2609716_CareyMFR

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1 Event: Dave Carey

Type of Event: Interview

Date: October 31, 2003

Special Access Issues: None

Prepared by: Gordon Lederman

Team Number: 2

Location: The Commission's K Street Office

Participants — non-Commission: Dave Carey

Participants — Commission: Lloyd Salvetti, 9999999/, Gordon Lederman

(U) BACKGROUND

‘('S„) He started work in the Directorate of Intelligence (DI) of the Central Intelligence Agency (CIA) in.June 1969, focusing on the Soviet Union.

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In 1990, he headed the DI's office devoted to Near East analysis. In 1993, he became the Director of CNC. Director of Central Intelligence (DCI) Woolsey changed the name to Crime and Narcotics Center (CNC) to reflect a focus on more than counternarcotics.I 9/11 Classified Information

1 but in July 1997 became CIA Executive Director. As Executive Director, he was responsible for everything from strategic planning to make sure wastebaskets were emptied. The Executive Director had considerable authority and latitude in certain issues such as employee dismissal. Tenet as DCI is a hands-on manager and stresses leadership. In April 2001 he became Counselor to the DCI, and in September 2001 he retired from CIA.

(U) THE CIA AFTER THE COLD WAR, AND THE TENURE OF DCI DEUTCH

(S) DCI Tenet inherited an agency severely downsized after the Cold War. Personnel fell by 22%, and budgets were cut accordingly.

‘('S) The mantra during the 1990s was to take CIA's expertise on the Soviet Union and move it to other areas, a mantra predicated on the belief that 80-90% of what CIA did was focused on the Soviet Union. In reality, he CIA was focused on the Soviet Union; the CIA was also doing -Weapons-o -mass- estruction (WMD) proliferation, counterterrorism --(CT), counternarcotics, etc. — all of those areas were hit by the resource crunch_as - well. CIA morale had plummeted, and DCI Deutch had

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demoralized the CIA Directorate of Operations (DO). Deutch at one point had insulted the DO by saying that the brightest DO officer was less bright than the worst colonel in DOD.

N Deutch isolated himself from the DO and the DI. Deutch may have had more connection with the Director of Science & Technology (DS&T) but only to show his scientific smarts. All communications to DCI Deutch had to go through his Executive Director, Nora Slatkin; the process took forever.

(U) GEORGE TENET'S ASSUMPTION'OF COMMAND

(U) THE ROLE OF THE EXECUTIVE DIRECTOR, AND THE STRUCTURE OF DECISIONMAKING

N When he became Executive Director, he talked with Tenet about what managerial model Tenet wanted. He wanted to capitalize on Tenet's good standing with CIA's rank-and-file and Tenet's being so personable in order to reinvigorate the CIA. He wanted Tenet to be more involved in the day-to-day activities of the directorates. To do so, the job of the Executive Director needed to recede — the CIA Director needed to be reestablished as the director. The agreement was that no head of a CIA directorate would take advantage of direct access to the DCI to cut resource deals with the DCI, although they tried to do so. He could walk into Tenet's office at any time and join whatever meeting he wanted.

(S) Under DCI Deutch, decisions went to the Executive Committee where they were put to a vote. The then-4 directorates could be outvoted by other members (the General Counsel, Comptroller, etc.). Tenet did away with the voting and made the directorate heads the only members of the ExCom. During the Deutch era, Carey was in CNC.

S) Ambiguity was introduced between the Executive Director and the directorates. The objective was to get to the point where the DCI was seen as the head of the CIA. Accordingly, he gave a speech in May in the bubble concerning the Strategic Direction.

(S) He talked to the DCI about major personnel changes. There was a senior personnel review board and al !senior management team.

(S) There was aI;ackdoor from the DO to the DCI's office, perhaps due to the allure of operations. "Who can resist playing spymaster?" he asked. Tenet had a robust relationship with the DI which was product-driven and focused on the President's Daily Briefing.

(U) A STRATEGIC DIRECTION FOR THE CIA

'S-) Senior managers were brought to an off-site in 1997, facilitated by management guru Jim O'Toole. Most of the senior management team that that CIA was in good shape. Yet several people left the off-site thinking that the off-site had "missed the boat." He and his

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• Strategic Direction to show a trajectory, that the more money CIA received, the faster it could accomplish its goals. Of course, there were some time considerations such as the lag effect of hiring new case officers.

.(S,) In In May 1998, Tenet told the workforce about the strategic direction. Congress was happy because at least CIA had a plan. The hearing for the FY1998 budget had been "abysmal" because CIA had no plan. To implement change, leaders need to tell the story over and over again. But Tenet did not like to do that. He always wanted to give a different speech. Tenet needed to be stage-managed.

(U) RELATIONSHIP WITH THE OFFICE OF MANAGEMENT AND BUDGET (OMB) AND THE COMMUNITY MANAGEMENT STAFF (CMS1

OMB would micromanage CIA's budget. OMB's "foreman" for the CIA budget became a big advocate of IT security. In the Gingrich supplemental (1999), Tenet personally worked the Hill. OMB got very upset because it felt that Tenet had gone around OMB's back.

CMS is a "thankless job." No one knew where the money was going to come from for FIA and other technical programs. TPED was going to cost billions. And then the National Reconnaissance Office dried-up as the IC cash cow.

(U) There was a lot of interaction between OMB and CIA. Most of the day-to-day interaction with OMB is between the CIA Chief Financial Officer and OMB's budget examiners (Kevin Scheid, then Peggy Evans). The OMB examiner would micromanage CIA's work. CMS was only involved in the CIA/OMB relationship when it came to new initiatives and supplementals. CMS also got involved in horsetrading.

') Budget proposals went to the Community Management Staff (CMS), and CMS "whacked it" or maybe would pass it through. CMS never enhanced the budget. OMB then "whacked it" and sent it to Congress. CIA then had to defend the budget before Congress. For example: information operations. In 2000, he and his deputy became convinced that there were unaddressed issues that could get a lot of money from Congress, namely bioweapons and information operations. He got Jami Miscik to lay out a vision for where CIA needed to be on information operations. He fashioned a budget


iTMS cut the request] I and OMB cut it to Congress and especially the House Permanent Select Committee on Intelligence gave it

' I CIA used the money to pay for information operations but also as result

could fund other operations. 9/11 Classified Information

(U) Having the DCI get more money is a multi-step process that is fraught with many problems. If you move money from an area of Congressional interest or into an area of Congressional interest, the DCI needs to ask for permission by notifying Congress — if the DCI does not hear a response in 2 weeks, then the DCI can move the money, but the

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DCI generally does not do so due to possible Congressional retaliation. And CMS still has to sign-off on certain things.

(U) As Executive Director, he went to biweekly community program meetings as the CIA representatives. Tenet spent a lot of time on community issues, generally budget-driven.

)3,) He had philosophical disagreements with the DDCl/CM, Joan Dempsey. She wanted to codify community issues in DCIDs, at the expense of CIA. Dempsey rewrote all of the DCIDs. For example, she wanted to make it such that a person could not be promoted at CIA unless they served for a time in another agency of the IC. But the rest of the IC did not have jobs, and he did not have the manpower. His opposition was not overridden by the DCI.

(U) COUNTERTERRORISM

(U) CT was the "first among equals" in terms of issues. CIA was beaten-up on WMD nonproliferation issues.

(S) CIA felt good because it got Kansi. Winston Wiley was moved out of the Counterterrorist Center (CTC) to become Assistant Deputy Director of Intelligence. CTC under Mr. Wiley had focused on Kansi. CTC felt good about itself There was a reasonable focus on Middle Eastern terrorism. Starting: in 1997, CTC started focusing on al Qa'ida in Sudan. Mr. Carey was not involved in the creation of ALEC Station, which was started while he was Executive Director. He would only have been brought into ALEC Station issues when they concerned resources.

‘("S) Counterterrorism was at least at, or maybe a little better than, other areas in terms of resources. CT suffered less than the DO in general in the Deutch-era malaise. At lest CTC had a focus.' 9/11 Classified Information

XXXXX CTC had good working relationships with the area divisions.

(U) STRATEGY

(S) Regarding a CT strategy, after getting Kansi CTC tried to formulate a strategy. Geoff O'Connell took over CTC. The strategy evolved. No one ever sat down to draft a strategy. I


(U) ANALYSIS

ZS) He did not look at CTC from a managerial perspective. His personal involved in CTC started in 1996 because CTC analysts went to CTC from the Office of Global Issues

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in the DI, which he headed. He saw the problem of analysts being dragged into operations. Ten years later, analysts were still being pushed into istipport for,,Operations. CTC had a de facto division of labor, but most of the operational support was in ALEC Station. He noted that CNC had a group of analysts for longer-term issues and a group of analysts to support operations.

'N) He was frustrated with O'Connell andl kcause their approath was that there was no need to redo papers that had been done several years before.

(S) CTC was the "counterterrorist" center, not the "counterterrorism' center, meaning • that it was focused on operations.

(U) OPERATIONS, AND RELATIONS WITH OTHER AGENCIES

N There was a meeting on Usama bin Ladin but there were too many people there. He cannot remember when the meetings started. The reduced the number of attendees to 4-6 people and held the meeting 3-4 times per week, and then he would brief highlights to the DCI. They met with the DCI once every week or every two weeks. UBL was in Kandahar in mid-1998. The purpose of the meetings was to examine whether there were any constraints.'


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support from NSA the military, the CSG. MI did power-point slides for those meetings and summary slides of the Friday meetings with the DCI.


The key issue was: where was UB


I Why are senior people dealing with these sort of issues? DCI has a penchant for these issues. Also, these issues were worked by lower-level people, but senior-level involvement may make things easier...or harder. There are also differing philosophies involved: CIA wanted transcripts, while NSA did not want to give them. It became a "manhood" issue with NSA. Transcripts were an issue in ever area. It was ,unclear whether the lack of access to transcripts had any effect on performance.

. (U) KUALA LUMPUR MEETING

He has no specific recollection of the January 2000 meeting in Kuala Lumpur. There was always something going on in South Asia.


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(U.) FUNDING

(g) He suggested that we should talk to Mary "Corado" about the unfunded mandate of 9/11 Classified Information I for CT. I 9/11 Classified Information


9/1,1 Classified Informat 'I'upplementals were terrible ways to finance operations. There was no guarantee of continuity. How can you develop relations with a source or a foreign country if there is no guarantee of continued funding.

(U) THE DCI'S 1998 "DECLARATION OF WAR" MEMORANDUM

(S) The CIA did not go through and do a head-count of whether resources were being spared. The memorandum was viewed as a note to the rest of the IC to say, "get out of our way —stop frustrating our efforts — if we need transcripts, give it to us." The DCI's memo came in the context of the DCI dealing with the cleanup of the East African


I In reality, there are 9/11 Classified Information

always dozens of things going on.

(5) How did the CIA respond to the "strategic warning" of the East African embassy bombings. CIA tried to find out how it happened.


I How could CTC have guessed that the Cole and 911 were next? CTC's first reaction was to focus on protecting embassies and then what targets were created due to hardening of embassies. Would a strategic analytic unit have changed things? A red cell? How could they have guessed 911?

(U) THE MILLENNIUM THREAT

He sent a lot of time on Y2K issues.

they were targeting a hotel complex and possibly an embassy! Second, ,

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*(S) As for the CT methodology in combating the Millennium plot, the millennium time was the logical time for terrorists to cause panic. Lots of people gathered in capitals, a lot of Americans were around the world — so there were lots of targets. In other words, the identification of the millennium as a time of particular CT focus was not driven by any intelligence.' 9/11 Classified Information Ithere was focus on the millennium as a high-threat time.

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The CIA high-level group started meeting less frequently because relations improved with the military (U.S. Special Operations Command), NSA, NIMA, parts of the Joint Chiefs of Staff, the Defense Intelligence Agency' 9/11 Cl assified Information I U) THE CONCEPT OF "CENTERS"

(U) Only in CIA can a center be created and then there is a fight about which directorate the center should be in. CNC succeeded (it was in the DI) because he ignored the DI and had relations with the Deputy Director of Operations. He went to DO staff meetings.

(U) Why put a center in any directorate? He saw himself as working for the DCI. A center needs to be under a directorate because that is how resources flow. Centers were getting their own career tracks.

(U) Centers take a lot of work to create and are very expensive. Also, giving centers operational control conflicts with the responsibility of the chiefs of station to know what can and cannot be done in their specific areas. Functional areas should have more say, but regional areas can be eliminated.

(U) COMMUNITY MANAGEMENT AND THE QUESTION OF A DIRECTOR OF NATIONAL INTELLIGENC (DNI)

(U) The only authority that the DCI has is because he is Director of the CIA and because he can put bodies on the target. Creating a DNI (meaning separating the DCI from CIA Director) would be works than creating a drug czar. If the Defense Department's intelligence agencies still report to the Secretary of Defense, then the DNI has no real power. He challenged us to name a matrix management model that actually works in practice. Matrix management is fundamentally ineffective.

(UI 911

IS) The fact that 911 happened was an intelligence failure. CIA is in the business of thwarting terrorists but did not. But there is probably no smoking gun. We did not have the sources to tell us what they were planning. Would analysis have guessed it right? If analysis had guessed it right, no one would have acted on it. Without no more than analysis, no one would have taken action.

(U) As for lessons from the private sector, he was looking at these lessons when he was in government. IT is not a cost center but rather an enabler. But CIA is not taking advantage of industry's IT capabilities. Doing so would free up CIA resources. CIA is wrestling with how to pay for performance. This was tried in 1998. In general, CIA is risk-averse in the managerial world.

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