Terrorism - U.S. Intelligence Funding

Enron and the Afghanistan military campaign notwithstanding, the big story this February is the increased money flowing to the Department of Defense and the myriad agencies (including defense) that have tied programs to homeland security.

Counting the defense nuclear activities of the Department of Energy, President George W. Bush’s defense request for Fiscal Year (FY) 2003 comes out at $396 billion, an overall 14 percent jump from 2002 and 12 percent after inflation adjustments.

Homeland security saw its FY’03 request almost double over the 2002 request, going from $19.5 billion to $37.7 billion. Even counting monies from the Emergency Response Fund targeted to homeland security ($9.8 billion) for FY’02 still leaves a gap of 29.3 percent between the two years.

Meanwhile, the increases for the13 agencies and offices that comprise the U.S. intelligence community have gone largely unnoticed – perhaps because, unlike defense and homeland security, they are secret. Only in 1997 and 1998 was the veil lifted. In those years, the director of Central Intelligence (DCI) and head of the Central Intelligence Agency, publicly informed Congress that total U.S. intelligence spending for those years was $26.6 billion and $26.7 billion, respectively.

Despite the re-imposition of secrecy about the intelligence budget, analysts and reporters have been able to estimate its inexorable rise. ¹ In 1998, Tim Weiner, a reporter for the New York Times, noted that intelligence would receive “the largest spending increase…in 15 years.” Conservative estimates placed the community’s budget request at $27 billion-$28 billion, not including classification costs. ²

Over the next few years, estimated increases were modest (see chart). There was much talk of reform, of strengthening the DCI’s oversight of the community, even of putting Pentagon agencies – the National Reconnaissance Office (NRO), the National Imagery and Mapping Agency (NIMA), and the National Security Agency (NSA) – under the DCI. But lapses in the agencies – the CIA’s Aldrich Ames, the bombing of the Chinese embassy in Belgrade attributed to outdated information, congressional displeasure with the pace of modernization at NSA and NIMA, and the FBI’s Robert Hannsen – seemed somehow to scuttle major systemic reforms. More puzzling has been the perception (if not the fact) that no one was held accountable for these missteps. And funds were never cut as an incentive to improve performance.

Even Sept. 11 had a mixed effect. More money – $1.5 billion – was immediately poured into intelligence and “situational awareness.” Under the “U.S. Patriot Act” passed in October 2001, the FBI was directed to reorient its activities from law enforcement to domestic anti-terrorist intelligence activities. The CIA was given broad powers to act overseas, while at home its reach was expanded to include involvement in FBI surveillance operations and in the tracking of terrorist financial activities by the Treasury Department ³ – this for an agency that, until his retirement at the end of the 106^th Congress in 2000, Sen. Daniel Patrick Moynihan advocated closing completely. In the Intelligence Authorization Act for FY’02, the conference committee highlighted four priorities: (1) revitalizing the National Security Agency (NSA); (2) correcting deficiencies in human intelligence; (3) addressing the imbalance between intelligence collection and analysis; and (4) rebuilding a robust research and development program. ⁴

Some analysts believe $41 billion for the FY’03 request is too high. However, when it comes to the intelligence budget, Congress is less a watchdog and more of an advocate. (Most often it bears down on the intelligence community when there is an abuse of power or violations of law.) Moreover, in addition to the comment by Rep. Jerry Lewis, R-Calif., comment on the percent increase in the intelligence proposal from FY’02 to FY’03, ⁵ conferees made three observations in the FY’02 bill that point to their receptivity to a large increase in FY’03.

1998 – Richard Stubbing, “Improving the Output of Intelligence,” in Craig Eisendrath (ed.), National Insecurity: U.S. Intelligence After the Cold War. Philadelphia: Temple University Press, 2000 (pp. 174 and 188). (A Project of The Center for International Policy.)

1999 – “Secret Budget Figures Estimated,” Defense Week, June 18, 2001 (p. 3); Tom Raum, “CIA Budget Disclosure Considered,” Associated Press, Nov. 2, 1999.

2000 – Glenn Zorpette, “Making Intelligence Smarter,” IEEE Spectrum, Jan. 2002 (pp. 38-43); “Secret Budget Figures Estimated,” Defense Week, June 18, 2001 (p. 3); “Senate Boosts Fnding for Intelligence,” Washington Post, Nov. 20, 1999 (p. A10).

2001 – Glenn Zorpette, “Making Intelligence Smarter,” IEEE Spectrum, Jan. 2002 (pp. 38-43); “Secret Budget Figures Estimated,” Defense Week, June 18, 2001 (p. 3).

2002 – “CIA Gets Increase For War on Terror,” The Washington Times (AP), Feb. 6, 2002 (p. 8);

2003 – Tony Capaccio, “Pentagon Wants to Add $6 Bln For Intelligence Over Five Years,” Bloomberg.com, Jan. 18, 2002; “CIA Gets Increase For War on Terror,” The Washington Times (AP), Feb. 6, 2002 (p. 8); “Rep. Lewis remains cautious on Air Force tanker lease,” Aerospace Daily, Feb.11, 2002 (p. 5).

1 Some specific dollar amounts are routinely revealed. For FY’01 and FY’02, Congress set aside $27 million and $44 million, respectively, for the National Drug Intelligence Center in the Department of Justice. In the same years, $216 million and $212 million were allocated for the CIA’s Retirement and Disability Fund (Congressional Record, Oct. 2, 2000 (p. S9578) and Conference Report 107-328).“Community Management” received $145 million in FY’02 in the Intelligence Appropriations Act for FY’02 (Public Law 107-108).

The FBI’s budget is public information, and the request is the subject of congressional hearings as part of the Commerce, State, and Justice appropriations act (for FY’02, Public Law 107-77).

Occasionally, funding for special projects becomes known. In the DoD Appropriations Act for FY’02, the House provided the Director of Central Intelligence with $451 million to create a Counter-Terrorism and Operational Response Transfer Fund. In the final bill this line disappeared but was apparently subsumed in Chapter 3, Sec. 303 dealing with transfers of funds for intelligence purposes from the $1.5 billion allocation for the Defense Emergency Response Fund. (Public Law 107-117).

A few specific dollar additions to intelligence budgets have been reported: $484 million for NRO, $245 million for “special Navy activities” (communications intercept programs), and $51 million to begin development of a replacement for the U.S. Air Force’s “Cobra Judy” seaborne missile trajectory tracking system. In Tony Capaccio, “Pentagon Wants to Add $6 Bln For Intelligence Over Five Years,” Bloomberg.com, Jan. 18, 2002.

2 Craig Eisendrath, “U.S. Intelligence After the Cold War: A Program for Reform,” The Center for International Policy.

3 Jim McGee, “An Intelligence Giant in the Making,” The Washington Post, Nov. 4, 2001 (p. A4).

4 House Conference Report 107-328 on the Intelligence Authorization Act for FY2002 (H.R. 2883), Dec. 6, 2001. Rebuilding the NSA was the top priority in the FY’01 budget. The conferees singled out the CIA to correct deficiencies in human intelligence collection by re-evaluating its agent recruitment guidelines so that “a new balance [can] be struck between potential gain and risk, a balance that recognizes concerns about egregious human rights behavior and law breaking.” Conferees lamented the 1990s decline in budgets for analytical tasks, and decried the use of research funds as “bill-payers” for other requirements.

5 Tony Capaccio, “Pentagon Wants to Add $6 Bln For Intelligence Over Five Years,” Bloomberg.com, Jan. 18, 2002. Rep. Lewis chairs the Subcommittee on Defense of the House Appropriations Committee.

6 House Conference Report 107-328.

7 The FY’98-FY’02 dollar totals are found in the sources indicated for each year. The FY’03 dollar total is derived from the percentage increase over the FY’02 total.

8 Capaccio notes that “analysts estimate the Defense Department will allocate $12 billion to $15 billion” for military intelligence, which makes sense only in the context of those agencies directly supporting military intelligence: service intelligence organizations, (mostly in the TIARA program), DIA, and perhaps NIMA.

9 The 1998 figure is for counterintelligence only. Other years reflect the entire FBI budget.

10 If the $1.5 billion added in for intelligence and “situational awareness” as a result of Sep. 11 is considered a one-time addition, the base total for FY’02 would fall from $33 billion to $31.5 billion, which would produce the lower figure for FY’03. This would accord with a Defense News report by Frank Tiboni, “Intel Budget Likely To Stay Flat Despite Needs,” Oct. 15-21, 2001 (p. 38).