NOMINATION OF AMBASSADOR FRANK C.C ARLUCCI HEARINGS BEFORE THE SELECT COMMITTEE ON INTELLIGENCE OF THE UNITED STATES SENATE NINETY-FIFTH CONGRESS SECOND SESSION ON NOMINATION OF AMBASSADOR FRANK C. CARLUCCI TO BE DEPUTY DIRECTOR OF CENTRAL INTELLIGENCE AGENCY JANUARY 27 AND 30, 1978 Printed for the use of the Select Committee on Intelligence U.S. GOVERNMENT PRINTING OFFICE 24-196 0 WASHINGTON : 1978 SENATE SELECT COMMITTEE ON INTELLIGENCE (Established by S. Res. 400, 94th Cong., 2d Ses.) BIRCH BAYH, Indiana, Chairman BARRY GOLDWATER, Arizona, Vice Chairman ADLAI E. STEVENSON, Illinois CLIFFORD P. CASE, New Jersey WILLIAM D. HATHAWAY, Maine JAKE GARN, Utah WALTER. D. HUDDLESTON, Kentucky CHARLES McC. MATHIAS, JR., Maryland JOSEPH R. BIDEN, JR., Delaware JAMES B. PEARSON, Kansas ROBERT MORGAN, North Carolina JOHN. H. CHAFEE, Rhode Island GARY HART, Colorado RICHARD G. LUGAR, Indiana DANIEL PATRICK MOYNIHAN, New York MALCOLM WALLOP, Wyoming DANIEL K. INOUYE, Hawai ROBERT C. BYRD, West Virginia, Ez Ofcio Member HOWARD H. BAKER, Ja., Tennessee, Er Officio Member Wnsa G. MILER, Staff Director . EAL D. ErISENOWEa, Minority Staff Director AUDREY H. HATRY, Chief Clerk (II) CONTENTS HEARING DAYS. Page Friday, January 27, 1978 - ----------------------------------- 1 Monday, January 30, 1978 --------------------------------------- 27 LIST OF WITNESSES FRIDAY, JANUARY 27, 1978 Testimony of Ambassador Frank C. Carlucci, nominee for Deputy Director of Central Intelligence ------------------------------------------ 4 Statement of Hon. Richard S. Schweiker, U.S. Senator from the State of Pennsylvania ------------------------------------------------ 10 MONDAY, JANUARY 30, 1978 Testimony of Hon. Larry McDonald, a Representative in Congress from the Seventh Congressional District of the State of Georgia, accompanied by Fred Smith, administrative assistant; and Louise Rees, research assistant ---------------------------------------------------- 27 Testimony of Hon. Frank C. Carlucci, Ambassador and nominee to be Deputy Director of Central Intelligence-Resumed ------------------ 36 MATERIAL FOR THE RECORD Prepared statement of Senator John Heinz - - 10 Chapter 3 of Final Report of the Select Committee on Presidential Cam- paign Activities -------------------- --------------------------- 17 Prepared statement of Representative Larry McDonald ---------------- 27 APPENDICES Appendix A-Biography of Frank C. Carlucci ------------------------- 57 Appendix B-Letter from Anthony A. Lapham to Senator Daniel K. Inouye, January 23, 1978 --------------------------------------- 58 Appendix C-Letter and memorandum from Hon. Larry McDonald, to Senator Birch Bayh, February 3, 1978 ----------------------------- 59 (M) NOMINATION OF AMBASSADOR FRANK C. CARLUCCI TO BE DEPUTY DIRECTOR OF CENTRAL INTELLIGENCE AGENCY FRIDAY, JANUARY 27, 1978 U. S. SENATE, SELECT COMMITTEE ON INTELLIGENCE, Washington, D.C. The committee met at 10:15 a.m. in room 6202, Dirksen Senate Office Building, Senators Daniel K. Inouye and Birch Bayh (chair- men of the committee) presiding. Present: Senators Inouye, Bayh, Hathaway, Huddleston, Garn and Chafee. Also present: William G. Miller, staff director; Earl Eisenhower, minority counsel and Audrey Hatry, clerk of the committee. Senator INOUYE. Several months ago, after much thought and consideration, I decided that because of the nature of the committee's work, the secret nature, and because of the special relationship held by the chairman of this committee and the top officials of the intelli- gence community, I felt that the chairmanship should be rotated and, accordingly, submitted my resignation 2 months ago to the leadership of the Senate. Yesterday, by unanimous action of the Conference of the Democratic Senators, the resignation was accepted and by nomination and by election and by unanimous vote my successor, Birch Bayh, was designated as chairman of this committee. Before leaving this chaiimanship I would like to thank all of the members of this committee for their cooperation and help throughout the term of my office and thank the staff especially for its high level of assistance, advice and help throughout the year and a half that I had the privilege of serving. I am convinced that this chairmanship must be rotated if this committee is to maintain integrity and objectivity in dealing with matters relating to the intelligence community. Ladies and gentlemen, it is my privilege now to pass on the symbol of this office to my successor, the distinguished Senator from Indiana, Senator Birch Bayh. Senator BAYH. Thank you very much, Mr. Chairman. I somehow sense that this seat is significantly warmer than the one I just left. I would just have one response to your very thoughtful opening comments, and that is I would hope the second chairman of the Senate Intelligence Committee can perform with just a small per- centage of the degree of exceptional ability that the first chairman did, who set a tremendous record, which we will try to emulate, knowing it is a difficult goal. I should say to my colleagues here I would feel more comfortable, if there are no objections at the time when we have a quorum of the committee, I would like to submit the selection to the committee for its concurrence in the action of the preceding body. I have always felt that should be the way we should do it. I don't suppose there will be any objection. When we have a quorum we can have a brief executive session to do it that way. The committee meets this morning to hear the nomination of Ambassador Frank C. Carlucci, to be Deputy Director of Central Intelligence. I think most of us recognize that these hearings come at a very crucial time. On Tuesday of this week, many of us gathered at the White House and watched the President sign Executive Order No. 12036. This Executive order is intended to serve as an interim measure governing the intelligence activities of the United States. This was the first time, at least in modern history, and probably in the history of the country, that the President of the United States participated -in an effort like this in an Executive order which involved the kind of close cooperation and indeed direct participation by members of the legislative branch, and we are encouraged and we want to compliment the President for the way in which this was handled. As I pointed out down there, earlier last year in a ceremony in the Rose Garden, again for the first time in history, we had a President of the United States willing to waive the implied or inherent authority that had been claimed by all previous Presidents to use electronic surveillance in the collection of intelligence under the guise of his responsibilities to conduct the foreign policy of this country. So think we have a President now who recognizes the importance of the mission that this committee is undertaking and the Executive order is just the first step and the President recognized that himself. At the end of next week the Select Committee on Intelligence will introduce a comprehensive legislative charter governing all the intelli- gence activities of the United States. We are indebted to our colleague from Kentucky for the work that he has put into this, and our col- league from Maine, for the first time in history again conducted a comprehensive set of budget hearings and, of course, this burden is placed on him, and that will be in the works here in the next several days. It seems to me that the committee has a very great duty to assure that the intelligence community performs at the most effective possible level and that it also does so within the Constitution. What we are all trying to accomplish is to see that we have the best intelligence gathering mechanism in the world. I think frankly we have. They are good. They are capable. When they do the job that is assigned to them I think they do it better than anybody else can do it. But we must see as they perform this important responsi- bility, necessary to protect the country as a whole, within the con- stitutional bounds that protect the individual rights of each American citizen. Now, the Central Intelligence Agency, of course, plays an indis- pensable role in the whole intelligence area, and the Deputy pirector of CIA is a key position in our national security scheme, particularly at this time in history. The person appointed to this position must have the ability to provide the kind of leadership that will lead to a more effective intelligence system, but he must be a person who is fully aware that the American intelligence service must operate within the Constitution and the law. The position of Deputy Director of Central Intelligence requires demonstrated management skills of a high order because of the highly complex organizations which make up the intelligence community. Effective intelligence requires, above all, the courageous independence of mind and scrupulous scholarship. It also requires the ability to bring together the diverse disciplines and points of view that make up the intelligence community so that they work together. We have a nominee that has been proposed by the President, Mr. Carlucci, and we are here this morning to examine his credentials for this very important job. The committee and staff over the past months have examined every aspect of Mr. Carlucci's career;.records of his performance and background have been made freely available to the committee; and dozens of Mr. Carlucci's friends and professional asso- ciates have been interviewed in order to give the committee a fuller understanding of Mr. Carlucci's quality and character. The mission before us is to examine fully in public hearing the background of the nominee. I think it is critical and we are glad to have him with us this morning. I suppose I should say before yielding to him that, of course, the Chair recognizes the rights of any member here to make a statement beforehand. Does anyone desire to make a statement at this time? [No response.] Senator INOUYE. I just wanted to advise the chairman, Senator Schweiker wants very much to introduce Mr. Carlucci and he should be here any moment now. Senator GARN. I did not intend, Mr Chairman, to make an opening statement but if you are fighting for time I will go ahead. The CHAIRMAN. I appreciate the fact that you would make such a significant and unusual sacrifice. Senator GARN. I can't stay a long time. I did meet with and talk to Mr. Carlucci yesterday in my office for a fair amount of time. I have had an opportunity to go into his back- ground rather deeply, to look at his career in public service. After having met him yesterday for the first time I would simply say that I think the President has made a very fine choice. Unless some thunderbolt comes out of the blue in these hearings it would certainly be my intent to vote for his confirmation and I congratulate the President for making an excellent choice. Senator HATHAWAY. Mr. Chairman, since we are waiting for Senator Schweiker to come over, I'd like to make a point now that I was going to make when it came my turn to question. I would like the record to show that the committee has received just within the last hours the final report of investigation that was conducted by the FBI into Mr. Carlucci's background, and I haven't had a chance to read it yet. I am a little bit surprised the final report arrived just this morning, as I understand the Bureau took the position as of yesterday after- noon that they would not have the investigation completed by this morning, and I am interested in knowing how they were able to wrap it up so quickly. At any rate, when I learned yesterday afternoon that the FBI investigation had not been finished, I took the position that we should postpone the hearings until everything was in. I understand the White House was so informed, and whether or not that had anything to do with the FBI being able to suddenly conclude they really could finish by this morning or not I don't know. But I do think we have an obligation to study the FBI report very carefully to make sure their investigation was adequate, and that it was not just wrapped up quickly so our hearings would not be postponed. I thought it important that the events of the last day or so should be made a part of this record, and I would hope, Mr. Chairman, that you would give the members of the committee an opportunity to ask further questions on Monday at a public hearing if anything we should ask about comes out of this FBI report, which I haven't had a chance to read, and which I understand most of the members of the committee have not yet had a chance to read. We are going to meet on Monday again for executive session. I would hope we could pursue further questions in a public session after that, if it were necessary. I am not saying it is necessary. I am not in any way saying there is something adverse in the FBI report, but I want to have an opportunity to study it carefully before con- cluding these hearings. The CHAIRMAN. When I was advised of the possibility the Bureau report would not be here, I also was concerned and suggested that the report be expedited as rapidly as possible as long as the quality was not compromised, but thought we could go ahead and dispose of these hearings with the complete understanding that an member of the committee has a right to look at these facts and figures and inter- pose objections to questions after the report is available. So I think this is a reasonable suggestion. We are all very busy and we can interrupt Mr. Carlucci, if he doesn't mind, when Senator Schweiker gets here. I understand his colleague, Senator Heinz has a statement he would like to submit for the record and I would suggest if there is no objection we submit it after Senator Schweiker when Senator Schweiker gets here. Ambassador Carlucci, why don't we hear from you please. Ambassador CARLUCCI. Thank you. The CHAIRMAN. Would you be so kind as to take the oath? Do you swear that you will tell the truth in response to any questions or any statements that you might make before this committee? Ambassador CARLUCCI. I do. TESTIMONY OF AMBASSADOR FRANK C. CARLUCCI, NONINEE FOR DEPUTY DIRECTOR OF CENTRAL INTELLIGENCE Ambassador CARLUCCI. Mr. Chairman, members of the committee, I am pleased to appear before this committee to discuss my qualifica- tions for the position of Deputy Director of Central Intelligence. I also appreciate the opportunity, Mr. Chairman, for this early hearing, as well as the courtesy and professionalism with which this comttee and its staff have conducted the investigation that preceqed this hearing. Also, I would like to in advance thank Senator Schweiker for being willing to appear today and thank Senator Heinz for the statement that he is submitting for the record. The committee has.my biography,' so I will not review my career except to say that I am fortunate m having had diversified Govern- ment experience, including service in domestic as well as foreign affairs agencies. The positions I have held during the last 8 years have afforded me the opportunity to work closely with the Congress, including several members of this committee, on a wide range of issues. I have learned how important a cooperative relationship between the Executive and the Congress is to the effective functioning of our Government. I, therefore, pledge myself-if confirmed-to work closely with this committee, its counterpart in the House, and with the respective subcommittees of the Appropriations Committees which have budgetary oversight of intelligence agencies. As I reflect on the responsibilities of the position for which I have been nominated, I am impressed with the importance of the issues the intelligence community and this committee face. Many of them are basic to the survival of our democratic institutions. On the one hand, we must continue to improve our intelligence effectiveness. In part this means protecting information from public disclosure lest such disclosure undermine this effectiveness. On the other hand, we all recognize the need for accountability of our intelligence agencies and for safeguarding the basic freedoms of our citizens. This may mean making more information available about our intelligence organza- tion. The challenges posed by these often conflicting needs are obvious and very familiar to this committee. As far as I know, no other modern society has attempted such a fundamental, difficult and complex task. Yet, I am confident that these problems can be resolved. I am confident that we can succeed in striking that balance which will enable a necessarily secret agency to accomplish its mission and still remain true to the principles of an open and free society-a society in which the rights of the individual are paramount. On January 24, President Carter signed a new Executive order, as you pointed out, Mr. Chairman. It strengthens coordination within the intelligence community. It establishes procedures within the Executive to enhance cooperation with the Congress. It erects safe- guards against abuses such as those that have recently come to light and that have troubled us all. At the invitation of the President, this committee. actively participated in the drafting of that Executive order. If confirmed, I will cooperate with this committee as it exercises its oversight responsibilities to insure compliance with the Executive order. Contrary to allegations in the Lisbon Communist press, I have never been on the CIA payroll; but as a Foreign Service officer I have had a working relationslup with the Agency and have been a user of the intelligence product. I have also been involved in intelligence budgets, and I am familiar with both the problems and the benefits of inter- agency coordination. Thus, I approach the position for which I have been nominated with a certain set of perceptions, assumptions, or perhaps even biases depending on your point of view. I think it appro- priate to present them to the committee. SSee page 57. 24-196 0 - 78 -2 First, I am absolutely convinced that good decisionmaking requires good intelligence. I have seen good intelligence reports turn a poten- tially unsuccessful policy into a successful one. I have also seen the undesirable effects of poor intelligence. We must continue to set high standards for ourselves to insure the careful collection, precise report- ing, critical analysis, and concise and clear presentation that are the ingredients of success of any intelligence organization. Second, I know from my experience as a reporting officerhowpains- taking a process it is to develop an overt relationship of confidence with foreigners who are constantly subject to a propaganda barrage which distorts our motives and which questions our strength of pur- pose. To develop a relationship which enables our Government to obtain information in sensitive areas is an even more painstaking, delicate and sometimes risky process. We need to recognize, more than we do, that human intelligence collection is a slow step-by-step process which often takes years of seed work to develop a fruitful source. It is a highly professional skill. Third, in my experience with domestic programs, I have seen how the rights of citizens can be ignored or even abused by insensitive Government machinery-even in so-called open agencies. I was a strong advocate of the controversial OEO legal services program for that reason. I have also seen in foreign governments how excessive secrecy and/or lack of an adequate machinery for accountability can turn a foreign intelligence agency from a national asset into an instru- ment of oppression. We must constantly strive to avoid this danger in our own country. Fourth, I have become a strong advocate of interagency coordi- nation. In the domestic area I was keenly interested in the Federal Regional Council system. In the foreign policy area, I have seen the constant temptation to compartmentalize our information-gathering process. Duplication, false confirmation and faulty decisionmaking are the inevitable results of this tendency. In several of my assignments overseas, I established or implemented procedures for coordination between the collectors of intelligence and embassy reporting staffs. I believe this enhanced the value of the product to Washington users. The coordinating role given the Director of Central Intelligence by the new Executive order is a positive step in resolving this problem. Fifth, and perhaps most important, I have had the privilege of working with intelligence professionals from the lowest to the highest level. While I did not normally know their sources and methods, nor, did I need to, I was able to benefit greatly from their information and to appreciate the motivation, objectivity, self-sacrifice and physi- cal and moral courage with which they approached their sensitive and, at times, dangerous jobs. Human nature being what it is, we all seek recognition. Most of us can receive it openly. Not so the intelligence professional. His or her reward must come from the quality of his product and its value to the user. He or she must draw satisfaction from the fact that they are serving their country in ways that some- times even their family cannot know. This, I submit, is the essence of patriotism., I confess to a strong reaction when the Lisbon press produced a so- called expos6 by a former CIA employee, pinpointing addresses of alleged CIA officers in Lisbon, even to the point of telIing people which way to turn to reach a particular apartment when they get off the elevator. I watched understandably worried officers uproot their families and move from house to house, finally leaving the country before the end of their normal tour. If confirmed, I would appreciate an opportunity to have a dialogue with this committee on ways to deal with this cold-blooded irresponsibility while still protecting the basic rights of American citizens. The role of Deputy Director of Central Intelligence has varied both in scope and authority throughout the history of the CIA. While one can never be precise about one's anticipated responsibilities, I believe it important that I try to describe to the committee as best I can how Admiral Turner and I intend to operate. I might note that Admiral Turner and I have discussed this subject in depth, and that I accom- panied Admiral Turner when he described my responsibilities to the President. Simply stated, we intend to adhere closely to the National Security Act of 1947 which established a single Deputy Director of Central Intelligence "who shall act for and exercise the powers of the Director during his absence or disability." Both Admiral Turner and I agree that the single-deputy concept is the most effective. This means that when Admiral Turner is away, I will assume his community-wide responsibilities as well as his CIA responsibilities. As a practical matter, Admiral Turner and I have discussed how we will divide our time. I will assume the day-to-day operating responsi- bilities of the Agency. I will, of course, discuss all major policy ques- tions with Admiral Turner, but he and I anticipate that I will be able to take much of the Agency decisionmaking and, to a lesser extent, representational responsibilities off his hands, thereby freeing him to devote more of his attention to his community-wide responsibilities. This does not mean that Admiral Turner will not continue to interest and involve himself in CIA. On the contrary, we anticipate that this will enable him to delve more deeply into basic policy ques- tions and to have more substantive contact at all levels. For example, we have already discussed a program that will enable Admiral Turner to make regular visits to the Agency's overseas establishments. Nor does it mean that I will not concern myself with community questions. With the new Executive order, it is essential that I remain abreast of what is happening to the community in order to fulfill my responsi- bilities as the day-to-day manager of the CIA and to substitute for the Director of Central Intelligence in his community responsibilities in his absence. But it does mean that we will have different areas of emphasis, at least initially. I believe that this arrangement should present no problems to the NSC, the community, the CIA, or the Congress. On the contrary, it should enable us to be more responsive to all four. During my visits with several members of the committee, questions have been raised about the personnel reductions that have been directed by Admiral Turner. I am sure the committee will understand that I cannot make a judgment on such a difficult and sensitive issue until I am actually on the job. When I do, I will present my views to Admiral Turner. I can, however, make a generalization or two. My past experience indicates that all agencies tend to continue with staff long after program requirements have altered, and that