Break Point

By George Friedman

A government has been formed in Iraq. It is
a defective government, in the sense that it does not yet have a defense or
interior minister. It is an ineffective government, insofar as the ability
to govern directly is at this point limited institutionally, politically and
functionally. Ultimately, what exists now is less a government than a
political arrangement between major elements of Iraq's three main ethnic
groups. And that is what makes this agreement of potentially decisive
importance: If it holds, it represents the political foundation of a regime.


If it holds.

If it holds, the rest is almost easy. If it
doesn't hold, the rest is impossible. Therefore, the fate of this political
arrangement will define the future of Iraq and, with that, the future of the
region -- and in some ways, the future of the American position in the
region. It is not hyperbole to say that everything depends on this deal.


The deal that has been shaped is about two things: power and money.
First, it addresses the composition of power in Iraq -- defining the Shia as
the dominant group, based on demographics, the Kurds next and the Sunnis as
the smallest group. At the same time, it provides institutional and
political guarantees to the Sunnis that their interests will not simply be
ignored and that they will not be crushed by the Shia and Kurds. In terms of
money, we are talking about oil. Iraq's oil fields are in the south,
unquestionably in Shiite country, and in the north, in the borderland
between Kurd and Sunni territory. One of the points of this arrangement is
to assure that oil revenues will not be controlled on a simply regional
basis, but will be at least partially controlled by the central government.
Therefore, at least some of that money will go to the Sunnis, regardless of
what arrangements are made on the ground with the Kurds.

The Sunnis
got this deal for a simple reason: Their insurgency made them impossible to
ignore. First, the insurgency forced the Americans to recognize that their
initial inclination, de-Baathification, also meant de-Sunnification of Iraq,
and that the price for that would be painful. Second, the insurgency
threatened Iraq with partition and civil war. Any such partition would have
made Iran the dominant power in the region, something that would be
unacceptable to Saudi Arabia and the other governments in the Persian Gulf.
The Saudis were no friends of the Baathists in Iraq, but the thought of
partition -- and of only the United States to provide security against
Iranian influence -- forced them to mobilize Arab support for the Sunnis.
The insurgency was the Sunni leaders' prime bargaining chip, and they played
it well.

Now there is a twofold question that must be faced. First, in
response to the deal that has been made, can the Sunni political leadership
move decisively to end the insurgency, or at least reduce its tempo? And
second, is it willing to do so? The implications are significant: If the
insurgency continues, the entire political agreement will cease to be
meaningful to the Americans, who are sponsoring and, in effect, guaranteeing
the deal. Moreover, if Sunni insurgents continue to target Iraqi Shia, the
quietly vicious counterattacks that the Shia have carried out will surge.
The Sunnis blow things up; the Shia come quietly and kill their enemies. If
the sectarian violence continues, it will mean there is no political
foundation, no government and no change in the situation in Iraq. In that
case, the United States will have to choose between remaining and mitigating
a chaotic situation, or leaving and letting events run their course -- which
also means leaving an open field for Iranian ambitions. From the American
point of view, this agreement has to work. And everything depends on the
Sunnis.

Core Assumptions and Brass Tacks

Insurgencies
don't simply float in the air. It isn't a question of just loading a car
with explosives or setting up an improvised explosive device. Someone has to
obtain, store and distribute explosives. Someone has to train people to build
the device. Someone has to communicate with others without getting caught.
Someone has to recruit new insurgents without being detected, and without
allowing enemy agents to slip in. Someone has to provide security. And all
of this has to happen somewhere, in a geographic space.

That space
has been, for the most part, the villages and urban neighborhoods of the
Sunni Triangle. The insurgency has been rooted there, the insurgents are
known and their presence is protected in those neighborhoods. They are
provided with food and shelter, and the village and neighborhood network
warns them of enemy approaches. Mao Zedong said once that revolutionaries
must be to the people as the tongue is to the teeth: If the support of the
population is withdrawn, the revolution collapses.

At the heart of
this political settlement, then, is the expectation that -- in return for
political and financial concessions -- the Sunni leadership will order the
insurgents they do control to cease attacks, and will order the population
to withdraw support from the insurgents they don't control. In other words,
the Baathist and nationalist insurgents who are linked to the Sunni
leadership would halt operations, while the jihadists led by Abu Musab
al-Zarqawi -- who have their own set of needs and goals in the region --
would either halt operations themselves or have the shield of the Sunni
community withdrawn. The insurgency would not just end suddenly, but would
decline fairly rapidly as recalcitrant troops were squeezed out of the Sunni
region.

Given this dynamic, we would expect a surge of violence from
elements who oppose the political agreement in Baghdad and see themselves
being squeezed out. Their hope will be that the violence, particularly
against the Shia, will trigger a Shiite response and cause the settlement to
collapse. But the success or failure of that gamble will hinge on the answer
to the core question: To what extent does the Sunni leadership control the
insurgents? We assume that it is not total control, and we assume that there
are elements among the Sunni leadership who oppose the political deal.


But the central assumption is that the bulk of the leadership has
bought into the deal and, therefore, that the bulk of the insurgents will
follow their lead. There also is an assumption that the bulk of the Sunni
population will follow these leaders and withdraw support for remaining
insurgents. Now, these insurgents could enjoy some lingering support among
the public, and they could coerce others into protecting them. This would
lead to a short but intense struggle within the Sunni community that, given
the correlation of forces, ultimately would result in the defeat of the
diehards. They would hang on -- waging a campaign that would be painful but
not decisive, increasingly marginalized and ineffective.

This is the
likely path, but it assumes two things. The first is that the political wing
that has negotiated this agreement is able to assert control over the bulk of
the Sunni population. In other words, one assumes that the Americans and Shia
have been negotiating with the right people. If not, then the political
settlement will not end the insurgency, and the violence will continue. We
do not see this as the likely problem, however: The leadership ought to be
able to deliver the bulk of the Sunni community and therefore reduce the
fighting, if they want to.

The real question is whether they want to.
As we said before, the insurgency is the only bargaining chip the Sunnis
have. It was because of the insurgency that the Sunnis were not completely
bypassed by the Americans and Shia. If they stand down but retain the
ability to resume their offensive, the political deal can hold. But if, by
standing down, the Sunnis demoralize their forces or permit intelligence on
the location of weapons caches and personnel to diffuse to the Americans or
Shia over time, the Sunnis could find themselves in a position from which
they no longer can enforce the agreement.

So the key calculation for
the Sunnis is this: If they stand down, can they maintain a credible force
that is ready to serve their political purposes?

The demand that
Iraq's various militias disarm has been focused on the Shiite militias. But
at the end of the day, the Shia are the dominant force in the Iraqi
government: If their militias were integrated into the military and security
structures, they still would be available to serve Shiite political purposes.
If, on the other hand, the Sunni militias were disarmed or integrated into
the Iraqi military and security structures, they would lose their force and
their leverage.

Obviously, this is why the defense and interior
ministers have not yet been designated. It is not really about the
individuals to be named, as their power will be circumscribed by the
Cabinet. The issue is not the ministers themselves, but how the ministries
will be run. More accurately, since it is these ministries that will control
Iraq's military and internal security forces, the question that must be
answered is how these forces will be configured. The Shia do not need
guarantees. The Sunnis do. So the architecture of these ministries -- and
the constitution of military and police units -- has everything to do with
Sunni security.

There is a chicken-or-egg problem. The Sunnis do not
want to begin standing down their forces until structural guarantees are in
place. The Shia -- and in this case, the Americans -- are not going to give
those guarantees until they see that the Sunnis can and will control the
insurgents. They will not both confirm the Sunni position in the ministries
and continue to endure the insurgency. They want to see steps toward the
insurgency being controlled. The naming of the ministers is more symbolic
than real, but the ministries themselves are very real. The Sunnis cannot be
both in the army and making policy and still be waging an
insurgency.

Other Considerations

There also is a real
question as to whether the Shia want the agreement to work. Certainly the
Iranians would like another go-around in order to increase not only the
power of the Shia in general, but of those Iraqi Shia who are close to the
Iranians. A civil war would increase Shiite dependence on the Iranians,
since they would need weapons and political support. The Iraqi Shia do not
seem to have much appetite for Iranian ambitions at the moment. They will
dominate the government; they do not need to obliterate the Sunnis at the
cost of a long civil war. They have most of what they want. Still, there are
those in the Shiite community who are ambitious to displace the current power
structure, and who see civil war as the way to achieve this. They are the
ones who will continue with operations against the Sunni community, hoping
to prevent a stand-down by the insurgents. The Shiite leaders, therefore,
have a similar (though smaller) problem to the Sunnis'. They can contain the
more aggressive and ambitious Shia. But Iran's ability to destabilize their
community is the wild card.

This points up another dynamic as well.
The United States and Iran have been engaged in a seemingly incomprehensible
round of meetings, non-meetings, threats, offers of accommodation and so on
over Iraq and nuclear weapons. Each side has made strange noises, given
contemptuous shrugs and pulled fierce faces at the other. One would think
that war was imminent. In fact, the opposite is true: Each is trying to
avoid war by appearing fearsome and slightly nuts. The Americans want to
scare the Iranians away from destabilizing Iraq's Shiite community. The
Iranians want to make one last run at the Americans to maximize the power of
the Shia -- and particularly that of their allies -- in the Iraqi government.


The Americans obviously want a settlement. And the Iraqi Shia want
one. They are less dependent on Tehran than it might appear, and it seems
they are prepared to follow through. The Sunnis, all doubts and worries
aside, have every reason to want a settlement, and it is unlikely that they
will get a better one. Certainly there are Sunnis who don't want a
settlement, but it seems to us that they can be dealt with if the Sunni
leaders want to deal with them. At this point, the only alternative to this
settlement is civil war -- and it is hard to see a major player who benefits
from a civil war, even if plenty of minor ones might.

For the
Americans, the deal at hand is the exit strategy from the war. As violence
declines, the United States can draw down its forces and begin concentrating
on the question of what it plans to do in Afghanistan, the next item on the
agenda. On the other hand, if the agreement in Baghdad blows apart, there is
little point in American forces remaining in Iraq. With 130,000 troops, the
United States could not contain a civil war; the forces could only take
casualties, while achieving nothing. The ideal outcome would be a drawdown
culminating in a residual force of, say, 40,000 troops based outside of
heavily populated regions.

This goal is not unreachable at this
point. It is possible to recoup the poorly played American hand, to some
extent. But the fate of the political deal is not within U.S. control. The
outcome depends, first, on the Sunni leadership and its desire and ability
to suppress the insurgency. It depends, second, on the Iraqi Shiite leaders'
ability to dominate their community and resist destabilization by Iran. And
it depends, finally, on the Iranians accepting the current situation without
surging forces covertly into Iraq.

In other words, the United States
has become, to a great extent, a bystander. Washington can make whatever
guarantees it wants, but the calculus by all sides now is whether they can
secure their interests with their own resources. At this point, the United
States is growing less and less relevant to the outcome in Iraq, though it
remains urgently interested in what that outcome will be.

If we had
to guess, we would say that the political arrangement should work, more or
less. But we don't have to guess. It is now nearly Memorial Day. The
violence in Iraq will surge, but by July 4 there either will be clear signs
that the Sunnis are controlling the insurgency -- or there won't. If they
are controlling the insurgency, the United States will begin withdrawing
troops in earnest. If they are not controlling the insurgency, the United
States will begin withdrawing troops in earnest. Regardless of whether the
deal holds, the U.S. war in Iraq is going to end: U.S. troops either will
not be needed, or will not be useful.

Thus, we are at a break point
-- at least for the Americans.

Send questions or comments on this article to analysis@stratfor.com.

Civil Liberties and National Security

By George Friedman

USA Today published a story last week
stating that U.S. telephone companies (Qwest excepted) had been handing over
to the National Security Agency (NSA) logs of phone calls made by American
citizens. This has, as one might expect, generated a fair bit of controversy
-- with opinions ranging from "It's not only legal but a great idea" to "This
proves that Bush arranged 9/11 so he could create a police state." A fine
time is being had by all. Therefore, it would seem appropriate to pause and
consider the matter.

Let's begin with an obvious question: How in
God's name did USA Today find out about a program that had to have been
among the most closely held secrets in the intelligence community -- not
only because it would be embarrassing if discovered, but also because the
entire program could work only if no one knew it was under way? No criticism
of USA Today, but we would assume that the newspaper wasn't running covert
operations against the NSA. Therefore, someone gave them the story, and
whoever gave them the story had to be cleared to know about it. That means
that someone with a high security clearance leaked an NSA
secret.

Americans have become so numbed to leaks at this point that
no one really has discussed the implications of what we are seeing: The
intelligence community is hemorrhaging classified information. It's possible
that this leak came from one of the few congressmen or senators or staffers
on oversight committees who had been briefed on this material -- but either
way, we are seeing an extraordinary breakdown among those with access to
classified material.

The reason for this latest disclosure is
obviously the nomination of Gen. Michael Hayden to be the head of the CIA.
Before his appointment as deputy director of national intelligence, Hayden
had been the head of the NSA, where he oversaw the collection and
data-mining project involving private phone calls. Hayden's nomination to
the CIA has come under heavy criticism from Democrats and Republicans, who
argue that he is an inappropriate choice for director. The release of the
data-mining story to USA Today obviously was intended as a means of shooting
down his nomination -- which it might. But what is important here is not the
fate of Hayden, but the fact that the Bush administration clearly has lost
all control of the intelligence community -- extended to include
congressional oversight processes. That is not a trivial point.

At
the heart of the argument is not the current breakdown in Washington, but
the more significant question of why the NSA was running such a collection
program and whether the program represented a serious threat to liberty. The
standard debate is divided into two schools: those who regard the threat to
liberty as trivial when compared to the security it provides, and those who
regard the security it provides as trivial when compared to the threat to
liberty. In this, each side is being dishonest. The real answer, we believe,
is that the program does substantially improve security, and that it is a
clear threat to liberty. People talk about hard choices all the time; with
this program, Americans actually are facing one.

A Problem of
Governments

Let's begin with the liberty question. There is no
way that a government program designed to track phone calls made by
Americans is not a threat to liberty. We are not lawyers, and we are sure a
good lawyer could make the argument either way. But whatever the law says,
liberty means "my right to do what I want, within the law and due process,
without the government having any knowledge of it." This program violates
that concept.

The core problem is that it is never clear what the
government will do with the data it collects.

Consider two examples,
involving two presidential administrations.

In 1970, Congress passed
legislation called the Racketeer-Influenced and Corrupt Organizations (RICO)
Act that was designed explicitly to break organized crime groups. The special
legislation was needed because organized crime groups were skilled at making
more conventional prosecutions difficult. The Clinton administration used
the RICO Act against anti-abortion activists. From a legal point of view,
this was effective, but no one had ever envisioned the law being used this
way when it was drafted. The government was taking the law to a place where
its framers had never intended it to go.

Following 9/11, Congress
passed a range of anti-terrorism laws that included the PATRIOT Act. The
purpose of this was to stop al Qaeda, an organization that had killed
thousands of people and was thought to be capable of plotting a nuclear
attack. Under the same laws, the Bush administration has been monitoring a
range of American left-wing groups -- some of which well might have
committed acts of violence, but none of which come close to posing the same
level of threat as al Qaeda. In some technical sense, using anti-terrorism
laws against animal-rights activists might be legitimate, but the framers of
the law did not envision this extension.

What we are describing here
is neither a Democratic nor a Republican disease. It is a problem of
governments. They are not particularly trustworthy in the way they use laws
or programs. More precisely, an extraordinary act is passed to give the
government the powers to fight an extraordinary enemy -- in these examples,
the Mafia or al Qaeda. But governments will tend to extend this authority
and apply it to ordinary events. How long, then, before the justification
for tracking telephone calls is extended to finding child molesters,
deadbeat dads and stolen car rings?

It is not that these things
shouldn't be stopped. Rather, the issue is that Americans have decided that
such crimes must be stopped within a rigorous system of due process. The
United States was founded on the premise that governments can be as
dangerous as criminals. The entire premise of the American system is that
governments are necessary evils and that their powers must be circumscribed.
Americans accept that some criminals will go free, but they still limit the
authority of the state to intrude in their lives. There is a belief that if
you give government an inch, it will take a mile -- all in the name of the
public interest.

Now flip the analysis. Americans can live with child
molesters, deadbeat dads and stolen car rings more readily than they can live
with the dangers inherent in government power. But can one live with the
threat from al Qaeda more readily than that from government power? That is
the crucial question that must be answered. Does al Qaeda pose a threat that
(a) cannot be managed within the structure of normal due process and (b) is
so enormous that it requires an extension of government power? In the long
run, is increased government power more or less dangerous than al Qaeda?


Due Process and Security Risks

We don't mean to be
ironic when we say this is a tough call. If all that al Qaeda can do was
what they achieved on 9/11, we might be tempted to say that society could
live more readily with that threat than with the threat of government
oppression. But there is no reason to believe that the totality of al
Qaeda's capabilities and that of its spin-off groups was encapsulated in the
9/11 attacks. The possibility that al Qaeda might acquire and use weapons of
mass destruction, including nuclear devices, cannot be completely dismissed.
There is no question but that the organization would use such weapons if they
could. The possibility of several American cities being devastated by nuclear
attacks is conceivable -- and if there is only one chance in 100 of such an
event, that is too much. The fact is that no one knows what the
probabilities are.

Some of those who write to Stratfor argue that
the Bush administration carried out the 9/11 attacks to justify increasing
its power. But if the administration was powerful enough to carry out 9/11
without anyone finding out, then it hardly seems likely that it needed a
justification for oppression. It could just oppress. The fact is that al
Qaeda (which claims the attacks) carried out the attacks, and that attacks
by other groups are possible. They might be nuclear attacks -- and stopping
those is a social and moral imperative that might not be possible without a
curtailment of liberty.

On both sides of the issue, it seems to us,
there has developed a fundamental dishonesty. Civil libertarians demand that
due process be respected in all instances, but without admitting openly the
catastrophic risks they are willing to incur. Patrick Henry's famous
statement, "Give me liberty or give me death," is a fundamental premise of
American society. Civil libertarians demand liberty, but they deny that by
doing so they are raising the possibility of death. They move past the tough
part real fast.

The administration argues that government can be
trusted with additional power. But one of the premises of American
conservatism is that power corrupts, and absolute power corrupts absolutely.
Conservatives believe that the state -- and particularly the federal
government -- should never be trusted with power. Conservatives believe in
"original sin," meaning they believe that any ruler not only is capable of
corruption, but likely to be corrupted by power. The entire purpose of the
American regime is to protect citizens from a state that is, by definition,
untrustworthy. The Bush administration moves past this tough part real fast
as well.

Tough Discussions

It is important to consider
what the NSA's phone call monitoring program was intended to do. Al Qaeda's
great skill has been using a very small number of men, allowing them to
blend into a targeted country, and then suddenly bringing them together for
an attack. Al Qaeda's command cell has always been difficult to penetrate;
it consists of men who are related or who have known each other for years.
They do not recruit new members into the original structure. Penetrating the
organization is difficult. Moreover, the command cell may not know details of
any particular operation in the field.

Human intelligence, in order
to be effective, must be focused. As we say at Stratfor, we need a name, a
picture and an address for the person who is likely to know the answer to an
intelligence question. For al Qaeda's operations in the United States, we do
not have any of this. The purpose of the data-mining program simply would
have been to identify possible names and addresses so that a picture could
be pieced together and an intelligence operation mounted. The program was
designed to identify complex patterns of phone calls and link the
information to things already known from other sources, in order to locate
possible al Qaeda networks.

In order to avoid violating civil
liberties, a warrant for monitoring phone calls would be needed. It is
impossible to get a warrant for such a project, however, unless you want to
get a warrant for every American. The purpose of a warrant is to investigate
a known suspect. In this case, the government had no known suspect.
Identifying a suspect is exactly what this was about. The NSA was looking
for 10 or 20 needles in a haystack of almost 300 million. The data-mining
program would not be a particularly effective program by itself -- it
undoubtedly would have thrown out more false positives than anyone could
follow up on. But in a conflict in which there are no good tools, this was a
tool that had some utility. For all we know, a cell might have been located,
or the program might never have been more than a waste of time.

The
problem that critics of the program must address is simply this: If data
mining of phone calls is objectionable, how would they suggest identifying
al Qaeda operatives in the United States? We're open to suggestions. The
problem that defenders of the program have is that they expect to be trusted
to use the data wisely, and to discipline themselves not to use it in pursuit
of embezzlers, pornographers or people who disagree with the president. We'd
love to be convinced.

Contrary to what many people say, this is not
an unprecedented situation in American history. During the Civil War --
another war that was unique and that was waged on American soil -- the North
was torn by dissent. Pro-Confederate sentiment ran deep in the border states
that remained within the Union, as well as in other states. The federal
government, under Lincoln, suspended many liberties. Lincoln went far beyond
Bush -- suspending the writ of habeas corpus, imposing martial law and so on.
His legal basis for doing so was limited, but in his judgment, the survival
of the United States required it.

Obviously, George W. Bush is no
Lincoln. Of course, it must be remembered that during the Civil War, no one
realized that Abraham Lincoln was a Lincoln. A lot of people in the North
thought he was a Bush. Indeed, had the plans of some of his Cabinet members
-- particularly his secretary of war -- gone forward after his
assassination, Lincoln's suspension of civil rights would be remembered even
less than it is now.

The trade-off between liberty and security must
be debated. The question of how you judge when a national emergency has
passed must be debated. The current discussion of NSA data mining provides a
perfect arena for that discussion. We do not have a clear answer of how the
debate should come out. Indeed, our view is that the outcome of the debate
is less important than that the discussion be held and that a national
consensus emerge. Americans can live with a lot of different outcomes. They
cannot live with the current intellectual and political chaos.

Civil
libertarians must not be allowed to get away with trivializing the physical
danger that they are courting by insisting that the rules of due process be
followed. Supporters of the administration must not be allowed to get away
with trivializing the threat to liberty that prosecution of the war against
al Qaeda entails. No consensus can possibly emerge when both sides of the
debate are dishonest with each other and themselves.

This is a case
in which the outcome of the debate will determine the course of the war.
Leaks of information about secret projects to a newspaper is a symptom of
the disease: a complete collapse of any consensus as to what this war is,
what it means, what it risks, what it will cost and what price Americans are
not willing to pay for it. A covert war cannot be won without disciplined
covert operations. That is no longer possible in this environment. A serious
consensus on the rules is now a national security requirement.

Send questions or comments on this article to
analysis@stratfor.com.

The Intelligence Problem

By George Friedman

Porter Goss has been fired as director of
the CIA and is to be replaced by Gen. Michael Hayden -- who is now deputy to
Director of National Intelligence John Negroponte and formerly was director
of the National Security Agency (NSA). Viewed from beyond the Beltway -- and
we are far outside the Beltway -- it appears that the Bush administration is
reshuffling the usual intelligence insiders, and to a great extent, that is
exactly what is happening. But there is more: White House Chief of Staff
Joshua Bolten, having decided such matters as who the new press secretary
should be, has turned to what is a very real problem for President George W.
Bush: a vicious battle between the White House and the CIA.

The fight
is simply about who bears the blame for Iraq. The White House and the Defense
Department have consistently blamed the CIA for faulty intelligence on Iraqi
weapons of mass destruction and over the failure to predict and understand
the insurgency in Iraq. The CIA has responded by leaking studies showing
that its intelligence indeed was correct but was ignored by Bush and Defense
Secretary Donald Rumsfeld. The truth, as usual, lies somewhere in the middle.
There certainly were studies inside the CIA that were accurate on the subject
-- but given the thousands of people working for the agency, someone had to
be right. The question is not whether someone got it right, but what was
transmitted to the White House in then-Director George Tenet's briefings. At
this point, it really does not matter. There was a massive screw-up, with
plenty of blame to go around.

Still, it is probably not good for the
White House and the CIA to be in a vicious fight while a war is still going
on. The firing of Goss, who was a political
appointee brought in to bring the agency to heel, is clearly a concession
to the CIA, where he and his aides were hated (that is not too strong a
word.) Hayden at least is an old hand in the intelligence community, albeit
it at the NSA and not the CIA. Whether this is an attempt to placate the
agency in order to dam up its leaks to the press, or whether Bush is
bringing in the big guns to crush agency resistance, is unclear. This could
be a move by Rumsfeld to take CIA turf. But in many ways, these questions
are simply what we call "Washington gas" -- meaning something that is of
infinite fascination within Washington, D.C., but of no interest elsewhere
and of little lasting significance anywhere.

The issue is not who
heads the CIA or what its bureaucratic structure might be. The issue is, as
it has been for decades, what it is that the CIA and the rest of the
intelligence community are supposed to do and how they are supposed to do
it. On the surface, the answer to that is clear: The job of the intelligence
community, taken as a whole, is to warn the president of major threats or
changes in the international system. At least that appears to be the
mission, but the problem with that definition is that the intelligence
community (or IC) has never been good at dealing with major surprises,
threats and issues. Presidents have always accepted major failures on the
part of the IC.

Consider. The IC failed
to predict the North Korean invasion of South Korea. It failed to predict
Chinese intervention there. It failed to predict the Israeli-British-French
invasion of Suez in 1956. It failed to recognize that Castro was a communist
until well after he took power. It failed to predict the Berlin Wall. It
failed to predict or know that the Soviets had placed missiles in Cuba (a
discovery that came with U-2 overflights by the Air Force). It failed to
recognize the Sino-Soviet split until quite late. It failed to predict the
tenacity of the North Vietnamese in the face of bombing, and their
resilience in South Vietnam. The IC was very late in recognizing the fall of
the shah of Iran. It was taken by surprise by the disintegration of communism
in Eastern Europe and the Soviet Union. It failed to predict the intentions
of al Qaeda. And it failed in Iraq.

Historically, the American
intelligence community has been superb when faced with clearly defined
missions. It had the ability to penetrate foreign governments, to eavesdrop
on highly secure conversations, to know the intentions of a particular
foreign minister at a particular meeting. Given a clear mission, the IC
performed admirably. Where it consistently failed was in the amorphous
mission of telling the president what he did not know about something that
was about to change everything. When the IC was told to do something
specific, it did it well. When it was asked to tell the president what he
needed to know -- a broad and vague brief -- it consistently fell down.


This is why the argument going on between the CIA and the White
House/Defense Department misses the point. Bush well might have ignored or
twisted intelligence on Iraq's WMD. But the failure over Iraq is not the
exception, it is the rule. The CIA tends to get the big things wrong, while
nailing the lesser things time and again. This is a persistent and not
easily broken pattern, for which there are some fundamental
causes.

The first is that the IC sees its task as keeping its
customers -- the president and senior members of his administration --
happy. They have day-to-day requirements, such as being briefed for a
meeting with a foreign leader. The bread-and-butter work of the IC is the
briefing book, which tells a secretary of state what buttons to push at a
ministerial meeting. Ninety-nine percent of the taskings that come to the IC
concern these things. And the IC could get 99 percent of the task right; they
know that this minister is on the take, or that that minister is in a
terrible fight with a rival, or that some leader is dying. They do that over
and over again -- that is their focus. They are rarely rewarded for the risky
business of forecasting, and if they fail to forecast the invasion of South
Korea, they can still point to the myriad useful things at which they did
succeed.

When members of the IC say that no one sees the vital work
they do, they are right. And they are encouraged to do this work by their
customers. If they miss the fall of the Soviet Union, it is the
bread-and-butter work that keeps them going. If the nuts and bolts of
intelligence compete with the vital need of a government to be ready for the
unexpected, the nuts and bolts must win every time. The reason is simple: the
unexpected rarely happens, but meetings of the G-8 happen every year. The
system is built for the routine. It is hard to build a system for the
unexpected.

A second problem is size. The American intelligence
community is much too big. It has way too many resources. It is awash in
information that is not converted into intelligence that is delivered to its
customers. Huge organizations will lose information in the shuffle. The
bigger they are, the more they lose. Little Stratfor struggles to make sure
that intelligence flowing from the field is matched to the right analyst and
that analysts working on the same problem talk to each other, and it is
tough. Doing it with tens of thousands of sources and intelligence officers,
thousands of analysts and hundreds of briefers is a failure waiting to
happen. All of the databases dreamt of by all of the information technology
people in the IC cannot make up for total overload.

It can be argued
that there is no alternative. The United States has global interests and thus
must have global and massive resources. But the fact is that global interests
are not well-served by a system that is too large to function efficiently.
Whatever the need is, the reality is that managing the vast apparatus of the
IC is overwhelmingly difficult, to the point of failure. Moreover, the
management piece is so daunting that finding space to look for the
unexpected -- and transmit that finding efficiently to the customer -- has
been consistently impossible. The intelligence services of smaller countries
sometimes do much better at the big things than massive intelligence
services. The KGB was an example of intelligence paralysis due, among other
things, to size.

A third issue is the cult of sourcing. There is a
belief that a man on the ground is the most valuable asset there is. But
that depends on where he is on the ground and who he is. A man on the ground
can see hundreds of feet in any direction, assuming that there are no
buildings in the way. It always amuses us to hear that so-and-so spent three
years in some country -- implying expertise. We always wonder whether an
Iranian spending three years in Washington, D.C., would be regarded as an
expert around whom analysis could be built. Moreover, these three-year
wonders frequently start doing freelance analysis, overriding analysts who
have been studying a country for decades -- after all, they are "on the
ground." But a blond American on the ground in the Philippines is fairly
obvious, especially when he starts buying drinks for everyone, and the value
of his "intelligence" is therefore suspect. Sourcing is vital; so are the
questions of who, where and for how long.

The most significant
weakness of the cult of sourcing is that the most important events -- like
the Chinese intervention in Korea -- might be unreported, or -- like the
fall of the shah -- might not be known to anyone. These things happened, but
there was an intelligence collection failure in the first case; the second
failure stemmed not from a collection problem, but from a purely analytic
one. In any case, the lack of a source does not mean an event is not
happening; it just means there is no source. There is no question but that
sources are the foundation of intelligence -- but the heart of intelligence
is the ability to infer when there is no source.

Another problem is
the IC's obsession with security, compartmentalization and
counterintelligence. The Soviet Union's prime mission was to penetrate the
U.S. IC. Huge inefficiencies were, therefore, appropriately incurred in
order to prevent penetration. The compartmentalization of sensitive
information increases security, but it pyramids inefficiency. Al Qaeda is
not engaged in penetrating the IC. It is dangerous in a different way than
the Soviets were. Security and counterintelligence remain vital, but
shifting the balance to take current realities into account also is vital.
Intelligence work involves calculated risk. The current system not only
keeps smart and interesting people out of jobs, but more important, it keeps
them from access to the information they need to make the smart inferences
that are so vital. That would seem to be too high a price to pay in the
current threat environment. Information on China can be compartmentalized;
information on the Muslim world could be treated differently.

The IC
wants consistent messaging. They want to produce one product that speaks
with a single coherent voice. The problem is that the world is much messier
than that. Giving a president the benefit of the official CIA position on a
matter is useful, but not as useful as allowing him to see the disputes,
discomfort and doubts stemming from the different schools of thought. Those
disagreements are sometimes treated as embarrassing by the IC -- but honest,
public self-criticism builds confidence. Stratfor -- and we are not comparing
our tiny outfit to the IC, with its massive responsibilities -- publishes an
annual report card with our forecasts, specifying where we succeeded and
failed. We may as well; our readers and clients know anyway.

This
may not be what the president wants, of course, and Negroponte and Hayden
will want to give him what he wants. But the head of an intelligence agency
is like a doctor: He must give the patient what he needs and try to make it
look like what the patient wants. In the end, it doesn�t matter what you do,
as Porter Goss has just found out. Negroponte and Hayden will probably lose
their jobs anyway -- through resigning or being sacked, or through Bush's
second term ending. Even if they are lucky, their jobs won't last much more
than two years. There is no percentage in hedging, when you think of it that
way.

Perhaps the single greatest weakness of the IC is its can-do
attitude. It cannot do everything that it is being asked to do -- and by
trying, it cannot do the most important things that need to be done. It has
had, as its mission, covering the world and predicting major events for the
president. It has failed to do so on major issues since its founding,
finding solace in substantial success on lesser issues. But it is possible
that the bandwidth of the IC, already sucked up by massive management
burdens, is completely burned up by the lesser issues. It may be that the
briefing book to the president for his next meeting with the president of
Paraguay or Botswana will be thinner, or he might just have to wing it. The
republic will survive that. The focus must be on the things that count.


Rethinking why there is an intelligence community and how it does
its job is the prerequisite for Hayden and Negroponte to be successful. We
do not believe for a minute that they will do so. They don't have enough
time in office, they have too many meetings to attend, they have too many
divergent views to reconcile into a single coherent report. Above all, the
CIA has to be prepared to battle the real enemy, which is the rest of the
intelligence community -- from the Defense Intelligence Agency to the FBI.
And, of course, the odd staffer at the White House.

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