AMU Papers

Marco Capriz March 19, 2009 Page 1
US Intelligence Community reorganization after World War 2.

US Intelligence Community Reorganization after World War Two:
Did the Federalization of Intelligence create a new post war Colonial Power?
Author: Marco Capriz (3102460)
October 2009

Overview.
The United States entered World War Two following a massive Intelligence failure:
the Japanese surprise attack on Pearl Harbor. Although throughout the War the US
scrambled to build up expertise in the areas of Intelligence collection and management, is
was not until the war’s end that the Truman administration saw the necessity to create a
coherent structure to oversee all tactical, strategic, political and military Intelligence.
The sheer breadth of this requirement made it difficult for the newly created agency
(the Central Intelligence Agency) and office position (the Director of Central
Intelligence) to manage effectively all the tasks that were asked of them. It is arguable
that this reduction in effectiveness was inadvertently (or maybe deliberately) planned by
its architect, President Truman, who envisioned dangers in the creation of strong
Intelligence services.
The immediate result of the weak mandate given to the CIA was that the new
organization naturally operated more freely in areas that had poor political oversight,
with the result that it created foreign policy legacies, rooted in perceived Cold War
necessities, that could arguably be said to still affect the standing and effectiveness of US
foreign policy today.
On the other hand the onset of the Cold War and the objective difficulties in
collecting information on the Soviet Union and its satellites through other sources, made
it necessary for the US to develop the technical skills to observe Soviet block
developments from afar. Within the creation of the new Intelligence infrastructure,
therefore, the US had to develop the capability to achieve domination in the field of
technical Intelligence, a supremacy that would appear to still be standing.
Assessing the success or otherwise of US Intelligence operations following the end

of World War Two is difficult, as most documentation pertaining its day to day functions
and operations are still classified. Observations can be made based on what has been
published and on a vision of recent history. It is clear that pragmatism ruled over
ideology from the very early days of US Intelligence activities during the Cold War, in

spite of the rather ideological foundations set by President Truman. It is also arguable
that since the end of the war the Intelligence Community in the US has been generally
operating within the rule of US law and by the decisions of elected lawmakers. Although
there have been some notable exceptions, this is probably the most important legacy left
behind by Truman’s reorganization. In the US at least a police state never emerged from
the Intelligence services. Whether this can be stated of the countries in which US and its
opponents competed is, unfortunately, still very debatable. In part the reason for this is
the lack of strong oversight that characterized the creation of the post war Intelligence
Community.
The birth of a “federalized” Intelligence Community.
Truman’s fears of allowing an Intelligence Community too much power, when

reviewing the foundations of the National Security Act of 1947, were based on his views
of wartime Germany and the emerging Soviet Union as dictatorial police states. Whereas
it was clear at the end of the war that the defense infrastructure had to be reorganized, the
CIA’s own history redactors recall that Truman made sure that there would be no
“Prussian style General Staff” running military operations, echoing the general American
distrust of large military establishmentsi. While centralizing military command under the
Joint Chiefs, and creating the Central Intelligence Agency and the new position of
Director of Central Intelligence, steps were taken in the Act to ensure that too much
power was not concentrated in an Intelligence infrastructure whose operations had to
remain (for obvious reasons) secret to US citizens and to most legislators. The CIA was
therefore not given any law enforcement powers.
Historical legacy also contrived to the creation of an agency with “hybrid”

responsibilities. Whereas the primary responsibilities of the CIA where those of
Intelligence collection and management, the new agency also inherited the management
of the disbanded OSS clandestine operations. In a study on the reforms implemented in
the Intelligence Community in the post war era, Michael Warner and J. Kenneth
McDonald observe that “[m]ost nations do not combine executive Intelligence synthesis
and operational coordination in one central office of the sort that President Truman

authorized in January 1946ii.” It could be argued that this dual responsibility may have
lead to conflicts of interest. Indeed there have been cases (the Bay of Pigs invasion
fiasco) that showed the flaws in this dual role, as operations were carried out sometimes
without the knowledge of the Intelligence gatherers and analysts (who, in some cases,
had different opinions on the viability of such actions). Nevertheless the wording in the
National Security Act clearly states that, additionally, the role of the DCI is to
perform such other functions and duties related to Intelligence affecting the national
security as the President or the Director of National Intelligence may directiii.
The vagueness of “other functions” left a wide open door for an agency for which
“prohibitions in the statute […] were so much clearer than permissions.iv”
To complicate matters further, and to appease the objections the military and the
FBI had on the creation of a civilian Intelligence overseer, the Truman administration
allowed existing Intelligence agencies to continue operating, while reporting their
findings to the DCI. Thus Intelligence was “federalized” with the additional
complications that military Intelligence operations were being scaled back at the end of
the war, when they should have been redirected towards the emerging enemy: the Soviet
Union.
Therefore at the onset of the Cold War the United States had created an embryonic
Intelligence Community that was loosely managed, with arguably wide reaching but
somewhat vaguely defined responsibilities. This new Community was faced with the
interpretation, and sometimes interdiction, of activities carried out by foreign powers that
had decades if not centuries of guile in the field of Intelligence. On top of that a whole
new set of political alignments were emerging from the ashes of World War Two. The
correct interpretation of these alignments would be determinant in addressing US security
concerns during the Cold War.
Post war political realignments and the new colonialists.
The end of the World War Two saw the demise of the great colonial powers that
had ruled world trade to that time: Britain, France and to a lesser extent Spain, Holland

and Portugal. The complex problems of maintaining security in their colonial possessions
meant, prior to the beginning of hostilities in 1939, that the home country taxpayers were
already overburdened with the costs of maintaining large standing armies in far flung
locations. To taxpayers at home this expense was only to the apparent benefit of the
trading companies who operated in those areas and did not translate in to any obvious
benefit at home. The post-war reconstruction costs that all sides of the conflict had to
meet were the final nail in the coffin of colonialism1.
The United States found itself looking at a world in transformation, with an

emerging threat in the Soviet Union that was looking to take advantage of the power
vacuum left behind by the European colonizers. The rapid industrialization that followed
in the wake of the war meant that control over the world’s energy and commodity
resources was vital. The old British, French and Dutch trading companies that dominated
the exploitation of these resources in newly independent countries were suddenly faced
with no political or military support from their mother countries. This situation left open
an opportunity for the Soviet Union to begin pushing Marxist rhetoric in new
independent countries that were previously subjugated to European colonial rule (or
Japanese rule in Asia); in some they had receptive ears. Any delusion that the USSR was
interested only in the development of socialist societies instead of securing its own access
to resources became evident as such as early as 1946 in Iran. During the war Russia,
Britain and the United States occupied Iran to deny it from Germany. In a relatively
recent review of the Cold War era, Prof. Roger S. Whitcomb informs us that the three
powers had agreed to withdraw from Iran, however
By early 1946 most of the American and British forces had been pulled out, but the
Russians stalled, demanding oil concessions on a par with those obtained by the
Britishv.

1 Britain and France attempted to maintain rule over parts of their holdings for a while, with no great
success. The French had to abandon Indochina and North Africa, and the British were forced to grant
independence to most of their territories and both suffered an ignominious defeat over the Suez
Canal affair. European colonialism did not outlast a decade following WW2.

The Russians eventually backed down, but this event became the world’s first post-
nuclear confrontation between emerging superpowers. The fact that the Russians reneged
on a deal was one of many such events that influenced Truman’s uncompromising views
of the post war world. These views were also shaped by the fact that Truman came to
office with much less foreign policy experience that Roosevelt had, and therefore had a
black and white view of the world with two blocks, one representing good and one
oppression, rather than a more nuanced view that saw powers competing for economic as
well as ideological domination of the post war vacuum.
Truman’s views culminated in his “Truman Doctrine” speech in which he described

to Congress in March 12, 1947 “the policy of the United States to support free peoples
who are resisting attempted subjugation by armed minorities or by outside pressures.vi” It
could be argued that the ideas Truman espoused in this speech were also present in his
mind during the formulation of the National Security Act. Discussing the legacy that
Truman left on the National Security policies of the US John Davis observes that
President Truman’s effort to reshape and redefine US foreign and defense policy
could not seriously be considered or validated until the president formally
implemented containment. Within the national security bureaucracy containment
would be defined through two policymaking venues: strategic planning and
responding to developing crises and events. It is through these venues that the
Truman national security legacy is revealed. Truman’s use of containment in
creating policy affected future presidentsvii.
That the Soviet Union was intent on economic domination should have come as no
surprise to Truman. In the often quoted “Long Telegram” sent by US envoy to Moscow
George Keenan in February 1946, in which he gives his views on possible Soviet
reactions to containment actions by the United States, he recalls Stalin’s words to a
delegation of American workers in 1927:
In the course of further development of international revolution there will emerge

two centers of world significance: a socialist center, drawing to itself the countries
which tend toward socialism, and a capitalist center, drawing to itself the countries

that incline toward capitalism. Battle between these two centers for command of
world economy will decide fate of capitalism and of communism in entire worldviii.
Keenan was the original architect of containment strategy that he introduced as

suggested policy thus:
It is clear that the main element of any United States policy towards the Soviet
Union must be that of a long term, patient but firm and vigilant containment of the
Russian expansionist tendenciesix.
Since Russian expansion tendencies were economical as well as political in nature,

for the US to make containment work, it had to devise economic and political counter
strategies. The difference between the actions of the two powers was that in communist
Russia, economic power was in the hands of the state; in capitalist America it was (and
still is) in the hands of corporations. This meant that the new Intelligence Community had
to devise containment strategies in cooperation with such corporations. This is where
severe conflicts of interest arose.
The Truman doctrine, containment policy and the consequent requirement for
economic interdiction became fundamental shapers in the definition of what the “other
functions” required of the DCI and the Intelligence Community were to be. Inevitably
these lightly overseen “other functions” also lead the US down a path of neocolonialism
as containment took place (outside of Eastern Europe) in countries that had recently
become independent from previous colonial masters. They also eventually contradicted
the spirit of the Truman Doctrine itself as the US was driven to support totalitarian client
regimes that were equally as brutal as those under Soviet tutelage. Truman himself never
presided over the true legacy of his Intelligence Community reorganization. The
consequences of the reorganization became visible through the actions of the
administrations that followed his. The first implementations of containment emerged
under the Eisenhower presidency.
From Truman Doctrine to Domino Theory.


It was at a press conference held on April 7, 1954 that President Dwight D.
Eisenhower first introduced the Domino Theory. 1954 was the year the French lost
Vietnam following the battle of Dien Bien Phu. When questioned about the importance of
Indochina to American interests, Eisenhower replied:
You have, of course, both the specific and the general when you talk about such
things. First of all, you have the specific value of a locality in its production of
materials that the world needs. Then you have the possibility that many human
beings pass under a dictatorship that is inimical to the free world.
Finally, you have broader considerations that might follow what you would call the
"falling domino" principle. You have a row of dominoes set up, you knock over the
first one, and what will happen to the last one is the certainty that it will go over
very quickly. So you could have a beginning of a disintegration that would have the
most profound influences.
Now, with respect to the first one, two of the items from this particular area that the
world uses are tin and tungsten. They are very important. There are others, of
course, the rubber plantations and so on. Then with respect to more people passing
under this domination, Asia, after all, has already lost some 450 million of its
peoples to the Communist dictatorship, and we simply can't afford greater losses.
But when we come to the possible sequence of events, the loss of Indochina, of
Burma, of Thailand, of the Peninsula, and Indonesia following, now you begin to
talk about areas that not only multiply the disadvantages that you would suffer
through loss of materials, sources of materials, but now you are talking really about
millions and millions and millions of people.
Finally, the geographical position achieved thereby does many things. It turns the
so-called island defensive chain of Japan, Formosa, of the Philippines and to the
southward; it moves in to threaten Australia and New Zealand.

It takes away, in its economic aspects, that region that Japan must have as a trading
area or Japan, in turn, will have only one place in the world to go-that is, toward the
Communist areas in order to live. So, the possible consequences of the loss are just
incalculable to the free worldx.
With this long a detailed answer Eisenhower brought commercial pragmatism to

the Truman Doctrine. He smoothly blended American and allied economic and trading
zone with losses of peoples’ freedom. Although Eisenhower did not state it openly, the
message that American trading freedom is associated with people’s political freedom
seems implicit and indeed resonates loudly to this day. Sadly, although during the Cold
War countries that traded exclusively with the Soviet Union did not experience any great
political freedoms, not all of those who traded with the US were automatically free either.
The battleground for economic containment and supremacy during the Cold War was in
developing countries where the US and the USSR imposed economic and trading
conditions that were beneficial to the new colonial masters but had little or no benefit to
the people of those countries. Indeed, in order to enforce these trading regimes, Truman’s
requirement that US policy was to free those under tyranny, was the first to be forgotten.
In many cases tyranny was a requirement for those trading policies to be enforced.
Moreover, at times American corporate trade priorities drove Intelligence operations to
counter fictitious, or at very least tenuous communist threats. This becomes quite evident
if one examines two Intelligence Community interventions that were carried out during
the Eisenhower administration.
Guatemala: corporations in containment strategies; a study in neocolonialism.
Eisenhower inherited an Intelligence operation in the making from Truman in

Guatemala. The root causes that led to operation PB/SUCCESS lay in the Guatemalan
Government’s desire to enact land reform legislation that, while quite modest in nature,
affected the largest American investor in the country: United Fruit of Boston, MA. In the
1930s United Fruit and other American companies found in Guatemala a business
friendly environment. The country’s dictator, former provincial Governor Jorge Ubico,
donated to United Fruit in particular vast estates on which the company employed up to

40,000 employees. United Fruit managed the estates with no Government interference
and acquired controlling interests in the country’s transportation and communications
links. Towards the end of the war, opposition to Ubico grew, as did the local resentment
against the treatment of workers by United Fruit on their estates. Ubico was deposed in
1944 by an Army coup led by Capt. Jacobo Arbenz Guzmán and Maj. Francisco Arana.
Both then stood aside to make way for democratic elections in which Prof. Juan José
Arévalo was elected President. Arévalo enacted moderate reforms, but, initially at least,
unions were still not permitted to operate and organize the laborers on the vast estates
owned by United Fruit. In 1949 Maj. Arana, one of the previous coup organizers
attempted another coup against President Arévalo. This time Arbenz Guzmán intervened
on the side of the President, Arana was killed in a shootout and one of Arana’s officers,
Lt. Carlos Castillo Armas was arrested following his attack on a military base in the
capital (he managed to escape after he was imprisoned). At this point Armas came to the
attention of the CIA. In 1950 Arbenz Guzmán was elected to succeed President Arévalo.
The relationship between Arévalo and United Fruit, while initially cordial, grew
colder as Arévalo enacted legislation defining minimum wage and the right of labor to
organize in unions. United Fruit had grown used to running a business effectively as its
own sovereign state under Ubico; they grossly under-declared the value of their land
holdings for tax purposes. When Arévalo eventually began enacting labor reforms United
Fruit appealed to the US Embassy for support. The CIA grew interested in Guatemala
and United Fruit made sure that labor and land reform legislations were seen to be
promoted by a communist infiltration in Arévalo’s Government (whereas some
communist union leaders did have a presence in Parliament, this had little effect on the
Government’s actions). Just prior to the 1950 elections the US State Department began
seeing United Fruit as a proxy for the American containment strategy. Even though the
Justice Department had begun monopoly investigations in to United Fruit’s holdings in
Guatemala, State intervened to squash them. The link between United Fruit and
containment is highlighted by Nick Cullather in his study of CIA’s operations in
Guatemala. Cullather writes

In a National Security Council session, Department representatives argued that a
legal attack on United Fruit's Guatemalan holdings would have "serious foreign
policy implications," weakening the company at a time when the United States
needed it. The action was suspended until the situation in Guatemala had improved.
It is often asserted that the United States acted at the company's behest in
Guatemala, but this incident suggests the opposite may have been true: the
administration wanted to use United Fruit to contain Communism in the
hemispherexi.
Arbenz Guzmán’s election as Arévalo’s successor did nothing to allay American

fears of a communist takeover in Guatemala, even though the new President did not seem
immediately concerned with drastic reforms. In 1952, however, Arbenz Guzmán
introduced plans for land reform, that while moderate and drafted along the same lines as
those that the United States had promoted in other countries, were angrily opposed by
United Fruit. The reforms called for land kept idle but in private hands to be expropriated
and redistributed to farm laborers. Landowners would be given compensation matching
the owners’ declared value for tax purposes. This put United Fruit in an awkward
position since the land’s value they declared for tax purposes was much below its real
value. United Fruit started a PR campaign to discredit Arbenz Guzmán’s government as
communist-driven. Although the Guatemalan Worker’s Party (PGT) had socialist
tendencies and did have some influence on the reform process, its influence in Arbenz
Guzmán’s Revolutionary Action Party (PAR) led Government remained weak.
Nevertheless the CIA began a campaign of propaganda, infiltration and disinformation.
Economic sanctions were imposed on the country, as was an arms embargo. The Agency
began training a small but growing group of officers and soldiers under the command of
Castillo Armas that would lead a military takeover. The operation, called PB/SUCCESS,
resulted (after several major setbacks, some tragic-comical in nature) in Arbenz
Guzmán’s resignation on June 27, 1954. Castillo Armas became the junta leader shortly
after.
The CIA considered PB/SUCCESS a complete vindication of its covert operations

capabilities. Unfortunately the hubris from the operation in Guatemala blinded the

Agency to the fact that the operation had barely succeeded, and it set the stage for an
unopposed and enthusiastic planning for the Bay of Pigs invasion of Cuba a few years
later. International condemnation of the action in Guatemala was swift, but ignored by
the US. Cullather, however, notes, “[i]n Latin America, the Arbenz regime's demise left
an enduring legacy of anti-Americanism.xii” The main stated aim the operation was
carried out to prevent Guatemala from falling in to the Soviet sphere of influence was
never really justified, as there was no proof of direct or indirect Soviet support for Arbenz
Guzmán’s Government. What does seem to be clearly the case is that a corporation
(United Fruit) became a proxy for an American colonialist expansion in Central America
and the CIA’s operations where brought to bear in dubious support of the strategic need
to maintain American national security, and in complete contrast to the stated aims of the
Truman Doctrine.
The anti-American legacy created by PB/SUCCESS in Central and South America

has persisted to this day. But the consequences of this legacy are not as profound as those
that were set by another earlier CIA operation conducted in a completely different part of
the world.
Anglo-American cooperation in the Middle East. Laying the foundations of Islamic

theocracy: the Mossadegh overthrow.
The overthrow of Mohamed Mossadegh, the legitimately elected Prime Minister of

Iran, who was first appointed in April 1951, was the clearest indication that the Truman
Doctrine did not survive the Truman presidency. The operation, called TP/AJAX by the
CIA, was planned during the Eisenhower administration, as Truman was an admirer of
post-colonial nationalists like Mossadegh, and rejected initial requests by the British for
help in replacing him.
Since 1908, the year it was founded, the Anglo-Persian Oil Company (the precursor
to the Anglo-Iranian Oil Company – AOIC – that eventually became British Petroleum)
exploited the Iranian oil fields while returning to Iran’s Government only 16% of the
company’s net profits. These were declared profits and the Iranians had to take the
British at their word, since the company never allowed the details of its accounts to be

disclosed to the Iranians. In 1933 the company was faced with the threat of losing its
concession and negotiated a slightly better deal for the Iranians, but still short of what
they wanted. Moreover the conditions of Iranian workers at the company’s production
site in Abadan (on the northern end of the Persian Gulf) were still woeful despite the
company’s promise to improve them. At the end of the war in 1946 and 1947 riots broke
out at the production site and a newly empowered Parliament (the Majlis) pushed for a
renegotiation of the concessions.
In his detailed account of the Mossadegh overthrow, on the subject of the riots
Stephen Kinzer writes:
The riots that shook Abadan led many Iranians to rally to the workers' cause, partly
out of instinctive sympathy but also because of the grossly unequal terms under
which the Anglo-Iranian Oil Company operated. In 1947, for example, the
company reported an after-tax profit of £40 million—the equivalent of $112 million
dollars —and gave Iran just £7 million. To make matters worse, it never complied
with its commitment under the 1933 agreement with Reza Shah to give laborers
better pay and more chance for advancement, nor had it built the schools, hospitals,
roads, or telephone system it promisedxiii.
It was at this time that Mohamed Mossadegh emerged on the scene. A nationalist
politician who never expressed any communist sympathies, Mossadegh was elected to the
Majlis in 1949 and immediately began to lobby for Iran to renegotiate the oil concessions
with the AOIC. The British refused (quite arrogantly) and the calls for nationalization
began. Riots and strikes also continued at the production site. Finally in 1951 the Shah
(Mohamed Reza) was forced to appoint him Prime Minister. By this time the Majlis had
powers and rejected a meaningless offer from AIOC that was well short of what the
Iranians demanded. Coincidentally the Americans had agreed to share equally the profits
from the fields they were exploiting in Saudi Arabia through ARAMCO. Again the
British were approached but they refused to extend the Iranians a similar deal. On March
15, 1951 the Majlis voted in favor of nationalization. This was done without any

intervention by the Soviet Union2 and only after several attempts at negotiation for better
terms were rejected out of hand by the British, who still displayed an extraordinarily
arrogant colonial view of the world.
Following the nationalization decree the British began a two year diplomatic and
PR campaign claiming that the Iranians were in violation of a 60-year contract. They
enforced sanctions against Iran, and threatened the country’s shores with naval
maneuvers. Initial appeals made towards the US fell of deaf ears, as the Truman
administration was sympathetic of the positions Mossadegh and the Iranians had taken
against a colonial position. This changed when Eisenhower came to power, however. The
British, knowing that any argument based on rejections of a nationalization policy might
again not be well received, decided instead to leverage the containment strategy. On this
new British approach to the US in late 1952 Kirzer writes:
The American attitude toward a possible coup in Iran changed radically after
Dwight Eisenhower was elected president in November 1952. Within days of the
election, a senior agent of the Secret Intelligence Service, Christopher Montague
Woodhouse, came to Washington for meetings with top CIA and State Department
officials. Woodhouse shrewdly decided not to make the traditional British
argument, which was that Mossadegh must go because he had nationalized British
property. That argument did not arouse much passion in Washington. Woodhouse
knew what would.
“Not wishing to be accused of trying to use the Americans to pull British chestnuts
out of the fire, ” he wrote later, “I decided to emphasize the Communist threat to
Iran rather than the need to recover control of the oil industry.”
This appeal was calculated to stir the two brothers who would direct American
foreign policy after Eisenhower's inauguration. John Foster Dulles, the incoming
secretary of state, and Allen Dulles, the incoming CIA director, were among the

2 Indeed Mossadegh was hostile towards them, as Russia also was considered a formal colonial
power and had occupied Iran for prolonged periods of time.

fiercest of Cold Warriors. They viewed the world as an ideological battleground
and saw every local conflict through the prism of the great East-West confrontation.
In their eyes, any country not decisively allied with the United States was a
potential enemy. They considered Iran especially dangerousxiv.
The Dulles brothers brought the CIA to bear on the problem, and the decision was
made to overthrow Mossadegh in a coup and replace him with the son of Mohamed Reza,
Reza Pahlevi, who would become the new Shah. After a few months planning operation
TP/AJAX, the CIA backed coup against Mossadegh succeeded on August 19, 1953.
Mossadegh was sentenced to three years in prison and subsequently died in exile in 1967.
AIOC resumed its operations as planned.
There was no communist threat in Iran. The Iranian Tudeh (Masses) Party had a
small representation in the Majlis and did support Mossadegh in his nationalization
efforts, but the decree was passed for all the reasons Truman would have approved of.
Iran wanted to rid itself of a colonial yoke. The British knew that the Eisenhower
administration would be receptive to a different message cast in the geopolitical
references that had been crafted by George Keenan and Eisenhower himself. Like the
operation in Guatemala that was to follow, the CIA intervention in Iran was dressed up as
part of the US containment strategy against the Soviet Union, but was in fact an operation
to preserve the colonial privileges of a multinational corporation. However, unlike the
PB/SUCCESS, TP/AJAX may well have had far longer unintended consequences for the
UK, the US and the entire world. The despotic and corrupt rule of Shah Reza Pahlevi
came to an end in 1979. By that time the polarization of Iranian society had become
irreversible. As Pahlevi had not allowed any free political opposition, the Iranian people’s
discontent found refuge in mosques, and political opposition eventually acquired a more
extreme religious connotation. The outcome of Pahlevi’s downfall was inevitable. The
social moderate opposition figure Shapour Bakhtiar, called in by Pahlevi to delay the
revolution that was brewing, managed to remain in power just over a month in early
1979. Although he freed political prisoners and disbanded the Shah’s dreaded secret
police (the SAVAK), Bakhtiar was forced to stand down with the return from exile of an
uncompromising Ayatollah Ruhollah Khomeini who believed that the only way forward

for Iran lay in the country becoming an Islamic theocracy run by a Council of Guardians,
and completely hostile to Western ideal of democracy. The rule of the Council of
Guardians remains strongly in place today, over 20 years after the Iranian revolution.
Arguably, therefore, the repercussions of Mossadegh’s forced removal are being felt to
this day.
Although it would seem that Truman’s constitution of a new post-war Intelligence

Community resulted in very poor early geopolitical choices made by the US and executed
by the CIA, it is in the other areas of responsibility the Intelligence Community was
given that a much more positive legacy lives on. Indeed it may be argued that it is
because of the technical advances made by the CIA and other agencies in the Intelligence
Community that the Cold War remained cold and never flared up to becoming World
ending.
The technology of spying from afar.
One area of expertise that the US needed to build up at the end of World War Two
was that of Signals Intelligence (SIGINT). During the war the US had been dependent on
support and technical expertise from the UK, and in particular from the ULTRA
cryptanalysis team that broke the German Enigma cipher. As the war came to an end the
UK and the US began debating how to pool their resources in this area. The British and
Americans knew that their confrontation with the Soviet Union required new ways of
conducting warfare. James Bamford observes:
For nearly a year both Washington and London had been secretly planning the first
battle of the new Cold War. This war, unlike the last, would have to be fought in
the shadows. The goal would be the capture of signals rather than cities; complex
mathematical algorithms and whirring computers, rather than brawn and bullets,
would determine the winner. The work would be known as signals Intelligence […]
- a polite term for ‘reading someone else’s mail.’xv”
Electronic collaboration between the UK and the US, although ongoing and
successful, was formalized by the UKUSA agreement signed in June 1948. In the US the

Army established the Army Security Agency in September 1945. Armed forces combined
their signals processing unit under the Armed Forces Security Agency in 1948. And
finally the NSA was created by a secret presidential directive on the day of the 1952
elections, one of Truman’s last official acts as President. The process of collecting
Intelligence from human and machine transmissions was technically challenging. A
whole new classification of Intelligence was created, summarized in the table below.
SIGINT Refers to electronic transmissions that can be collected by ships, planes,

SIGnal Intelligence ground sites, or satellites. Communications Intelligence (COMINT) is a type
of SIGINT and refers to the interception of communications between two
parties. U.S. SIGINT satellites are designed and built by the National
Reconnaissance Office, although conducting U.S. signals Intelligence
activities is primarily the responsibility of the National Security Agency
(NSA).
IMINT Sometimes also referred to as photo Intelligence (PHOTINT). One of the
IMage Intelligence earliest forms of IMINT took place during the Civil War, when soldiers were
sent up in balloons to gather Intelligence about their surroundings. IMINT
was practiced to a greater extent in World Wars I and II when both sides took
photographs from airplanes. Today, the National Reconnaissance Office
designs, builds, and operates imagery satellites, while the National
Geospatial-Intelligence Agency is largely responsible for processing and
using the imagery.
MASint A relatively little-known collection discipline that concerns weapons
Measurement And capabilities and industrial activities. MASINT includes the advanced
Signatures Intelligence processing and use of data gathered from overhead and airborne IMINT and
SIGINT collection systems. Telemetry Intelligence (TELINT) is sometimes
used to indicate data relayed by weapons during tests, while electronic
Intelligence (ELINT) can indicate electronic emissions picked up from
modern weapons and tracking systems. Both TELINT and ELINT can be
types of SIGINT and contribute to MASINT.
Table 1: INT categoriesxvi.

Not much information has been declassified on the Intelligence Community’s
capabilities and yield through technical Intelligence collection means in the Cold War
era. It is known that Western allies carried out a number of MASINT operations called
“ferret flights” to test and understand Soviet border electronic defenses (radar
capabilities, etc.) Aircraft flew to the edges of Soviet airspace to record the electronic
signatures of Russian air defense radars. Similar operations were also carried out at sea
by boats to test coastal defenses. MASINT operations also yielded information on Soviet
and Chinese atomic tests, as aircraft flew missions for the Long Range Detection
Program, monitoring levels of radioactivity in the air above the North Pacific and North
Atlantic. It was during one of these tests in September of 1949 that it became evident that
the Russians had tested their first atomic weapon four years ahead of the CIA’s forecast.
SIGINT operations were ongoing throughout the Cold War. The task of collecting
and analyzing signals traffic was loosely divided between the UK and the German
Federal Information Service (Bundesnachrichtendienst or BND). The objectives of the
BND were much more focused on signals interception in the central European theatre, as
opposed to those of GCHQ that were more strategic in nature. The British also
cooperated with the US in SIGINT collection operations at sea. The Soviet sea route out
of Murmansk in to the Atlantic Ocean passed through what was known as the GIUK
(Greenland-Iceland-UK) Gap. Once again Scotland was the natural geographic location
for UK/US naval Intelligence bases. The US Navy operated SIGINT stations out of
Edzell and Thurso to support their Polaris nuclear submarine fleet based in Holy Loch,
according to a study on the role Scotland played for US SIGINT operations during the
Cold War by David Mackayxvii, although the details of the activities carried out in these
locations is still not known. However a large HF listening post was constructed at Edzell
that managed to monitor communications during the USS Pueblo incident in North
Korean watersxviii .
SIGINT operations never yielded the breakthrough the British achieved in World
War Two with ULTRA and the US with MAGIC (the Japanese code decryption efforts).
The Soviets had become much more disciplined with the management of their encryption
systems, and even the breakthroughs that the US achieved in decrypting the VENONA

messages during the war and during the very early stages of the Cold War (that allowed
prosecutions of the Rosenbergs), were never repeated (at least, as far as the declassified
information that is publicly available). Most successful SIGINT interceptions were
carried out against foreign legations in third world countries, but no public record exists
of strategic information being recovered from these intercepts.
The most important contribution to the stability in the early years of the Cold War
came from IMIT collections. In the late ‘50s the US Air Force claimed that the US was
facing a “bomber gap”, i.e. the Soviet Union was moving greatly ahead in strategic
bomber production. One instance that seemed to confirm this theory occurred in July
1955, when, during Soviet Aviation Day, the Russians flew 10 Bison bombers past the
spectator stands. The bombers then flew out of the public’s view and looped back over
the airfield a few minutes later. They overflew the airfield six times, thus giving the
observing public the impression that 60 bomber had flown by. From this an extrapolation
was made of Soviet bomber production capability that was wildly inflated. As Norman
Friedman recalls “The US Air Force prepared the [Soviet] bomber estimates, and
naturally it favored higher rather than lower numbers.xix” Eisenhower did not believe the
numbers that were being presented to him, and his administration was concerned about
spending, particularly on military equipment3. He needed a way to verify the estimates
the Air Force was giving him. This came to him in 1956, when the Lockheed Martin’s
new high altitude plane, the U-2, flew with the most sophisticated photographic
equipment of the time, developed by Dr. Edwin Land. In July that year U-2 aircraft
overflew several Russian bases, too high to be in range of Soviet Surface-to-Air missile
defenses, and the analysis of the resulting images confirmed that the “bomber gap” was
indeed an illusion. Unfortunately while flying over the Soviet Union in 1960 to disprove
a new “missile gap” scare, a U-2 piloted by Gary Powers was finally intercepted and shot
down by Russian upgraded SAMs over the Urals. Nevertheless, according to Christopher
Andrew

3 His famous farewell speech on January 17, 1961 mentioned the “unwarranted influence […] of the
military-industrial complex” on the councils of Government.

The confidence in the American lead over the Soviet Union in delivery systems that
Ike derived from U-2 imagery enabled him to withstand formidable pressure from
the military-industrial complex and its supporters on the Hill for massive increases
in arms expenditure. The U-2 thus saved the American taxpayers tens of billions of
dollars and spared the world a major escalation in the nuclear arms racexx.
The U-2 was instrumental a few years later in discovering the preparation of Soviet
medium-range ballistic missile bases in Cuba.
Conclusions.
It is arguable that the post war reorganization of American Intelligence suffered

from a number of false starts and the federalization, rather than the centralization of its
control did lead to some adventurist operations, some of which may have had long term
consequences that are still detrimental to the US today. It is less arguable that the
difficulty in getting information out of the Soviet Union through classic spying operations
did prompt a development in information acquisition technology that very quickly put the
US in a position of leadership in the fields of technical Intelligence. It is also plausible to
consider that this technical lead (and the information acquired through it) allowed the US
to restrain some its more impulsive legislators from pushing the country down a
dangerous path of militarization, by allowing reasonably correct estimates to be
determined on Soviet military capabilities.
The duration of the Cold War, however, lead the US’s Intelligence mindset (and
Russia’s for that matter) to atrophy in complacency and be unprepared for the
asymmetric conflicts that began to emerge in the late ‘90s. The mindset of East vs. West,
and the Cold War strategies of fighting wars by proxy through developing countries,
blinded the Cold War protagonists to the fact that a new class of players (such as Iran)
was emerging that would challenge their military supremacy. New paradigms in
warfighting also emerged for which Western armed forces were not prepared (such as
non state actors fighting 4th generation asymmetric guerrilla warfare). Intelligence
operators, trained as they were in the use and counter-use of ever more sophisticated high
technology information collection and detection, also failed to pick up signals that new

enemies could avoid such detection by resorting to communications and deceptions
methodologies that shunned technology and thus were undetectable by it.
References.

i
Central Intelligence: Origins and Evolution. Editor: Michael Warner, CIA History Staff, Central
Intelligence Agency, Washington DC. Page 1, Historical Perspective.
ii
US Intelligence Community Reform Studies since 1947. Michael Warner and J. Kenneth McDonald.
Published by the Strategic Management Issues Office and the Center for the Study of Intelligence. April
2005. Page 5.
iii
National Security Act 1947. SEC. 104A. [50 U.S.C. 403–4a] Paragraph D(4).
iv
Central Intelligence: Origins and Evolution. Editor: Michael Warner, CIA History Staff, Central
Intelligence Agency, Washington DC. Page 7, Historical Perspective.
v
The Cold War in Retrospect: The Formative Years. Roger S. Whitcomb; Praeger Publishers, 1998. Page
73.
vi
United States Department of State website accessed at http://www.state.gov/r/pa/ho/time/cwr/82210.htm
on October 4, 2009
vii
The National Security Legacy of Harry S. Truman. Edited by Robert P. Watson, Michael J. Devine,
Robert J. Wolz. Truman and containment. Author John Davis. Truman State University Press, 2005. Page
79.
viii
The Long Telegram; George Kennan, Moscow, 22 February 1946. Accessed at
http://www.ntanet.net/KENNAN.html on October 4, 2009.
ix
George Kennan, writing as “Mr. X”, The Sources of Soviet Conduct (Foreign Affairs, July 1947),
accessed online at http://weber.ucsd.edu/~bslantch/courses/nss/documents/kennan-sources-of-soviet-
conduct.html
x
Eisenhower’s press conference transcript can be found on many websites. Complete transcript accessed at
http://coursesa.matrix.msu.edu/~hst306/documents/domino.html on October 4, 2009.
xi
Secret History: The CIA's Classified Account of Its Operations in Guatemala, 1952-1954. Nick
Cullather; Stanford University Press, 1999. Page 19.
xii
ibid, page 112.
xiii
All the Shah's Men: An American Coup and the Roots of Middle East Terror. Stephen Kinzer; Wiley,
2003. Page 67.
xiv
ibid, page 4.
xv
Body of Secrets; Anatomy of the Ultra-secret National Security Agency. James Bamford. Anchor
Books, 2002. Page 7.
xvi
Definitions from the FBI website accessed at http://www.fbi.gov/Intelligence/di_ints.htm on October 6,
2009.
xvii
Mackay, David Gerard (2008) Scotland the brave? US strategic policy in Scotland 1953-1974. MPhil(R)
thesis, University of Glasgow. Page 31.
xviii
See also the author’s “GCHQ and the BND in the Cold War.” written for AMU RQ310.
xix
The Fifty-Year War: Conflict and Strategy in the Cold War. Norman Friedman. Naval Institute Press.
Page 201.
xx
For the President’s Eyes Only. Secret Intelligence and the American Presidency from Washington to
Bush. Christopher Andrew. Harper Collins, 1995.

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Marco Capriz March 19, 2009 Page 1

US Intelligence Community reorganization after World War 2.

US Intelligence Community Reorganization after World War Two:

Author: Marco Capriz (3102460)

Assessing the success or otherwise of US Intelligence operations following the end

The birth of a “federalized” Intelligence Community.

Truman’s fears of allowing an Intelligence Community too much power, when

Historical legacy also contrived to the creation of an agency with “hybrid”

Post war political realignments and the new colonialists.

The United States found itself looking at a world in transformation, with an

Truman’s views culminated in his “Truman Doctrine” speech in which he described

In the course of further development of international revolution there will emerge

Keenan was the original architect of containment strategy that he introduced as

Since Russian expansion tendencies were economical as well as political in nature,

From Truman Doctrine to Domino Theory.

With this long a detailed answer Eisenhower brought commercial pragmatism to

Guatemala: corporations in containment strategies; a study in neocolonialism.

Eisenhower inherited an Intelligence operation in the making from Truman in

Arbenz Guzmán’s election as Arévalo’s successor did nothing to allay American

The CIA considered PB/SUCCESS a complete vindication of its covert operations

The anti-American legacy created by PB/SUCCESS in Central and South America

Anglo-American cooperation in the Middle East. Laying the foundations of Islamic

The overthrow of Mohamed Mossadegh, the legitimately elected Prime Minister of

Although it would seem that Truman’s constitution of a new post-war Intelligence

The technology of spying from afar.

SIGINT Refers to electronic transmissions that can be collected by ships, planes,

It is arguable that the post war reorganization of American Intelligence suffered

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