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The Origins of the CIA

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Over the past six decades the Central Intelligence Agency has become notorious for its covert political warfare capability.1 However, the acquisition of an offensive capability was not even a consideration when the Agency was originally established during 1946 and 1947. Some historians have, to varying degrees, implied that the CIA was always intended to intervene abroad through clandestine political actions. For instance, historian Rhodri Jeffreys-Jones has contended “that covert political action was already on the agenda during the CIA’s 1946-47 gestation period.” Evidence of this has been located in Washington’s rapid development of political warfare machinery in the late 1940s to pursue an offensive programme of operations against Soviet power within the context of the early Cold War.2 Continuity has also been suggested between American wartime efforts to subvert Nazism and the application of subversive operations against the Soviet bloc by American peacetime intelligence agencies through the prevailing existence of a “Donovan tradition” rooted in the wartime Office of Strategic Services.

Recent scholarship has also increasingly addressed the gap in the historiography of broad Cold War narratives provided by prominent historians like John Lewis Gaddis and Melvyn Leffler. These grand narratives tend to give fleeting mention to the covert plane of the early Cold War, focussing instead on the overt world of diplomatic, economic and military policy.In the last decade several historians have begun to address this by exploring the origins of the CIA and the inauguration of the U.S. political warfare campaign against the Soviet bloc in the late 1940s.

Despite much progress being made, important distinctions that characterised the emergence of American plans to subvert Soviet power in the late 1940s still require greater historical attention. The full political warfare capability was only sanctioned by Truman’s National Security Council (NSC) after the founding of the CIA. Under top-secret directives beginning with NSC 4-A and NSC 10/2 the Agency gradually evolved its political warfare capacity and mission. When originally founded the CIA and its forerunner CIG were established to undertake other roles and not to wage an offensive

* Dr Stephen Long completed his PhD at the University of Birmingham in 2009 and can be contacted at stephenjlong@hotmail.com' 49th Parallel, Vol. 24 (Spring 2010) Long ISSN: 1753-5794 (online) 

programme of operations abroad.6 There was significant discontinuity between wartime clandestine warfare and the founding of CIG/CIA, as well as between the Agency’s nascent period and its experience as a political warfare unit. The distinction drawn out in this study illuminates the lack of a long-term approach by the United States towards waging political warfare. This in turn helps to demonstrate a fundamental but largely underestimated aspect of the early Cold War- that the American challenge to Soviet power in this period was often characterised by bureaucratic disorganisation and strategic incoherence.

On the organisational level, disunity undermined the creation of sound and centralised machinery to conduct political warfare operations.The fragmented bureaucracy exacerbated an even more significant flaw in the U.S. approach to the early Cold War. During the late 1940s policymakers in Washington failed to devise an effective peacetime political warfare strategy capable of successfully waging and winning the Cold War. Attempts were made, particularly by the famed head of the State Department’s Policy Planning Staff George F. Kennan, to provide a strategic basis for an American political warfare campaign. But although Truman officials gradually authorised the means of waging a Cold War offensive against the Soviet bloc, this was never adequately tied into clearly defined and achievable methodologies and objectives.

The absence of a political warfare agenda at the CIA’s outset is an important but often overlooked factor that impacted upon the application and success of the political warfare operations conducted later by the United States. It is striking that the Agency initially did not pursue a political warfare agenda, but in contrast, resisted such a role under Directors of Central Intelligence Roscoe Hillenkoetter and Walter Bedell Smith. Only when Allen Dulles was appointed DCI in early 1953 did the Agency finally and unequivocally embrace its mandate to undertake foreign subversive campaigns around the world as a “covert” arm of U.S. foreign policy. By then, the long-standing strategic failings underpinning the effort were seriously undermining the viability of these operations.

While the development of a political warfare agenda and capability came about before Dulles’s directorship, its origins are surprisingly not entwined with those of the CIA. Instead its development was prompted primarily by the Departments of State, War and the Navy (reorganised into the Department of Defense in 1947) in the late 1940s amid concerns about the evolving post-war geopolitical situation. Despite emerging antagonisms between Moscow and Washington that heralded the onset of the Cold War era, in 1946 and 1947 a nascent Cold War strategy incorporating political warfare was completely overshadowed by internecine feuds within the bureaucracy of the Truman administration. 49th Parallel, Vol. 24 (Spring 2010) Long ISSN: 1753-5794 (online) 3

For the most part, prior to the formal creation of the CIA under the National Security Act of 1947, senior American policymakers did not conceptualise peacetime foreign policy outside the conventional structures of the diplomatic and military services. Thus little consideration was given to the formulation of plans to wage an offensive political warfare programme abroad. Increasing emphasis was instead given to developing capabilities to meet the Soviet challenge through diplomatic and economic measures and to improving the quality of intelligence on Soviet intentions and capabilities.

The establishment of a peacetime intelligence system was therefore not initially motivated by the perception of an acute Soviet threat.Government officials recognised the merits of peacetime intelligence long before the deterioration in U.S.-Soviet relations, although the creation of the Central Intelligence Group (CIG) in January 1946 fell well short of fulfilling Washington’s peacetime requirements. The formation of this nominally centralised intelligence body generated extensive friction within the government bureaucracy among rival agencies that feared the usurpation of their own powers, undermining the potential effectiveness of CIG in its original form. During 1946 demand within the Truman administration grew for intelligence on Soviet intentions and capabilities, and this facilitated CIG’s expansion, value and effectiveness within the community of government agencies. It was only later, when American policies began to be reconfigured towards the Cold War from mid-1947, that this agency was also linked to the perceived need to implement countermeasures against the Soviet threat to American interests in Europe.

Nonetheless, before 1947 plans for a future covert capability were discussed within the Truman administration. These initial studies only considered the wartime implementation of political warfare activities and were conducted in light of the Allied experience in World War Two. There was no attempt to link these explorations to a coordinated peacetime interventionist agenda or to CIG or any other civilian organisation. Interdepartmental studies conducted by the State-War-Navy Coordinating Committee (SWNCC) were strictly limited to psychological warfare, such as the uses of propaganda and other devices to affect enemy morale, rather than a broader political warfare campaign. Peacetime political warfare under the auspices of the CIA evolved later along a different trajectory. The National Security Council (NSC) assigned a peacetime psychological warfare capability to the fledgling CIA late in 1947 under the top-secret directive NSC 4-A. The bureaucratic and geopolitical factors that motivated this move did not converge before the statutory founding of the CIA in July 1947. Thus there was no longer-term strategic development of a peacetime political warfare programme against the Soviet Union prior to this point. 49th Parallel, Vol. 24 (Spring 2010) Long ISSN: 1753-5794 (online) 

However, CIG’s evolution into the CIA unwittingly provided the organisational machinery and the potential legal basis to implement political warfare in the future. Most significantly, espionage and counter-espionage functions were secretly approved by Congress and the executive, although no thought was initially given by either branch to expanding into offensive political warfare operations. The authorities affirming CIG/CIA’s secret intelligence function contained loopholes that opened up the possibility for a broader capability. Prior to the passage of the National Security Act of 1947, these loopholes were not exploited by CIG, the National Intelligence Authority (NIA), the Intelligence Advisory Board (IAB) or the White House towards such a purpose.

Ironically, the determination of rival departmental intelligence agencies to emasculate CIG during its brief existence was a significant factor in the Agency’s later acquisition of an interventionist capacity. CIG was compelled to expand from its meagre origins to survive in the cut-throat institutional environment. The need for statutory recognition inadvertently provided it with more credible legal authority to conduct political warfare than its competitors, but at no stage was the push for legislation linked to a move into operations. Legislation was regarded as essential to formalise its institutional position and protect its jurisdiction from jealous administrative predators.

In particular, CIG’s expansion under its second director General Hoyt S. Vandenberg laid an institutional platform facilitating the later capacity to undertake political warfare. This was neither inevitable nor arrived at by design. But CIG’s non-strategic growth ultimately shaped the CIA in ways that gave it an edge over rivals as an offensive operational unit. The incorporation of its espionage capacity in mid-1946 was most significant. The partial preservation of the wartime Office of Strategic Services (OSS) within the War Department’s Strategic Services Unit (SSU) led to the formation of the Office of Special Operations (OSO) within CIG and a mandate to collect secret intelligence abroad and conduct counter-espionage activities. Ultimately, this provided the fledgling agency with the expertise and an operational base from which to expand into broader political warfare actions. Yet this potential capability was only harnessed later, when President Truman and the National Security Council called upon the CIA to engage in Cold War operations to undermine communist power initially in Western Europe but soon also behind the “iron curtain.”

The Organisational Roots of Political Warfare: From OSS to CIG

The first formal suggestion for the United States to acquire a peacetime political warfare capability was made by General William “Wild Bill” Donovan, head of America’s wartime intelligence and special operations organisation the Office of 49th Parallel, Vol. 24 (Spring 2010) Long ISSN: 1753-5794 (online) 

Strategic Services.Towards the end of 1944 he sent several proposals to President Franklin D. Roosevelt outlining his vision for a peacetime centralised intelligence service in the hope of preserving OSS after the close of war against the Axis powers.

In October and November 1944 Donovan innocuously proposed that one function of the peacetime intelligence service should be to conduct “[c]landestine subversive operations” and “[s]ubversive operations abroad.” In Donovan parlance this meant political warfare, but at this stage the OSS chief was simply inserting the principle of a political warfare capability to mirror the functions carried out by OSS.  Donovan did not follow this up with a specific proposal for a peacetime political warfare programme. In any case his proposals fell on deaf ears, although his failure to win over President Roosevelt had nothing to do with passing reference to a peacetime covert political warfare capability. Donovan was primarily opposed because the Departments of State, War and Navy and the Federal Bureau of Investigation (FBI) suspiciously eyed his concept as a challenge to their existing powers. This stemmed primarily from the wartime intelligence services within the departments, each of which was “jealous of its own sovereignty and jurisdiction.”

The controversy surrounding Donovan’s call for a permanent centralised intelligence agency resulted in his proposals being leaked by a “rival” agency to the Chicago Tribune and Washington Times-Herald in February 1945.14 In light of public and Congressional fears that the United States was considering establishing an American “Gestapo” with unbridled domestic powers, Roosevelt shelved Donovan’s plans. This in turn ruled out any immediate deliberation on a foreign political warfare capability.15 Any hopes of weaving an OSS-type agency into the fabric of the peacetime foreign policy apparatus were dashed early on, as was the survival of any semblance of a “maverick operational culture.”16

OSS was dissolved by Executive Order 9621 on 20 September, 1945. Between the time of its dissolution and the creation of the Central Intelligence Group four months later, the concept of political warfare played no part in the planning for a peacetime centralised intelligence system. Even after the formation of CIG no agenda to inaugurate a peacetime political warfare campaign emerged until the autumn of 1947, once the CIA had been statutorily recognised.

CIG was created by presidential directive on 22 January, 1946.19 In its original form it was an institutionally enfeebled entity far from Donovan’s vision of a powerful, centralised, operational agency capable of conducting political warfare abroad. This resulted from the widely held fears within the departments that a centralised body would usurp the powers of existing departmental intelligence units. Initially CIG was therefore 49th Parallel, Vol. 24 (Spring 2010) Long ISSN: 1753-5794 (online) 6 et.24

regarded as a coordinating mechanism rather than an independent agency. It did not command its own personnel, budget or facilities but was dependant on allocations from its departmental competitors. Moreover, it was placed under their authority with the department heads comprising the National Intelligence Authority, while the departmental intelligence chiefs held an “advisory” role on the Intelligence Advisory Board.

CIG’s first director Rear Admiral Sydney W. Souers accepted that its role was limited to “serving the departments under supervision and control of the department heads in the National Intelligence Authority.” Its diminished status was confirmed by the NIA when Secretary of State Byrnes, Secretary of the Navy Forrestal, Secretary of War Patterson and Truman’s personal representative in the NIA Admiral Leahy formally designated it a “cooperative interdepartmental activity” rather than an independent agency. Unwilling to relinquish their own intelligence functions and capabilities, State, War and Navy agreed to “adequate and equitable participation” in CIG’s activities through the NIA. As noted by one historian, CIG was “a central authority in name only” at the outs

Despite these beleaguered origins, the seeds of the CIA’s future operational capacity were contained within two clauses delineating CIG’s mandated functions and duties in the January 1946 directive. The Group would perform “such services of common concern as the National Intelligence Authority determines can be more efficiently accomplished centrally.” It would also undertake “such other functions and duties related to intelligence affecting the national security as the President and the National Intelligence Authority may from time to time direct.”

Despite the hostility shown towards Donovan’s proposals, these loose authorities were carried over from them. They were not viewed by CIG and the NIA as a gateway to expanded powers, but a precedent was set whereby these clauses were retained in later authorities within the statutory formation of the CIA. These same authorities subsequently provided the legal loopholes by which the Truman administration authorised covert operations against Soviet and communist power in the Cold War from late 1947 onwards.

CIG’s Expansion: the Non-Strategic Development of a Potential Political Warfare Capacity

Although the formation and evolution of CIG has received substantial scholarly attention, this was also a notable period for laying significant platform foundations for the future conduct of the CIA in the Cold War. The seeds of an operational agency emerged early on as CIG grew in size and scope, but it is important to clarify that this was not 49th Parallel, Vol. 24 (Spring 2010) Long ISSN: 1753-5794 (online) 

accompanied by an agenda or a strategic vision. CIG’s foremost need was to address its weak position within the bureaucracy. To strengthen its value as a government office, from January 1946 to July 1947 it incrementally acquired new functions and duties, thereby enhancing its institutional life expectancy. This expansion inadvertently laid the organisational platform for the CIA’s later capacity to conduct political warfare.

The energetic and highly effective expansion of CIG’s functions, particularly under DCI Vandenberg, ensured an operational future for the Agency.27 Vandenberg did not envisage a political warfare campaign against the Soviet bloc but instead faced the imminent prospect of CIG’s institutional redundancy. Ten days into his new post Vandenberg began the task of carving out a role for the Group. In a draft NIA directive to the IAB on 20 June, 1946, he proposed “a redefinition of the functions of the Director of Central Intelligence which will give him the necessary authority to augment the Central Intelligence Group so that he may effectively perform his assigned missions.”28 In the first month of Vandnberg’s tenure he received an additional $10 million in funds to augment the CIG’s existing $12 million budget and was authorised to expand the Group’s permanent staff from 165 to 3,000 people by the end of the fiscal year, just ten weeks away.

The most significant factor paving the way for its future interventionist role was CIG’s acquisition of a secret intelligence capability. National Intelligence Authority Directive 5 authorised CIG to conduct “all organized Federal espionage and counter-espionage operations outside of [the] United States and its possessions for the collection of foreign intelligence information required for the national security.” This transformed CIG from a dependent “coordinating mechanism” into a semi-independent and operational organisation in its own right. Although political warfare was not envisaged when OSO was established, it shared methods of operation and foreign intervention with espionage and counter-espionage, as well as organisational and security needs. This provided a ready-made foundation for the CIA when it inherited CIG’s limited but nonetheless practical base of expertise and experience from which to expand- a platform that competitor agencies lacked.

Following the approval of NIAD 5 CIG absorbed former OSS personnel including a very small nucleus of political warfare expertise. The main factor behind the transfer was administrative expedience rather than a planned expansion into political warfare actions abroad. When OSS was dissolved part of it had been transferred to the War Department and reorganised as the Strategic Services Unit as a holding measure until a permanent home could be found. Due to its interim status in the War Department SSU was vulnerable to federal spending cuts imposed after the war.31 Diminishing budget and resource allocations made it increasingly untenable to preserve the “facilities and assets 49th Parallel, Vol. 24 (Spring 2010) Long ISSN: 1753-5794 (online) 8

of OSS” that were deemed to be “potentially of future usefulness to the country.” By February 1946 SSU’s exasperated chief John Magruder resigned in protest at the heavy “attrition” of OSS assets. Magruder warned Secretary Patterson of the “urgent need for clarification of the status of the SSU if its assets [are] to be preserved. [. . .] the assets of the organization continue to be sapped by attrition of high grade personnel, and its morale lowered at a rate accelerated by continuing obscurity in the Unit’s future.

Some OSS veterans like Philip Horton in France, Richard Helms in Germany, Alfred Ulmer in Austria and James Angleton in Italy did stay on to administer the skeletal post-war service. But many important members like Frank Wisner were lost because they either became disillusioned about the long-term career prospects in intelligence or because their salaries were simply not affordable.

Although Magruder personally believed in the principle of centralised peacetime intelligence “on the basis of national rather than departmental requirements,” the primary motivation for SSU’s transfer to CIG was to preserve the valuable intelligence networks across Europe, North Africa and the Middle East.35 Therefore when Truman established CIG Magruder requested that the NIA obtain “at the earliest practicable date an objective analysis of the functions and assets of the SSU and an appraisal of their value for employment operationally in the Central Intelligence Group.” DCI Souers appointed a committee chaired by Colonel Louis J. Fortier to look into the matter which quickly approved Magruder’s recommendations that SSU be transferred to CIG based on “the national interest and the preservation of existing organization and facilities for tapping foreign intelligence systems [. . . .]

A secret intelligence capability was finally organised within the Office of Special Operations under Donald Galloway on 11 July, 1946. Galloway was instructed to conduct “all organized Federal espionage and counterespionage operations outside the United States and its possessions for the collection of foreign intelligence information required for the national security.” At the time of the transfer SSU employed 400 field officers as well as 260 staff in Washington and 1,432 in auxiliary roles, although not all of these were rehired by the new office. Budgetary restrictions determined that OSO would be a modest undertaking, at least at the outset. DCI Vandenberg stipulated that “Only a limited number of carefully selected individuals formerly with Strategic Services Unit will be employed to inaugurate the program under the new auspices.”

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