the actor has private

information. Simply replacing the word intelligence or its derivatives (such as

counterintelligence) with a term such as weapons or even furniture works just as well

(e.g., “Furniture acquisition is the process by which specific types of sitting needs

important to people’s bottoms are requested, purchased, analyzed for comfort, and

provided to sitters”). There is nothing of specific value to the understanding of

intelligence in this definition. This research is not the first to comment on the problem of

defining intelligence or on the weakness of Lowenthal’s definition (Marrin, 2016), as this

topic was the subject of perhaps the most infamous attempt to create academic debate in

intelligence studies. This attempt both highlighted a problem in this field of research and

identified a key point regarding how language can become critical to securing

information advantage.

Although Walter Laqueur (1985) first noted that the theories of intelligence had

all failed to materialize and that a lack of definition development was a key component of

this failure, the next major attempt to create discussion on this matter did not occur until

2002. Seeing the lack of development as a problem of an intelligence definition, Mark

Warner (2002b) penned an article with the express purpose of generating an academic debate in the hopes that stronger definitions, or at least a strong discussion of those definitions, would emerge. That did not happen, however. Warner’s article has been cited more than 100 times over a 15-year period, but the academic debate has not appeared.

Only a handful of other authors have attempted to push the debate about the definition of intelligence forward (Breakspear, 2013; Sims, 2005; Ron and Hoffding, 2015), and their

works have largely fallen flat. The most significant impact of Warner’s (2002b) article

was that it became the exemplar of how the field of intelligence studies has failed to generate cumulative knowledge or to create a debate in any topic area. As applied to intelligence reform, the starting position of information advantage still is seen as resting with the agents, the responders still are seen as seeking to preserve the status quo; this is the expected result of using traditional assumptions about principal–agent relations.

However, this also demonstrates that definitions of intelligence are necessary; a unitary definition offers little theoretical flexibility with which to examine the topic from other angles. As part of his article, Warner (2002b) found a variety of abandoned definitions that others had proffered to highlight their strengths and weaknesses; the thus hoped to spur dialogue. One definition of note is what the Task Force on Intelligence

Activities (also known as the Clark Task Force) proposed; this task force’s streamlined

definition linked the concept of intelligence to customers’ desires to make decisions:

“Intelligence deals with all the things which should be known in advance of initiating a

course of action” (Clark, 1955, p. ix; see also Dulles, 1963). This definition is interesting

for a few reasons:

1. It links the concept of intelligence to that of states’ sense-making need, thus

creating a method of interpreting the world and other actors’ signals.

2. A key figure in the development of U.S. intelligence, Allen Dulles (1963), in

his autobiography, labeled Clark’s as perhaps the most useful definition of

intelligence.

3. Sims (2005) made one of the few attempts (aside from Warner’s) to develop a

definition of intelligence, although this attempt did not have much success.

4. The task force, which ultimately failed to create any change, rejected their

initial, novel definition in favor of the extant military doctrinal definition,

which essentially matches Lowenthal’s version.

Though the Clark Task Force rejected their own new, novel definition, it is used in this research for the following reasons:

1. It links what intelligence provides to the reason that it is useful (i.e., making

sense of the work in which the state exists), and it states a value proposition

for intelligence.

2. It has been referenced in previous attempts to create academic dialogue, albeit

without success.

3. It highlights, in the case of the Clark Task Force, how a proposer who accepts

established definitions (rather than imposing or developing new definitions)

surrenders the information advantage.

This underutilized definition provides a useful definition for this research, and its history provides an excellent example of how intelligence studies has remained relatively stunted. With this definition in mind, it is worthwhile to look at the broader intelligence literature and to delve into the related works on the proposed explanations to determine

whether they are based on external stimuli or internal processes.

Themes in Intelligence Reform

As mentioned at the start of this chapter, the body of intelligence literature is large. Most of the works in this field, however, are not academically useful and are instead geared toward entertainment or other nonacademic areas. Most of these studies are not academically serious, as they simply do not seek to further human knowledge.

Instead, most recount the authors’ careers in intelligence or describe the role of intelligence in the context of a significant historical event. Only few deal with reform in particular; some of these can be considered academically rigorous,5 but most are not.

Although, in this study, individual works are examined in the context of specific

explanations, a broad survey of the literature reveals four common themes:

1. Reforming intelligence is difficult.

2. There is great reluctance to change in this field, both within intelligence

organizations and from nonintelligence principals.

3. Intelligence organizations hold an information advantage over proposers.

4. There are sufficient negative incentives in the U.S. government’s structure to

cause potential proposers to focus on other, nonintelligence issues rather than

on trying to overcome the obstacles listed above.

5 The historical documents that were of the greatest utility for this research include Warner and McDonald’s U.S. Intelligence Community Reform Studies Since 1947 (2005); Warner’s The Rise and Fall of Intelligence (2012); Best and Boerstling’s “Proposals for Intelligence Reorganization, 1949-1996” (1996); and Gutjahr’s The Intelligence Archipelago (2005). Special note must be made of Gutjhar, who provided all the original documents from her own historical research for this research effort.

Most potential explanations, whether they are based on external stimuli or internal

processes, are included in Themes 2 and 4. Both reluctance to change and the incentives

from the governmental structure can be manipulated to alter reform outcomes. These

obstacles must be directly addressed if they are to be overcome. Different explanations

involve different specific variables to accomplish this goal. The next few sections explore

these proposals. This research challenges the themes above and proposes that Themes 1,

2, and 4 are true but have little explanatory power.

The explanation proposed in this research actually has a lot in common with the

existing explanations in terms of the themes listed above. Scholars have universally

agreed that intelligence reform is hard; after all, so many attempts have failed. They have

also agreed that there is generally a great reluctance to change and that the incentive

structures of the U.S. government do not offer positive incentives to focus on reform and

see it through. However, this research differs by denying the other authors’ assumption

that these incentives are variables; it instead recognizes them as constants and treats

information asymmetry as a variable.

Before delving into the specifics of each explanation, there is a need to define

reform and change, as this allows a common position to be taken when comparing the

suitability of explanations to the historical record. Considering the close association

between the military, war, and intelligence, the academic works on military innovation and change are very useful (Davidson & Glass, 1948; Keegan, 2010; Kent, 1949; Petee,

1946). The ideas should also easily map onto the framework of this research.

With regard to change, Jensen (2016) discussed doctrinal change in the U.S.

Army, thus providing an excellent foundational definition and a borrowable scale for

measurement. Jensen’s four-point qualitative scale assesses changes in doctrine reform as

major, minor, or “old wine in a new bottle” (surface-level changes presented as being

more significant than they are); the fourth point on the scale is the possibility of no

change. However, there is a weakness in this scale with regard to determining the

distinction between major and minor changes. These are qualitative assessments, so ensuring that the line between one category and another is bright and consistently applied can be vexing. Extending this same logic, some might apply the same arguments to the

“old wine in a new bottle” category by claiming that it is a minor change. To simplify this research, qualitative measures are placed into four categories (mirroring Jensen), with the major and minor categories collapsed into a single category (representing change) and the

“old wine in a new bottle” and no-change terms collapsed into a single category

(representing failure). Additionally, the “old wine in a new bottle” term is relabeled (with the irony fully acknowledged) as superficial change. The full definitions for the purposes of categorization can be found in Appendix B.

Where should change measurement begin? Jensen (2016), in his work on doctrine, recognized—as did the authors of works on military innovation—the need to identify a start point (Adamsky, 2010; Avant, 1994; Zisk, 1993). It should also have a discernible end point. A reform should be a moment in time rather than a long-term shift in an organization’s culture or behavior—even though the reform should initiate long- term shifts in that culture and behavior. By recognizing the need to have an observable start and end, as well as recognizing that change is a qualitative act, it is possible to narrow the broad universe of U.S. intelligence reforms such that the competing explanations can be tested and compared in a controlled and logical fashion.

The matter of having identifiable start and end points highlights that this research essentially rejects incrementalism out of hand. Incrementalism rests on the notion that actors, whether individuals or organizations, have greater openness to small changes than to large changes; small changes thus require less convincing (Gregory, 1989; Johnson,

1988). These smaller changes can be consecutive and can occur in a rather rapid fashion

(Lindblom, 1959, 1979). As a visualization, if a histogram were made of changes, then incrementalism would predict a gentle, ever-rising slope. Translating this into intelligence reform, significant changes are infrequent, which explains why so many reform efforts fail to create change at all. The perspective of incrementalism even questions the fundamental assumptions of this research, as the presence of rapid, small changes would mean that reform is not needed. It should be noted that, although some attempts have been made to reconcile incrementalism with punctuated equilibrium (which is discussed in the next section), this research treats them as opposing, competing concepts (Howlett

& Migone, 2011).

Spinning off of incrementalism is the policy-streams model, which includes the issue of multiple causality. This model suggests that no single causal factor should be expected to be responsible for a given change; rather, a combination of two or more streams (explanations in this case) generates the necessary momentum to move agendas forward (Kingdon & Thurber, 2011; Zahariadis, 2014). As it relates to this research, this means that many of the explanations that are explored herein can all contribute to the outcome. The only explanations that cannot coexist are the external-stimulus explanations based on a government’s divided or unified status, as a government has to be one or the other. However, nothing inhibits an interaction between the event

explanation and, for instance, the coalition explanation. Having identified these

boundaries, it is now possible to look at the possible explanations by using the referenced

bins of external stimuli and internal processes. These all are isolated, single-causality

explanations, but—unless the exclusion of other explanations has been directly

identified—multiple causality can be assumed to still be in play, and it thus needs to be

explored so as to identify any explanations that have an impact on the outcomes.

External Stimulus: The Event

Using Jervis’s (1976) typology of external stimuli and internal processes, the

method of starting from the outside and working inward when looking at potential

explanations seems as good as any technique. The furthest potential external point is the event that caused the reform to be initiated. It follows, then, that the characteristics of this event are the independent variable of interest. The logical line of reasoning is that big events create big reforms. A big event is politically valuable, as it generates large amounts of momentum and sufficient justification for the proposer to impose changes by establishing political maneuverability (Van Eeten et al., 2011; Tama, 2011). A big event brings attention to the need for change and for the political justification to undertake that change (Betts, 2007).

The foregoing is a recurring theme in the non-theory-based intelligence literature.

Pillar’s (2011) critique of IRTPA rests on this explanation: Both Congress and the White

House felt the need to do something—anything—to demonstrate that they were creating change in the intelligence community after the attacks of September 11, 2001. This also

44 fits in well with the intelligence community’s creation myth, which links the formation of the modern U.S. intelligence structure to the attack on Pearl Harbor that initiated World

War II (Berkowitz & Goodman, 1991). These claims, in particular—as well as others not cited here—come from individuals with sound academic credentials. However, these individuals did not base their claims on a particular theory and did not offer any evidence outside of anecdotes regarding a specific case. More is needed.

One theory that would map well onto this explanation is punctuated equilibrium theory (PET), which suggests that—rather than observing small changes over time—it is more common for policy topics to feature a general calmness that is interrupted at intervals by large sea changes. These large changes occur when an actor is dislocated from a policy topic and replaced by another actor (Baumgartner et al., 2009;

Baumgartner, Jones, & Mortensen, 2014).

An example of this is the topic of crime and criminal punishment. Due to the rise in crime in the United States during the 1960s, the federal government inserted itself into the criminal-punishment space, displacing the influence of state and local governments.

With the passage of Omnibus Crime Prevention and Safe Streets Act (1968), the federal government became the primary influencer in the policy space, thus triggering a short spike that included massive changes in how criminal prosecution and punishment occurred (Baumgartner & Jones, 2015). Change, in this view, tends to be swift and large, followed by periods of little to no change.

Of course, intelligence has one characteristic that is not found in most policy areas: The centrality of secrecy to intelligence means that new actors cannot insert themselves into the process to create these changes. Established actors can create or bring

in new actors, but an outside element cannot force its way in. There is one exception to

this—when a foreign intelligence service infiltrates an organization—but in that case, the

foreign actors are not seeking to change the organizations; instead, they simply are

seeking access to private information. They even desperately try to keep that access

hidden. Thus, there is more emphasis on external events to be drivers of change and to

create the policy space needed for reform. Going back to the logic that big events make

big reforms, this requires defining what is meant by big.

Focusing on the event does require an acknowledgement that not all events are

created equal. Some events have a higher visibility, including among those who do not

regularly interact with that policy topic (Birkland, 1998; Gingrich, 2014). An event that

the public at large learns about has high visibility (Kiousis, 2004; Koopmans, 2004).

Because of the impacts and implications of the function in question, some events are

significant only among the parties who are normally engaged in that field; the event is

highly salient only for those people (Hannigan & Kueneman, 1975; Linder & Peters,

1989). Saliency, as the authors of the cited works have all attested, is difficult to define.

For the purposes of this research, and to align with the established definition of intelligence, saliency requires a clear impact on the government’s decision-making and on the utilization of its action arms within the broader national-security enterprise.

Examples of this include going to war over nonexistent weapons of mass destruction and committing to large combat operations against a woefully underestimated foe. It should be assumed that the facets of visibility and saliency do not necessarily covary. An event with high public visibility might also be highly salient within the policy space—or it might not be. However, PET’s effects, if measured for either visibility or saliency, should

be visible whenever the event can truly provide an explanation for intelligence-reform

outcomes.

External Stimulus: Domestic Politics

Moving closer to the reform—though still within the realm of external stimulus— the domestic political context at the time of the reform is another potential explanation

for the reform’s outcome. Although potentially linked to other external stimuli related to

the event, this explanation suggests that the struggle among political actors (who seek to

impact government control in a broader sense) is what truly matters. The content of the

reform itself does not matter as much as the fact that conducting the reform requires

political posturing. This posturing could be intended to embarrass or constrain an

opposing party, to control damage, or to push through change when (in the broader

government context) one party can shift powers into a specific branch of government

(Berliner, 2005; Kitts, 2006; Nielson, 2003).

Of course, this explanation cannot apply in a parliamentary government, but as

this research is focused on U.S. intelligence reform, it can apply here. The most important

aspect is the divided or united control of the executive and legislative branches (or the

divided control of the houses within the legislative branch).

The literature provides competing theories as to the relevance of partisan control

in the government as it impacts the formulation of policy and the execution of reform.

One line of argument suggests that reforms can truly be made only under a unified

government. In that case, the controlling party has sufficient political weight to see its

agenda come to fruition as the reliance on checks between one branch and another is not

a major concern (Coleman, 1999; Durbin, 2017; Thurber, 1991).

The opposite side of this argument is that, in times of divided government, it is

significantly more difficult to perform basic functions—much less to enact reform

(Clarke, 1998). This includes Congress’s attempts to directly or indirectly limit the

freedom of maneuverability in policy formulation (Epstein & O’Halloran, 1996;

Lohmann & O’Halloran, 1994) and the executive branch’s attempts to prevent legislative encroachment; each creates gridlock (Edwards et al., 1997). Stopping reform becomes a way to limit the opposing actor. Related (although not entirely the same) is the fact that reform can be used to anticipate the opposing party (Milner & Rosendorff, 1997).

These perspectives on unified and divided governments are not in competition. In fact, they are complementary (despite being mutually exclusive). The competing perspective is the proposal that political control has no real impact on policy formulation or execution (Howell et al., 2000; Krehbiel, 1996; Mayhew, 1991; Rogers, 2005). For intelligence-reform outcomes, this is a key observable; if political control of the government really matters, either in unity or in division, then a clear pattern of reform outcomes should match these swings in political control. However, if such a pattern is not apparent (or is even completely absent), this would not be surprising because of the unique characteristics of intelligence, such as the inability to bring actors into the system

(or expel them) and the principal’s monopoly over the product.

If this explanation has little power, then the fact that intelligence has (from a legislative perspective) such a small constituency justifies partisan control’s failure to explain the outcomes (Zegart, 2011; Zegart & Quinn, 2010). As scholars have explored in

48 other works, legislators’ primary motivation is to ensure visibility among their constituency, whether this is measured in terms of voters (Peltzman, 1984) or funding sources (Kroszner & Stratmann, 1998); intelligence simply does not provide visibility among either group (at least, not in an appealing way for most legislators). If this explanation has no supporting empirical evidence, then it should be clarified that this research is not directly seeking to add to the arguments that political control does not impact policy formulation. Rather, this research is based on the assertion that intelligence is sufficiently different from other policy issues and that its constituency is so small as to be unique among policy issues. Although intelligence is closely linked to public goods, as it is part of the national-security enterprise, it is more accurately considered a club good; this has implications for actors’ motivations.

Internal Processes: Coalitions

Unlike the studies that apply external-stimulus explanations, the few theoretically based studies on intelligence reform are focused on internal processes. These works seek to determine why reforms are less than optimal, but more is needed for their conclusions to fit with this study’s research question. To get a full explanation, it is necessary to blend this question with those from past works on coalitions. First, however, actors’ behaviors

(separate from coalitions’ behaviors) must be considered in isolation. Specifically, the bureaucratic status quo preference in intelligence reform is a key concept in this area. The most prolific author within this subfield is Amy Zegart (2000, 2005, 2007, 2011, 2013), who has examined the issue several times. There is a commonality throughout all of the

works that rely on institutionalism, and this foundation has contributed a great deal of

insight regarding the ways in which governments and bureaucrats function (March &

Olsen, 1983, 1995, 2010; North, 1993; Pierson & Skocpol, 2002). Generally, authors in

this field have proposed that organizations essentially chose to let organizational rules

shape and even constrain their behaviors and goals. The rule set’s incentives feed into the

choices regarding behaviors and goals, with the result that the system in which the

organizations exist becomes more stable (Greenwood & Hinings, 1996). This focus on

resistance to change (rather than on change itself) provides an easy first step toward

explaining why reforms fail (Dougherty, 1994).

This assumption about the rules that promote stability leads to another assumption

about actors’ behaviors: Because the system incentivizes stability-increasing behavior,

the actors choose those behaviors and reject any ideas that bring about disruption

(Buckho, 1994). To put it more plainly, an assumption can be made that actors only chose

disruptive behaviors when the system no longer provides incentives to maintain the status

quo. This nests quite well with a variety of perspectives, including those from well beyond intelligence studies such as those on bureaucratic change (Wilson, 1984, 1989), legislative evolution (Davidson & Oleszeck, 1977), military innovation (Rosen, 1994), and even private industry (Frynas et al., 2006; Hannan & Freeman, 1984). Below the organizational level—even down to the individual—the accumulated evidence is that the status quo preference may hold even where there is more incentive to change than to preserve the status quo, as the cost of greater disruption works against change

(Samuelson & Zeckhauser, 1988).

This is a constant theme throughout Zegart’s (2000, 2005, 2007, 2011, 2013)

works on intelligence reform. From an intelligence organization’s perspective, the status

quo provides for a flow of resources, which allows the organization to exist and even

flourish; disruption jeopardizes this flow (Fernandez & Rodrik, 1991; Kopp et al., 1997).

Thus, intelligence organizations work hard to prevent reform, regardless of whether it

comes from the legislative branch or the executive branch. In the executive branch, this

even extends to single organizations in which the principal (the proposer of change) is not

the president or a member of Congress but an agency director who seeks to reform his or

her own organization. Proposers of change, regardless of their origin, are limited in the

amount of time, energy, and political capital that they can (or are willing to) spend on intelligence reform. If resistance is high, and if other areas—particularly those with larger constituencies or with more publicly visible impacts—offer greater incentives, then the incentive to implement reform disappears (Zegart, 2007). Zegart even proposed policy prescriptions that could change the larger incentive structures of the U.S. government and

that would encourage proposers to maintain their attention on reform and that would shift

responders away from fighting change. This incentive change should increase the

likelihood of an intelligence reform’s success, notwithstanding the acknowledgement that

those policy prescriptions are unlikely to manifest, as they would upset the status quo in

other areas (Zegart, 2004, 2011).

Garicano and Posner (2005), in one of the few non-Zegart theoretical pieces on

intelligence reform, applied an economic model of resource allocation that utilized

institutionalism; unsurprisingly, they presented essentially the same findings. The

incentive structures in place can cause an actor to prefer the status quo, but if the

incentive structure is changed, then the actor may prefer to follow the proposed changes

51 toward a new status quo. For Garicano and Posner, the primary incentive, then, is to offer side payments that should push actors toward preferring efficient change and away from the inefficient status quo. There is no reason to suspect that other types of incentives would have different results.

Combining Zegart’s (2000, 2005, 2007, 2011, 2013) various works with that of

Garicano and Posner (2005) provides an almost (although not quite) fully formed explanation of the outcome variation in intelligence reform. From this view, reforms fail because one party (the responders) prefers the status quo, and because the incentives for the other party (the proposers) are not strong enough to cause them to dedicate their resources to forcing change. Reforms thus succeed when the proposers make sufficient side payments to the responders or when a change in the proposers’ larger incentive structures causes them to choose to expend more effort on the reform.

The problem with this logic is that it fails to explain the actual outcomes in the historical record; in fact, there are no historical examples that support this theory. When examining the historical record, the most successful reforms did not include side payments to recalcitrant organizations. NSA 47 and the Church Committee offered no such positive incentives, for example. Incentive changes that sway responders’ positions are neither more nor less popular in successful reforms than in failed reforms. In fact, in a few instances, side payments were offered in the form of increased budgetary discretion

(House Report 107-789), but the responders held on even more tightly to the status quo

(Public Law 107-306). This explanation is intuitive and well-founded according to established theory, but it simply is a poor fit with the established record of cases.

This shortcoming can be addressed by marrying status quo preference to coalition

formation. Clearly, there are two roles: proposer and responder. It is not clear how many

actors are on each side, however. Each side has at least one, but there could be several;

for instance, the United States currently has 17 intelligence organizations, cabinet-level

representation for six executive departments, and the White House itself; in addition, 12

standing committees in the two houses of Congress have oversight over various portions

of intelligence activities (Office of the Director of Natioanl Intelligence, 2009). Thus,

there is the possibility that either role could feature many actors, which increases the

likelihood of coalition formation.

From a political perspective, larger coalitions are more likely to achieve their

preferred resolutions (Kelman, 2005; Pritchard & Slinko, 2006). Variations in the outcome of intelligence reforms, then, should follow a straightforward pattern: Identify

which side has the strongest coalition, and the result follows. If status quo preference is

(as Zegart, Garicano, and Posner have all predicted) the dominant position, then the

actors who can form a larger coalition should be able to stop reforms. The opposite holds

true as well: If the proposers can create incentives to sway additional actors to adopt that

role, then the ranks of those pushing for change swell.

It does not particularly matter why an actor choses one role or the other. Perhaps a

coalition’s organizer makes side payments (Riker, 1962) or creates such a tightly focused,

small-scale effort that almost all the involved parties can agree that the problem exists

(Heeks & Bhatagar, 1999). Perhaps actors see that the cost of the reform is diffused and

thus are willing to join in support of the change (Burman & Phaup, 2012; Etchemendy,

2001). Conversely, the actors may perceive that another actor has already offset the costs

of opposing the reform, which makes joining the status quo coalition a free-ride

opportunity (Olson, 2009; Sweeney, 1973). The important aspect of this explanation is

that one side, either the proposer or responder, can create a larger coalition. Whichever

coalition of actors is larger thus produces its preferred outcome; because the status quo

preference is the default for almost every actor—and because the system’s rules support it—in almost every case, the status quo coalition is the larger of the two groups.

The historical record, however, presents mixed results. The cases of the

Rockefeller Commission and the Pike Committee highlight this. The same events spurred the creation of these efforts, and initially, both limited the actors that could be added to the responders’ side. Still, the Rockefeller Commission deliberately expanded its opposition and created change, even as the Pike Committee floundered and eventually failed in spectacular fashion. The historical record does not support the idea that the larger coalition has an advantage in achieving its desired outcome.

Internal Processes: Information Advantage

There is one recent academic work on intelligence reform that has begun to branch away from the bureaucratic status quo model and into the realm of information advantage by attempting to answer this study’s research question (Why is there variation in intelligence-reform outcomes?). Durbin (2017) also utilized this study’s principal– agent framework and acknowledged that the bureaucratic status quo was a constant among agents. In the process, Durbin identified information advantage as one of two key conditions for a successful reform, with the other being consensus among the U.S. foreign-policy leadership at the time of the reform, which is best measured using the

domestic political configuration (one of the external-stimulus explanations discussed in this research). However, Durbin’s work has a significant weakness and thus has less

explanatory power than this research. This research seeks to address these issues.

The weakness resides in Durbin’s very lax differentiation of change, in which he

places adaptation, reform, and change all within a single area and does not attempt to

differentiate or categorize the amount of change. Because the outcome is the dependent

variable, some effort should be given to identifying which of these are actually change.

Without this, it is difficult to determine whether reforms are even necessary; it is theoretically possible, even, for incrementalism (through adaptation to the external world) to be sufficient. Numerous practitioners have demonstrated that this approach simply is not sound, and the results of this research support that conclusion.

The variation in explanatory power is nuanced. This research, like Durbin’s

(2017) work, is focused on the role of information advantage. When the principal holds it or denies it to the agent, change occurs; when the agent holds it, change does not occur.

Durbin’s work and this research differ with regard to how this plays out, however. Durbin relied upon established assumptions about information advantage in the principal–agent problem and viewed the principal as using the established mechanisms of oversight to overcome information advantage. This research questions those assumptions.

The most concise version is that reform is not an established relationship between principal and agent, so the established mechanisms of oversight may not be appropriate.

This research challenges two key assumptions of the standard principal–agent model: actors’ interest drift and information advantage. With these loosened assumptions, intelligence reform becomes a special case of the principal–agent model: renegotiation,

except with different expected behaviors (ones that match with the historical record).

This version shifts the nature of the principal’s problem away from a struggle to overcome information advantage using established tools and toward the act of setting conditions for a new dialogue so as to decrease information advantage, thus causing the

agent to struggle.

The issue of which actor’s interests drift from the original contract is important, as

it highlights a disconnect between the desire for the status quo and the standard principal–

agent model. If an event has caused a proposer to begin a reform, then the status quo is no

longer valid, but the responder will still wish to preserve it. The normal assumption is

that the agent’s interests have shifted, leading to the event or being highlighted because

of the event. However, when the agent is subject to the principal’s natural monopoly, this

shift in interests itself is a move away from the status quo. There is no opportunity to find

another principal whose interests are naturally closer to alignment. This is almost a

paradox: The agent wishes to keep the status quo because the resource flow depends on a

monopolistic principal, but shifting the status quo jeopardizes these resources. The

agent’s interests are essentially fixed and cannot change except through an acquired

interest in creating change in the status quo; the resulting resource flow trumps all else.

The crux of the matter is that the principal is no longer satisfied with the product.

It is very possible that the original contract’s product did not fully meet the principal’s

needs (i.e., the contract was made in error). Alternatively, the world may have changed,

causing the product to no longer fit with the principal’s needs. It does not really matter

why the product is no longer satisfactory. Regardless, if a reform is warranted, then the

principal’s interests have shifted.

This creates a special case of the principal–agent model. When the principal’s

needs shift away from the originally negotiated agreement, renegotiation of that

relationship is required. The drift in interests is constant, as it is in any principal–agent dilemma, but identifying which actor’s interests are actually drifting is important. In the case of intelligence reform, this research suggests that the principal drifts away from the agent, not the other way around. It is not clear if the principal recognizes this, though.

If the agent holds a constant information advantage over the principal, as assumed in standard principal–agent models, it is unclear how a principal could successfully renegotiate the relationship. In the special case in which the principal’s interest drifts, however, the information advantage can no longer be constant. A renegotiation means different costs and other changes, and the agent may not know these new costs or the

extent of what is needed to satisfy the principal. Even the principals may not fully know

the extent of these new costs or their actual needs. Information advantage thus becomes a

variable. The side that can claim the information advantage—or at least deny it to the

other side—has an asymmetric advantage. Though is model with a shift in the principal’s

interest is different from most principal–agent models, the special cases that account for

how actors can use information asymmetry to their advantage remain the same: adverse

selection when the principal holds the advantage and moral hazard when the agent holds

it.

This intelligence relationship exists within a hierarchical relationship of uneven

power in combination with a principal monopoly; thus, any agent who loses the

information advantage succumbs to adverse selection. When under adverse selection,

responders are unable to prevent changes because they cannot argue against those

changes due to a lack of information. The unequal power between the principal and the

agent, combined with the preference for status quo, means that it is not surprising that

any agent who has the chance to fall into moral hazard by leveraging an information advantage to gain a desired outcome (i.e., the status quo) likely will do so. This might be displayed through slow-rolling, voice, benign neglect, or a host of other tactics (Allison

& Zelikow, 1999; Golden, 1992; Gormley, 2014; Hirschman, 1978; Schurr & Ozanne,

1985). The specific tactics are not important; all that matters is that the responders use the tools available to them if they hold the information advantage. Assuming that the side with the information advantage maximizes the opportunities that this advantage presents, the issue is how to best observe whether, in an intelligence reform, the proposers have

created the conditions for selection advantage or for moral hazard. This can be done by

looking at how the proposers set the conditions for addressing the contractual

relationship—normally at the start of the reform effort.

Determining which side has the information advantage is challenging but not

impossible. Three distinct behaviors, each with its own logic, can shed some light on

which side has the information advantage. This explanation includes multiple

observables, as in the event explanation, and each has a distinct behavioral logic; they all

essentially have the same logical mechanism, however: the shifting of information advantage. There is potential here for multiple causality, including not just these behaviors but the observables from other explanations. Internal to this explanation, one assumption is that multiple behaviors demonstrate renegotiation; externally, this explanation may show that traditional multiple causality is in play.

The first observable is the direct linkage to the event itself. Proposers can choose

between two options with regard to addressing the event that initiated the reform. The first is to deny that their own interests have shifted and to assume that the agent’s interests have actually moved—likely as a result of the principals’ initial reaction to a contracted good or service being deemed insufficient. In that case, the predicted reaction would be for the principals to engage the established oversight and enforcement

mechanisms against the agents, thus generating sufficient incentives to bring the agents’

interests back in line. This blame-seeking behavior (Peterson, 1993; Pollack, 2007;

Stoker, 1998), although potentially cathartic, does not actually increase the utility of the

products from the principals’ perspective (Fenster, 2008). Those mechanisms were

established for the old, insufficient products. They do not generate the newly desired

products, and more importantly, they frame the discussion within the confines of the old

relationships, in which the agents held the information advantage.

The second option for the proposers is to delink the reform and the event, thus

creating some rhetorical space in the minds of both the proposers and the responders.

This does not deny the visibility or saliency explanations; it speaks simply to how the

proposers use the event to discuss reform with the responders. The event becomes an

example—a way to highlight systemic problems with the products. The implication of

renegotiation is clear. The principals have identified the products as insufficient, but—

rather than lashing out against the agents, although some punishment may be necessary— the principals seek to adjust the terms of the contract (i.e., to renegotiate). In other words, the proposers set the stage for adverse selection, as the responders may not understand the extent of the proposed changes in this rhetorical space (as opposed to the context of the actual events).

The second observable is that of the proposed solutions and of the changes that

occur due to the reform. Potential solutions can be generated in multiple ways:

resurrecting solutions from past proposals, using other states’ organs as a starting point

(or directly duplicating them), asking the responder for suggestions, or even creating

entirely new ideas. These have all been tried in various reforms. What matters is the content of the proposed solution, and for this, there are only two paths: Propose a known solution or propose a previously unknown solution. The garbage-can model suggests that the former is more prevalent than the latter and leads to greater acceptance among responders (Cohen, March, & Olsen, 1972). This position stems from the bureaucratic status quo preference that the other internal-process explanation (Hastedt, 2007) relies upon. This, however, denies the possibility of renegotiation, as the recycled solutions were made in the context of the existing relationship at an earlier point. These solutions thus reflect the old relationship, and any renegotiation should be separated from these previous thoughts and boundaries. The garbage-can model and recycling of the propositions succeeds by ensuring that the responder holds the information advantage,

not by reducing status quo resistance.

With their greater knowledge of the recycled solutions’ actual costs, agents

succumb to moral hazard and generate arguments as to why the proposed (resurrected or

recycled) changes will not work. Creating previously unknown solutions, however,

passes the information advantage to the principal. Although the principal may not know

the full costs of the proposal, neither does the agent. This denial of the agent’s

information advantage is just as effective for the principal, who also holds a hierarchical

power advantage. This method is thus de facto adverse selection.

The third observable is related to how the two sides use language to transmit data.

Language is a powerful tool in this process and thus plays a considerable role in establishing where information advantage resides (Dyer & Singh, 1998; Mayr, 2008;

Morand, 2000; Nadler & Shestowsky, 2006). For a reform to progress—either by

creating or failing to create change—a common language must be used. Again, the

proposer has two clear options: Utilize the current terms of art (which the responder

knows well) or impose new definitions. The results should not be surprising. Although

utilizing established terms helps to more quickly establish common understanding, this

method also hands the information advantage to the responder, thus granting the

opportunity to slide into moral hazard and argue against changes. When a proposer

imposes new terms and definitions, the responder is robbed of the information advantage

and placed in adverse selection.

Though each of these three observables has a distinct logic, they all have a

commonality of establishing information advantage. The party who can gain this

advantage is able to resolve the issue in an advantageous way. However, there is another

commonality among the observables: The proposer chooses which path to take. The

choices that the proposer makes—whether to seek blame, recycle solutions, or rely on old

definitions—determines whether the responder is stuck in adverse selection or succumbs

to moral hazard. This is a reflection of how the proposer approaches the reform: whether

as a renegotiation or simply as the execution of a relationship that existed before the

effort. More likely than not, proposers must behave in more than one of these ways if

they are truly pursing renegotiation.

Armed with these four explanations and their various observables, one can create

61 testable hypotheses, measure the broader historical record and test to determine each explanation’s validity (or lack thereof). This is the focus of the next chapter.

Chapter 3: Examining the Universe

The goal of this chapter is for the explanations from the previous chapter to be tested beyond one or two test cases. When that is done, the established explanations fall flat. However, as this chapter shows, this research’s proposed explanation does not suffer the same fate. Identifying when proposers are truly approaching a reform as a renegotiation (unlike the variety of other explanations) offers a consistent result: change.

The proposers shift the information advantage away from the agents and thus are able to create changes. The converse is also surprisingly consistent, when a proposer does not behave as one would expect in a renegotiation, failure is the result. Closing the gap between the principal’s old and new desires—through renegotiation, rather than an attempt to counteract the agent’s perceived drift—best explains an intelligence reform’s success or failure. This chapter first discusses the nature of the universe of cases, including some of the difficulties that the universe presents. From there, the explanations of the previous chapter are turned into testable hypotheses, and the results of the testing are analyzed to determine how consistent each explanation is when determining whether an intelligence reform succeeds or fails. The results of the tests demonstrate that the established explanations do not meet the necessary or sufficient conditions for creating successful intelligence reforms; the proposed explanation’s observables, however, can create sufficient conditions.

Establishing the Universe

As mentioned earlier in this research, the bulk of the literature on intelligence

reform has centered on just two cases: The National Security Act of 1947 and the

Intelligence Reform and Terrorism Prevention Act of 2004. There are many other

instances of reform, however. An examination of these historical but atheoretical works

can be used to rapidly populate the universe of cases to nearly 50. This number itself adds

a bit of emphasis to the relevance of the question posed earlier: Why should anyone care

about this topic? If the U.S. intelligence community has been around for fewer than 70 years but has had almost 50 reform efforts, then the mean time between efforts is less than a year and a half. Though this mean is artificial (as some efforts occurred in parallel), clearly, these reforms did not satisfy all the customers’ desires and needs, as the occurrence of reform is so frequent. Why, then, do so many reform efforts fail to create change? Table 1 lists all the possible cases in the universe along with some additional information of interest; some cases also include an explanation of why they were not included in the data set.

This is only the potential universe, and not every potential case was valid. Some culling of cases needed to occur; thus, the final universe was narrowed to 36 cases. This reduction was the result of data grooming to create a common and consistent set of standards for the creation of a valid data set. A prime example is the combination of the

Clifford and Cline proposals. Some historical works separate these into distinct instances

(Gutjhar, 2005). Cline’s proposed changes to U.S. intelligence were an unsolicited set of recommendations that were presented in an atheoretical work—which was a combination

of autobiography, history, and exposé of current events (Cline, 1976). Clifford, however, gave testimony before Congress on his suggested changes to intelligence capabilities; in the process, he quoted Cline (U.S. Senate Committee on Government Operations, 1976).

The difference is quite clear: Clifford acted under a solicited reform effort, but Cline did not. Though the total number of cases could be rapidly expanded by accounting for every unsolicited suggestion on intelligence reform, serious doubts remain as to the value that these cases would add to the data set. It is not clear how one would determine whose unsolicited suggestions are worthwhile for consideration. Cline’s name is still attached to this case, as Clifford directly cited him, but what of the other atheoretical works? Should their unsolicited advice be included because of some perceived authority due to their authors having served in the intelligence realm? What of think tanks that publish their

opinions so that they can be shaped into proposed policy? This could be a slippery slope,

so only those efforts that a branch of the government sponsored were considered valid in

this research. From a testing perspective, to do otherwise would greatly increase the

number of failed cases, as unsolicited suggestions that lack governmental sponsorship

have no means of creating change. The result is somewhat tautological: A government

entity (whether legislative or executive), not an outside party, must solicit a reform effort

in some form.

Table 1. Potential Cases

Although cases such as those of Clifford’s and Cline’s became entangled into a

single case, in the history of U.S. intelligence reform, the opposite situation can also

occur, thus creating a need to disentangle cases. IRTPA presents perhaps the most

notable example. One could treat—as many scholars have—IRTPA as a single case.6

However, three reform efforts (two direct and one indirect) were at play. Working in

almost parallel timelines, these three efforts converged as IRTPA. The attacks of

September 11, 2001, resulted in two investigations, each of which had associated reform

efforts: (a) the Joint Inquiry Into Intelligence Community Activities Before and After the

Terrorist Attacks of September 11, 2001, and (b) the National Commission on Terrorist

Attacks Upon the United States. These bodies made many similar recommendations for

reform, however, so it is impossible to properly allocate credit. That is why most works

do not attempt to disentangle them. In this research, however, they are disentangled; this

is possible because both failed to create change. An argument could be made that, due to

their failure, they should be lumped together, but examining them independently shows

that the bodies pursued different paths to failure, and that conclusion is of interest to this

research. The Commission on the Intelligence Capabilities of the United States Regarding

Weapons of Mass Destruction is also often indirectly associated with IRTPA. Though

IRTPA was passed prior to the conclusion of that commission, many of the commission’s findings and recommendations were similar to the nearly parallel works of the September

11 reform efforts, and the George W. Bush administration touted the fact that many of the

6 Allen’s Blinking Red is perhaps the best example of this; it blends aspects of the distinct but related Joint Inquiry Into Intelligence Community Activities Before and After the Terrorist Attacks of September 11 (2001) and the National Commission on Terrorist Attacks Upon the United States.

commission’s recommendations had already been applied via the enactment of IRTPA

(White House, 2005). The problem is that those recommendations were superficial.

The issue of replicability also led to some cases’ rejection. Several of the potential cases in the universe, for example, had poor documentation. There may be evidence that these cases existed, or even still exist, but there is not sufficient evidence for someone to accurately render judgment regarding their outcomes or what transpired during the cases.

For a handful of very recent cases—such as Defense Intelligence Agency 2020, NSA 21, and the Brennan CIA reforms—a fair assumption is that currency and secrecy limit the available information. Aspects of the NSA and Brennan reforms are potentially still unfolding, as it has been less than two years since Brennan stepped down as director of the CIA (Mazarakis & Shontell, 2017) and less than a year since the NSA directorship changed hands (NSA, 2018). The agencies in question still regard some aspects that would be of value to this research—such as changes in organizational structure—to be classified. In the case of DIA 2020, the author’s efforts to discover unclassified materials through interactions with DIA historians and individuals directly involved in the reform effort revealed a lack of documents, classified or unclassified, beyond some press releases and a very brief PowerPoint presentation.7 Then there is the legendary, perhaps

partly mythical, Bruce–Lovett Report. Though authors of secondary sources (Grose,

1994; Schlesinger, 1978) have mentioned this report offhandedly, archivists and

historians have not found any copies, despite scouring the national archives and both

Dwight D. Eisenhower’s and John F. Kennedy’s presidential libraries (Best, 2004). In

7 Through personal contacts, the author engaged with individuals who were directly involved in the creation of DIA 2020 to discuss the process and to discover any available artifacts. The result was only a short, unclassified PowerPoint presentation. When questioned if there was a written document or a longer, classified presentation, all individuals responded that no such documents existed.

68 such a situation, that case cannot be included. There is no way to verify or replicate the claims that the secondary sources make about what this report examined, what its findings might have been, or what changes may have been attempted as a result.

Regarding the issue of culling cases via mergers, as in the Schlesinger Report and the second revision of National Security Counsel Directive 1 (NSC-1), highlights an important point about assessing outcomes in relation to the primary research question:

This research does not place a value judgement regarding whether a change had a positive or negative impact on the principal. If a reform effort created a change that was later found to create new flaws, thus leaving the principal unsatisfied, it was still considered a successful reform in this research because it created change. A reform that returns a situation to the status quo before the previous reform is still likewise considered a change. The true quandary of this research relates to why only a few reform efforts have been able to get to the point of creating change, with the majority of these efforts simply failing to produce change, either good or bad.

A related assertion should be made explicit by demonstrating how the universe of intelligence-reform cases begins to diverge based on the outcome condition of creating change. Table 2 shows the reduced universe, after culling, and these cases’ assessed outcomes. As referenced in previous chapter, this scale is borrowed from Jensen (2016), and the full counting rules used in the assessment can be found in Appendix B.

Table 2. Culled Universe With Assessed Outcomes

Selecting a Method

The number of cases regarding the outcome of interest (change) presents a quandary. The outcome of interest is qualitative in nature, but 36 cases are too many for

traditional, qualitative in-depth case studies, at least if the intent is to cover the entire

universe (Schneider & Wagemann, 2006). The only way to accomplish this would be to

select just one or two cases and to thus ignore the vast majority. To avoid the taint of cherry-picking the entire universe would have to be used to identify why the particular

one or two cases were of such interest and warranted further examination in more traditional in-depth studies.

Likewise, the number of cases is too small to reliably use traditional quantitative techniques. It is possible to generate a larger N by examining the universe of something other than reform efforts—perhaps by looking at specific recommendations. As the data gathering for this research reveals, N could thus be well over 1,000. However, this technique also presents problems. If a reform effort is fully broken down to its core components, which are then isolated from the other aspects of the reform, it is difficult to truly discover the relationship between the reform and the outcome. Regarding the issue of recommendations, the number of findings and recommendations varies wildly from effort to effort, so it can become difficult to control (and thus equitably analyze) the universe. This can also lead to an unacceptable loss of nuance in examining the changes that result (or fails to result) from reform efforts.

As it is not possible to use either traditional qualitative or quantitative methods, this research instead relies on qualitative comparative analysis (QCA). QCA is a fine fit for the dependent variable, which is qualitative in nature; this method also allows for examination of the whole universe so as to identify cross-case patterns, as more traditional qualitative techniques would be unwieldy (Schneider & Wagemann, 2006).

The traditional qualitative and quantitative methods’ weaknesses can be mitigated by applying QCA, so QCA is the best fit for examining the problem of variation in reform

outcomes (Ragin, 2014).

However, using QCA also requires a slight shift in thinking regarding the

translation of the explanations into testable hypotheses, the ways in which the

observations are made, and the types of measurements. QCA, at its heart, is about set

comparison (Ragin, 2014). There are several types of QCA, but they have some

commonalities: The work revolves around organizing cases’ membership scores into sets,

identifying relationships between phenomena as those among sets, and interpreting those

relationships in terms of their sufficiency and necessity (Berg-Schlosser et al., 2009).

Most variations on QCA revolve around the commonality of membership scores, such as

crisp-set QCA (csQCA), which scores cases in a binary fashion (Rihoux & De Meur,

2009), and fuzzy-set QCA (fsQCA), which gradates cases (Ragin, 2009). Other

variations, such as multiple-value QCA (mvQCA) and temporal QCA (tQCA), attempt to

address scoring by acknowledging multinomial conditions or accounting for time, but at

their core, these variations are all about scoring cases to properly frame the relationships

among sets (Caren & Panofsky, 2005; Cronqvist & Berg-Schlosser, 2009). In this research, csQCA is utilized; the differences between this and the other flavors of QCA, although interesting, are not explored further, as they add no value to the examination and discussion of this study’s hypotheses.

QCA assists in revealing the necessity and sufficiency of conditions to the outcomes. This is because the concepts of necessity and sufficiency are at the center of the set comparison, the traditional visualization of which involves Venn diagrams (Gill,

2006). There are various ways to approach this: either through the generation of a hypothesis that already incorporates the issue of a condition’s necessity or sufficiency

into the outcome, or by testing to see whether the necessity or sufficiency can be discovered (Ragin, 2006). Although other explanations, such as those involving external events, are not always framed in terms of necessity or sufficiency, the necessity is

implicit. However, this study initially frames the hypotheses as neither necessary or

sufficient, instead testing each condition for them; this creates flexibility and opens the

door for the possibility of multiple causality (Ragin, 2008)—as it could be that, in certain configurations, more than one of the conditions are truly needed to generate the outcome.

Going back to the Venn diagram visualization, this allows for the determination of whether a condition is a subset or a supraset of the outcome—whether it is sufficient or necessary, respectively (Bol & Luppi, 2013).

Table 2 highlights one problem with using QCA for this particular universe: The distribution of cases is unevenly skewed toward failure. With N = 36, the optimal distribution of cases with significant change would be 12, or 33% (Ragin, 2004); the actual figure is only 7, or 19%. Although it would be nice to have a more optimal distribution (one that leads to greater confidence in the test results), the universe is not dependent upon such concerns. There are no good ways to address this problem, however. For instance, even if previously excluded cases, such as the CIA Act of 1949, were brought into the universe, the distribution would still remain skewed heavily toward failure. The overwhelming majority of excluded cases are labeled as failures or as producing only superficial changes using this research’s counting rules. Other options include creating nonexistent cases—which generates even greater concerns than result from having an uneven distribution—and loosening the counting rules. The latter option can be used to create a more desirable distribution of outcomes, but it would also distort

73 the impacts of the conditions. Determining a superficial change to be a success invalidates the basic problem, as superficial changes do not truly impact the function’s execution or the resulting product. As it stands, the limited population and distribution of outcomes must be acknowledged as a constraint due to the reality of the historical record.

The final issue with QCA is measurement consistency. The primary researcher coded and reexamined every case within the universe according to the rules in Appendix

B, so a high degree of consistency should exist in the data set (Compton et al., 2012;

Love & Sell, 2012). However, this does not aid in replication and does not expose any inherent bias, which raises another question with regard to data validity. To mitigate this,

10 external coders processed selected cases using the counting rules. Although the optimal solution would have been for these outside observers to code the entire universe, time was a limiting factor. The external coders were only available for 3 business weeks, so the task had to be condensed.

The independent coders focused on a discrete set of cases that had a reduced set of conditions for measurement. The selected measures were the ones with the highest potential for subjectivity (e.g., outcome and visibility). The independent coders used the same coding book as the primary researcher but had a truncated set of primary reform documents; the coders generated their own measures of the conditions. The purpose of using a single discrete set rather than a random assignment of cases was to not only validate the coders’ internal consistency but also to identify where the external group deviated from the primary researcher. This method thus would expose bias. For the external conditions, such as visibility and saliency, the outside coders showed over a 90% concurrence with the primary researcher. For the internal conditions, there was greater

deviation, with only a 70% concurrence on specific behaviors. An interesting fact that became clear in testing, however, was that the total number of internal-process observations was the same for the outside coders and the primary researcher (although perhaps they were not the same observations); this made information advantage a larger explanation, with a concurrence of over 90%. That is to say, if the primary coder and the independent coders each marked two conditions as present, they may not have been the same two. This happened exclusively for the three conditions that support the explanation of this research but not for the internal-process condition that was associated with an established explanation. In the exit questioning, the coders generally reported feeling rushed, as the internal-process and information-advantage conditions were difficult to

differentiate in such a short time period. They expressed that, if more time had been

available, a second review of the material and a reconsideration of the scoring would

have been useful—and perhaps would have led to adjustments in their scores. These anecdotal comments, when explored in discussions with the primary researcher, would

have raised the overall concurrence of their measures above 70%.

Overall, the results suggest that the primary researcher’s determinations and

values were somewhat robust. Although the consistency, both among the independent

coders and between them and the primary researcher, was not perfect, it was rather

substantial after taking into account the tight time constraints under which the

independent coders worked. The largest amount of variation occurred when attempting to

disentangle the internal-process conditions that were more important than others, but the

overall determination is that these conditions, and specifically the information-advantage

conditions, provided the best evidence in support of the outcome (change). To that end, a

fair assumption is that, upon replication, other parties would generally reach the similar

conclusions regarding the conditions and thus, by extension, the same findings would

emerge in subsequent steps. With that in mind, the primary researcher’s values are used for all calculations. Appendix C provides brief autobiographical information on the external coders: their age, education, and experience in the intelligence field, as measured from both academic and practice-based perspectives.

A Few Key Differences

A brief description is needed regarding how QCA differs from regressional techniques. The first difference is in the underlying algebraic system on which each is based. QCA is founded on Boolean algebra, but regressional techniques rely on linear algebra. Despite some claims that “differences between the quantitative and qualitative traditions are only stylistic and are methodologically and substantively unimportant”

(King et al., 1994, p. 4), the formal languages of Boolean and linear algebra differ to such an extent that direct translation may not be possible (Brady, 2013). Claims to the contrary are not considered valid in this research.

The primary notion that needs to be considered is that of necessity and sufficiency. Simply put, the question is whether (what is normally referred to as) an independent variable is required to produce (what is normally known as) a dependent variable. If so, the independent variable is necessary. From a Venn-diagram perspective, the independent variable is a large circle that fully encompasses a smaller circle (the dependent variable); the independent variable, in other words, is a supraset of the

outcome. However, if that independent variable, by itself, is not enough to generate the

outcome but, when matched with one or more other variables, does lead to the outcome, the result is sufficiency—in which the outcome exists in the space where the two circles of a Venn diagram meet (Caren & Panofsky, 2005; Cronqvist & Berg-Schlosser, 2009).

This is not quite the same as in linear algebra. Boolean algebra does not have a measure of how much of a variable is present; only that variable’s presence or absence is measured. The variables—or conditions and outcomes in Boolean terms—are thus binary

(Ragin, 2008). Of course, real-world measurements, especially those that use qualitative terms, are rarely only on or off. For the conditions in this research in which the variable can have gradations in intensity, a scale for determining presence and absence is needed.

These scales are shown in Appendix B.

As hinted in the paragraph above, the terms independent variable and dependent variable are not used in Boolean algebra or, by extension, in QCA. Instead, these terms correspond to conditions and outcomes, respectively (Ragin, 2008). As a warning, this research uses these terms as opposed to the more traditional terms (independent variable and dependent variable). There is also a notation issue, as the Boolean language must be summarized for orientation purposes before the research begins to dig into the universe of cases. This research applies all-uppercase notation for the presence of a condition (e.g.,

THIS), all-lowercase notation preceded by a tilde for the absence of a condition (e.g.,

~this), and mixed case when simply discussing a general condition (e.g., This).

An arrow, when pointing toward the outcome from a condition or set of conditions, signifies sufficiency for achieving the outcome. An arrow pointing from an outcome to a condition or set of conditions indicates those conditions’ necessity in

generating the outcome. Here are some examples:

1. THIS → RESULT

2. ~this →~result

3. THIS←RESULT

For expression 1, the presence of the condition THIS is sufficient to produce the outcome

RESULT. Expression 2 is just the absence of the condition and outcome. In Expression 3,

though, the arrow is reversed. This reflects the necessity of THIS for RESULT. This is a

supraset of Result, and Result is a subset of This.

If a condition does not demonstrate necessity—and most do not—the next issue is

that of sufficiency. It may be that various conditions, in isolation or in combination, can

generate an outcome. For instances in which the logical operation or is needed, the +

character is used to create an expression of sufficient conditions that an each lead to the outcome shown, as in Expression 4:

4. THIS + THAT → RESULT

If the logical operation and is needed because a combination of conditions is required to reach the result, the * character is used, as in Expression 5:

5. THIS * THAT→RESULT

Testing for Necessity and Sufficiency

To understand whether conditions are necessary or sufficient to generate an outcome using the theories laid out in the previous chapter, there is a need to create hypotheses for each explanation. There is also a need to identify whether any of the

theories are mutually exclusive, as those that are not mutually exclusive but do

demonstrate sufficiency may lead to other recipes for getting to the outcome; this is the

issue of multiple causality. Another issue stems from the limited size of the universe. As

a rule of thumb, the number of cases in a universe should equal or exceed 2k, where k is the number of potential conditions. For this research, this means that the number of conditions being investigated (k = 7) would require a universe of at least 27, or 128 cases.

It would be disingenuous to either create an additional 96 cases out of nothing or to

simply ignore a potential explanation and its associated conditions, so testing for

necessity and sufficiency in isolation offers a good opportunity to eliminate the

explanations that simply do not contribute to understanding the research question.

Ignoring the conditions that have no real role in this understanding helps prevent a

problem that is similar to, but not entirely the same as, the quantitative concept of

overfitting. Identifying the conditions that do not actually play a role in the outcome

allows for parsimony to be found and prevents overly lengthy multiple-causal

explanations. To thus determine the necessity or sufficiency of each condition, the

condition’s consistency and coverage both need to be generated.

This determination is relatively straightforward. A 2 × 2 matrix is established for

each condition in relation to the outcome, as shown in Figure 5. Assuming that the focus is on the presence of the condition and outcome, Quadrant A shows where the outcome is present and the condition is absent; Quadrant B shows where both are present; Quadrant

C shows where both are absent; finally, Quadrant D demonstrates where the condition is present but the outcome is not (Schneider & Wagemann, 2012). From here, the condition’s consistency is determined using the rows by dividing B by the sum of A and

B. The condition’s coverage is determined using the columns, then dividing B by the sum

of B and D. For each condition, a similar table is presented, and a consolidated list of the consistencies and coverages is in Table 12, page 107. The benchmark for necessary conditions is a consistency of at least 90% and a coverage of at least 50%.

Figure 5. Matrix for Necessity or Sufficiency

Sufficiency has a slightly lower threshold of at least 75% consistency and at least

50% coverage (Ragin, 2008). However, due to the less-than-desirable distribution of the outcome in this universe, this research uses a lower sufficiency threshold of 70%

(coverage still must be at least 50%). This lowering of the threshold is done not only to

compensate for the skewed distribution toward failure but also to help prevent

overreliance on any condition that appears to be (but might not actually be) necessary.

High levels of both coverage and consistency are needed to demonstrate relevance

to the outcome. A condition with a high value for consistency but no correspondingly high value for coverage indicates doubt with regard to the proposed logical mechanism—

in a manner similar to the consideration of correlation without causation. Because

asymmetry is assumed, each condition’s consistency and coverage for both the presence

and the absence of the outcome is required.

The Hypotheses

Incrementalism: The Rejected Hypothesis

Looking at the explanations from the previous chapter, incrementalism was rejected out of hand. However, there is something to be said for testing such an explanation anyway, as doing so converts mere assertions about validity into demonstrated facts. This explanation suggests that large-scale reform efforts are not necessary, so the outcomes of such reforms should not matter. This logic indicates that intelligence organizations are in a constant state of evolution, adapting to the changing stimuli that they encounter when performing their function for decision-makers. If the assumption is that the external world is constantly changing (which means that the evolutionary stimuli are constantly changing), then the result should be constant changes in the intelligence organizations. The key observable here is time: As the world changes, intelligence organizations change to match it after some amount of time. The shortcomings of intelligence organizations shift over time as well: An evolution solves one problem, which causes that problem to change, thus requiring a new solution.

H1: The passage of time should be sufficient to create changes in identified intelligence shortfalls.

If intelligence organizations are adapting in a constant fashion to external stimuli, then when an intelligence shortfall is revealed, it should be dependent on the amount of time since last being identified as inadequate: After all, time allows for adaptation. Time is thus the condition of note. The identified shortfall, referred to here as Context, is the

81 outcome. The shortcomings that are identified in the major reform efforts in this universe can serve as starting points through which to measure Time, and as other reform efforts come into being, shortcomings can be compared to determine whether the Context has changed substantively. Are the shortcomings new, the same, or slightly different? The resulting Boolean expressions are the following:

• TIME→CONTEXT

• ~time→~context

If the evidence supports this hypothesis, then reforms play no real role. The basic conclusion simply would not hold. However, this also presents something of a quandary:

The outcome for all the other explanations (which do accept reforms as a necessary mechanism for change) cannot be used here, as reforms do not matter in this hypothesis.

The same holds true for the outcome of this explanation, which does not hold value for the others. A single-use outcome and condition are required, as are a different set of data points: The reform efforts themselves are not the data points in the matrix; rather, the shortfalls that the efforts identified are used. This means decomposing the reforms in a way that is not optimal for understanding the reforms as objects themselves; however, this does lead to a larger universe of just under 490 data points. This is preferable to the

36 data points of the main universe, but the distribution is just as poor, and the testing reveals that the results do not support the explanation, as seen in Table 3.

Table 3: Test for Time Necessity or Sufficiency

The results suggest that U.S. intelligence organizations are not continually

evolving. In fact, there appears to be no real self-generated reaction to external stimuli.

These organizations do change but do not do so without a reform (aside from superficial

changes). Incrementalism does not provide any insight as to why this happens. The basic

question of this research stands, and—as reforms appear to be essential to creating changes—the determination of why some succeed when others fail is of even greater importance.

Before delving into the other hypotheses, it is enlightening to look at some detailed examples regarding this lack of incremental change. This helps make the universe more than just an abstract set of numbers and allows for a detailed look at the evidence against incrementalism.

A strong and explicit example can be found in the 10 reform efforts in which proposers called out personnel policies and practices as suboptimal. The earliest occurred in 1949 (Dulles et al., 1949, pp. 36–37), and the most recent was in 2004 (Commission on the Intelligence Capabilities of the United States Regarding Weapons of Mass

Destruction, 2005, pp. 366, 423). There are commonalities among these, such as insufficient language skills, insufficient training programs, and poor recruitment and retention policies. Only one of these 10 reforms, the inquiry into 9/11, referenced a new

83 process or program that might mitigate such personnel shortcomings (a new language- skill program), and this program was too close in time to the inquiry to provide an adequate measurement of utility (S. Rept. 107-351; H. Rept. 107-792, Errata 5). The others simply restated that problems exist; as a result, the same problems continue to exist over time.

Another damning fact to the incrementalism argument is that some of the reformers, such as Kirkpatrick, specifically call out the fact that previous reform efforts had identified the same shortcomings but did not produce real efforts to address these problems (Kirkpatrick, 1961, pp. 145–146). This is not to say that intelligence organizations are stagnant or that the internal arrangement of the organizations does not change; rather, those changes have been largely superficial. For instance, offices changed names, and personnel billets were shifted to areas of crisis or need (but the skills associated with the billets did not change). These are superficial changes—“old wine in new bottles” in Jensen’s (2016) terminology. These functions and organizations are not really resolving the underlying problems or providing improved sense-making.

The same is true of the critiques of intelligence organizations’ quality of analysis.

Though investments have been made in automation since the microprocessor revolution increased information-storage and -sharing potential (National Commission on Terrorist

Attacks Upon the United States, 2004, p. 418), these investments are superficial, not incremental, changes to the nature of the work. Otherwise, 11 of the reform efforts— spanning from 1949 through 2004—would not have identified poor analytic quality as a shortcoming to be addressed. In other words, computers have made the work of intelligence analysis faster, not better.

Twenty-five of the reform efforts (again, spanning the entire time period of this

research) commented on the insufficiency of coordination among the intelligence community; this would not have occurred if there were actual incremental adaptations.

Improved communications ability through better computers may allow for faster coordination, but if the culture and content behind that communication does not evolve, the result is not true change. Simply purchasing new technology that improves the pace of coordination and analytical production is not actually an incremental change toward improved coordination and better analytical products. A faster version of a flawed product is still flawed.

There is no evidence in the historical record that U.S. intelligence is demonstrating evolutionary incrementalism. Indeed, several proposers in the historical record have explicitly called out a lack of change over time, despite many reform efforts.

This suggests the following items for consideration when moving forward into other

explanations:

• Intelligence reforms are needed to create significant change in the U.S.

intelligence community. Incrementalism is not a valid explanation of change

in this policy space, and the main research question remains valid.

• Looking forward, doubts have been cast upon the utility of the garbage-can

model, which is tied to incrementalism and is tangentially important to one

internal-process explanation (that of coalition size).

Testing The Event

Moving onto established explanations that rely on reforms to achieve change, the first mechanism from the previous chapter dealt with the nature of the event that caused the reform. This is a highly intuitive explanation: when the event is more visible or impactful, change is more likely to result. The event generates the momentum or political motivation that can overcome any desire to preserve the status quo. When an event is

larger, it can create more change. The event creates political space for reformers to step

in and push changes forward.

Although a definition for change was established earlier, by modifying Jensen’s

(2016) scale, defining the size of an event poses a problem. There are two distinct facets

to an event: the visibility in the public eye and the impact that the event has on the organs

of a government from accomplishing their other tasks. The two can be but are not

necessarily related. An event could be highly visible, holding onto a place in the public

agenda for long lengths of time, but may not have a long-term impact on the execution of

other government security functions.

The presence of weapons of mass destruction in Iraq, leading to the Second Gulf

War, is a prime example of how a reform-causing event can be both visible and impactful. The role of intelligence in that policy decision and the issue of reforming the intelligence community because of that decision were both on the public agenda for quite a long time. The decision to enter into that war not only had a significant budgetary impact (Crawford, 2014) but also required so many military resources that it reduced the

nation’s ability to respond militarily to emerging crises anywhere else in the world

(White & Tyson, 2005). Compare this to the attacks of September 11, 2001, for which reforms were also discussed in a highly public fashion for an extended period, but the ability to conduct other national-security functions was only hindered for a handful of hours (Garamone, 2006). Of course, some events are only in news cycles for a day or two—quickly pushed out of the way by other, more compelling stories—but still greatly impact national-security functions. The infiltration of U.S. intelligence by Humam Khalil al-Balawi is a perfect example of this: Although only covered in the national media for less than a week, this event revealed that a terrorist group had been successful in passing material up to the highest levels of the U.S. government so as to steer policy decisions and the use of national-security capabilities in directions that were beneficial to a terrorist group (Warrick, 2012).

Clearly then, a single hypothesis cannot be used to test whether the reform- causing event is sufficient or necessary to cause reform. Instead, two subhypotheses are needed: one examining the event’s visibility and another examining its impact. The primary hypothesis and two subhypotheses are as follows:

H2: A large event is sufficient to produce change.

H2a: An event that stays in the public view is sufficient to produce change.

H2b: An event that impacts the rest of the national-security enterprise is sufficient to produce change.

To test these, two conditions are needed: Visibility and Relevancy. Visibility measures how much attention the initiating event had on the public stage and how well it placed and remained on the public agenda. Those events that resonated with the public are annotated by VIS, and those that quickly passed from the national dialogue are ~vis.

Relevancy measures how much of an impact the initiating event had on the rest of the

national-security enterprise; an event that limits or prevents another security function

from occurring would be REL, whereas one that has no real impact would be ~rel. The

counting rules for these and all other conditions can be found in Appendix B. As Boolean

expressions, these subhypotheses include the following:

• VIS→CHANGE

• ~vis→~change

• REL→CHANGE

• ~rel→~change

If this explanation has merit, then at least one of the subconditions, visibility and relevancy, should have both a high level of consistency and coverage, checking for the former to cross at least a 70% threshold before seeing if the latter hits at least a 50% threshold. However, when the testing for visibility occurs, the following is revealed:

Table 4: Test for Visibility Necessity or Sufficiency

This condition shows a high consistency when present but fails to achieve needed levels in coverage. This suggests that the condition is essentially noise, at least in its presence.

The same is not true in the absence of visibility. Here there is both high consistency and

88 coverage at levels that suggest sufficiency. The interpretation of this condition then is that a highly visible event is not needed to create change, but lacking a place in the public dialogue appears to be a contributing factor to the failure of a reform.

Why would this be for the absence? Although that question is somewhat outside the scope of this research, it should be addressed. Although this research proposes a different explanation, the extant explanation cannot truly provide insight into the outcome’s absence. The likely explanation for this is that decision-makers, those executing the national-security enterprise, simply have other matters demanding their attention. New crises are emerging, and without a large public eye on the problem calling for change, there is no incentive to spend time and attention on fixing intelligence

(Baumgartner et al., 2011). That time and attention would be better spent focusing on the crisis at hand.

Testing for relevancy reveals a much simpler result. This condition lacks consistency in both presence and absence. At such low levels, there is no need to check coverage.

Table 5: Test for Relevancy Necessity or Sufficiency

This condition then is noise and can be excluded from further consideration. Why? The likely explanation mirrors the discussion for the absence of visibility; although decision- makers are having their various levers for action constrained by the event, there is not

89 sufficient attention or time left to dedicate to fixing the intelligence that constrained the security enterprise. There is a current crisis at hand, possibly linked to the event that caused the reform, and it demands the lion’s share of the decision-maker’s attention.

Overall then, H2 reveals the following findings:

• High visibility in the public agenda does not influence reform outcome and

can be excluded from further analysis of positive outcome.

• The absence of the reform from the public agenda may contribute to reform

failure; ~vis needs to be included in determining absence pathways.

• The saliency of the event shows no relevance at all. This condition can be

eliminated from further analysis.

Testing Domestic Politics

The next set of existing explanations relies on the domestic political structures for their logic. One camp proposes that reforms go through due to the tension between opposing political parties; this is either from a willingness to expend political capital to embarrass the other party or to short circuit an opposition’s attempt by being a first mover. The other camp suggests that only periods of unified government allow for successful reforms , as there is no need to worry about political opposition in such cases.

Both opposing stances result in the same outcome. This does pose something of a quandary for testing; the absence of the condition must not only be tested against the absence of the outcome but also with the presence of the outcome. As with the other external stimulus, this hypothesis is broken down into two subhypotheses. Unlike the

other external stimulus, however, these two subhypotheses are mutually exclusive.

H3: The domestic political configuration is sufficient to determine outcome reform.

H3a: A divided government, in which the legislative and executive branches are

controlled by opposing political parties, is sufficient to result in successful reform.

H3b: A unified government, in which the legislative and executive branches are

controlled by the same political party, is sufficient to result in successful reform.

It does not matter what the content of the reform is; what matters is if a political party is willing to expend political resources on a reform project. The literature, however, is divided regarding the mechanism of party control. Does a divided government suggest that one party uses the subject of reform to constrain or embarrass the opposition by pushing change through? Does having total control, and thus being free of effective political opposition, instead free up a government to push changes through? The dyad of proposer and responder, at the center of this research’s proposed explanation, does not really matter here. All that matters is the dyad of political parties in and out of power.

The condition Government is created with the value of GOV representing a divided government in which at least one legislative chamber is controlled by a party other than the one holding the executive branch. Unified government, in which the same party controls both legislative chambers and the executive branch, is represented by the absence notation, ~gov. The Boolean expressions become somewhat tricky, as there is literature suggesting that GOV and ~gov both result in CHANGE. This results in four distinct expressions, two for each subhypothesis. For H3a, they are

• GOV→CHANGE

• ~gov→~change

For H3b, they are

• ~gov→CHANGE

• GOV→~change

Of particular note is that there is a third camp in the literature; this camp proposes that neither value of this condition truly plays a role in policy change; the domestic configuration plays no role at all. It is a distinct possibility that neither H3a nor H3b demonstrate necessity or sufficiency for successful reform. In this case, partisan configuration is simply identified as noise to be eliminated from further consideration.

Table 6: Test for Divided Government Necessity or Sufficiency

The testing supports this third camp suggesting there is little value to domestic configurations. Looking at the result for GOV, there is insufficient consistency to support the argument that a divided government is sufficient to create change. There is also insufficient consistency to support the argument that a lack of a divided government, or a unified government, is sufficient to prevent change from occurring. This half of the argument about domestic politics, that a divided government matters, appears to be simply noise.

A similar result occurs when testing H3b, a unified government, but with the presence of change. Consistency now meets the threshold of sufficiency, but the coverage is too low. As such, it would be too much of a stretch to propose that unified government

affects the outcome. The converse, the lack of a unified government with a successful

change, fails to achieve sufficient support for consideration of sufficiency.

Table 7: Test for Unified Government Necessity or Sufficiency

As with the event conditions, it is somewhat outside the scope of this research to explain why unified governments have a high consistency but a low coverage. This logic is likely very similar to that of the visibility of the reform efforts, however. Intelligence reform is likely a secondary consequence of some other activity occurring in the broader context—domestic politics in this case. As intelligence is of a secondary or even tertiary importance combined with a small domestic constituency, the attention of policy makers, whether legislative or executive, would likely rapidly turn elsewhere. Borrowing in an extremely loose and nontechnical fashion from regressional terms, a unified government is correlation without causation to reform outcome. The overall findings for this hypothesis include the following:

• Divided government has no impact on the success or failure of intelligence

reform, and this condition can be eliminated from further analysis.

• Unified government has no impact on the success or failure of intelligence

reform, and this condition can be eliminated from further analysis.

• This very specific field of intelligence reform may be additional support for

the literature suggesting that domestic configuration plays little role in policy

formulation. This is a potentially important line of questioning but outside the

scope of this research.

Testing Coalitions

Although the domestic political configuration did not yield any results, it does

lead to the consideration of the political configuration of the actors within the reform.

The actors, or potential actors, for a reform can play one of three roles: proposer,

responder, or a neutral observer. The first two are the most interesting, for obvious

reasons. The interactions between these two are political events, as each is seeking to

achieve its preferred end state at the expense of the other. As they take their respective

roles, they begin to wrestle with their opposite number. With a similar mechanism to the

unified government logic, the side with the largest coalition should be successful. Both

the proposer and the responder have opportunities to form coalitions with like-minded

actors or at least deny coalition partners to the other side—keep actors in the third

bystander category. An ally denied to the opposition is just as effective as gaining an ally.

Whichever side can create the largest coalition has the political power to create its desired outcome.

Keeping in mind the notion that an actor does not have to be an ally, it is enough simply to not be an opponent, the logic for a proposer would be to try and keep the band of responders small. This is because of the assumption of the bureaucratic status quo preference: The actors, with the exception of the proposer, seek the status quo so as to

94 preserve resource flow (Asatryan, Heinemann, & Pitlik, 2017; Miller & Moe, 1983).

However, in the larger sense, even joining the responder’s coalition is a potential endangerment of the status quo. Why do so if not immediately endangered? Although there is an aspect of the free rider problem here, this also reflects something of the nature of the proposers and power imbalance with most responders. Proposers in this research are very powerful actors outside the context of the reform: directors of intelligence agencies, cabinet level secretaries, chambers of Congress, or the president. Unless one of these elements places the title of responder onto an intelligence actor, there is no positive reason to voluntarily enter into the reform to preserve the status quo. Remaining neutral has a better chance of not endangering resources flowing from the proposers. This would translate to a proposer that limits the disruption, which provides an opportunity for many potential responding actors to stay neutral; this then denies the responder of potential allies and constrains the size of the responding coalition. Considering the finite but large number of potential actors available to participate in an intelligence reform, it can be just as effective to deny an ally to an opponent as it is to actively recruit an ally. This leads to the next hypothesis:

H4: A tightly limited set of responding actors is sufficient for successful reform.

To measure this, the condition of coalition is created to look at how broadly a proposer engages with other actors as an opponent and how many actors the proposer designates as a responder. The assumption is that the targets of the reform form a de facto coalition to oppose the change and preserve the status quo. When not given the opportunity to stay outside the reform boundaries, they naturally form into a coalition.

An active measure of coalition coordination (on either side) is not needed; the

assumption is that all those seeking status quo automatically overcome coordination

problems when the proposer gives them the justification to do so. Thus, in COALITION,

a large coalition of responders is created, as the proposer is engaging broadly. Based on

the logic that the larger coalition receives its preferred outcome, this leads to a failed

reform. The absence, ~coalition, speaks more directly to the hypothesis. A reformer who

is engaging selectively (i.e., tightly) to limit the opposing coalition has the larger

coalition, either by actively recruiting other allies or by simply denying allies to the other side. The Boolean expressions include the following:

• COALITION→~change

• ~coalition→CHANGE

Table 8: Test for Coalition Necessity or Sufficiency

Testing these expressions did not yield significant results, as with the previous

explanations. The historical record suggests the opposite, with this Boolean expression:

• COALITION→CHANGE

where the larger responding coalition results in change. However, that only holds when

considering the consistency. The coverage, even of this unexpected result, falls below the

needed threshold. Likewise, there is no strong consistency with the absence of reform: a

narrow reform shows no real consistency for either achieving or failing to achieve

96 change. As with many of the previous conditions, the condition about the size of the political coalition appears to be simply noise.

As with many of the other conditions so far, there is the potentially interesting issue of a high consistency that then fails to achieve coverage, in this case, a broad reform with a successful change. The literatures on which this explanation is founded offer no theoretical basis to explain this. Using other literatures, there may be some explanation as to why this occurs, such as examinations of coordination problems within coalitions.

However, that is outside the scope of this research. The key findings for this explanation deny the value of coalitions to explain the reform outcome:

• Attempting to limit the size of the coalition opposing change does not impact

the outcome of the reform.

• There is no drawback to ignoring the size of the opposing coalition in terms of

reform outcome.

Testing Information Advantage

The final explanation and the one proposed by this research is that there is successful reform when a new information balance between the proposer and responder is established. In the normal principal–agent relationship, the agent automatically holds the information advantage. If the proposer shifts that information asymmetry, however, then he or she has a de facto information advantage; even information parity is essentially an information advantage for the principal. This is the state of play when a renegotiation of the contract between the actors is occurring.

H5: Treating the reform as a contract renegotiation is sufficient to create change.

How to measure a renegotiation is somewhat daunting but not impossible. To

begin with, all measures should originate from actions by the proposer. The explanation

hinges upon the proposer taking actions that shift information advantage from its default

position supporting the responder, so every measure should come from proposer actions.

However, there appears to be no single way to definitively identify that a proposer is

pursuing a renegotiation. After examining several of the cases, three behaviors, each with

their own unique theoretical mechanisms, began to emerge. This leads to the need for

distinct conditions and Boolean expressions, but not for unique subhypotheses, as these

conditions could have a multiple causality effect, be entangled, and are not mutually

exclusive. In other words, they arrive at the same outcome, reform success, just through

different theoretical mechanisms.

The first behavioral condition is Questioning. This is looking at the behavior of the proposers in how they question the responder in the data discovery and gathering phases of the reform. Does the proposer directly link the initiating event in their questioning using blame-seeking behavior? Blame seeking relies on the enforcement

mechanisms of the existing contract, not a renegotiation. When in the old contract, the

proposer is exercising enforcement and would be seeking to affix blame; recognizing

this, and understanding the costs of accepting this blame, the responder has the

knowledge to diffuse and deflect the blame. Now the proposer has no real target for

enforcement actions. Staying within the old contract does not shift information

advantage.

Alternatively, does the proposer seek to create some rhetorical space between the

discussion of the initiating event and the reform itself? The investigation is not looking so

much as what happened but why something happened, and the event becomes a context

for the reform but not the central issue being discussed as the inquiry moves into new

areas. This is QUESTIONING, which should deny the responder any information advantage with regard to the costs of the product. The Boolean expressions are as follows:

• QUESTIONING→CHANGE

• ~questioning→~change

When applied to the universe of cases, both positions had a strong showing, as seen in

Table 9. Proposers who created rhetorical space and who did not actively engage in blame-seeking showed a consistency and coverage that crossed the sufficiency threshold.

The same held true for proposers who did engage in blame-seeking. The failure rates suggest that ~questioning is sufficient to ensure no progress with regard to changing the intelligence function. It should be pointed out that, although the coverage for

~questioning (97%) is higher than that for QUESTIONING (60%), this does not make one statement truer than the other. Still, this is an eye-opening and strong result.

Table 9. Test for Questioning Necessity or Sufficiency

The findings from this condition include the following:

• Delinking the reform directly from the event by not delving into blame-

seeking creates an informational problem for the responder.

• Pursuing blame-seeking creates an opportunity for an informationally

advantaged agent to derail reforms by diffusing blame.

• The information advantage hypothesis is supported from this first observable.

The second behavioral condition deals with the solutions being proposed. For this, the condition Proposal measures whether the proposer’s solution is new or recycled from somewhere else. This could be from a previous reform effort or even a previous configuration of the intelligence function. From an information advantage perspective, the new proposal would shift information advantage; the agent’s information advantage comes from a knowledge of costs. A new proposal also has new, unknown costs that grant the proposer information parity, if not outright information advantage, relative to the responder. The opposite is true for a recycled proposal, for which the agent already knows the costs and the impacts on the contract and thus can retain the information advantage.

This does contradict most of the established thought on the impacts of proposals for change, for which the known solution should generate less pushback from status quo seekers, and for which the recycled solutions have some familiarity (Aberbach &

Christensen, 2001; Paton, 2014). However, if the proposer is, as this research suggests, entering into renegotiation of the contract and thus is needing to deny the information advantage, then there is no benefit in seeking to generate less pushback. This is confirmed in the examination of the previous hypothesis on coalition size.

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Indeed, one assumption of this research is that status quo preference is a constant,

so there is no real way to lessen or mitigate the pushback from change. For this research

then, PROPOSAL is a new solution, not previously seen or referenced in other

intelligence reforms, and ~proposal is the recycling of solutions. The Boolean

expressions are as follows:

• PROPSAL→CHANGE

• ~proposal→~change

When tested, both show strong consistency and coverage. When the reformer presents a new solution for the intelligence function, which suggests a renegotiation of the established contract, the consistency is significant at 86% matched to a 55% coverage. In the opposite situation, in which the proposer brings in old, recycled

solutions, the consistency with failed reform is 83%, and the coverage is a shocking 96%.

The presence of new solutions does appear to indicate that the proposers are entering the

reform as a renegotiation; they are seeking to change the base nature of the relationship

and not merely to punish the agents for supposed error. In doing so, they shift the

information advantage, and thus change occurs. The presence of recycled solutions would

seem to be the opposite—a proposer who is sticking with the old, flawed relationship.

This indicates that the proposer has not grasped that there is a severe information

disadvantage that must overcome; the proposer thus is lurching toward failure.

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Table 10. Test for Proposal Necessity or Sufficiency

The findings from this condition include the following:

• Generating new solutions denies information advantage to those seeking to

preserve the status quo, de facto placing the advantage into the proposer’s

hands.

• Recycling or resurrecting known solutions hands information advantage to

those seeking to preserve the status quo.

• The second information advantage condition adds additional support to the

hypothesis.

The third condition to examine information advantage looks at the language being used by the proposer, specifically the terminology used to establish clear communication between the proposer and responder. If any discussion is to occur, there must be common definitions and terms. Whose definitions and terms are to be used, though? The answer to this question highlights if the proposer is actually engaging in renegotiation and where the information advantage lies.

When proposers establish that, for the reform in question, they are bringing in new definitions, demonstrating that they are pursuing a renegotiation of the relationship,

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and thus shifting the advantage toward themselves. When the words in the relationship

are reset, the nature of the relationship changes. Proposers that decide to utilize existing

definitions are surrendering the information advantage. After all, the responders use these

definitions in the daily execution of the contract, as they know full well how the terms

shape and create the costs associated with the product.

To address this, then, is the condition Terminology. For a value of TERM, the

proposer establishes new definitions that the responder must adopt in the dialogue

between the proposer and responder. For a value of ~term, the proposer is adopting the

current terms of art used by the responder. The Boolean expressions are as follows:

• TERM→CHANGE

• ~term→~change

Table 11. Test for Terminology Necessity or Sufficiency

As with the previous two information advantage conditions, there is a strong showing. The consistency for proposers introducing new definitions is 71%, slightly below the traditional threshold of 75%, but, again, this research lowered that bar slightly to account for the less-than-optimal distribution of outcomes. The coverage was 100%.

This is an unusual result: As there are a few situations of outcome success in which new

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language was not introduced, there were no situations of failure in which new language

was introduced. This condition may be sufficient, rather than necessary, to generate

success, but it may be even more important in simply preventing failure.

This is confirmed when looking at the absence of new terminology. Here the

consistency is 100% with a coverage of 94%. This is a critical finding: the use of extant

definitions and terms, the responder’s language, appears to be necessary to generate

reform failure. The means that the Boolean expression should actually be reversed, as

~term is not a subset of ~change, but ~change is a subset of ~term. This is not the same

as saying that ~term causes the reform failure, just that if the condition is valued at ~term,

it is an exceptionally strong indicator that reform failure is about to occur as the

responder retains information advantage.

The logic is fairly straightforward: common language is key for the actors to

reach some resolution and move forward with the discussion. That is without question.

However, defaulting to existing definitions keeps that information advantage with the

responder, allowing the agents to derail change. With such a large consistency and

coverage, the question must be asked, “Why would a proposer ever accept the extant

definitions and not force the dialogue in different directions?”

There are several plausible reasons. One possible explanation is that proposers, sensing a time pressure, want to start discussions quickly and so default to established terms. Another possible explanation is that proposers are seeking to offer an olive branch to the responders by using their own terms. The most likely explanation—and the one with some anecdotal evidence—deals with the backgrounds of many of the proposers. As is noted in several reform effort reports, the staff and often the heads of reform efforts

104 have long backgrounds in intelligence. After all, who better to examine a function than someone with serious intelligence credentials such as Dulles with the Intelligence Survey

Group, Lowenthal with the Church Committee and IC 21, and both deputy directors of the WMD Commission? They emerged from the function, they may return to the function, they feel they understand the function, and so they can use the language.

This is not unlike the iron triangle concept of decision-making proposed in the

1950s (Jordan, 1981) but with a slightly different take. This suggests that proposers who have a significant background already feel that they have information parity with the responders. Possessing this notion, there is no incentive to ensure they hold information advantage by dedicating the effort needed to create new definitions. Rather, it would be more efficient to simply use the extant language. This assumption of information parity is flawed, however, as the knowledge of the function degrades over time when someone is not actively engaged in the function. Thus, rather than force new definitions as part of an effort to gain information advantage, the proposers inadvertently surrender one aspect almost automatically. Of course, this also suggests that proposers are trapped in their perspective of the old relationship in other behaviors as well. In the end, it does not really matter why a proposer chooses this path, as it leads to the same result: surrender of information advantage and reform failure. Surrendering this initial position would not bode well for the ability to establish information advantage in the other areas.

• The use of the responder’s terminology indicates an almost guarantee of

failure, not that the terminology itself creates the failure.

• The Boolean expression for the absence of Lang needs to be changed to

~term←~change. This represents that failure to change becomes a subset of

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absence of terminology as opposed to terminology being a subset of change.

• The use of new or altered terminology within a reform appears to create

favorable conditions for change—a third observable supporting the

information advantage hypothesis.

Eliminating Conditions

As mentioned earlier, there is a problem with the number of possible conditions and the cases available, as there simply were not enough cases compared to the possible conditions that supported the various explanations. However, several of the conditions in individual testing failed to show relevance, and so they, along with the hypotheses they support, can be eliminated, leaving a more manageable set of conditions to explore the potential for multiple causality.

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Table 12. Consolidated Consistencies and Coverages of Conditions

For reform success, no explanation other than the internal process, information advantage explanation, was able to generate consistency and coverage levels to suggest validity. This greatly supports the base explanation of this research: the problem of intelligence reform outcome is an information advantage problem. In a contract renegotiation, if proposers are truly seeking a renegotiation of the relationship, as observed by their actions, then they have created an information problem that responders cannot overcome. The reverse is true for those proposers who are behaving in ways that are not reflective of a renegotiation. Through these actions, they bestow a likely insurmountable information advantage to the responders.

However, this explanation had three distinct conditions. Do these conditions, in certain configurations, result in success, or is it just the presence of a single condition with something else that makes the recipe for change? Alternatively, does a proposer who

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is truly conducting a renegotiation, by virtue of seeking to change the product,

automatically engage in multiple types of these behaviors? This last scenario requires the

fewest assumptions about proposer intentions, and, as the case studies show, it seems to be a good fit for the historic record.

Reform failure has a slightly different issue with conditions: One condition supporting the external stimulus explanation did demonstrate sufficiency in addition to the conditions associated with the information advantage explanation. Specifically, one of

those conditions must meet the necessity threshold for reform failure, which is a

significant finding that must be controlled for, as multiple causality must now be explored. Controlling for this necessary condition, do the remaining conditions create other pathways to failure? Which pathways, both for reform success and failure, demonstrate more robustness than others? To explore this, truth tables must be created and analyzed.

The concern mentioned earlier regarding the effect of the number of conditions, as compared to the number of cases, 2k, now comes to the fore. This is an issue because it determines the number of logically possible combinations among the data: too many possible combinations with too little data would create too many empty combinations and suggest a problem similar to over fit. However, as so many conditions were able to be eliminated, just three conditions each remain for both success and failure, although they are different sets of three. Questioning, Proposal, and Terminology remain for success,

whereas visibility, questioning, and proposal remain for failure. Terminology for failure

is removed, as it tested as necessary. Now at 23, or 8, in a universe of N = 36, confidence can be placed in the truth-table calculations.

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Truth Tables and Analysis

Truth tables are at the heart of csQCA, as they demonstrate the conjunction and configuration of different conditions to achieving the outcome (Grofman & Schneider,

2009). Of course, that is limited to the conditions showing sufficiency; any necessary

conditions should be removed, as they would influence the results of the truth table,

producing flawed results (Goertz, 2002). Truth tables allow for logical minimization: If

there are two rows on the truth table, both linked to the outcome result but only differing

in the presence and absence of one condition, then that condition can be discarded. This

can lead to the identification of prime implicants, which are the most parsimonious

combinations of conditions that can lead to the outcome (Ragin et al., 2003).

With three informational conditions demonstrating sufficiency, but not necessity,

eight potential combinations are created, but building a truth table around the data shows

that only four primitive expressions, pathways to the outcome, are created:

• QUESTION*TERM*~proposal + QUESTION*~term*PROPOSAL +

~question*TERM*PROPOSAL + QUESTION*TERM*PROPOSAL →

CHANGE

This is shown in Table 13, page 111, but these pathways can be further logically

minimized into prime implicants. The reduced pathways are

• QUESTION*TERM + QUESTION*~term*PROPOSAL +

~question*TERM*PROPOSAL → CHANGE

Unfortunately, these pathways cannot be further reduced. However, significant

observations do leap out. The first is that there are no contradictory cases to examine.

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Every time a reform makes change, one of these pathways is used, and no instance in which one of these paths was used resulted in reform failure. When two or more of these information advantage shifting behaviors are in play, the proposer changes the nature of the information advantage problem by shifting it to the responder. Although, in many cases of intelligence reform, the proposers claim that they are seeking a renegotiation of what the relationship looks like, it is when the proposers actually behave as if they are renegotiating, they create change. When truly entering into a renegotiation, the proposers start to act in ways that bring multiple conditions into play.

This becomes important, as there is no instance of change in which a single information advantage holds necessary sway to generate the outcome. Although this was discovered previously, when testing each condition in isolation, it is now important because of the multiple information-advantage pathways. This suggests two things. The first has already been addressed: A proposer who seeks renegotiation simply engages with multiple conditions. The second is that there may be a tipping point in the information advantage. If proposers can be observed engaging in at least two of these behaviors, then they are successful in seizing the information advantage and are able to enact change. What is unclear here, and beyond the scope of this research, is whether these conditions have a simple cumulative effect or an interactive effect on information advantage. That would require a different type of measure and a different method of analysis, which is beyond the scope of this research.

This also foreshadows an interesting issue with the condition of Terminology, specifically its absence as a necessity for failure. Previously, this study established that

~term is a superset of the outcome ~change, as it was a necessary condition. However,

110 the coverage was not 100%; two successful cases have the value of ~term along the pathway QUESTION*PROPOSAL. This further suggests that there is a tipping point for information advantage; thus, this pathway receives some additional scrutiny in the in- depth casework. The findings from the truth table for the presence of the outcome,

CHANGE, are summarized as the following:

• There are no contradictory cases for CHANGE. All fit within one of these

four prime implicants.

• At least two of the information advantage behaviors are observed in every

case of CHANGE outcome. This suggests there may be some information

advantage tipping point in pursuing renegotiation.

• There are two cases, Rockefeller Commission and Halloween Day Massacre,

which provide contradictory cases to the necessity of ~term when examining

the outcome of ~change.

Table 13. CHANGE Truth Table

The absence of change requires a slightly different take. As ~term appears to be necessary for the outcome of ~change, it needs to be removed from the truth table— although the new Boolean expression, the reversal of the arrow, is acknowledged. Again with three conditions, there are eight potential combinations or primitive expressions. A simple minimization leaves five prime implicant expressions, but unlike the CHANGE

111 prime implicants, additional minimization can occur due to redundancy. Two of the prime implicants, ~question*~proposal and ~question*Proposal can be removed from consideration, as other expressions provide coverage. This leaves the following three expressions, plus the potentially necessary condition of ~term:

VIS*~question + ~vis*~proposal + ~vis*~question→~change←~term

In the absence of change, there is one contradictory case: The Foreign Intelligence

Surveillance Act of 1978 (FISA) traveled along the ~vis*~proposal pathway but resulted in CHANGE. This particular case, as shown in the next chapter, can be best explained by the presence of TERM along with QUESTION, as the proposer clearly engaged in two areas that shifted the information advantage and thus were truly engaged in renegotiating the product—the lack of a new solution.

The ability to strip down the prime implicants into just one of the informational conditions, combined with the necessary condition of ~term, continues to add support to the hypothesis that holding the information advantage is what leads to one or the other outcome conditions. When a proposer simply executes the established relationship or attempts renegotiation, this shifts the information advantage. This also adds support to the idea that, within this struggle, there is an identifiable tipping point, which backs up the earlier assumptions about ~term’s necessity. The power of ~term is not particularly causal in and of itself; rather, the most ubiquitous of the behaviors that proposers can engage in involves automatically surrendering a portion of the information advantage to the responder at the start of the effort.

If the outcome of CHANGE required two or more information advantage behaviors to show a proposer is renegotiating, then the same would seem to hold for

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~change. In every case of failure, one of these behaviors, ~term, is consistently demonstrated, giving the responder a fighting change by only needing the proposer to cede advantage in one other area, which is a likely occurrence if not approaching the reform as a renegotiation but merely the exercise of enforcement mechanisms in the flawed extant relationship. This would mean that ~term is not truly necessary, despite the testing indicating it as such. Rather, ~term is simply sufficient and can combine with other conditions to create failure. This downgrading accounts for the contradictory case.

• ~term is likely sufficient, despite initially testing as necessary. Considering

the nature and background of the personnel working on intelligence reforms,

human nature may simply mean this is the first area of information advantage

that a proposer surrenders.

• The high consistency of ~term is better considered as a strong predictor of

outcome.

• A similar situation occurs with ~vis. Although tested as sufficient, if the

behaviors of the proposers are truly what matter, Vis is likely redundant and

simply noise.

Table 14. ~change Truth Table without ~term

Both truth tables show that information advantage conditions provide the greatest

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driving force in explaining intelligence reform outcomes, whether that outcome is a success or failure. Looking at the truth tables can only take the analysis so far. What is clear is that information advantage plays a critical role in determining an intelligence reform outcome, and these behaviors are seen when a proposer is genuinely renegotiating the product. The next chapter examines two key cases that reveal the power of the informational conditions.

There were three cases that the truth tables highlighted as unusual configurations:

The Rockefeller Commission, the Halloween Day Massacre, and FISA. Two of these cases, the Rockefeller Commission and the Halloween Day Massacre both showed the absence of language, ~term, but were true renegotiations and so leveraged the other conditions to shift the information advantage, resulting in success. These are compared to the Cuban Study Group, also known as the Taylor Commission, which used none of the conditions. All three had a common topic, centered on covert action, with just the Taylor

Commission failing to create any change.

FISA, which would on the surface appear to be a case that should fail, tips the balance to a positive outcome with the use of new definitions and is compared to similar electronic surveillance reform efforts within the Church Committee. The Church

Committee immediately preceded FISA, and in the macro sense was a paragon of reform success except in the limited area of electronic surveillance in which no change came about. Although in the broad sense the Church Committee was renegotiating the function, it failed to retain information advantage in the specific topic of electronic surveillance.

FISA did not fall into this same trap and imposed new definitions, although the proposers there did surrender some information advantage in the process by recycling proposals.

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Chapter 4: Information Advantage in Action

The previous chapter highlighted the power of information advantage as an indicator of renegotiation of the contract and placing the agent in a position of adverse selection. In doing so, three specific cases came to light: the Commission on CIA

Activities, also known as the Rockefeller Commission, the Halloween Day Massacre, and the FISA of 1978, also known as FISA. All of these cases had a positive outcome, and as in all the other positive outcome cases, the proposer demonstrated at least two of the information-advantage-gaining behaviors, suggesting the undertaking of a renegotiation of the product and thus placing the responder in adverse selection. Looking at these unusual, although not contradictory, cases and comparing them to similar cases that failed to create change can change the abstractness of information-advantage behaviors into more tangible and specific concepts, thus highlighting how renegotiation shifts information advantage and leads to success, whereas the simple execution of enforcement mechanisms allows responders to keep the information advantage and halt change.

The Rockefeller and Halloween Day Massacre cases are interesting, as they are the only two instances of change in which the new language behavior was not observed.

In the context of the larger universe, this lack of the language condition was a necessary condition leading to a reform being unable to enact change. These two cases are interesting because they still resulted in change despite this absence; the other areas of information advantage clearly pointed toward renegotiation and so shifted information advantage toward the proposer. As they are both so similar in the pathway, the primary focus is on the Rockefeller Commission, although the Halloween Day Massacre is not

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entirely ignored. The case to best compare them to is the Cuban Study Group, also known

as the Taylor Commission. In this case, it is quite clear that the proposers rapidly surrendered the information advantage, resulting in an almost embarrassing resolution to the effort.

FISA poses a slightly different reason for consideration. Although the proposer in this case did demonstrate two information-advantage behaviors, one of the failure pathways was the result: a lack of public visibility and the recycling of a previously suggested solution. This particular case demonstrates the larger importance of information advantage relative to all of the other conditions (which the testing in the previous chapter cast doubts upon), particularly the importance of visibility in the public agenda. The Church Committee, in its attempt to address electronic surveillance, provides the best comparison. Although the Church Committee was generally successful—and is scored as such in this research—it was not universally so. In the area of electronic surveillance, it failed to create any change, and this failure can be traced back to an overall inability to leverage information advantage away from the responder.

Advantage Without Language

Although the absence of new definitions, or the use of the responder’s language, was identified as a necessary condition to failure, there were two cases in which this did not occur. These two cases are not exactly a contradiction of the finding that the condition is necessary, although the arrow in the Boolean expression points from the lack of outcome toward the absence of the condition. The causal logic does not indicate that

117 the lack of new definitions, or the coopting of the responder’s language, somehow magically results in reform failure, but it is an indicator—perhaps the key indicator—that information advantage has been ceded and that the proposer is pursuing enforcement rather than renegotiation.

These two cases cast some doubt on the actual label of necessity for this condition because of the strong presence of the other behaviors. Two others, the use of previously considered solutions or, more accurately, the proposal of previously unseen solutions and the separation of the reform from the initiating event—a move away from blame-seeking behavior—played key roles in both cases. These two cases, although apparently lacking the necessary condition, still reach the outcome of success because the proposers in their actions were clearly pursuing a renegotiation of the relationship, although they took risk in this area of terminology. These two cases show that multiple paths to success are possible so long as the pathway truly does shift information advantage away from the responder when the proposer is genuinely renegotiating.

In both the Rockefeller Commission and the Halloween Day Massacre, the proposers, although using extant language, demonstrated that these other behaviors, controlling a large portion of the information advantage, are sufficient to place the responders in adverse selection, ceding just a little to the responders by simply adopting their language. Although the absence of language is normally a powerful indicator that reform failure is about to occur, in these instances, it is not, thanks to the high level of activity in the other behaviors; the proposers were truly pursing a contract renegotiation.

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Covert Action, Not Intelligence

All three of these cases have one core commonality that must be addressed: The primary subject in all of them is covert action. Covert action is not intelligence (Scott,

2004), and it fits neither Lowenthal’s definition nor the definition of intelligence used in this research. It is not about collecting and analyzing information, and it does not mean offering a decision advantage. Rather, it refers to performing actions as a result of decisions (Barry, 2006; Charters, 1985; Jeffreys-Jones, 2011). These actions could be as mundane as providing under-the-table funding to a political party in a foreign nation or as extreme and violent as conducting paramilitary operations or assassinations (Johnson,

2006). The key in all of these coverts actions is that the identity of the true originator—in this case, the United States—remains concealed. Otherwise, an action is not covert.

In some states, such as the Islamic Republic of Iran, intelligence and covert action are considered distinct functions and thus fall into various organizational portfolios

(Wege, 2013). Other states, such as a Russia, see no difference between these functions

(Gustafson, 2013). In the United States, these actions are seen as related functions but are, from a statutory perspective, distinct (Wall, 2011). Only one agency, the CIA, has the statutory authority to perform covert action, although the fact that other organizations can provide support and funding for covert actions is woven into (and concealed within) the intelligence-budget process (Andrews & Lindeman 2013; Elkins, 2014; Gellman &

Miller, 2013).

Establishing that line between support and conducting covert action can be quite difficult and confusing, and the repercussions of covert actions gone awry can be quite

119 severe (Stempel, 2007). This would explain why covert action, even though not technically intelligence, has been at the center of the majority of U.S. intelligence reform efforts, even though it actually consists of a small portion of the overall function’s budget

(Johnson, 1989). This field can offer high reward for policymakers when they engage with the world, but it also poses high risk. Still, this area does not actually help with the sense-making aspect of intelligence. This becomes a hook for the successful cases to reframe the discussion in ways that grant them information advantage. Thus, this odd mission is central in all three of these cases.

Human Experiments

Three significant reform efforts began in 1975, including the Rockefeller

Commission as well as the Church and Pike Committees. The Rockefeller Commission and Church Committee would go on to make significant changes to the intelligence function in the U.S. government, albeit in different areas. The Pike Committee floundered and failed in a spectacular fashion. Although they all resolved in different places, all three had their origins in the same set of events: claims in the New York Times of intelligence organization activities within the United States and activities against U.S. citizens

(Epstein, 1978; Hersh, 1974). Of course, some of these allegations dealt with intelligence collection, but many others dealt with covert actions: the infiltration and influence on dissident groups (Brodeur, 1983), assassinations of foreign leaders (Pickard, 2001;

Schmitt, 1992), and experimentation on human subjects for biological and behavioral impacts of drugs as potential covert action and counterintelligence tools (Edgar &

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Rothman, 1995).

President Ford established the commission headed by his vice president in

January of 1975 to investigate these claims as they related to the CIA (Executive Order

[EO] No. 11828, 1975). Pike would also focus on the CIA, whereas the Church

Committee would encompass the entire intelligence community at the time (Johnson,

2008). As mentioned before, these had varying levels of success in creating change. The

scope here is interesting, not because the Rockefeller Commission limited itself at the

outcome—testing in the previous chapter demonstrated that scope has no real impact— but because the enacted recommendation with the largest impact was applied beyond the initial scope of just one agency to all agencies. The issues uncovered in looking at one were framed in a solution that were applied to all and thus generated a larger responder coalition.

EO No. 11905, signed in February 1976, is the direct result of the Rockefeller

Commission. This document is often considered a milquetoast and ineffective document as far as creating reform, an opinion based on the creation of a variety of advisory boards with limited-to-no power (Conway, 2016; Kitts, 1996). This research agrees with the analysis that these boards were toothless and presented, at best, superficial reforms.

However, there are two key and often overlooked items in EO No. 11905. These items caused significant change:

1. An outright ban on human experimentation unless conducted within the

boundaries issued by the National Commission for the Protection of Human

Subjects of Biomedical and Behavioral Research

2. An outright ban on assassination (EO No. 11905, 1976)

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The termination of a function is the most radical shift possible from the status quo; the

contracted good is no longer needed. This is a true renegotiation, and it should lead to

behaviors that move the information advantage toward the proposer.

The assassination ban is often misattributed to EO No. 12036 (1978), signed by

President Carter, or EO No. 12333 (1981), signed by President Reagan (Harder, 2002).

However, these two EOs merely tightened the language on the assassination prohibition.

Establishing a hard stop of actions along the escalatory ladder of covert action, especially if those actions had been used in the past, is a significant change. Assassination, or at least participation in a conspiracy for assassination, had been a covert action tool used by the CIA in many instances8 but not any longer.

The human experimentation prohibition is also significant and arguably the most

significant change. EOs after this would also adjust the language to reflect the larger

changes on medical research ethics, specifically that the guidelines established by the

National Commission for the Protection of Human Subjects of Biomedical and

Behavioral Research had been absorbed by the Department of Health and Human

Services, which established the ethical and procedural framework under which such

experiments could occur (Steneck & Bulger, 2007). That language change itself is superficial, however. What is momentous is putting a full stop to an entire spectrum of activity across all organizations, of the unaware experimentation on human subjects, which had been conducted for over 2 decades by just one agency according to the records reviewed by the commission. This is no small feat, as the assumption is that agencies and

8 Varying levels of activity, ranging from direct involvement in overthrow or assassination to mere long- term relationship with assassins of foreign leaders occurred in a variety of countries: Cuba (Bohning, 2004), Chile (Devine, 2014), Congo (Weisman, 2014), Guatemala (Immerman, 1982), Iran (Roosevelt, 1979), and South Vietnam (Laurie, 2016).

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their functions are highly durable (Kaufman, 1976; Lowi, 1979).

How the commission was able to accomplish these feats can be seen in how it

leveraged information advantage, specifically with two behaviors: the solutions and the linkage to the events that caused the reform to begin. The solution behaviors are perhaps the easiest to examine. There was no debate in this effort that covert action was a tool that the United States should not use, and indeed the CIA had been quite active in covert action since its founding. Previous reform efforts had suggested minor changes for covert actions: better external oversight boards, better internal coordination and visibility, and a more stringent approval process (Doolittle, 1954; Dulles, Jackson, & Correa, 1949;

Kirkpatrick, 1961). These were expected solutions that really only create superficial

change or tweaks at the margins of the issue.

The solution of terminating the function is rare and had not been seen in

intelligence reform before. Although there is debate about the longevity of government agencies, the functions tend to simply migrate with some adjustment rather than experience pure termination (Daniels, 1997). Even when there is agency termination, which is acting as the stand-in for function termination here, the driving force is political turnover (Lewis, 2002), or partisan control, a force that tested earlier as having no impact

on intelligence reform.

What this radical solution does offer is an ability to seize and control information advantage in the renegotiation between principal and agent. The obvious agent argument is that the capability should be maintained, at least at a reduced level, if needed for the future. If the principal simply no longer wants this good or service, then the agent has no

way to create an effective counterargument, however. Having a principal hold a

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monopoly on being the recipient of that good or service makes this even more difficult to

rebut. The agent is limited to appealing to an unknown future, building counterfactual

conditions based on past successes of the capability to convince the principal that this is a

capability needed at some level. In the agent’s experience, which the principal lacks in

this field, the agent argues the principal should trust the agent’s perspective that this

status quo capability may be needed at some point in time. This is a powerful argument

and one that was likely used to sway the Doolittle Task Force in its evaluation of covert action two decades prior to the Rockefeller Commission. The old adage of “better to have it and not need it than to need it and not have it” can seriously impact the resolve of even the strongest proposer, as the exact nature of future crises and opportunities is unknown.

A proposer may begin to wonder if the responder is correct, and this capability could be useful in the next crisis or the crisis after that. This argument has the potential to pull the principal’s interests back into alignment with the agent’s (i.e., back to the status quo)

because it surrenders the information advantage back to the responder.

The record about human experimentation suggests that this function was part of

the status quo; it was part of the normal operating environment. For two decades, the CIA

had been conducting these actions on behalf of the U.S. government. When specific

experiments were deemed unnecessary, they were terminated, but the larger function was

apparently desired and thus continued (Rockefeller, 1975). The status quo reigned. The change in this case was the principal’s desire for the product of human experimentation.

If the product is simply no longer desired, this is a true renegotiation of the contract.

When exploring this function, the proposers made note of previous oversight and

enforcement activities, when specific experiments had been deemed to have gone too far,

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such as the loss of life of a subject (Hearing, 1977). The proposers, however, did not seek

to reprosecute these matters and did not seek to place blame (Rockefeller, 1975). They created rhetorical space between the events and their inquiry. Their lines of inquiry were to uncover the facts and reach conclusions for two questions: Did the U.S. government

ever desire this capability? Does the U.S. government, acting as the agent for the

American society, still desire this capability? The former was yes, and the latter was no.

This shows two key facets of information advantage: not pursuing blame and generating

a new solution.

The simplicity of these questions (and the solutions that flow from them) place

the responder at an information disadvantage. The second question, in particular, is

dangerous for the agent; there is no accurate insight into what the needs of the principal

have become. The agents’ knowledge is based on the original contract and the cost to

themselves if the contract goes away; there is no way the agent is able to accurately

understand the cost to the principal of canceling the contract for that good. The

Rockefeller Commission established its information advantage by approaching the

reform as a renegotiation with the agent and thus was able to enact change.

Trick or Treat

The Halloween Day Massacre demonstrates many of the same behaviors on the

part of the proposer—in this case, the DCI at the time, Admiral Stansfield Turner. Once

again, the proposer demonstrated a renegotiation of the contract with the agents, which in

this case was the CIA’s Directorate of Operations. The Halloween Day Massacre saw a

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few hundred middle-to-junior officers as well as a handful of senior personnel, primarily

although not exclusively paramilitary officers in the Directorate of Operations, let go

from government service (Shackley, 1981). Although the title of this event would make it

seem as if it occurred on a single day, the firings occurred over a period of a week, and

the discussions about shaping the Directorate of Operations occurred over a period of

months (Maxa, 1980; Turner, 1985). This was such a dramatic and traumatic shift that it

has been claimed as evidence of the CIA’s ineffectiveness for decades (Brooks, 2016),

despite the validity of the claims being suspect.

The Directorate of Operations had (and still has) two primary functions: human espionage and covert action (Office of the Director of National Intelligence, 2009).

Espionage is normally termed human intelligence. This is the act of acquiring the private information of other countries by recruiting citizens of those countries who have placement and access to the desired secrets into the service of the CIA (Imler, 2006).

These individuals, known as assets, are the ones doing the real dangerous work of spying: they are the ones taking risks by betraying their governments in providing secrets to their

CIA case officers (Cogan, 2006; Felix, 2001). Covert action was defined earlier in this chapter, and the difference between the two functions of espionage and action became a key leverage point for the proposer.

Depending on how active a covert action is, these two functions may be rather similar or very distinct. For example, bribing a reporter from a foreign newspaper to plant stories in his or her paper or passing off sums of money to an opposition political campaign requires many of the same skills as recruiting an individual to betray their country: the ability to convince the other person to perform this action at their own risk

126 and the ability to be discrete so as to remain undiscovered. Running paramilitary operations, however, is not as similar in needed skills. Raising, training, equipping, and leading groups of armed people—often those who are indigenous to the area of operations—in low-end levels of combat is not the exactly the same as running an asset; these actions require different sets of skills and abilities (Cline, 1976). However, from a personnel perspective, at the time, the CIA appeared to assume that there would be a certain level of fungibility among its officers (Turner, 1985).

When Admiral Turner was made DCI in 1977, the CIA and Directorate of

Operations had recently finished a series of paramilitary operations in Southeast Asia that had spanned nearly three decades (Laurie, 2016). Although manning documents are not available, by all contemporary accounts, the paramilitary side of the Directorate of

Operations was the driving force in the agency (Shackley, 1981). Human intelligence did occur, but it simply was not considered to be the main driver of missions and resources; it was not sexy (Cline, 1976). Admiral Turner had different ideas about what the CIA should do, and these ideas are dominant to this day (George, 2011).

Of course, those nearly three decades of paramilitary action did not have a positive resolution from the U.S. perspective. In all the Asian states where these paramilitary activities occurred, the opposition eventually toppled the U.S.-backed governments (Laurie, 2016). In Africa, the largest paramilitary operation was newer, still had a sense of currency about it, and also appeared to be lacking in positive results

(Stockwell, 1978). There was an opportunity here for blame-seeking behavior from this new DCI. The reform could have been framed as a decision to eliminate covert action personnel associated with these failed paramilitary actions, replacing them with new

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individuals judged more likely to provide effective paramilitary results. This would

appear as true blame-seeking behavior.

However, that was not how the layoffs were executed. Firing decisions were not

based on association with a particular operation, but simply on overall performance of the

individual against the organization’s intelligence—not covert action—mission (Turner,

1985, 2005). Blame-seeking behavior would have provided the leadership of the

Directorate of Operations with an information advantage to deflect and diffuse accusations from the principal against wide swathes of the affected personnel. That was not the path taken. The new principal was not interested in blame-seeking; he was instead

changing the very concept of what was expected of the CIA.

The primary purpose of the CIA, in the mind of this new director, was to find out

the secrets of other nations for the decision advantage of the president (Turner, 2005).

This required neither a large paramilitary covert action capability, nor officers who did not have the skills to gain these secrets or were demonstrated low performers in doing so.

This is an almost pure example of contract renegotiation: The DCI was adjusting the focus of the organization in a new direction; status quo desire was for continued emphasis on paramilitary operations. With 28 years of conducting covert actions in Southeast Asia, as well as years of covert actions in Africa and South America, the claim could not be made that the CIA’s interests were drifting away from the government’s interests.

Clearly, the government had desired that good of a paramilitary capability. There were too many instances of it occurring across too many different administrations and too many resources repeatedly granted to the CIA to perform these kinds of paramilitary actions for this to have been anything other than a desired good (Johnson, 1989) until, it

128 seems, something else was desired.

This lack of taste for paramilitary action and a desire for greater emphasis on secret acquisition was not the only change in the nature of the product. A new solution was also proposed. DCI Turner felt that improvements in technology, specifically satellite technology, offered better opportunities for delivering the product of finding out the secrets of others (Turner, 2005). From space, there were now opportunities to listen in on the conversations of threats and actors of interest; there were now opportunities to take pictures of their activities from orbit as well. Although a human case officer is still needed in certain instances, technology offered the same good of secrets to provide decision advantages, but without all the risks that come with conducting espionage.

From an information advantage perspective, this was a new solution. Yes, the

CIA had been involved in joint spy satellite efforts before with the Department of

Defense (Berkowitz, 2011), but what was proposed was radically different: prioritization of technological means over human means as the primary method of performing the function was completely unexplored territory for both proposer and responder.

Coupled with the proposer’s position that what had unofficially been the organization’s primary function (paramilitary operations) was no longer desired, the responder was left without any knowledge of how to frame a sound counterargument against change. The responder lost information advantages in both links to the failed paramilitary events and potential solutions, as these two areas were intertwined in the principal’s new vision of the organization and the inherent hierarchical power of a chain of command. The responder was placed against an insurmountable disadvantage. There appears to have been enough loss of information advantage for the status quo-seeking

129 responders to falter in their defense, only able to publicly decry the changes after the dust was settled. Considering the hierarchical nature of the relationship, it was enough for the principal to push changes through and bring the rest of the organization toward these new, renegotiated interests.

Stating the Obvious

In mid-April 1961, one of the most famous covert action disasters in history—

U.S. or otherwise—unfolded on the beaches of the Bay of Pigs on the southern coast of

Cuba. On April 15, a CIA-supplied bomber aircraft attacked Cuban airstrips as part of a shaping action before a beach landing that followed two days later. By April 19, the invasion of CIA-trained counterrevolutionaries opposing the Castro regime had been resolved, and not to the benefit of the United States or CIA (Gleijeses, 1995;

Vandenbrouke, 1984). This particular operation strained the definition of covert action, as there was no credible way for the United States to deny involvement in this highly visible event.

This event itself spawned two reform efforts, one internal to the CIA launched by the Inspector General and documented as the Kirkpatrick Report, and one launched by the White House, the Cuban Study Group. The second effort is the one of interest to this research, as it was a spectacular failure of reform wherein the proposer held a significant hierarchical power advantage over the responder on a level equal to the other cases.

This effort was established on April 22, just three days after the last moments of fighting, and offered its final report and sole enacted accomplishment by June 1961

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(Cuban Study Group Memorandum, p. 4). That sole accomplishment was a session among senior U.S. leadership critiquing points of failure in the plan (Taylor, 1972). Other proposed solutions, such as an interdepartmental covert action coordinating body, were left by the wayside, argued out of existence by the responders. How the responders were able to do this becomes quite clear when looking at how the Cuban Study Group approached the problem: There was no renegotiation. The Cuban Study Group used existing oversight measures and enforced the established relationship.

When President Kennedy first chartered and gave guidance to the Cuba Study

Group, its purpose was broadly defined and avoided blame-seeking terminology, appearing to be grounded in renegotiation:

It is apparent that we need to take a close look at all our practices and programs in the areas of military and paramilitary guerrilla and anti-guerrilla activities which fall short of outright war. I believe we need to strengthen our work in this area. In the course of your study, I hope that you will give special attention to the lessons which can be learned from recent events in Cuba. Since advice of the kind I am seeking relates to many parts of the Executive Branch, I hope that you will associate with yourself, as appropriate, senior officials from different areas. (Kennedy, 1961)

This is language that does not speak to affixing blame. Even the mention of the specific fiasco, the “recent events in Cuba” is to extract lessons learned. There is an acknowledgment that something went wrong, but as an effort to gain some understanding to prevent the same or similar mistakes in the future.

The Cuban Study Group was not executed in this manner. Within 48 hours of the president’s letter forming the effort, interviews began (Cuban Study Group, 1961b). All told, approximately 50 witnesses were called (Taylor, 1972). All but one or two were called because of their connections regarding the Cuban operation. There were some senior officials, as directed by the charter, from the Department of Defense and

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Department of State, as well as individuals from the White House and CIA. Most were

not senior—they were CIA officers who had been personally involved in the operation, some from the boats (Cuban Study Group, 1961g), some who had trained the Cubans

(Cuban Study Group, 1961f), and some who were briefly on the shore with the Cubans

(Cuban Study Group, 1961e).

The line of questioning did not follow the guidance of looking at practices and programs. It instead focused on what went wrong in Cuba, when it went wrong, and when the witnesses knew of problems (Cuban Study Group, 1961b, 1961c). Questions about when messages were sent, to whom, and when responses were received could generate generic lessons learned, but the questioning by these proposers was for names and positions. This blame-seeking behavior caused responding actors to begin to derail the effort. At one point, the national security advisor weighed in, attempting to rebut findings and the line of inquiry even before the reform effort had finished its questioning of witnesses (Cuban Study Group, 1961f).

This shift toward blame-seeking clearly benefited the responder, as it allowed

interviewees to select their own particular favorite target of blame: the logistics plan

(Cuban Study Group,1961h), the training (Cuban Study Group, 1961d), the lack of air

cover (Cuban Study Group, 1961b), the types of boats used (Cuban Study Group

Memorandum of Fifteenth Meeting), and so on. The potential for blame now became

diffuse, and the proposer had difficulty determining exactly who did what wrong and

when. General Maxwell Taylor, head of the Study Group, even acknowledged this fact in

his autobiography (Taylor, 1972).

In terms of solutions, using the lines of questioning, it is difficult to identify how

132 the proposers reached the conclusion of establishing a new interdepartmental body to coordinate covert actions. It would seem the group simply jumped to that solution from the start (Cuban Study Group, 1961b). This was not a new solution, as Doolittle (1954) and Clark (1953) had proposed it—each time without success. The responders understood the cost of this solution primarily as a constraint on their ability to demonstrate agency in pursuing courses of action. With this information advantage, they were able to mount a successful defense headed by the secretary of state (Taylor, 1972). The Department of

State, having the least to lose within such a proposed new organization, was able to deftly generate an effective argument as to why it would not add value to national security

(Cuban Study Group, 1961x). This is interesting for two reasons: First, it clearly shows the power and intensity of the desire for status quo from responders that the actor that would have had the least impact to its agency led the defense, and it shows how proposing previously considered solutions becomes a strong indicator of surrendering information advantage.

The language used by the Cuban Study Group—which was led by a retired four- star general but which also had a former DCI in a senior position—was that of a responder. It was language that all sides were comfortable with, so they used it. The reasoning for doing so is clear: The study group was moving at a fast pace and creating new terms would slow the process to an unacceptable level. But at what cost to actually understanding the larger problem and actually creating reform? Diving into the tactical language of covert action placed the advantage back with the responder.

In all three behaviors, the Cuban Study Group surrendered information advantage.

Though their charter was for broad, non-blame-seeking purposes, they entered into the

133 effort as a postmortem for blame-seeking, to the point of essentially ignoring their charter to examine other low-intensity capabilities and coordination practices across the government. They recycled previous solutions, giving the status quo-seeking responders an opportunity to demonstrate their superior knowledge as to why the proposed solution would not work. Finally, they utilized the terms of art to which the responders were accustomed. The commission tied themselves to old oversight and enforcement mechanisms when their charter was for renegotiation.

The final result was that the only recommendation emplaced from the Cuban

Study Group was a briefing to senior decision-makers about what went wrong, yet lacking any solutions for preventing similar problems in the future. At the conclusion of this milquetoast climax to the reform effort, President Kennedy remarked, “Well, at least nobody got mad” (Taylor, 1972), a rather sardonic quote considering the size and visibility of the Bay of Pigs invasion and the negative political impacts that it had on the

U.S. government at the time.

The Power of Language

In a society such as the United States, there is a tension between conducting intelligence activities and the need for privacy (Bok, 1989, pp. 10–12). Although this has been a topic in several reform efforts, there are just two of interest right now: the Church

Committee of 1975 and FISA of 1978. Both of these reform efforts had this privacy concern at their centers. The Church Committee cast a wide net over the issue of rights to privacy, from the release of tax returns to monitoring of political groups to electronic

134 surveillance conducted inside the United States; FISA was focused solely on the issue of electronic surveillance. Overall, the Church Committee was a large success in creating change, except in this one area of electronic surveillance. FISA, by contrast, only looked at one area and was successful in creating change, which raises the question, “What was different?” Language—specifically, the way in which the proposer defines the terms—is the key leverage point from which information advantage tipped the scales to one party or the other. The Church Committee tipped the advantage to the responder when they also relied on recycled solutions. FISA tipped the advantage to the proposer when they created rhetorical space by delinking discussion from scandals.

In a broad sense, the Church Committee could be considered the poster child for successful reform: It established Congress as a valid costumer of intelligence; it redefined the relationships between the legislature, the executive branch, and their intelligence organizations (Johnson, 2004). The Committee did not generally approach the task in terms of blame-seeking, but framed their task as ensuring that the civil liberties of

Americans were protected in the future. Early within their final report, the committee established that their actions were to ensure that the necessary function of intelligence was conducted “efficiently, and within the framework of the Constitution” (Church

Committee, 2007a, p. 2). Recognizing that intelligence was a necessary capability, the committee asserted that they had the responsibility to ensure that the public good of society was being met by taking to heart the warning by Justice Brandies, “The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding” (Church Committee, 2007a, p. 2).

Had the committee gone in the other direction, relying on more pointed language

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regarding who had violated the civil liberties of Americans, it would have been visible at the center of their queries. Almost universally, however, that was not the line of questioning pursued. Instead, the questioning showed a proposer not seeking to simply punish wrongdoers, but rather to create systems and processes to ensure wrongdoing did not occur again.

Though initially mandated to investigate allegations of domestic activities—the same activities that spawned the Rockefeller Commission discussed earlier—the Church

Committee began to explore a wide swath of other activities from covert action to analytic training and administrative processes (Church Committee, 2007a, pp. 5–6). From the explanation discussed in Chapter 2 and supported by findings in Chapter 3, these proposers appeared to be on the road to success. They were renegotiating the relationship between the government and its intelligence elements. Generally speaking, this was the case; in the counting rules for the wider effort, the Church Committee is counted as creating change in the data set.

Not all of the changes the Church Committee sought came into being. Electronic surveillance was the key area in which it was stymied. Within just this facet of the proposer’s problem, one can observe a change in language from the committee that became key for the responder to preserve the status quo, as the committee fell back to old oversight and enforcement mechanisms, specifically old solutions and the responder’s language.

In terms of using the extant terms of art, the committee often stayed away from this practice, denying an information advantage. In the broader sense of the Church

Committee’s efforts, they shifted the term collection away from the intelligence

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community-prescribed definition about information gathering to one closer to a more

legal, evidentiary perspective (Church Committee, 2007b, 100). This forced the

intelligence agencies to reshape their own thinking in their responses. However, pushing

the responder off a set of definitions occasionally is not the same as doing so all the time.

Regarding one specific facet, that of electronic surveillance, the committee did rely

entirely on the extant terms of art. This is not surprising, as the terms of art were closer to a legal definition, so it fits within the overall model that the committee had been following. Within this policy space, though, this move passed information advantage to the responder rather than retaining it with the proposers as it had in other areas of inquiry, hinting at stepping away from renegotiation in just this area. This is what caused the committee, which was otherwise successful, to stumble into a significant failure to create change in this very specific instance.

Through their investigation into electronic surveillance, the committee found many egregious violations of privacy. These included the CIA’s electronic surveillance of

U.S. citizens, the FBI’s overzealous surveillance, the NSA’s interception and maintenance of domestic calls, and the establishment of watch lists of U.S. citizens for additional monitoring (Church Committee, 2007b, p. 388). These violations spawned, as one would expect, some recommendations on electronic surveillance from the committee, but no action on these recommendations occurred. The only tangible change—the cessation of the NSA watch list—actually occurred two years prior to the committee’s formation (Church Committee, 2007b, p. 388). The committee was not questioning in a blame-seeking manner. Why, considering the general success of the Church Committee, did nothing change on the surveillance front?

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A look at the testimony and discussions around this surveillance illuminates why

this occurred. It becomes clear that the committee surrendered information advantage to

the responder, in both language and solutions. The responder then took advantage and

halted progress toward change. The committee framed the discussion about surveillance

in light of extant laws and statutes, putting both their solutions and language in terms that

were easily met by the responder. Unlike the committee’s foreign-intelligence and covert-

action investigations (during which laws and statutes were a new and unusual framing

language for the issues), which pointed toward renegotiation, this topic of electronic surveillance was already familiar to the responders and pointed to oversight and enforcement.

The culmination of handing all this information advantage to the responder can be seen in the prepared statements and testimony of the attorney general when he was called in to defend these intelligence practices. Although Attorney General Edward H. Levi was

called upon specifically to support the FBI, the responders took advantage of his greater

information asymmetry to also defend the acts of the NSA and CIA—all to great effect.

Eulogized as the “Greatest Lawyer of All Time” (Roth, 2008, p. 188), Levi’s

ability to deftly wield an argument is clearly seen in his time before the committee. His

testimony and prepared statements intertwine the concepts of intelligence in general as

well as the technical aspects of electronic surveillance, all while turning the committee’s

language back on itself, as in these examples:

It may be that that the importance of some information is slight, but that may be impossible to gauge in advance: the significance of a single bit of information may become apparent only when joined to intelligence from other sources…

By the term “agent,” I mean a conscious agent; the agency must be of a special kind and must relate to activities of great concern to the United States for foreign

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intelligence or counterintelligence reasons. (Select Committee on Government Operations with Respect to Intelligence Activities, 1975)

Neither quote directly discards the language and foundation of the committee.

They capitalize on the phrasing the committee members had been using to weave in

extant concepts and constructs of the intelligence organizations in a fashion that

reinforced the information advantage they held.

Who else but the responder really knows if a single bit of information is

important? The proposer does not, which is why the intelligence organizations provide that function for them. The same is true of acting on items of “great concern.” Is it not

true that understanding and acting on behalf the proposers, thus providing them with a

decision-making advantage, was why these organizations were formed? Certainly, there

should be no need to change the relationship. That is the why behind the relationship

evening existing.

Members of the committee were so swayed by the eloquence and thoroughness of

the Attorney General that one member, Senator Huddleston, commented on how the

prepared remarks were so scholarly that perhaps having read them, he might now be able

to practice as an attorney (Select Committee on Government Operations with Respect to

Intelligence Activities, 1975), an overly friendly stance. This is not to imply that

proposers should take a hostile position in dealing with responders, but the recorded

reactions of the committee to the Attorney General show that they were essentially cowed by his great legal knowledge and reasoning. He held the information advantage, wielded it well, stymied attempts to take the advantage away, and discouraged the committee from pressing harder.

Was this enough to fully secure responder information advantage? The solution

139 proposed by the committee offers another opportunity for the responders to secure information asymmetry in their favor. The stated entering assumption of the committee was that any solution would be an updating of the Communications Act of 1934 or the

Omnibus Safe Streets and Crime Control Act of 1968 placed against the context of the 4th

Amendment (Select Committee on Government Operations with Respect to Intelligence

Activities, 1975). This is a solution that was already known and in place. It was not a new proposal, so this was not a renegotiation. This, too, played to the responder’s strengths; there were few people at the time who could testify at the level of the Attorney General about these two statutes. Though testimony indicates that committee members were toying with the idea of new legislation, the preferred solution was to utilize and rely upon existing court structures and statutes (Select Committee on Government Operations with

Respect to Intelligence Activities, 1975).

Again, this placed the information advantage firmly with the responder, allowing the Attorney General to assure them that any potential alternative solution would not be worthwhile, and the responder redirected the proposer’s inquiries into different directions which were rhetorical dead ends. With the committee suggestion of new legislation for extant courts, the redirection was that existing courts were already overburdened with requirements and additional requirements would only make the situation worse. With the committee’s suggestion to create new courts, another redirection back to the executive was offered in rebuttal, again citing a general overload on the judicial system writ large.

New courts to deal with new requirements would create an additional cognitive capability drain on the system beyond even the previously suggested new requirements. This solution would be a further exacerbation of the problem. The obvious solution then was

140 to rely instead on high level—that is, the attorney general’s—authorization for domestic electronic surveillance activities, or, to stick to the status quo.

The most devious aspect of these deflections is that no alternative other than maintaining the status quo was demanded by the proposer from the responder. Having the information advantage so firmly in hand, there was also no compunction or incentive to provide an alternative. When asked what he felt the most useful and effective solution to this tension over privacy and electronic surveillance would look like other than the status quo, the Attorney General simply stated “that is not a question that one answers without a great deal of thought.” (Select Committee on Government Operations with Respect to

Intelligence Activities, 1975). He offered no further expansion on this line of reasoning, and the committee did not press him further. They knew they had been beaten.

Thus, the Church Committee, though greatly impacting the landscape of intelligence in the larger sense, did not have a record of success in addressing privacy issues involving electronic surveillance. At every turn, they inadvertently surrendered the information advantage, which reveals that, unlike other areas in which they sought to renegotiate the contract, for electronic surveillance, they had not recognized the flaw in the originally contracted product (or sought to adjust it), as it was firmly in the existing relationship.

The Foreign Intelligence Surveillance Act

The Church Committee’s inability to create change in electronic surveillance was not the end of reform efforts on this topic. Shortly after the conclusion of the Church

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Committee and the enactment of its proposals, Senator Kennedy introduced S. 3197 late

in the legislative year for 1976, with the support of the Ford administration, to establish

limits on and changes to domestic electronic surveillance. This was primarily envisioned

as occurring through the establishment of a court-based warrant system, one of the proposed solutions of the Church Committee (Dawson, 1992). Although the full Senate did not consider this bill before the end of the legislative session, it did conduct hearings, and those hearings offer great insight as to how potential solutions were being formulated: Specifically, they were all essentially recycled solutions. In the next session of Congress, the legislation was again proposed; it eventually passed as the Foreign

Intelligence Surveillance Act (FISA) of 1978 (PL 95-511).

This act was a watershed moment in electronic surveillance; it established new procedures and processes, eliminated the practice of some actions, and most importantly established new definitions (Cinqugrana, 1988). Of course, the act that finally passed was not the same as the initially proposed act; there were some minor changes and modifications, tweaks in how the underlying idea would manifest. Despite these tweaks and the recycling of solutions, changes still occurred. In addition to the recycled solutions, there is another behavioral similarity between FISA and how the Church

Committee approached the topic: a lack of blame-seeking. There is one key difference: language. Though information advantage was ceded on solutions, the proposer kept

FISA’s language in terms of avoiding blame-seeking; then fully secured the information advantage by shifting the definitions in a new direction. This locked-in information advantage indicates that the proposer was indeed seeking a renegotiation of the product, creating a situation of adverse selection for the responders.

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The similarities of the cases are quite significant. The subject was a very narrow area of discussion: domestic electronic surveillance. Neither reform effort approached the issue from a blame-seeking model, but more of a preventative model simply seeking to ensure the same problems would not arise again in the future. Of course they have arisen again (Jaeger et al., 2003, 2004; Sloan, 2001).

The FISA solution, though modified somewhat into its final form of PL 95-511, is essentially recycled not only from the previous session’s legislation but also from the

Church Committee. The idea of judicial warrants for electronic surveillance in support of foreign intelligence was first proposed in that effort (Church Committee 2007b, p. 227).

There were minor variations proposed among all the hearings: using existing appellate courts, a single federal judge within a circuit, or eventually an independent court appointed by the Chief Justice. These are only variations of the technique. The point of importance is that the concept of requiring a judicial warrant was not a new proposal unique to FISA. The tweaks do not cover up the recycling, and as the testing earlier showed, recycling assists the responder in defeating change; it normally indicates an adherence to the existing good and its oversight and enforcement mechanisms, not a renegotiation.

There was a new sitting attorney general for the federal government, Levi having been replaced by Griffin Bell in the time between these two reforms. However, attributing all the resultant change to simply a different attorney general is problematic:

Levi also participated in the hearings for FISA. This time, a year after the Church

Committee, his testimony supported the changes. What becomes apparent, and is even remarked upon by Levi in his testimony, is that the language, the definitions, changed.

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These changes had deprived his previous arguments of their foundation. The proposer

had shifted and renegotiated the nature of the discussion away from the criminal law

model in which he was an expert, so his counterarguments to the recycled solutions no

longer stood.

Unlike the Church Committee, which was primarily focused on preservation of

civil liberties, FISA hearings shifted the focus to national safety from foreign powers in

the context of civil liberties. This meant forging a new model. The proposers took a few, but not all, elements from the established criminal law model as well as many previously unconsidered elements from the foreign intelligence model. This blending of partial models created something new, which meant new definitions and considerations were required. These primarily focused on defining foreign power, defining U.S. personhood, and establishing the nature of information needed by the government in order to protect itself from hostile acts. Within his testimony, Levi specifically called out the difference in the language approach from the previous effort and how that required him to take a new stance, a stance which now supported the proposed reform. Changing the terminology changed how he approached thinking about the issue and deprived him of his ability to derail change via an information advantage. This impact of language shift on Levi can be seen in the following quotes from his testimony:

I know that a certain discomfort comes in departing from the criminal law model of allowing searches only to obtain evidence of a crime…Information concerning the activities of foreign agents engaged in intelligence, espionage, or sabotage activities is a valid, indeed a vital, government interest. and

an earlier draft of the bill was not phrased in terms of clandestine intelligence activities, but rather in terms of the somewhat simpler term “spying.” Whatever phrase is used in combination with the clause “pursuant to the direction of a foreign power” is intended to convey the requirement that is probable cause to

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believe that the target of the surveillance is indeed a secret agent who operates as part of the foreign intelligence network of a foreign power. And it is at this crucial point that the judge must be satisfied before he gives permission for the surveillance. (Subcommittee on Intelligence and the Rights of Americans Hearing, July 1 1976)

As part of the process related to this effort, the proposers established, then

codified into the statute, key definitions different from extant intelligence definitions. For

example, there was debate over the standard defining lawful resident or other aliens and

their relationship to assumptions of privacy. Although the executive-branch representatives argued, with empirical evidence, that temporary aliens such as those on student visas were often Soviet intelligence officers, the proposers held firm. Their definition did not recognize a differentiation of aliens for ease of monitoring based on a time spent in country; all were held equal. Probable cause would be required and must be based on more substantive evidence that the individual was, in fact, a clandestine agent for a foreign power beyond the type of visa used to enter the United States (Senate Report

95-604 part 1).

It should not be construed that discussions between proposer and responder were smooth regarding language shifts. There was pushback from the responders and attempts to weaken the act so as to retain a level of flexibility for the FBI and NSA. In a move that evokes both delinking behavior and new language to secure the information advantage and mitigate this pushback, the proposers consistently shifted dialogue away from past transgressions and into a series of hypothetical scenarios. This forced the responders to often abandon their historically based empirics and attempts to use now outmoded elements of language (Senate Report 95-604, Part 2).

Bounded by hypothetical scenarios, with terminology that deprived the responders

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of their previous foundations, the responders found themselves with little maneuvering

room to deflect or derail changes. There was no incentive for the proposers to

compromise on these positions of new definitions and hypothetical scenarios and to

instead use some sort of shared language. They held an information advantage that they

could (and did) use to force this new language on the responders so as to create a new contract for a product that the proposers felt was more in line with their wants.

This forced language is a powerful tool, lasting well beyond just the efforts to turn

FISA into law; it remains the extant language of intelligence organizations for training

new employees, as highlighted during an outbrief with an independent coder brought in

for data validation. He remarked that interpreting FISA was significantly easier than

earlier cases because the terms and definitions were the same as those he had been

exposed to in his prior experience as a signals intelligence collector. He contrasted this

with his unease with the older cases in which he felt as though terms were being misused,

as they did not quite fit with his experience and training. It was not that terms were

misused in the older cases; rather, FISA had such an impact on language that its effects

are still felt on the terms of art almost 40 years later.

Conclusion

For all the cases in this chapter, and indeed all the other cases across the wider

universe of U.S. intelligence reform, the key commonality that determined success or

failure to create change was how the proposer approached the problem. In cases in which a

proposer sought true renegotiation of the contract between proposer and responder,

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principal and agent, the behaviors were such that information advantage clearly belonged to

the proposer. When proposers engage in multiple behaviors that deprive the responders of their information advantage, that is renegotiation, which results in change. In those times

during which a proposer is not truly seeking out that renegotiation but instead merely

exercises oversight and enforcement mechanisms with regard to the existing relationship,

the responders firmly hold the information advantage, as they can use that advantage to argue against change, thus preserving the status quo.

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Chapter 5: Conclusions

The purpose of this research is to answer a relatively simple question: Why do some intelligence reforms succeed and others fail? This has been a fairly underserved question within an underserved area of study. The vast majority of literature on the topic of intelligence reform is atheoretical, with just a few key exceptions that are predominately focused on a slightly different question, that of optimization. This required casting a wide net to find established, theoretically based explanations that could be mapped to atheoretical claims, and so tested alongside the few theoretically based efforts that had restrained themselves to an overly small sample of cases.

This research took a different path, reaching out to encompass the entire universe of cases in its analysis and identifying a variable that had only been utilized in one other work on intelligence reform, although taking a different position from that work by acknowledging the nature of the actors involved, a shortcoming of the established literature. Chapter 2 reviewed these testable explanations, whether newly mapped or already based on theory, as well as the new explanation of this research. Chapter 3, in addition to presenting information about the novel qualitative method used to address the medium-sized data set (N = 36), conducted the testing on the full universe of cases. In doing so, significant support for this research’s proposed new explanation was found.

Chapter 4 focused on a handful of specific cases selected for interesting configurations based on the previous chapter’s testing. These were paired with similar cases which had different outcome results, the intent being to isolate actions that changed information advantages between actors. Of course, all of this rests on an assumption that intelligence

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is something that has actual value to a state.

Why Intelligence Reform Matters

Intelligence is important. It is (or should be) a critical tool for states to understand the world around them. Intelligence organizations exist to assist their states in better understanding the threats, risks, and opportunities that emerge from interacting with others. Intelligence organizations should be providing decision advantages to those actors; the express purpose of sense-making is the entire reason behind their creation.

Placing this in a principal–agent framework, this means the very basis for the contracted relationship between the state and its intelligence organs is for the agent to generate decision advantage for the principal. That is intelligence by definition. Sometimes, however, what is provided does not meet what is needed for decision advantage—the contract has not been fulfilled. Perhaps the intelligence was outright incorrect, information remained undiscovered, or the information was misinterpreted. Regardless of the reason, the contracted good was insufficient.

It follows, then, that having the ability to change the product into something sufficient is important as well. If a state has created such organs and such a principal– agent relationship for decision advantage, yet is not getting that decision advantage, then it should be able to make adjustments to the relationship. This is reform. However, in the

U.S. case of intelligence reform, more often than not there are no adjustments of consequence to the relationship. Either the adjustments are superficial or simply nonexistent; times of significant change are rare. Why is that? This is the question that

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this research attempts to answer—to understand why some of these reforms failed even

as others succeeded.

Looking for Explanations

Relying on the established dichotomy of external stimuli and internal processes, it becomes possible to identify the possible points in a reform from atheoretical works to the more academically rigorous works. Working through this, five potential explanations came to the fore. One denies the problem to begin with, three are highly intuitive, and the last is new and somewhat counterintuitive. The intuitive explanations seek to explain much about intelligence reform by framing the problem in a broad fashion, encompassing the entire problem from why a reform starts all the way through to its outcome. In certain specific cases taken in isolation, these intuitive explanations seem to ring true. When tested against the larger historical record, they consistently fall flat, though. All, that is, except the fifth potential explanation. This is the new explanation proposed by this research which rests on an information asymmetry between the involved parties.

Counterintuitively, this explanation narrows its scope to just actions by the principal as it frames the reform and loosens some of the key assumptions in the principal–agent model.

This actually increases the overall explanatory power against the universe of cases.

The first potential explanation actually challenges the basic assumption of the

research question (i.e., that reform is even necessary). Relying on incrementalism, this

first explanation suggests that intelligence organizations are constantly shifting to meet

the changing conditions of the outside world. These are small, rapid changes that show

150 constant evolution in intelligence organizations as they provide decision advantages. In such a world, intelligence failures are not eliminated. However, the reasons for the failures, the identified shortcomings, should change from incident to incident because the intelligence organizations themselves are constantly adjusting to the world around them.

Processes and organizations should improve and streamline at a rapid pace. New technologies, techniques, and skill sets are adopted as needed to address the dynamic world around them on a daily basis. Reform efforts in this world would likely only hinder this constant improvement.

This explanation’s world is fictional. The historical record does not support this explanation. Time and time again, when a reform effort identifies a shortcoming, it is a repeated, not an evolved shortcoming that is identified. The problems before have not been addressed, creating new problems. More than a few reformers have even noted an inability to address shortcomings by their predecessors in the exact same areas they themselves found to be less than satisfactory. It would seem that to have U.S. intelligence organizations actually adjust their processes to the changing outside world, reform is needed.

The dramatic lack of evidence supporting this explanation and the evidence explicitly denying it supports the assertion that this research question is valid on its face:

Reforms are needed for intelligence organizations to change, so identifying why these efforts are sometimes successful has value. Identifying any conditions that demonstrate impact on the outcome is a worthwhile area of inquiry.

Having established that intelligence reforms matter, the next potential explanation for why some reforms create change and others do not is intuitive: Reforms cause change

151 because of a large-magnitude event. Such an event generates enough political pressure that those who seek change can push through to a successful conclusion. This explanation seems sound on its surface, and it is very intuitive. Considering certain cases in isolation, it seems to fit. The revelation in 1975 of inappropriate activities on U.S. soil led to key reforms by the Church Committee and the Rockefeller Commission. However, in other cases, the claim is somewhat suspect: The intelligence community points to the attack on

Pearl Harbor as the event that generated NSA 47, perhaps the greatest of all intelligence reform efforts, but those claims are very tenuous. Also, how does this model explain the many other high-impact events that spawned failed reforms? Instances such as the Bay of

Pigs, the collapse of the Soviet Union, and the attacks of September 11, 2001, should have generated sweeping change. When the broader universe of cases is considered, no strong relationship can be found to link each external stimulus for reform to how the reforms eventually resolve.

Accepting that reforms are necessary for change, but the events themselves do not matter perhaps domestic political climate explains why some fail and succeed. This explanation is, like the event explanation, quite intuitive. It does not matter if one looks through the mechanism of a unified government, wherein a party holding all levers of power is able to push change through because it desires to shape government in times of unconstrained power, or a divided government in which one party seeks to hinder or embarrass the other through the lens of leading reform. Both mechanisms have two commonalities: It is assumed that the content of the reform is of lesser importance than the political realities of partisan control of the branches of government, and both have extensive amounts of supporting and confounding research in policy areas other than

152 intelligence. This explanation also would seem to make perfect sense at first glance, as it fits with how many believe the world (or at least government) works.

Just as with the event explanation, however, there is no pattern that can be seen when the entire universe is brought to bear. There are cases of significant reform success in times of unified government, such as FISA, and are cases of significant reform failure in times of unified government, such as IRTPA. There have been cases of significant reform in times of divided government: NSA 47, the Church Committee, and the

Rockefeller Commission. There have been cases of significant reform failure in times of divided government, with the Pike Committee being perhaps the most spectacular failure of all. Looking to the domestic political configuration is appealing, but it falls flat.

This leads to the third potential explanation, and the first that begins to utilize a set of established, theory-based works with an intelligence focus. It rests on the status quo bias of intelligence organizations as the variable of importance. When that status quo bias can be overcome or altered, the reforms create change. Again, this is intuitive and seems to ring true even before considering theoretical foundations. It has the advantage of already having that solid foundation when studying intelligence. The question is then raised of how to overcome that status quo bias. How is the variable manipulated?

Manipulation occurs either through sheer force of will or by convincing those who prefer the status quo to shift position. Both speak to the size of the coalition for change. When the coalition of actors—which for intelligence can be quite large—outnumbers the other side, the outcome should be the preferred outcome of the larger coalition.

There is nothing controversial or unexpected about this explanation. It continues the trend of being very intuitive, and from an intelligence reform literature perspective, is

153 actually grounded in established theory, which cannot be said of the previous two theories. Taking certain cases such as FISA and IRTPA in isolation can and has been mustered to support this position, both for success and failure. Once the aperture is widened to account for the entire universe of cases, however, this hypothesis starts to lose its ability to address the historical record. Great changes occurred even when the larger coalition opposed them in the instances of NSA 47, the Brownell Commission as part of the Bedell-Smith reforms, and the Church Committee. Likewise, failures occurred when those seeking change denied allies to those seeking the status quo, essentially making their own coalition large by default, in failed cases such as the Pike Committee. Once again, the intuitive explanation fails to satisfy.

Why Information Advantage Matters

That leaves the fifth explanation, which relies on information advantage. This explanation, as in the sole other piece of theoretical literature devoted to the success or failure of intelligence reform, recognizes that a reform is an instance of the principal– agent dilemma. However, unlike previous works on intelligence reform, and most work using the principal–agent model, this research’s explanation treats principal interests and information asymmetry as changeable conditions. Instead of seeing the agent’s interests as a variable inevitably drifting away from the principal’s interests, those interests are now frozen into a constant, rigid state of seeking to preserve the status quo. This needs to be put next to the previous explanation: both identify a strong status quo bias from the intelligence organizations; this new explanation simply identifies this bias as a constant.

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Status quo preference is not something that can be modified. The underlying condition is

in agreement between these explanations, it is only the mechanism that differs.

When the principal recognizes that their interests have shifted, they can shift the

information advantage toward themselves. This comes into nuanced conflict with the sole

other work on this particular question about intelligence reform. This reconsideration of

information advantage from a constant to a variable has some significant impacts on

understanding the problem. If the actor holding information advantage is kept as a

constant, as Durbin suggests, then the principal must always struggle to overcome the

information advantage, bringing themselves up to the power level of the status quo

seeker. Are principals truly so weak that they must struggle? These reforms occur within

a hierarchical structure, and the principals are powerful individuals and organizations

with the ability to wield this power should they so choose.

On top of that, this is a monopoly relationship, but not a traditionally considered monopoly. It would be understandable if the agent held the monopoly advantage that the principal would have to struggle, as is often discussed in the civil-military relations literature, but in intelligence the monopoly advantage resides with the principal. To suggest that these extremely powerful principals are essentially helpless to overcome agents without a massive effort on their part denies the very nature of these principals and misidentifies the nature of information advantage.

Information advantage in intelligence reform is a last measure of defense, not an impregnable wall. To suggest that the juggernauts of power that are the principals are so easily thwarted by pure information advantage denies both the principals’ ability to choose their actions as well what information advantage truly provides. In starting a

155 reform, the principals choose to make an attempt to create change. They also choose how to approach this problem. This is the crux of this new explanation. When the principal makes choices that reflect that the existing relationship is insufficient, they rip away that last defense of the agent. When they make the choice to not do that, then the agent can cling to that advantage and hold on to the status quo. If, as Durbin suggests, the assumption is that information advantage is fixed, then it is implied that these otherwise wholly powerful principals are coming across something that offers their agents complete security. It denies the nature of these principals’ power, their ability to choose, and their opportunity to impact their agents’ behaviors. Information advantage is important not because it requires great struggles to overcome, but because it is the only defense that agents have when facing the principal in intelligence reform. The agents, it should be assumed, use it for whatever advantages they can; they do not have the luxury of other defenses.

As the principal is the one who initiates a reform, holds the power of monopoly, and holds a structural power advantage, the way in which the principal chooses to approach the reform effort should be considered. By taking this nuanced look at the principal–agent problem and loosening the assumption on the constancy of information advantage, a new understanding emerges.

An Explanation That Fits

If the original contract was flawed, or if the principal’s needs have shifted, a large event should emerge from this flawed good at some point in time. The principal would

156 understandably want to change the relationship to something less flawed whereby needs are met. It becomes apparent that the emphasis on the event is misplaced. It is not that an event causes reform, but the event highlights that the contract was flawed from the start.

The principals have opportunity here to choose how they use this event to frame the discussion. One pathway begins to strip away the last line of defense from those seeking to preserve the status quo. This is the pathway of using the event to illustrate how the contract is insufficient. The other pathway is to allow the agents to retain the information advantage by seeking to punish the agents, interpreting the insufficient good as evidence of shirking that must be corrected in the traditional principal–agent dilemma.

If domestic political configurations are not propelling reforms forward, this suggests that there is a recognition that political and ideological disagreement or agreement is not as important as addressing the flawed contractual relationship with intelligence organizations. Why can the power of a unified government or the power of two normally opposing political parties not make reform happen? In times of united government, the principal could choose to make intelligence reform a priority, or in times of divided government the principal could choose either to work with the other party or seek to thwart their efforts. This explanation suggests it is because the principals, whether divided or unified in political party, choose to let the status quo seekers retain their information advantage rather than choosing to deny this advantage to those they seek to reform. This question becomes compounded when looking at the size of coalitions formed either supporting or opposing a given reform.

Principals also choose how large of a coalition they can go up against and how many allies they may recruit, or at least stand to the side. As the testing showed, these

157 particular choices from the principal play no real role in predicting how a reform resolves. However, there is a commonality among all of these failed explanations: There is a moment during which the principal makes a choice. The principal is initiating the reform, and the principal makes a choice about how to approach the problem. They have the ability to choose their actions. Why should the ability of the principal to choose the conditions which set information advantage suddenly disappear? Information advantage can shift because of these choices.

The explanation that this research proposes is that successful intelligence reforms happen when principals are entering into renegotiation of the original contract because they recognize that their interests have shifted. In a renegotiation, the information advantage is not fixed; it can be denied to the agents based on behaviors that the principal chooses to pursue. This leaves the agents stripped of their sole defense and leaves them at the mercy of a much more powerful principal.

There are certain behaviors that indicate whether this renegotiation is occurring.

These behaviors include denying the information advantage to the agents, setting the stage for the principal to enact changes to the relationship, and getting a good that meets the principal’s needs, not just punishing the agent for producing a good judged to be inadequate.

The historical record supports this explanation. In times when the proposers of change demonstrated these behaviors, they deprived the responders of changing the intelligence organizations, with their sole defense of information advantage. These cases had proposers of change who sought to renegotiate. The same cannot be said in instances wherein these behaviors were not observed. When the proposers chose not to pursue a

158 renegotiation, instead staying within the confines of the established relationship, they failed.

That relationship, though, is now unquestionably flawed. The interests of the principal are different from the interests when the original contract was established.

Although this may not be recognized by the principal, the contract remains the same. The principals have chosen to grant information advantage to the agent to allow this sole defense to continue. Being otherwise powerless against the principal, the agent uses this shield to its maximum extent.

What happens in successful intelligence reforms is not that the principal struggles to overcome the information advantage of the intelligence organizations. Rather, the principals are making a choice to allow the agents to retain the information advantage or to deny this advantage based on how reform is framed. Because this is the agents’ only real defense, if it is denied, then they cannot preserve the status quo. The true variable is how the principal chooses to approach the problem. This shifts the information advantage to one actor or the other.

This research found, by using observables based on the behaviors of the proposers of reform, that this explanation has the most impact on understanding why some U.S. intelligence reforms create change even as others fail. When compared to the historic record, not only does this explanation fit very well, it does not deny the powerful nature of the principals. Rather, the explanation acknowledges and recognizes this power.

That being said, it is not likely that this explanation has much utility in other policy spaces. Intelligence appears to be rather unique among government functions. It is not like defense which, in theory, is exercised sparingly but must be maintained

159 constantly. Intelligence, if it is to provide the desired decision advantage, has to be exercised constantly. Benefit providing organizations, such as the Social Security

Administration, have to maintain constant contact and a high level of transparency with the public at large. The intelligence produced by intelligence organizations, if it is to retain its value for decision advantage, has to rely on secrecy, limited transparency, and allowing access to a limited number of government personnel.

Areas of Further Research

The first obvious area for further research is exploring the nature of intelligence as a good. Flowing from the identification that intelligence does not behave in the same manner as defense or other government functions and matched to its unusual monopoly situation, perhaps intelligence is a different type of good from these other functions.

Perhaps it is not a pure public good, as in these other policy areas. Perhaps intelligence is an impure public good, more akin to a club good or pool good (Buchanan, 1965; Sandler

& Tschirhart, 1997). The former seems to offer the most likely avenue of success. A cursory look at the traditional club good, the toll road, and intelligence appears to be quite congruent.

The decision advantage aspect of intelligence, again fencing off the covert action function from consideration, does not fit well in the public good mold. Not everyone can use it for their decision advantage, only those who have committed resources to create the intelligence organizations to deliver the information advantage. Yes, everyone in the society in question, the United States for this research, should benefit from the decisions

160 made because of the decision advantage: more success in war, better trade agreement terms, etc. That is a second intention, though. The military forces conducting the war or the diplomat’s negotiation of trade issues create the public good; the intelligence organizations are producing something to assist those creating the public goods. The product of intelligence does not go beyond that small circle, that club.

What happens when there are “free riders”—those who seek to avoid costs—or when too many individuals begin to pay those costs? The result is congestion and the club good’s value plummeting (Cornes & Sandler, 1996). This also appears to be a good fit for intelligence: When private information is no longer private, it loses its ability to provide that decision advantage. The intelligence value drops to zero.

Properly identifying the true nature of the product that is intelligence is beyond the scope of this research. However, as different goods create different expectations of behavior, this could shed additional light as to why proposers choose to exhibit the information asymmetry-changing behaviors that this research observed. Research into the nature of intelligence as a good, though spawned by the narrower question of this research, would be a necessary bridge to exploring and disentangling the individual observables found in this research that led to change.

More specifically, the primary question that arose, but was beyond the scope of this research, was why proposers made the choices they did. This research demonstrated that when these choices were made by proposers, the reforms successfully completed.

Fully understanding why that choice was made is a different and interesting question, but a question that could not be asked until this research’s question identified the need.

Understanding the reasons behind these choices would require a broad interdisciplinary

161 approach, but could also bolster the findings of this research. The sociological and psychological factors that eventually build into political decisions made by principals in intelligence reform may be the only way to truly disentangle the observed behaviors from this research. To understand why certain behaviors manifested individually would provide great insight and predictive power for future intelligence reforms.

162

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Appendix A: Case Summaries

Name: National Security Act of 1947 Also known as: NSA 47 Initiated: January 1946 Reason for initiation: Presidential dissatisfaction with intelligence product Visibility: High Saliency: Low Government configuration: Unified Areas of focus: Relations among U.S. intelligence elements to principals, mission sets of U.S. intelligence elements, creation of new intelligence elements Span of elements affected: All extant + creation of one new Highest conceptual-level recommendation: Limitations on organizational missions by intelligence function: State, the CIA focused on analysis; the FBI on counterintelligence; Army, Navy, Air Force on operational and tactical collection and analysis Enactment document: NSA 47 Highest conceptual level of adopted recommendation: The CIA would become the centralized coordinating element for all national-level analysis and dissemination of intelligence to highest customers Comments: This act is treated in many histories as originating from WWII, but its intelligence-specific elements are more plausibly Truman’s displeasure with intelligence support (Truman, 1952) and the political pressures of the emerging Cold War (Jeffreys- Jones, 1997).

Name: Eberstadt Report Also known as: First Hoover Commission, Commission on the Organization of the Executive Branch of the Government (Eberstadt was a sub-element within) Initiated: July 1947 Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Quality and efficiency of intelligence support provided Span of elements effected All extant Highest conceptual-level recommendation: Teamwork between CIA and other elements, especially Army G-2 should be improved (Hoover, 1949). Enactment document: None Comments: This report is considered to have been derailed by the parallel or simultaneous efforts of the Intelligence Survey Group.

Name: Intelligence Survey Group Also known as: Dulles-Jackson-Correa Report Initiated: February 1948 Reason for initiation: The NSC’s concern over the performance of the CIA Visibility: Low Saliency: Low

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Government configuration: Divided Areas of focus: Operational, analytical, and administrative aspects of the CIA. Expanded later to be a survey of all intelligence elements. Span of elements effected Initially one, expanded to others as they related to the CIA Highest conceptual-level recommendation: Covert action planning should have access to SIGINT as part of the planning and execution process (Dulles et al., 1949). Enactment document: None Comments: This groups highlighted the need for significant internal changes, which became a focus for Bedell Smith when he became DCI a few years later.

Name: CIA Act of 1949 Initiated: June 1949 Reason for initiation: Place occurring actions in a statutory framework Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Personnel administration (PL 110) Span of elements effected One Enactment document: CIA Act of 1949 Comments: This act is not considered to be a distinct data point for this research due to its “catch-up” aspect. There was no intent to change processes—only an attempt to better document those processes. The CIA was able to directly pay for personnel expenses rather than utilize Department of Defense finance systems.

Name: Smith Reforms Also known as: The Brownell Committee Initiated: October 1950 Reason for initiation: Poor performance in the Korean War Visibility: High Saliency: High Government configuration: United Areas of focus: Overall organization of the CIA Span of elements effected Initially one, expanded to all Highest conceptual-level recommendation: SIGINT taxonomy should come from content, not collector. Enactment document: Various, including NSC Intelligence Directive 9 Highest conceptual-level of adopted recommendation: New SIGINT agency coordinating and removing conflict from all of the signal capabilities of the U.S. government (NSC, 1950) Comments: These reforms examined the solutions proposed in Eberstadt and ISG as part of a wider discovery process rather than simply recycling (Brownell, 1981). The internal CIA structure revision has generally remained stable (Montague, 1992), with the potential to change in the case of the Brennan reforms that began in 2015.

Name: Doolittle Report Also known as: Report on the Covert Activities of the Central Intelligence Agency

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Initiated: July 1954 Reason for initiation: White House concern over the efficiency and cost of covert operations Visibility: Low Saliency: Low Government configuration: United Areas of focus: Covert action, administration Span of elements effected One, CIA Highest conceptual-level recommendation: The NSC should provide support to the DCI in advancing covert actions rather than directing the DCI to execute covert actions. A reversal of the principal–agent relationship where the CIA becomes the principal (Doolittle, 1954). Enactment document: None Comments: This report was exceptionally supportive report of the CIA and its covert activities. However, evidence suggests that the DCI ensured no dissemination of the recommendations (or actions taken as a result) despite the report’s highly supportive stance.

Name: Task Force on Intelligence Activities Also known as: Clark Task Force, Second Hoover Commission, Commission on the Organization of the Executive Branch of the Government Initiated: July 1953 Reason for initiation: Identify the weaknesses and inefficiencies of intelligence system Visibility: Low Saliency: Low Government configuration: United Areas of focus: Collection, analysis, security, administration Span of elements effected All extant Highest conceptual-level recommendation: Establish a permanent, small, bipartisan oversight element (Clark, 1955). Enactment document: None Comments: The task force was generally frustrated in its data gathering by the elements. Of particular note is that, although the task force initially created a powerful definition of intelligence, the definition that it used came from the Department of Defense dictionary.

Name: NSC Intelligence Directive 1 Revision Also known as: NSCID 1 Initiated: May 1958 Reason for initiation: White House concern with efficiency Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Interagency coordination Span of elements effected All extant Highest conceptual-level recommendation: Intelligence sharing among elements is required during a warning scenario

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Enactment document: NSCID 1 Rev 1 Highest conceptual-level of adopted recommendation: Each element is responsible for sharing an intelligence warning of impending attack or disaster with other elements before presentation to the NSC (NSCID 1, 1958). Comments: Essentially an unfunded mandate, as the DCI was given no mechanism to ensure such sharing occurred.

Name: Bruce-Lovett Report Initiated: Unknown month in 1956 Reason for initiation: Unknown Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Covert action Span of elements effected CIA Highest conceptual level recommendation: Unknown Enactment document: None Highest conceptual level of adopted recommendation: Unknown Comments: No extant copy of this report exists, so it was not used as a data point. Secondary references suggest that the report was critical of covert actions in third world countries as it siphoned off resources from Soviet intelligence targets (Grose, 1994).

Name: National Security Agency Act of 1959 Initiated: May 1959 Reason for initiation: Place the NSA in a statutory framework Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: NSA administrative matters Span of elements effected NSA Enactment document: NSA Act of 1959 (PL 86-36) Comments: Not considered to be a distinct data point for this research due to the “catch up” aspect of the act. There was no intent to change processes, just better document processes. Now, the NSA had a foundation beyond the executive order that established it.

Name: Kirkpatrick Report Also known as: Inspector General’s Survey of the Cuban Operation Initiated: October 1961 Reason for initiation: Failed covert action Visibility: High Saliency: High Government configuration: United Areas of focus: Covert action Span of elements effected CIA Highest conceptual-level recommendation: Covert action, when reaching a certain size threshold should be transferred to defense (CIA 1961)

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Enactment document: None Highest conceptual recommendation adopted: None Comments: Identified several internal gaps, such as lack of coordination between covert actions planners and analytic personnel

Name: Taylor Commission Also known as: Taylor Committee Initiated: April 1961 Reason for initiation: Failed covert action Visibility: High Saliency: High Government configuration: United Areas of focus: Covert action Span of elements effected CIA Highest conceptual-level recommendation: Establish a resource steering group to shift resource emphasis among agencies, allowing for quicker transition from diplomacy to covert action to war Enactment document: None Highest conceptual-level adopted recommendation: Brief senior personnel on what went wrong during the Bay of Pigs invasion (Taylor, 1972). Comments: This effort was significantly restrained from the original term of reference that the president provided, which was to assess the overall capabilities of the United States to conduct guerrilla and antiguerrilla operations.

Name: Schlesinger Report Also known as: Review of the Intelligence Community Initiated: March 1971 Reason for initiation: Presidential dissatisfaction with intelligence support Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: All Span of elements effected All, but primary focus was on the CIA Highest conceptual recommendation: Create a cabinet-level position with direct authority over all national assets (Schlesinger, 1971). Enactment document: NSCID 1 2nd Revision (NSC 1972) Highest conceptual recommendation adopted: The DCI should assist in generating a community-wide intelligence budget Comments: This enactment essentially created unfunded mandates, as the DCI was given increased responsibilities to manage the community but no additional enforcement mechanisms.

Name: National Security Council Intelligence Directive 1 2nd Revision Also known as: NSCID 1 2nd Revision Initiated: November 1971 Reason for initiation: Increased control over the community by the executive branch

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Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: All Comments: Although this is treated as an independent data point in several historical works, a stronger argument can be made that it is only the enactment of the Schlesinger Report. It is treated as such in this research.

Name: Murphy Commission Also known as: Commission on the Organization of the Government for the Conduct of Foreign Policy Initiated: July 1972 Reason for initiation: Congressional concern about coordination between the branches of the government over foreign policy Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Covert action, analysis, collection Span of elements effected All Highest conceptual-level recommendation: Create a joint congressional oversight committee and a new multi-year budgetary process for the consolidated intelligence community (Murphy, 1975). Enactment document: None Highest conceptual-level adopted recommendation: None Comments: This commission was overshadowed by the more salacious commissions that emerged as the commission’s report was released.

Name: Rockefeller Commission Also known as: Commission on CIA Activities Initiated: January 1975 Reason for initiation: Allegations of domestic activity Visibility: High Saliency: High Government configuration: Divided Areas of focus: Domestic actions, covert actions, analysis Span of elements effected CIA Highest conceptual-level recommendation: No element of U.S. intelligence should perform human experimentation Enactment document: Executive Order 11905 Highest conceptual-level adopted recommendation: No human experimentation or assassination by intelligence elements (EO 11905 1976, Rockefeller 1975) Comments: The common attribution in which EO 11905 was meant to thwart the Church and Pike Committees by depriving them of a potential legislative avenue does not appear justified. Considering the high visibility of the incidents, the desire of the congressional committees to take an active part in creating change, and the language similarities between the EO and the Rockefeller report, make it more reasonable that the EO is the

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enactment of the commission, not merely a reaction.

Name: Church Committee Also known as: U.S. Senate Select Committee to Study Government Operations with Respect to Intelligence Activities Initiated: January 1975 Reason for initiation: Domestic activities Visibility: High Saliency: High Government configuration: Divided Areas of focus: Initially domestic activities, expanded to covert action, collection, and analysis Span of elements effected All Highest conceptual-level recommendation: Congress is a full principal and customer of the intelligence community and must exercise oversight Enactment document: Senate Resolution 400 (1976), House Resolution 658 (1977) Highest conceptual-level adopted recommendation: New oversight committee established within both chambers of Congress Comments: Although this organization is traditionally only associated with the Senate Select Committee on Intelligence, its successful founding also influenced the establishment of the House Permanent Select Committee on Intelligence.

Name: Pike Committee Also known as: Select Committee on Intelligence Initiated: February 1975 Reason for initiation: Domestic activities Visibility: High Saliency: High Government configuration: Divided Areas of focus: Initially foreign collection budget, then shifting to domestic activities Span of elements effected CIA Highest conceptual-level recommendation: Ban covert action (Pike, 1977). Enactment document: None Comments: The committee was so ineffective that it had to leak its final report to the press, as the House would not approve the report. Although the committee was renamed the House Permanent Select Committee on Intelligence, the consideration of the House as a valid intelligence principal and customer should be more attributed to the success of the Church Committee and the Senate Select Committee on Intelligence, which was founded prior to the name change.

Name: Clifford and Cline Proposals Initiated: January 1976 Reason for initiation: Dissatisfaction with intelligence support Visibility: Low Saliency: Low Government configuration: Divided

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Areas of focus: Administration, collection, analysis Span of elements effected All Highest conceptual-level recommendation: Create a single analytic agency, all other elements would stop this function Enactment document: None Highest concept adopted recommendation: None Comments: Although technically two distinct proposals, Cline’s recommendations (1976) were referenced in Clifford’s testimony before the Senate (Select Committee on Government Operations, 1976).

Name: Executive Order 12036 Initiated: January 1978 Reason for initiation: Establish control over the intelligence community Visibility: Low Saliency: Low Government configuration: Unified Areas of focus: Covert action Span of elements effected: CIA Highest conceptual-level recommendation: Refined language from EO 11905 on assassination bans Enactment document: EO 12036 (1978) Highest conceptual-level adopted recommendation: Eliminated potential loopholes Comments: This order changed the language such that no one employed by or acting on behalf of the U.S. government could engage in or conspire to engage in assassination.

Name: Proposed Charter Legislation Also known as: National Intelligence Reorganization and Reform Act of 1978 Initiated: April 1978 Reason for initiation: Establish greater statutory framework on intelligence organizations Visibility: Low Saliency: Low Government configuration: United Areas of focus: Covert action, collection, analysis, reporting structure Span of elements effected All Highest conceptual-level recommendation: Convert DCI position to the DNI, establish a deputy position to deal with daily CIA requirements (S. 2525 1978, H.R. 11245 1978) Enactment document: None Highest conceptual-level adopted recommendation: None Comments: This report also used the EO 12036 language.

Name: FISA Also known as: Foreign Intelligence Surveillance Act Initiated: March 1978 Reason for initiation: Inability to change electronic surveillance during Church hearings Visibility: High Saliency: High

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Government configuration: United Areas of focus: SIGINT collection Span of elements effected the FBI and the NSA Highest conceptual-level recommendation: Create new court with distinct appeals process Enactment document: FISA Highest conceptual-level adopted recommendation: New court for approval of classified warrants, along with appeals process (Foreign Intelligence Surveillance Act, 1978) Comments: This report framed surveillance not in intelligence-collection terms but in legal, evidentiary terms.

Name: Halloween Day Massacre Initiated: April 1977 Reason for initiation: Director dissatisfaction with workforce and direction of agency Visibility: Low Saliency: Low Government configuration: United Areas of focus: Covert action, collection, analysis Span of elements effected All divisions within CIA Highest conceptual-level recommendation: Discovery of secrets via technology is preferred method Highest conceptual-level adopted recommendation: Covert action heavily disinvested, increased efforts in satellites (Turner 1985, 2005). Comments: This is not to be confused with Gerald Ford’s Halloween Massacre.

Name: Executive Order 12333 Also known as: United States Intelligence Activities Initiated: December 1981 Reason for initiation: Establishing greater control over intelligence organizations Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Collection, analysis, covert action Span of elements effected All Highest conceptual-level recommendation: Reduce the power of the DCI to oversee National Foreign Intelligence Program budget requests Enactment document: EO 12333 (1981) Highest conceptual-level adopted recommendation: Reduced power of the DCI to oversee the National Foreign Intelligence Program budget Comments: This essentially consolidated EO 11905 and 12036, and every president since its creation has signed or expanded it.

Name: Turner Proposal Initiated: January 1985 Reason for initiation: None Visibility: Low

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Saliency: Low Government configuration: Divided Areas of focus: Covert action, community management Span of elements effected Primarily CIA Highest conceptual-level recommendation: Eliminate all covert action (Turner, 1985) Enactment document: None Highest conceptual-level adopted recommendation: None Comments: Most historical pieces recognize this. It is not a data point in this research, as it was initiated only by the former DCI—not by either the executive or legislative branches.

Name: Tower Commission Also known as: President’s Special Review Board Initiated: December 1986 Reason for initiation: Scandal over covert action Visibility: High Saliency: High Government configuration: Divided Areas of focus: Covert action Span of elements effected CIA Highest conceptual-level recommendation: Replace oversight committees with a joint committee (Tower et al., 1987). Enactment document: None Highest concept adopted recommendation: None Comments: The remaining recommendations encouraged the White House to use the NSC system.

Name: Congressional Select Committees on Iran-Contra Also known as: House of Representatives Select Committee to Investigate Covert Arms Transactions with Iran and Senate Select Committee on Secret Military Assistance to Iran and the Nicaraguan Opposition Initiated: January 1987 Reason for initiation: Scandal over covert action Visibility: High Saliency: High Government configuration: Divided Areas of focus: Covert action Span of elements effected CIA Highest conceptual-level recommendation: U.S. government cannot ask another government to perform an act that would otherwise be illegal for the U.S. government (House of Representatives Select Committee to Investigate Covert Arms Transactions with Iran and Senate Select Committee on Secret Military Assistance to Iran and the Nicaraguan Opposition, 1987). Enactment document: None directly impacting intelligence community Highest conceptual-level adopted recommendation: The NSC cannot perform covert

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actions.

Name: McCurdy Also known as: National Security Act of 1992 Initiated: February 1992 Reason for initiation: Dissatisfaction with current arrangement, end of the Cold War Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Collection, analysis, community management Span of elements effected All Highest conceptual-level recommendation: Consolidate all imagery capabilities into one agency (HR 4165, 1992). Enactment document: None Highest concept adopted recommendation: None Comments: This report also proposed the DNI and open source as a distinct discipline.

Name: Intelligence Reorganization Act of 1992 Also known as: Boren Act Initiated: February 1992 Reason for initiation: Dissatisfaction with current arrangement, end of the Cold War Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Collection, analysis, community management Span of elements effected All Highest conceptual-level recommendation: Consolidate all human intelligence activities in the CIA and eliminate functions from all other elements (S. 2198 1992) Enactment document: None Highest conceptual-level adopted recommendation: None Comments: This was similar to McCurdy—there is evidence that they launched similar efforts in a parallel fashion in hopes of getting to conference.

Name: Presidential Decision Directive 24 Also known as: U.S. Counterintelligence Effectiveness Initiated: May 1994 Reason for initiation: End of the Cold War, multiple high profile spy arrests Visibility: Low Saliency: Low Government configuration: United Areas of focus: Counterintelligence Span of elements effected All Highest conceptual-level recommendation: Establish a National Counterintelligence Center; however, with little enforcement capabilities (PDD 24, 1994). Enactment document: Self Highest conceptual-level adopted recommendation: Technically, a center was established

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Comments: The center did not last long, but it was reestablished 6 years later (as case 38, PDD CI for the 21st Century).

Name: Presidential Decision Direction 35 Also known as: Classified title Initiated: Unknown due to classification Reason for initiation: End of the Cold War Visibility: Low Saliency: Low Government configuration: United Areas of focus: Unknown due to classification Span of elements effected Unknown Highest conceptual-level recommendation: Unknown Enactment document: PDD-35 Highest conceptual-level adopted recommendation: Comments: The mandatory declassification review request was denied, so this data point was not included in the calculations.

Name: IC 21 Also known as: The Intelligence Community in the 21st Century Initiated: May 1995 Reason for initiation: End of the Cold War Visibility: Low Saliency: Low Government configuration: United Areas of focus: Collection, analysis, community management, covert action Span of elements effected All Highest conceptual-level recommendation: Combine all technical collection into one agency (House of Representatives, IC 21, 1995) Enactment document: None Highest conceptual-level adopted recommendation: None Comments: This thorough report established what the intelligence community looked like at that moment in time.

Name: Aspin-Brown Also known as: Commission on the Roles and Capabilities of the U.S. Intelligence Community Initiated: October 1994 Reason for initiation: End of the Cold War Visibility: Low Saliency: Low Government configuration: United Areas of focus: Collection, analysis, community management Span of elements effected All Highest conceptual-level recommendation: Shift all human intelligence capability to the CIA (Aspin & Brown, 1996)

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Enactment document: None Highest conceptual-level adopted recommendation: None Comments: None

Name: Intelligence Renewal and Reform Act Also known as: PL 104-293 Initiated: October 1996 Reason for initiation: End of the Cold War Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Community management Span of elements effected NIMA, NSA, NRO Highest conceptual-level recommendation: The DCI must provide concurrence to nominated personnel to head NIMA, NSA, NRO Enactment document: Self Highest conceptual-level adopted recommendation: Concurrence of the DCI to appointments of major DOD agency heads (PL 104-293) Comments: None

Name: National Imagery and Mapping Agency Act Also known as: PL 104-201 Initiated: July 1996 Reason for initiation: End of the Cold War Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Collection, analysis Span of elements effected Essentially just NIMA (later renamed NGA) Highest conceptual-level recommendation: Consolidate imagery into one agency Enactment document: National Defense Authorization Act of 1997 Highest conceptual-level adopted recommendation: Created new agency by combining two extant elements Comments: None

Name: Hart-Rudman Commission Also known as: Commission on National Security in the 21st Century Initiated: September 1999 Reason for initiation: End of the Cold War, start of the 21st Century Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Collection, analysis Span of elements effected All Highest conceptual-level recommendation: Increase focus on economics and science Enactment document: None

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Highest conceptual-level adopted recommendation: None Comments: This report was very in the weeds, to the point of directing human intelligence agents to place a greater emphasis on a particular subject: terrorism (U.S. Commission on National Security in the 21st Century, 2001).

Name: National Reconnaissance Office Review Also known as: National Commission for the Review of the National Reconnaissance Office Initiated: December 2000 Reason for initiation: End of the Cold War, issues with NRO budget practices Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Acquisition practices Span of elements effected NRO Highest conceptual-level recommendation: Increase budget (National Commission for the Review of the National Reconnaissance Office 2000) Enactment document: None Highest conceptual-level adopted recommendation: None Comments: These findings are exceptionally friendly to the NRO.

Name: PDD CI for the 21st Century Also known as: PDD with classified number Initiated: January 2001 Reason for initiation: High profile espionage cases Visibility: High Saliency: Low Government configuration: Divided Areas of focus: Counterintelligence Span of elements effected Almost all Highest conceptual-level recommendation: See comments Enactment document: Classified Highest conceptual-level adopted recommendation: See comments Comments: The PPD remains classified, but an unclassified “fact sheet” was released at the time of its signing (White House Press Secretary, 2001). It appears that the counterintelligence center concept from PDD-24 was recycled to create a counterintelligence executive.

Name: Counter Intelligence Enhancement Act of 2002 Also known as: PL 107-306 Initiated: May 2002 Reason for initiation: High profile espionage cases Visibility: High Saliency: High Government configuration: Divided Areas of focus: Counterintelligence

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Span of elements effected All Highest conceptual-level recommendation: National counterintelligence executive should coordinate, but not dictate consolidated counterintelligence budget for IC (Intelligence Authorization Act, 2003) Enactment document: Self Highest conceptual-level adopted recommendation: Budget consolidation Comments: This is essentially “catch-up” legislation from the classified PDD CI for the 21st century. Although this type of legislation is normally ignored in this research, it is included here, as the PDD remains classified.

Name: Joint Inquiry into Intelligence Community Activities Also known as: Joint Inquiry into Intelligence Community Activities Before and After the Terrorist Attacks of September 11, 2001 Initiated: February 2002 Reason for initiation: September 11 attacks Visibility: High Saliency: Low Government configuration: United Areas of focus: Collection, analysis Span of elements effected FBI, NSA, CIA Highest conceptual-level recommendation: Create the DNI position (Joint Inquiry into Intelligence Community Activities, 2004) Enactment document: IRTPA 2004 Highest conceptual-level adopted recommendation: The DNI’s creation Comments: This inquiry ran in parallel with the 9/11 Commission (see below).

Name: National Commission on Terror Attacks Also known as: 9/11 Commission Initiated: November 2002 Reason for initiation: 9/11 attacks Visibility: High Saliency: Low Government configuration: United Areas of focus: Collection, analysis Span of elements effected FBI, CIA, NSA Highest conceptual-level recommendation: Create the DNI position Enactment document: IRTPA 2004 Highest conceptual-level adopted recommendation: The DNI’s establishment Comments: This commission also included recommendations about acquiring better information technology and language skills.

Name: WMD Commission Also known as: Commission on the Intelligence Capabilities of the United States Regarding Weapons of Mass Destruction Initiated: February 2004 Reason for initiation: Iraq lack of WMDs

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Visibility: High Saliency: High Government configuration: United Areas of focus: Collection, analysis, community management Span of elements effected All Highest conceptual-level recommendation: Simplify classification system Enactment document: None Highest conceptual-level adopted recommendation: The National Counter Proliferation Center was established, but without the ability to coordinate intelligence or develop a national strategy (Commission on Intelligence Capabilities, 2004). Comments: The vast majority of the recommendations had been acted upon for months by the time of the report’s publication.

Name: CIA Torture Report Also known as: Committee Study of the Central Intelligence Agency’s Detention and Interrogation Program Initiated: March 2009 Reason for initiation: Revelations about torture (Senate Committee Study, 2014) Visibility: High Saliency: Low Government configuration: Divided Areas of focus: Collection Span of elements effected CIA Highest conceptual-level recommendation: Stopped short of making recommendations Enactment document: None Comments: This report did not advocate for changes, so it was not considered to be a case for calculation purposes in this research.

Name: DIA 2020 Also known as: DIA Vision 2020 Initiated: October 2012 Reason for initiation: Director dissatisfaction with organization based on perception of threat (Clark, 2012). Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Collection, analysis, agency management Span of elements effected All within DIA Highest conceptual-level recommendation: Flatten communication pathways between analysts and collectors Enactment document: See comments Highest conceptual-level adopted recommendation: Have personnel sit in new areas to establish proximity among analysts and collectors Comments: No documentation aside from press releases and a single unclassified PowerPoint brief (four slides) has been identified.

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Name: Brennan Reform Also known as: TBD Initiated: November 2014 Reason for initiation: Dissatisfaction with organization based on perceptions of threats Visibility: Low Saliency: Low Government configuration: Divided Areas of focus: Collection, analysis, covert action, agency management Span of elements effected All within CIA Highest conceptual-level recommendation: TBD Highest conceptual-level adopted recommendation: TBD Comments: This si still developing (Slick, 2016). Many changes are classified, with only public statements available for examination. This case was not included in the data set.

Name: Freedom Act Also known as: PL 114-23 Initiated: October 2013 Reason for initiation: Exposure of collection programs by the NSA Visibility: High Saliency: Low Government configuration: Divided Areas of focus: Collection Span of elements effected NSA Highest conceptual-level recommendation: Stop utilizing a specific procedure within PATRIOT Act for collection authorization Enactment document: PL 114-23 Highest conceptual-level adopted recommendation: Shift collection authorization from one procedure to another Comments: The timeline for collection authorization has been extended, but the activity has not actually halted.

Name: NSA 21 Also known as: NSA in the 21st Century Initiated: May 2016 Reason for initiation: Changing threat environment Visibility: Low Saliency: High Government configuration: Divided Areas of focus: Collection, analysis, administration Span of elements effected All (of NSA) Comments: This effort is ongoing, and many changes are unavailable due to classification (Clark et al., 2014).

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Appendix B: Counting Rules

The following definitions were established to create a series of flat databases that could be used to create the testing conditions data set. Not all observations or measurements were directly tested; some conditions are amalgamations of measurements. Other measurements are simply administrative tools to differentiate cases.

A case is a reform effort that is concerned with reforming U.S. intelligence. A reform that also encompasses other nonintelligence elements, such as the NSC, is also considered if there is a significant intelligence component to the reform.

The case name is generated by: 1) Consensus title among secondary historical works, either: a. The official name of the effort b. The common name of the effort, often based on the head of the effort 2) The common name of the enactment document (if applicable) if the effort did not generate a unique reform name. This applies primarily to legislation. Example 1: Intelligence Survey Group (official name) vs. the Dulles-Jackson- Correa Report (common name) is more frequently referred to by the official name in historical works. Example 2: Foreign Intelligence Surveillance Act (FISA) would be selected over PL 95-511 (official enactment name) or House Report 95-1720, Senate Report 95- 604 parts 1 or 2, or 95-701 part 1 (official names of the effort). Type: Text (free)

Start is identified only by month and year, not day, and is based on: 1) Self-identified start point (e.g., discussion in final report) 2) Document initiating the formation of the effort (e.g., memorandum of record) 3) Date of earliest document that can be directly attributed to the reform effort (e.g., the congressional testimony or committee report on legislation) Type: Date

An enactment is a document that is associated with the reform effort that places recommendations of the effort into practice. The case name and enactment may share the same value. The enactment must be tied to a directly preceding reform effort and the effort’s documents from the same originating body and cannot bypass other reform efforts from the same body. Example: Although the Church Committee’s report recommended changes to electronic surveillance, those changes were not enacted in Senate Resolution 400. The actual changes occurred with FISA, which is linked to House Report 95-1720, Senate Report 95-604 parts 1 or 2, or 95-701 part 1, and FISA itself as the enactment document. Type: Text (free)

The event is the time-proximate event that initiated the reform. It is identified by (in

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descending order of preference): 1) Initiating documentation 2) Reform reports 3) Secondary historical work Example: The Church Committee references allegations of domestic spying allegations. Type: Text (free)

The event type is the categorization of an event. It is scored by using a modified version of the causes identified by the Indian Institute for Defense Studies and Analyses (2012). The categories are as follows: 1) Warning failure: A lack of intelligence or timely notification of an event that causes surprise to policymakers 2) Incorrect assessment for policy action: Flawed intelligence leading to a problematic course of action 3) Incorrect assessment of threat: Flawed intelligence of a threat that does not result in a warning failure 4) Boundary violation: Allegations or confirmations of inappropriate behavior on the part of intelligence organizations 5) Customer dissatisfaction: General dissatisfaction by a customer over provided intelligence Example 1: Test Offensive Example 2: Iraq’s WMD capabilities Example 3: Collapse of the Soviet Union Example 4: Torture of prisoners Example 5: Erberstabt Report Type: Text (limited)

A crisis is a categorization of an event as either a crisis or agenda event and is linked to the event type. Warning failure, incorrect assessment for policy action, and boundary violation are coded as crisis (1), and the incorrect assessment of threat and customer dissatisfaction are coded as agenda (0). Type: Text (limited) w Numerical via Source

Coverage is a categorization of and event’s media coverage. This is primarily generated from assessments by secondary historical works as high (2), medium (1), or low (0). When historical works provide no insight, coverage from two major news sources (The New York Times and The Washington Post) will be examined, starting with the date of the event. Three or more articles/OPEDs within a week (Sun-Sat) are coded as high (2), two articles/OPEDs within a week (Sun-Sat) are coded as medium (1), and less than two articles are coded as low (0). Type: Text (limited) w Numerical via Source

Impact is a categorization of the impact of an event on the decision-making process of the larger U.S. national security enterprise. This is primarily generated from assessments

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by secondary historical works as either high (2), medium (1), or low (0). When historical works provide no insight, autobiographical works from contemporary key leaders or testimony/depositions regarding decision making within the reform will be utilized. Type: Text (limited) w Numerical via Source

Visibility is a variable of public attention of the event. This is a testable condition. It is generated by combining crisis and coverage, resulting in a value from 0 to 3. For values of 0 and 1, visibility is low (0). For values of 2 and 3, visibility is high (1). Type: Number

Relevancy is a variable of effects of the event on the decision-making process in the national security enterprise. This is a testable condition. It is generated by combining crisis and impact, resulting in a value from 0 to 3. For values of 0 and 1, relevancy is low (0). For values of 2 and 3, relevancy is high (1). Type: Number

House control records which party, Democratic (0) or Republican (1), controls the House of Representatives at the start. Type: Text (limited) w Numerical via Source

Senate control records which party, Democratic (0) or Republican (1), controls the Senate at the start. Type: Text (limited) w Numerical via Source

White House records which party, Democratic (0) or Republican (1), controls the White House at the start. Type: Text (limited) w Numerical via Source

Government is a variable to measure whether or not the legislative and executive branches are controlled by the same party (0) or differing parties (1) at the start. This is a testable condition. The value is determined by the following Boolean expressions: IF House Control = 0 OR Senate Control = 0 AND White House = 1 THEN Divided Gov’t = 1 IF House Control = 1 OR Senate Control = 1 AND White House = 0 THEN Divided Gov’t = 1 IF House Control = 0 AND Senate Control = 0 AND White House = 0 THEN Divided Gov’t = 0 IF House Control = 1 AND Senate Control = 1 AND White House = 1 THEN Divided Gov’t = 0 Type: Number

Split legislature is a record of partisan control of the legislative branch at the start with values of yes (1) and no (0). The value is determined by the following Boolean expressions: IF House Control = 0 AND Senate Control = 0 THEN Split Legislature = 0 IF House Control = 1 AND Senate Control = 0 THEN Split Legislature = 1

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IF House Control = 0 AND Senate Control = 1 THEN Split Legislature = 1 IF House Control = 1 AND Senate Control = 1 THEN Split Legislature = 0 Type: Number

The initiator is a record of which branch of government initiated the reform effort. Efforts initiated by the legislative branch will be categorized as House of Representatives, Senate, or Joint. Efforts are categorized as executive, regardless of which particular element within the executive branch initiates the reform. This also encompasses efforts by heads of intelligence organizations to self-reform. Type: Text

The finding is a record of a single item identified by a reform effort as being flawed and having some material contribution to the event. The content of the finding is recorded in a data field as free text. Type: Text

The recommendation is a record of a single recommendation by a reform effort of changes to intelligence organizations or processes. Efforts may possess multiple recommendations, but those recommendations with specific subrecommendations are counted only by the top-level recommendation. Example: The National Commission on Terrorist Attacks Upon the United States contains 11 recommendations. One of these is that “Lead responsibility for directing and executing paramilitary operations, whether clandestine or covert, should shift to the Defense Department. There it should be consolidated with the capabilities for training, direction, and execution of such operations already being developed in the Special Operations Command” (National Commission on Terrorist Attacks Upon the United States, 2004). Subrecommendations on joint planning and legal authority consolidation were provided in support of this specific recommendation. These subrecommendations are ingested as part of a single recommendation and are not counted as part of the 11 recommendations of this case. Type: Text (free)

A coalition records the number of intelligence organizations impacted by a recommendation based on language within the recommendation. It is measured as either single (0) or multiple (1). In instances of recommendations that address nonintelligence organizations (e.g., the NSC), the recommendation is scored based upon how the recommendation impacts the relationship with intelligence organizations. If the recommendation only impacts one relationship, it is scored as a single; if multiple relationships are affected, it is scored as multiple. This case is scored based on the highest score within the case. Example 1: “Lead responsibility for directing and executing paramilitary operations, whether clandestine or covert, should shift to the Defense Department. There it should be consolidated with the capabilities for training, direction, and execution of such operations already being developed in the Special Operations Command.” The National Commission on Terrorist Attacks Upon the United States (2004) is scored as single as the recommendation addresses the relationship between a single intelligence

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organization, the CIA, and a nonintelligence organization, the Defense Department, and its suborganization of Special Operations Command. Example 2: “…each Finding should specify each and every department, agency, or entity of the United States government authorized to fund or otherwise participate in any way in any covert action…” The House of Representatives Select Committee to Investigate Covert Arms Transactions with Iran and Senate Select Committee on Secret Military Assistance to Iran and the Nicaraguan Opposition (1987) is scored as multiple as all intelligence organizations are impacted. Type: Text (limited) w Numerical via Source

A shift assesses the proposed deviation from the extant conditions of the recommendation. The scoring is as follows: No change (0): The recommendation proposes no changes to extant organizations or processes beyond increasing available resources. Administrative change (1): The recommendation proposes changes with minimal impacts. Examples include changing the name of an advisory board without adjustments to responsibilities or portfolio, increasing the emphasis in hiring processes for language skills, and purchasing specific technologies to be integrated into existing processes. Operational change (2): The recommendation proposes changes that require significant adjustment by intelligence organizations in order to incorporate them. Examples include the creation of new organizations or processes and the adjustment of mission areas. Strategic change (3): The recommendation proposes changes that upend existing processes and concepts. Examples include the rejection of organizing principles, creation of new principal relationships, and termination of mission areas. Type: Text (limited) w Numerical via Source

Accept records whether or not a recommendation found within reform artifacts is also found in an enactment. The recommendations that are not found in an enactment, or for cases with no enactment, the value is rejected (0). Recommendations that are altered beyond grammar or sentence structure have a value of modified (1) and recommendations without change other than grammar or sentence structure have a value of accepted (2). Type: Text (limited) w Numerical via Source

A change is the primary dependent variable that reflects the highest shift score among all recommendations of an effort. The difference in measure between a shift and a change is that the former is proposed, but the latter is enacted. The shift may need to be modified based on the accept score. This creates the shift score, which directly becomes the change score. Recommendations must have a value of accept that is greater than 0 to be considered. For a modified shift with a value of 2 or 3, change is valued at 1. For a shift with a value of 1, change is valued at 0. In cases where accept equals 0 for all recommendations, outcome is also valued at 0. Type: Number

Question is a qualitative assessment of the reform effort relationship with an event. The alignment of the reformer’s questioning within the effort and referral to the event in

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reformer artifacts are evaluated to judge how specifically the reformer treats the event. A reformer that places strict specificity on the event is scored as 0, but a reformer who is less restrictive on the specificity of the event is scored as 1. This is a testable condition. Example 1: In response to allegations of domestic intelligence activity, “How the fundamental liberties of the people can be maintained in the course of the government’s effort to protect their security” (Church, 2007a). This example places the focus away from the actual intelligence events and transfers it to the society, scrutinizing how intelligence supports or detracts from that subject. Example 2: In response to allegations of domestic intelligence activity, “Our instructions…are clear. We are to investigate the intelligence gathering activities of the US Government…We start by looking at the cost” (Pike, 1977). This example adheres closely to the event, focusing directly on a subsection. Type: Number

Terminology is a qualitative assessment of extant intelligence concepts by the reformer. This is assessed by examining final reformer artifacts for definitions of terms. If terms used by the reformer and intelligence organizations differ, then the language is scored at 1. If the terms used by the reformer and intelligence organizations are the same, then reformer data collection efforts (e.g., testimony) are examined for documented interactions and critical questioning of concepts and definitions. If evidence of such questioning is found when terms are the same in the final artifact, then the language will be scored as 1. If no such questioning is found and the terms are the same, then language is scored as 0. This is a testable condition. Example 1: “The Commission perceives four functional roles for intelligence agencies—collection, analysis, covert action, and counterintelligence…” Testimony demonstrates questioning only for placing agreed upon definitions of these functions on the record (Aspen & Brown, 1996). Example 2: “We have examined three types of ‘intelligence’ activities…intelligence collection…dissemination of material which has been collected…covert action…” The longer definitions of each are discussed in testimony but did not fully match with extant definitions of collection, analysis, and covert action (Church, 2007a). Type: Number

A proposal is a qualitative assessment of a reformer’s recommendation generation process. If, through the artifacts, a solution is not linked to previous, but not enacted, proposals or demonstrates a fulsome development process within the current effort, it is scored as 1. If a solution is explicitly referenced from previous reform efforts or is proposed without interaction among the actors (i.e., typically being proposed within the first few moments of the effort), then it is scored as 0. This is a testable condition. Example: The recommendation “the General Accounting Office be empowered to conduct a full and complete management as well as financial audit of all intelligence agencies. There shall be no limitation on the GAO in the performance of these functions by any executive classification system, and the audit function of GAO shall specifically apply those funds which presently may be expended on certification of a Director of an Agency alone” (Pike, 1977). Is a propsal mentioned in the first two questions by

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reformers of a 48-page testimony session of the first individual questioned on the topic, demonstrating no attempt at data gathering via interaction. Type: Number

The time is the measure of the number of years between two cases that record a similar finding. This is determined by subtracting the start year of the older case from the more recent case. If the value is less than or equal to 2, then time is scored at 0. If the value is greater than 2, then time is scored at 1. This is a testable condition. Type: Number

The context is the qualitative comparison of similar findings from different cases. This is determined by measuring the language of each finding, focusing on the latter finding for references of emplaced systems, processes, or other changes since the previous finding, which was meant to mitigate shortfalls. The specifics of the finding are not considered true change (e.g., a shortfall in language capability does not change based on the language of interest). What is measured is any language hiring practices in place that attempted to correct language shortfalls. A finding that does not reference new systems is worded almost exactly as the previous finding. A finding that explicitly mentions a lack of new systems is scored as 0. Otherwise, it is scored as 1.

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Appendix C: Outside Coder Biographic Data

General Population Characteristics: Completed education: 50% had master’s degrees, and 50% had bachelor’s degrees Mean years as intelligence practitioners: 6.7

Coder 1 Highest level of completed education: M.S. (Biology) Years as intelligence practitioner: 5 Agreement with master coder on major conditions: 80%

Coder 2 Highest level of completed education: M.P.S. (Professional Studies), No further information Years as intelligence practitioner: 6 Agreement with master coder on major conditions: 94%

Coder 3 Highest level of completed education: M.A. (Theology) Years as intelligence practitioner: 8 Agreement with master coder on major conditions: 76%

Coder 4 Highest level of completed education: M.S. (Strategic Intelligence) Years as intelligence practitioner: 7 Agreement with master coder on major conditions: 76%

Coder 5 Highest level of completed education: M.S. (Strategic Intelligence) Years as intelligence practitioner: 16 Percentage of agreement with master coder on major conditions: 80%

Coder 6 Highest level of completed education: B.A. (Business Administration) Years as intelligence practitioner: 0 Agreement with master coder on major conditions: 84%

Coder 7 Highest level of completed education: B.A. (Criminal Justice) Years as intelligence practitioner: 12 Agreement with master coder on major conditions: 68%

Coder 8 Highest level of completed education: B.S. (Computer Science) Years as intelligence practitioner: 11

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Agreement with master coder on major conditions: 80%

Coder 9 Highest level of completed education: B.S. (Biology) Years as intelligence practitioner: 2 Agreement with master coder on major conditions: 94%

Coder 10 Highest level of completed education: B.A. (Communications) Years as intelligence practitioner: 0 Agreement with master coder on major conditions: 94%

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