Creation of the CIA Essay
Creation of the CIA
Despite the popular perceptions generated by Tom Clancy novels and James Bond movies, American intelligence gathering was not a Cold War invention: it has existed since the Republic’s founding. George Washington organized his own intelligence unit during the Revolutionary War, sending spies behind enemy lines and overseeing counterespionage operations. In 1790, just three years after the Constitutional Convention, Congress acknowledged executive prerogative to conduct intelligence operations and gave then-President Washington a secret unvouchered fund “for spies, if the gentleman so pleases”. Intelligence has been a component of American foreign policy ever since.
More important for our purposes, America’s growing involvement in world affairs during the late nineteenth and early twentieth centuries led to the establishment of several permanent intelligence organizations. In 1882, the Office of Naval Intelligence (ONI) was created and charged with collecting technical data about foreign navy ships and weapons. Three years later, the Department of War established its own intelligence unit — the Military Intelligence Division (MID). In 1908, the Federal Bureau of Investigation opened its doors. By the 1930s, the FBI had become the nation’s preeminent counterespionage agency and had branched into running intelligence activities in Latin America.
The State Department, meanwhile, had developed an expertise and a mission, which focused on overt information collection. Finally, several critical events sparked the creation of a new wartime central intelligence agency under the Joint Chiefs of Staff, the Office of Strategic Services (OSS), which collected information, analyzed raw intelligence, and carried out a range of covert, subversive operations abroad — from propaganda, to sabotage, to paramilitary operations. By the end of World War II, these five bureaucratic actors were vying for their own place in the postwar intelligence arena. This was hardly the same straightforward War versus Navy Department environment that gave rise to the National Security Council system or the Joint Chiefs of Staff.
It is frequently cited that former President Truman never thought that when he created the CIA it would ever be involved in peacetime covert operations. In 1964 Allen Dulles, one of the most influential Directors of Central Intelligence in CIA history, challenged Truman’s remarks, saying that although Truman did not care for dirty Gestapo tactics, the CIA had certainly performed them during his presidency. This paper will chronicle the transformation of the Office of Strategic Services (OSS) into the Central Intelligence Agency. It also will examine how and why the peacetime Central Intelligence Agency came to possess many of the same powers as its wartime predecessor. In particular this paper will focus on the OSS legacy of covert operations and how the CIA inherited that legacy.
The Creation of CIA
During World War II, the OSS wielded broad powers, including clandestine intelligence gathering and covert political warfare. William Donovan, Director of the OSS, exhorted the United States to maintain the OSS or a close facsimile of it in the post-war period. The end of the war and the reminder of another secret organization that waged covert political warfare, the Nazi Gestapo, influenced President Truman to dissolve the OSS. However, as the United States gradually entered the Cold War with the Soviet Union, the necessity of a peacetime intelligence agency became apparent. To meet the need, Truman created the Central Intelligence Group (CIG) in 1946.
In 1947 Congress transformed the CIG into the Central Intelligence Agency (CIA). The powers of the CIA increased dramatically as U.S. policymakers began to perceive an increasing threat of Soviet-Communists bent on world domination. By 1952 the CIA closely resembled the wartime OSS, having the same authority and capabilities. At the same time the War Crimes Trials were being conducted at Nuremberg, American intelligence officers were secretly interviewing high-ranking German officers to determine their potential usefulness in supplying intelligence on the Soviet Union.
Three critical events were significant influences on the Truman Administration officials who founded and built the CIA. The first was the Japanese surprise attack on Pearl Harbor, which demonstrated that the United States was unprepared, not for want of information, but because no apparatus existed to filter and analyze the large volume of available information in a way that could produce accurate intelligence. This infamous intelligence failure clearly demonstrated that the security of the United States would be greatly compromised until it developed a peacetime centralized intelligence agency.
The second significant event was Stalin’s seizure of political and military control of most of Eastern Europe in violation of his wartime understanding with the Allied Powers. The fighting in Europe had only recently ended when American and foreign reports on Soviet activities in the occupied territories began to distress leaders in Washington, London, and other capitals. The third event concerned the sponsorship by Soviet and Chinese Communists of the North Korean invasion of South Korea. This sponsorship heightened Cold War tensions and strengthened the conviction of policy makers to buttress the CIA’s power to fight communism. Pearl Harbor illustrated the need for a peacetime central intelligence service and the Cold War struggle with the Soviet Union galvanized the Truman Administration to create a peacetime intelligence organization with quasi-wartime powers.
During World War II, the United States created the first American centralized intelligence agency, the Office of Strategic Services (OSS). On June 13, 1942, a Military Order issued by President Roosevelt created the OSS and granted it broad powers that included intelligence analysis, clandestine collection, and paramilitary, psychological and political warfare. The agency operated under the authority of the Joint Chiefs of Staff. It was devoted to the business of sabotage, espionage, counterespionage, and covert action, hallmarks that would be passed on to its successor, the CIA. The OSS was involved in both intelligence gathering and clandestine political warfare. To combine both of these capabilities in one agency, Donovan assigned different functions to separate branches of the OSS. Three of the main branches of the OSS were Special Operations (SO), Secret Intelligence (SI), and Counterintelligence (X-2).
The OSS was extremely successful in carrying out covert operations. The first important OSS covert operation was conducted in North Africa. Several assassinations, allegedly including that of Vichy French Admiral Darlan, were carried out by the Morale and Special Operation departments of the Psychological Warfare Division of the OSS. The success of the operation earned the burgeoning agency great respect and notoriety, especially in regards to covert action. The CIA would soon inherit the OSS’s wartime experience and assassination methods. The OSS was also remarkably successful in setting up and maintaining clandestine agents in Thailand. The OSS established a solid foundation for future CIA activities in the Southeast Asia.
Even early in World War II, paramilitary and political covert operations gained support of high-level figures, such as Roosevelt and Eisenhower, and began to eclipse the accomplishments of intelligence collection. The OSS emphasis on covert paramilitary operations would be one of the primary legacies passed on to the CIA As historian John Ranelagh noted, “The benefits of covert paramilitary action in peacetime tended to be favorably regarded on the basis of a romantic recollection of these wartime experiences of the OSS.” Perhaps the most important legacy the OSS bestowed upon the CIA was that of former OSS personnel who filled the ranks of the fledgling CIA with experienced intelligence officers. Four OSS veterans, Allen Dulles, Richard Helms, William Colby, and William Casey, went on to become Directors of the Central Intelligence Agency.
Throughout the war, the OSS proved to be invaluable in both intelligence collection and covert operations, clearly illustrating the advantages of combining these two capabilities in one agency. In 1944 President Franklin Roosevelt requested a secret memorandum on the subject of a postwar intelligence service from General Donovan, OSS chief. Donovan exhorted President Roosevelt to create a permanent, worldwide intelligence service after the war’s end. Donovan anticipated the Cold War struggle: “When our enemies are defeated the demand will be equally pressing for information that will aid us in solving the problems of peace.” Donovan went on to argue that the OSS had “the trained and specialized personnel needed for the task. This talent should not be dispersed.”
Donovan’s proposal was foiled by the Director of the Federal Bureau of Investigation (FBI), J. Edgar Hoover, who wanted the FBI to have the exclusive right to collect and analyze intelligence on a global level. Hoover obtained a copy of Donovan’s proposal for a postwar intelligence service and leaked the top-secret document to the Chicago Tribune. The newspaper printed a number of inflammatory stories about Donovan’s plan to create a super-spy network. Congressional uproar, no doubt spurred by the bad press, caused the peacetime central intelligence agency proposal to be shelved. The cautious Roosevelt was optimistic about Donovan’s plan, but offered no guarantees. After Roosevelt’s death and the close of the war, President Truman stated in a letter to Donovan that said he would “liquidate those wartime activities of the Office of Strategic Services which will not be needed in time of peace.” Truman feared Donovan’s proposed centralized peacetime intelligence agency might one day be used to spy on Americans.
However, the reminders of Pearl Harbor and the intensifying Soviet aggressions made Truman realize that the United States could no longer deny its role as a world leader and, as such, it would require a formidable centralized intelligence agency. Even before Truman abolished the OSS, he recognized the necessity and requested proposals for the creation of an organization to collate and coordinate intelligence. Upon learning of Truman’s plan to disband the OSS and transfer functions to separate agencies, Donovan sent a memorandum to President Truman, on September 13, 1945, pleading that “in the national interest, and in your own interest as the Chief Executive, that you will not permit this to be done.”
President Truman, ignoring Donovan’s objections, issued Executive Order 9621 on September 20, 1945, titled “Termination of the Office of Strategic Services and Disposition of Its Functions.” According to the Order, the State Department took over the OSS Research and Analysis Branch, while the War Department adopted the remnants of the OSS clandestine collection and counterintelligence branches, which it named the Strategic Services Unit (SSU). The capability that the wartime OSS had developed to perform subversive operations abroad was officially abandoned.
In December 1945 Truman deliberated proposals from both the State Department and the Joint Chiefs for a new centralized intelligence agency. Truman ultimately opted for a diluted version of the more simplistic and workable Joint Chiefs’ proposal. The result was the creation of the Central Intelligence Group (CIG) on January 22, 1946. Naval Reserve Rear Admiral Sidney Souers was selected to be the first Director of Central Intelligence (DCI). President Truman invited Souers to the White House two days after creating the CIG to award him a black cloak and dagger as symbols of his new office.
The CIG was drastically understaffed, consisting primarily of officers borrowed from the State Department and the military services. The new agency was only a shadow of the wartime OSS. The CIG had no authorization to collect clandestine foreign information from agents in the field or to form a consensus based on information gathered from other intelligence agencies. The primary function of the agency was to coordinate the flow of intelligence to policymakers. Truman attempted to keep covert action, a prominent part of the OSS, out of this peacetime agency.
In reference to the directive creating the CIG, Truman stated, “No police, law enforcement or internal security functions shall be exercised under this directive.” Compromises in the Joint Chiefs’ plan to appease the State Department and the Bureau of the Budget had made the CIG an interdepartmental body that lacked its own budget and personnel. However, President Truman greatly appreciated the Daily Summary produced by the CIG. The Daily Summary was prepared according to Truman’s own specifications, and when complete satisfied his requirements, it saved him the time of having to search through the hundreds of intelligence reports that normally flooded into the White House.
Rear Admiral Sidney Souers, after five months as DCI, was replaced with U.S. Army Air Forces Lieutenant General Hoyt S. Vandenberg. DCI Vandenberg had an impressive military record and had the clout and ambition necessary to build the CIG into an agency that wielded great power. In just one year as Director, Vandenberg broadened the CIGs power to incorporate an independent budget and work force and won the authority to collect and analyze, as well as collate, intelligence. The CIG expanded in importance as the United States attempted to contain the Soviet Union in Europe.
At this point, all sides thought the intelligence battle was over. Donovan and OSS were out of the picture, the State Department had come back into the fold, and the president had created a Central Intelligence Group, which left each department to run its own intelligence affairs. As Truman and his warring military services now turned to drafting a compromise military unification bill, the intelligence consensus was clear: any legislation should include provisions codifying the president’s CIG directive. Doing so would freeze the existing intelligence system into law, insulating it from the whims or desires of future political players. On this much, at least, the War and Navy departments agreed.
The Central Intelligence Group did not. Ink on the CIG directive had hardly dried before the agency began taking on a life — and agenda – of its own. CIG’s problems were apparent from the start. During the early months of 1946, departmental intelligence services readily bypassed the central agency, sending their information and taking their case directly to the president They provided CIG with a small budget and a meager, mediocre staff. They refused to share raw intelligence and ignored the agency’s efforts to reconcile or synthesize conflicting information. As Anne Karalekas writes, the intelligence units “jealously guarded both their information and what they believed were their prerogatives in providing policy guidance to the President, making CIG’s primary mission an exercise in futility”. The problem was simple: CIG’s success hinged on the generosity of those who wanted it to fail. Truman’s directive appeared to be working too well.
Frustrated with their agency’s impotence, CIG officials soon began pressing for substantial changes. In their capacity as National Intelligence Authority members, the Secretaries of War, Navy and State granted some significant concessions. But these were not enough. In July of 1946, CIG General Counsel Lawrence R. Houston sent a draft “Bill for the Establishment of a Central Intelligence Agency” to the White House which sought to transform CIG from a small planning staff to “a legally established, fairly sizable, operating agency”.
This move came as an alarming surprise to the White House, which was now deeply embroiled in the unification conflict. As Troy writes, “In this perspective, where the White House had the difficult problem of getting generals and admirals to agree on a fundamental reorganization of their services, the legislative problem of the CIG must have seemed…an unwelcome detail”. As the War and Navy Departments moved towards compromise, the president and his legislative drafting team hardened toward CIG. By January, when the military finally agreed to a comprehensive unification bill, the White House was in no mood to humor CIG’s demands that the legislation specifically outline CIA functions, make the Director of Central Intelligence a statutory nonvoting member of the NSC, provide procurement authorities, or grant the CIA power to “coordinate” foreign intelligence activities and “operate centrally” where appropriate. Such controversial measures threatened to reignite military opposition and reopen the entire unification conflict.
Thus, as CIG pressed for more, the White House responded with less. On 26 February, the President submitted his draft National Security Act to Congress. It included only the barest mention of the CIA — enough to transform the CIG directive into statutory law, and nothing more. In just 30 lines, the CIA section established the agency, placed it under the National Security Council, gave it a director appointed from civilian or military life by the president (with the Senate’s consent), and authorized it to inherit the “functions, personnel, property, and records” of the Central Intelligence Group.
On March 12, 1947, President Truman announced the ‘Truman Doctrine,” which was instrumental in determining the eventual shape of the CIA. Historian Harry Ransom stated, “So, while Pearl Harbor may be considered the father of the CIA, the Truman Doctrine certainly was the mother; the OSS was the hero model.” Britain had announced that it would withdraw from Greece, allowing it to fall to the Communists. Truman decided that the United States would take on the role of a world policeman to protect all people from communist insurgency. In Truman’s famous statement to Congress, he said, “The peoples of a number of countries of the world have recently had totalitarian regimes forced upon them against their will.” He went on to state, ‘I believe that it must be the policy of the United States to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures.” These words would later justify the creation of a permanent intelligence agency with the power to wage political warfare in a time of peace.
CIA provisions of the National Security Act went relatively unnoticed and unaltered in Congress. Instead, legislators concentrated on the more hotly contested aspects of merging the two military departments — issues like the power of the new Secretary of Defense and the protection of the Navy’s Marine Corps and aviation units. In the Senate, Armed Services Committee deliberations resulted in only two relatively minor changes to the proposed CIA, neither of which dealt with CIA functions or jurisdiction. In fact, the committee’s final report specifically noted that the Agency would continue to perform the duties outlined in Truman’s CIG directive until Congress could pass permanent legislation at a later date.
The CIA which arose from the National Security Act of 1947 closely resembled its CIG predecessor. Like CIG, the CIA was supposed to “correlate,” “evaluate” and “disseminate” intelligence from other services, but was given no specific authority to collect intelligence on its own or to engage in any covert subversive operations. Like CIG, the CIA operated under the watchful eyes of other intelligence producers; where CIG reported to a National Intelligence Authority, the CIA operated under the National Security Council — a committee including the Secretaries of War, Navy, State, Defense and the President. Mimicking the CIG directive, The National Security Act protected existing intelligence components with explicit guarantees. In deference to the FBI, the law barred the CIA from exercising any “police, subpoena [sic], law-enforcement powers, or internal-security functions.” It also provided that “the departments and other agencies of the Government shall continue to collect, evaluate, correlate, and disseminate departmental intelligence.”
Finally, the Act borrowed two broad clauses from Truman’s directive, which were to have a profound impact on the CIA’s subsequent development. The new agency was charged with conducting “such additional services of common concern as the National Security Council determines” and with performing “such other functions and duties related to intelligence affecting the national security as the National Security Council may from time to time direct”. Taken together, these CIA provisions created an agency, which suited War and Navy department interests to a tee. If CIG were any guide, the CIA would pose no threat to departmental intelligence agencies.
Here, too, it appears that a major national security agency was forged without much Congressional input and without much consideration of broad national concerns. Like the National Security Council system and the Joint Chiefs of Staff, the Central Intelligence Agency took shape almost exclusively within the executive branch, where bureaucratic players cared first and foremost about their own institutional interests.
The CIA was clearly a product of executive branch discussions and decisions. All three rounds of the postwar intelligence battle were fought among bureaucratic actors and were ultimately decided by the president. Round one, which pitted OSS chief Donovan against the State/Justice/Navy/War department coalition, ended with an executive order disbanding OSS and transferring its functions to the Departments of State and War. Round two featured internecine warfare between top State Department officials and the military. It, too, ended with unilateral presidential action: an executive directive which implemented the military’s recommendations for a weak Central Intelligence Group.
In round three, it was CIG against the White House. With the entire unification bill hanging in the balance, and with military preferences about postwar intelligence well known, Truman and his legislative drafting team took decisive action. Rebuffing CIG’s advances, they introduced a National Security Act bill which included brief, vague CIA provisions. Their aim was to continue CIG under new, statutory authority while generating as little controversy as possible.
Truman succeeded, thanks in large part to Congressional indifference. Legislators in both chambers accepted CIA provisions with little comment or debate. Though a few Members raised alarms about the Agency’s potential police power and broad jurisdiction, these voices were whispers against the wind. Average legislators had little incentive to probe deeply into CIA design, while national security intellectuals had bigger fish to fry in the unification bill. Tellingly, even those who pressed for a more specific CIA mandate ended up simply copying from Truman’s CIG directive of 1946. It seems that even here, legislators were content to defer to the executive. The QA which emerged bore an uncanny resemblance to the Central Intelligence Group. Truman himself writes that the National Security Act succeeded in “renaming” the Central Intelligence Group — implying the Act made no substantive changes to CIG’s design or operations at all.
There can also be little doubt that the Central Intelligence Agency was forged out of parochial, rather than national, interests. Creating any kind of postwar central intelligence apparatus inevitably benefited some bureaucratic actors and threatened others. While OSS and CIG had much to gain by a strongly centralized system, the Departments of State, Justice, War and Navy all stood to lose. For these “big four” departments, promoting U.S. national security was never a paramount concern. Instead, these departments sought a central intelligence system which, above all, insulated their own intelligence services from outside interference. Paradoxically, their vision of an “effective” central intelligence agency was one without strong central control or coordination. The ideal CIA was a weak CIA.
But why did these departments succeed? Why did the president so readily accept their vision of postwar intelligence organization? The short answer is that Harry Truman needed the military services more than they needed him. Propelled by national interest, the president had placed military consolidation at the top of his political agenda. To him, no issue was more vital to American postwar security than unifying the War and Navy Departments into a single Department of Defense, and no price was too great to achieve success. In this context, Donovan’s vision of a powerful statutory CIA never had a chance. From day one, War and Navy leaders strenuously opposed such a scheme. With no political capital to spare, the president went along. His executive actions and legislative recommendations all sought to create a central intelligence apparatus, which protected departmental intelligence units, rather than ensuring the new central agency would function well.
Ambrose, Stephen E. Ike’s Spies: Eisenhower and the Espionage Establishment. New York: Doubleday, 1981.
Andrew, Christopher. For the president’s eyes only: Secret intelligence and the American presidency from Washington to Bush. New York: HarperCollins, 1995.
Cline, Ray S. The CIA Under Reagan, Bush, and Casey: The Evolution of the Agency from Roosevelt to Reagan. Washington, D.C.: Acropolis Books, 1981.
Caraley, Demetrios. The politics of military unification: A study of conflict and the policy process. New York: Columbia University Press, 1966.
Dunlop, Richard. Donovan: America’s Master Spy. Chicago: Rand McNally, 1982.
Lowenthal, Mark. U.S. Intelligence: Evolution and anatomy. 2d ed. Westport: Praeger, 1992.
Donovan, Robert. Conflict and Crisis: The Presidency of Harry S. Truman 1945-1948. New York: Norton, 1977.
Karalekas, Anne. History of the Central Intelligence Agency. In The Central Intelligence Agency: History and documents, edited by William M. Leary. University, A.L.: University of Alabama Press, 1984.
Ransom, Harry Howe. The Intelligence Establishment. Cambridge, MA: Harvard University Press, 1970.
Sayle, Edward F. 1986. The historical underpinning of the U.S. intelligence community. International Journal of Intelligence and Counterintelligence 1, no. 1.
Smith, R. Harris. OSS: The Secret History of America. First Central Intelligence Agency. Berkeley. University of California Press, 1972.
Truman, Harry S. Memoirs: Years of Trial and Hope. New York: Doubleday, 1956.
Troy, Thomas F. Donovan and the CIA: A History of the Establishment of the Central Intelligence Agency. Washington, D.C: Central Intelligence Agency, 1981.
 Andrew, Christopher. For the president’s eyes only: Secret intelligence and the American presidency from Washington to Bush. (New York: HarperCollins, 1995), 11
 Sayle, Edward F. The historical underpinning of the U.S. intelligence community. International Journal of Intelligence and Counterintelligence 1, no. 1. 1986.
 Stephen E. Ambrose, Ike’s Spies: Eisenhower and the Espionage Establishment (New York: Doubleday, 1981), 178.
 John Ranelagh, The Agency: The Rise and Decline of the CIA (New York: Simon and Schuster, 1986), 28-30.
 Ibid., 33-5
 Ray S. Cline, The CM Under Reagan, Bush and Casey: The Evolution of the Agency from Roosevelt to Reagan (Washington, D.C.: Acropolis Books, 1981), 71.
 Ranelagh, 88
 Ibid., 94.
 Ibid., 96.
 Quoted in R. Harris Smith, OSS: The Secret History of America’s First Central Intelligence Agency (Berkeley: University of California Press, 1972), 383.
 Ambrose, 162-64.
 Truman to Donovan, 20 September 1945, United States, Central Intelligence Agency, CIA Cold War Records: The CIA under Harry Truman, (Washington, DC: U.S. Government Printing Office, 1994), 15. Here on cited as CIA Cold War Records.
 Richard Dunlop, Donovan: America’s Master Spy (Chicago: Rand McNally, 1982), 467-68.
 Harry S. Truman, Memoirs: Years of Trial and Hope (New York: Doubleday, 1956), 73-76.
 William J. Donovan, Memorandum for the President, 13 September 1945, CIA Cold War Records, 3
 Ranelagh, 99
 Sidney W. Souers, Memorandum for Commander Clifford, 27 December 1945, CIA Cold War Records, 17-19.
 Ambrose, 127.
 CIA Cold War Records, 30.
 Thomas F. Troy, Donovan and the CIA: A History of the Establishment of the Central Intelligence Agency (Washington, D.C.: Central Intelligence Agency, 1981), 346.
 Mark Lowenthal, U.S. intelligence: Evolution and anatomy. 2d ed. (Westport: Praeger, 1992), 167-9
 Anne Karalekas, History of the Central Intelligence Agency. In The Central Intelligence Agency: History and documents, edited by William M. Leary. (University, A.L.: University of Alabama Press, 1984). 24
 Elsey, George M, Papers. Harry S. Truman Library. Quoted in Demetrios Caraley, The politics of military unification: A study of conflict and the policy process (New York: Columbia University Press, 1966), 56.
 Troy, 371
 Ibid, 378-9
 Lowenthal, 191-5.
 Harry Ransom, The Intelligence Establishment (Cambridge, M.A.: Harvard University Press, 1970), 83.
 Quoted in Robert J. Donovan, Conflict and Crisis: The Presidency of Harry S. Truman 1945-1948 (New York: Norton, 1977), 284.
 First, the committee voted to make the president a statutory National Security Council member. Since the CIA reported to the NSC, this move theoretically gave the CIA greater presidential access than originally planned. However, it still fell far short of granting the agency a private channel to the president, especially since the president was not required to attend NSC meetings. Second, the Committee made clear that civilians, as well as military, were eligible for appointment as Director of Central Intelligence; the president’s bill did not rule out civilian appointments, but did not specifically mention them (Troy 1981: 380-90).
 Troy, 395
 Cold War Records, 131-5.
 CIA Cold War Records, 177-8.
 Lowenthal, 176
 Truman, 56-7