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The Intelligence Reform Boondoggle

The Intelligence Reform Boondoggle
by Gary D. Halbert
December 14, 2004


1. The New “Intelligence Reform Bill”
2. Another Total Political Rush Job
3. The Good, The Bad & The Ugly
4. Is The “National ID Card” Coming?
5. Will We Be Safer? Probably Not.


The Intelligence Reform Bill, as it is being called, sailed through Congress. It will soon be signed into law by President Bush. We are told that it incorporates suggestions made by the 9/11 Commission regarding reforming the national security and intelligence infrastructures, and will better facilitate the sharing of information and the coordination of individual agency efforts. In theory, the changes recommended by the Commission and those found in the bill should position the US intelligence apparatus to better address the asymmetrical threat that terrorism represents.

On the surface, this sounds good. But it is important to remember that President Bush himself opposed this bill initially, suggesting that it was not necessary for the reasons I will outline below. He changed his position only after tremendous outcry from the families of the 9/11 victims and widespread political pressures in Washington to “do something” in addition to the heightened security measures already put into place.

There are several questions regarding the Intelligence Reform Bill that I would like to address this week. First, do we really need this huge new piece of legislation in the first place? Second, do we really need a new federal agency and an “Intelligence Czar” to oversee some (but not all) of our security agencies, mainly the CIA and the FBI, and report as a lone voice to the president? Third, do we really want to implement all or most of the recommendations of the 9/11 Commission, including what some believe will eventually be a National ID card? And fourth, haven’t the Bush administration and the Department of Homeland Security already taken steps to remedy some of the security issues raised by the 9/11 Commission?

The truth may be that we didn’t need the Intelligence Reform Bill, that we may have been better off without it, and that it probably has as many negatives as positives (if not more). Perhaps more than anything else, it was simply a political move to give Senators and Representatives something they can brag about to their constituents back home over the holidays.

Whatever the reasons and motivations, the new bill will create a new federal agency headed by the National Intelligence Director. To hear the media tell it, you might think this will be primarily one person with a modest staff. Hardly! This will become another huge government bureaucracy with a mandate that few will dare to challenge or hold accountable. More on this below.

This week, we will look at all of these concerns. The truth is, there are some good things about the Intelligence Reform Bill, there are some bad things and then there are some that are downright ugly. So let’s get to it.

Another Total Political Rush-Job

To begin with, we must state the obvious: the Intelligence Reform Bill itself was a total rush-job. Like all pieces of major reform legislation that are rushed (the Patriot Act, prescription drug bill, etc.), this bill has obvious problems, both in what it does, and does not, address. In many cases, the particulars of the bill have been glossed over entirely by the media.

The sad thing is, there was no real need to rush this bill. Of all the 9/11 related legislation, intelligence reform was the most important element, in my opinion. The time should have been taken to do this right and to address all the security concerns. But it did not. In its current form, the bill is – more than anything else - merely a political trophy that the politicians can show off to constituents over the holiday recess.

Before diving into the specifics of the Intelligence Reform Bill, it is important to keep in mind that one of the main drivers for this bill was the perceived need to implement all or most of the recommendations made by the 9/11 Commission. Yet it is worth remembering that the 9/11 Commission itself was embattled, and it’s credibility was called into question on more than one occasion.

If you will recall, controversial 9/11 Commission members Richard Ben-Veniste and Jamie Gorellick cast a shadow over the proceedings. The supposedly non-partisan Commission was frequently dominated by Mr. Ben-Veniste’s overtly partisan (ie – blame Bush) grandstanding. Ms. Gorellick was tainted by the fact that, while at the Justice Department, she played a pivotal role in “building the wall” between the intelligence agencies in the first place. These and other controversies had many questioning whether or not some of the recommendations made in the Commission’s final report would be of any use whatsoever.

Was The Bill Even Needed?

Actually, many of the 9/11 Commission recommendations did make their way into the Intelligence Reform Bill in one form or another. Yet as I will discuss below, some of the provisions in the bill are good, some are bad and some are just plain ugly. And in the end, will this bill actually do remotely what it purports to do? Is it even needed?

Many of the “reforms” outlined by the 9/11 Commission that are the center of attention in the current legislation were set into action by President Bush on August 27 of this year by Executive Orders. The first Executive Order granted the Director of Central Intelligence (DCI) the oversight authority outlined in the 9/11 Commission’s report. (Link: http://www.whitehouse.gov/news/relea...0040827-6.html).

If, and I stress if, this needed doing at all, the Executive Orders were the best method for implementation. The DCI, as opposed to a political appointee, is typically a product of the intelligence community. This has obvious advantages. The DCI knows the intelligence apparatus, who does what, why and how. He would command an element of respect in the community whereas a civilian politico generally would not.

This is not to say the DCI has instant credibility across the intelligence spectrum, but at least he wouldn’t require years of “on the job” training. The DCI also has a vast bureaucracy already at his command, and the extra layer of bureaucracy that the National Intelligence Director agency will bring is not required to get the job done.

The reason often touted for these new reforms is counter-terrorism. That’s fine, but President Bush issued another Executive Order on August 27 creating the National Counterterrorism Center (NCC). (Link: http://www.whitehouse.gov/news/relea...0040827-5.html).

Why does this need to be recreated? This Executive Order placed the NCC under the directorate of the CIA, which is where it should be. Why do we need to create a new one? Why do we need to expand the bureaucracy and the size of government again? The answer is, we don’t.

These Executive Orders accomplished virtually everything the new reform bill hopes to do. Certainly these new orders expanded the already large intelligence bureaucracy and created additional costs. But that was nothing compared to this huge pig-in-a-poke Intelligence Reform Bill!

We can debate whether or not the Intelligence Reform Bill was needed at all, or if some radically different measures should have been taken ad nauseam. Likewise, we can discuss the political motivations that were behind this bill. But the fact is, it passed overwhelmingly in the Congress, and it’s here to stay. So, let’s dissect it. While I won’t enumerate every aspect of what the bill does and does not provide for, I will instead hit what I consider do be the high and low points.

The Good

The new bill seeks to strengthen ties between the federal intelligence apparatus and state and local agencies as well as creating common standards for issuing security clearances and classifying information. This is a good idea and could prove very valuable, especially to the “first responders” in the event of another terror attack.

It also strengthens visa application requirements and establishes a visa and passport security program at the Department of State. While this is clearly a good idea, we have to wonder why there wasn’t such a program in place well before now.

The bill also calls for the creation of an independent “Privacy and Civil Liberties Board,” made up of private citizens who are appointed by the president to examine Executive Branch policies to make sure they don’t violate citizens’ privacy and civil liberties. This is perhaps the single most positive aspect of this bill. It sounds as though there won’t be many constraints on this board. Hopefully, they can also take a crack at certain troubling aspects of the Patriot Act.

There are also a number of provisions in this bill that pertain to the Department of Homeland Security. While some of these are good suggestions, they seem out of place in this legislation.

The Bad

Where to begin? While there are some good aspects of the bill, as pointed out above, there are some aspects of it that are flat out bad. Here are the major offenders.

The bill would grant the federal government the ability to more closely track cross-border financial transactions. While this sounds good on the surface for the purposes of money laundering, it is clear that the government is moving toward scrutinizing most all of our financial transactions. The financial privacy we once enjoyed in this country is slipping away. This is a topic of discussion for a future E-Letter.

This legislation will also allow Grand Jury information to be shared with government officials in order to prevent or respond to terrorist threats. This information is currently kept secret under federal law. The US Supreme Court held that there are four reasons why Grand Jury proceedings are to be kept secret.

Secrecy prevents those who are being investigated from tampering with witnesses or the investigation. It allows witnesses who are reluctant to testify in a public court to speak privately before a Grand Jury. It protects innocent persons whose names may be implicated in a Grand Jury investigation but who will never be indicted. Grand Jury secrecy also lessens “flight risk,” since the accused often do not even know they are under indictment.

This seems like a part of the bill that will certainly be challenged in the courts. You can expect the ACLU to be all over this, and rightly so. Again, if the bill had not been pushed through in haste, perhaps this obvious pitfall could have been avoided.

The National ID Card?

The legislation also calls for the Department of Homeland Security (DHS) to establish national standards for driver’s licenses and birth certificates, which will ultimately be linked through a national database. DHS is also tasked with standardizing ID used to board airplanes. Taken together, this is nothing short of a national ID card.

This has no place in a free society. While we have reluctantly “bent” on some civil liberties issues for the greater good in the post-9/11 world, this would in my opinion constitute “breaking.” I can think of no better government representative than Texas’ own Congressman Ron Paul to sum up my feelings on this:

“A national identification card, in whatever form it may take, will allow the federal government to inappropriately monitor the movements and transactions of every American. History shows that governments inevitably use such power in harmful ways. The 9-11 commission, whose recommendations underlie this bill, has called for internal screening points where identification will be demanded. Domestic travel restrictions are the hallmark of authoritarian states, not free nations. It is just a matter of time until those who refuse to carry the new licenses will be denied the ability to drive or board an airplane.
Nationalizing standards for drivers licenses and birth certificates, and linking them together via a national database, creates a national ID system pure and simple. Proponents of the national ID understand that the public remains wary of the scheme, so they attempt to claim they’re merely creating new standards for existing state IDs. Nonsense! This legislation imposes federal standards in a federal bill, and it creates a federalized ID regardless of whether the ID itself is still stamped with the name of your state.”
I couldn’t agree more with Dr. Paul on this one! National ID cards are not proper in a free society. This is America, not Soviet Russia. The federal government should never be allowed to demand papers from American citizens, and it certainly has no constitutional authority to do so.

Those who are willing to allow the government to establish an internal passport system because they think it will make us safer are terribly mistaken. Subjecting every citizen to surveillance and screening points could actually make us less safe, not in the least because it will divert resources away from tracking and apprehending terrorists and deploy them against innocent Americans. Every conservative who believes in constitutional restraints on government should reject the authoritarian national ID card and the nonsensical intelligence bill itself.

The Ugly

What the bill gets wrong is the creation of a National Intelligence Director (NID). The NID is the bill’s crown jewel. The new office is that of a single director who would mystically coordinate the vast, varied and usually disagreeable agencies and sub-agencies, which constitute part of the US “intelligence community”.

Of course, the NID position cannot possibly function with a single person, or even a small group of people, as has been suggested. Instead, it will certainly entail an all-new layer of wasteful bureaucracy set atop the current intelligence infrastructure. This is a terrible idea for a variety of reasons.

This political appointee will face the impossible task of unifying the intelligence community, which is composed of 17 primary agencies that are accustomed to being independent, and independent for a reason. Their work is secret.

Also, having an NID could well lead to intelligence “norming” and/or “groupthink” in place of truly independent analysis. As it is to be designed, the NID would serve to filter the various intelligence information, and then decide what should be presented to the president. This is just plain stupid for a variety of reasons!

Political appointees have agendas, period. The president needs all of the cold, hard truth in all of his intelligence briefings. Intelligence should not be omitted or suppressed just because it might not fit someone’s political agenda or the policy de jour.

Furthermore, the president needs to hear multiple voices when it comes to security intelligence. He needs to hear from the head of the CIA, the head of the FBI and the other agencies that will soon report to the NID – not just one voice, one opinion. How anyone could have voted for this major change is beyond my imagination!

Limited Scope, Fortunately

The good news, dare we call it that, is that the NID will have limited powers. Fred Kaplan of Slate.com (a liberal online magazine) points out that the NID will only ha
ve direct jurisdiction over a fraction of the US intelligence community.

“The Defense Department's ‘statutory responsibilities’ for intelligence matters—which the bill says the new NID may not abrogate—are laid out in Title 10 of the U.S. Code (Chapter 21) and in DoD Directive 5100.20. They cover the personnel, operations, and budgets of not just the Defense Intelligence Agency (and its Army, Navy, Air Force, and Marine sub-branches), but also the National Reconnaissance Office (which controls all spy satellites), the National Imagery and Mapping Agency (which selects the routes for those satellites), and, most critically, the National Security Agency (the largest U.S. intelligence apparatus, which handles electronic and communications intercepts).”
In total these agencies account for about 80% of the US intelligence apparatus. So what is left for the NID to coordinate? The CIA, the FBI and a handful of smaller agencies are all that remain. While these agencies are not insignificant by any means, they are dwarfed by the Defense Department agencies which will not be under the NID’s direct control. This is good.


At the end of the day, the Intelligence Reform Bill was little more than a giant political boondoggle that was jammed through in haste so that the members of Congress can say they had a hand in making America safer. They couldn’t stand it that the Bush administration was getting most of the credit. Now everyone can go home and say they had a hand in it.

The new “reform” bill duplicates many things that President Bush set in motion with his Executive Orders on August 27. Yet Congress had to duplicate much of it for the reasons cited just above.

The National Intelligence Director will multiply into another huge government bureaucracy. As this unfolds, the president will hear from a lone voice instead of hearing directly from the heads of the CIA and the FBI and certain other intelligence agencies. What he hears, or does not hear, may at times be tainted due to politics.

As discussed above, the new reform bill includes the apparatus for implementing a National ID card. Sure, they promise it will never happen, but the gate is now open if the analyses of the bill I have seen are accurate.

As it stands, this Intelligence Reform Bill does very little to actually reform our intelligence networks. The bill does not address our lack of “human intelligence” (HUMINT) and what is being done about that. Nor does it address what kinds of assets our agencies will need to develop to combat the new threat. And do you know why? Because that information is secret! Those types of details will never, nor should they ever, be revealed to the public at large.

It remains to be seen if the new Intelligence Reform Bill will make us safer at all. It could have the opposite effect in some regards. President Bush should have vetoed it. He didn’t.

I wish I had better news. If reading this has made you angry, you’re not alone!

Best holiday wishes,

Gary D. Halbert

Gary Halbert is the president and CEO of the ProFutures companies, a diversified investment advisory firm located in Austin, Texas. ProFutures offers professional financial planning services to a nationwide base of clients. Mr. Halbert's firm specializes in tactical investing, and its recommended investment programs include mutual funds, managed accounts with professional Investment Advisors and alternative investments. For more information about the programs offered, call 800-348-3601 or visit the website at www.profutures.com.


Another call for the US to get out of the United Nations.

A good review of media bias in the presidential election.

How Tom Daschle got blogged.

Copyright 2004 Gary D. Halbert.

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