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Spy vs. Spy

The secret battle to control the intelligence budget.

Most Americans only ever hear about the director of national intelligence (DNI) when the person who holds the job happens to stick his foot in his mouth. Take Dennis Blair, President Obama’s first pick for the position, who landed in hot water when he proposed Chas Freeman—a former adviser to a Chinese national oil company who asserted that U.S. interests were being subverted by Israel’s Likud Party—to chair the National Intelligence Council. Blair made headlines again last February when he controversially asserted that the intelligence community could kill an American citizen who was involved in terrorism, provided it had obtained special permission.

Blair’s successor, former Air Force Lieutenant General James Clapper, took his turn in the spotlight last week, when he testified to the Senate Armed Services Committee that Muammar Qaddafi would likely prevail against rebel forces in Libya. This statement did not mesh well with President Obama’s previous call for Qaddafi to leave office, and Clapper was swiftly slapped down by National Security Adviser Tom Donilon, who said his assessment was “static and one-dimensional.”

With Clapper in the news, it seems worth resurrecting a question that has long dogged the DNI position: Why, exactly, is it needed? Since being created by Congress in 2004 as a response to the intelligence failures of September 11, 2001, the post has frequently looked like a superfluous layer within the U.S. national security apparatus, one without a true mandate or turf of its own. As it happens, Clapper has been working behind the scenes to fix this—to expand the power of the DNI in a way that could finally provide the office with a compelling reason to exist.


The idea behind the creation of the DNI’s office seven years ago was that it would set the top-secret $80 billion-plus intelligence budget, thus coordinating the activities of the 16 other agencies that make up the U.S. intelligence community—and stopping them from operating at cross purposes. At the last minute, however, California Republican Representative Duncan Hunter offered an amendment stating that the DNI’s authority would not impinge on the powers of Cabinet-level secretaries. This effectively gave the defense secretary control over current-year spending for major organizations like the National Security Agency (NSA). And so, while the DNI helps establish the intelligence agencies’ budgets and priorities, the intelligence budget resides at the Pentagon’s comptroller. “The whole problem with the DNI is that he was given lots of responsibility, but he doesn’t have the authority,” says Christopher “Kit” Bond, the former Republican senator from Missouri who acted as vice chairman of the Senate Select Committee on Intelligence.

Ironically, one of the people known to have undermined the DNI’s authority was none other than James Clapper. Before being confirmed as DNI in August of last year, Clapper was the undersecretary of defense for intelligence (USDI). According to four current and former intelligence officials, Clapper defended his budgetary turf the way a lioness defends her cubs. Through the years, DNIs sought approval from Congress to reallocate funds within the black budgets during the current appropriations year. Clapper blocked them, asserting that it was for the Pentagon to negotiate such changes. By this logic, the DNI would be unable to shift money to respond to the outbreak of war in Libya without Pentagon approval.

Bond called Clapper a “very dedicated career military officer,” but added: “He could be stubborn. He had his views. He was a strong personality with whom to deal, let’s put it that way.” For instance, in 2010, before Clapper took his current position, he provided Democrats on the Senate Armed Services Committee detailed objections to the Senate’s intelligence authorization bill—going behind the backs of both the DNI and the Intelligence Committee that wrote the bill.

In one sense, it was strange that Obama nominated a man who had undercut the DNI’s authority to that very post. In another sense, though, it was an inspired choice. On November 2, Clapper told a crowd at an intelligence conference in New Orleans that he had reached a “conceptual agreement” with Defense Secretary Robert Gates to extract the classified $53.1 billion National Intelligence Program (NIP) budget from the Pentagon’s comptroller and move it to an independent account controlled by the DNI by 2013. The NIP covers everything from high-tech spy satellites to maintenance for CIA headquarters. The move, Clapper said, would give the DNI “a lot more authority and insight and transparency” when it comes to the NIP budget. (The DNI’s spokeswoman, Jamie Smith, said that Clapper had advocated this change earlier: “In February 2009, as USDI James Clapper sent a letter to the [Office of the Secretary of Defense] comptroller asking him for a plan to exclude the NIP from the Defense Military Budget.”)

This move is not a done deal. “This is like removing a kidney,” Michael Hayden, a former director of the CIA and the NSA, told me. “There will be all sorts of Defense Department lawyers guarding the secretary of defense’s authority in this process.” Even if it happens, the Pentagon appears to be insisting that it won’t upend the existing power structure. Last month, in response to written questions from the Senate Armed Services Committee, Michael Vickers, the nominee to replace Clapper at the Pentagon, insisted that moving the NIP would “not weaken the authority of the secretary of defense over the intelligence components of the Department of Defense.”

But Vickers may be underselling the impact of this kind of change. If Clapper does wrest control of the NIP budget from the Pentagon, it will likely mean that the DNI is finally assuming its intended place as the leader of the intelligence community. Whether he succeeds will almost certainly depend on how well he can out-maneuver the Department of Defense in bureaucratic fights over the black budget in the coming months. In this battle, he will have one advantage that his predecessors never enjoyed: He won’t have to fight James Clapper.

Eli Lake is a contributing editor for The New Republic. This article originally ran in the April 7, 2011, issue of the magazine.