On 22 January 1946, Truman signed an executive order forming a Central Intelligence Group (CIG) modeled after the OSS. Its mission was to provide analysis and coordination of information about foreign threats and to undertake advantageous policy initiatives. Truman signed the National Security Act on 26 July 1947, replacing the CIG with the new CIA as an independent agency operating within the Executive Office.
Truman appointed legendary OSS spymaster William "Wild Bill" Donovan to serve as the first CIA director. The CIA's primary function was to advise the National Security Council (NSC) on intelligence matters and make recommendations for coordination of intelligence activities. To accomplish these goals, the CIA was to correlate, evaluate, and disseminate intelligence and perform other services in accordance with NSC directives. Because Congress was vague in defining the CIA's mission, broad interpretation of the act provided justification for subsequent covert operations, although the original intent was only to authorize espionage. The CIA director was responsible for reporting on intelligence activities to Congress and the president. Power over the budget and staffing only of the CIA meant that no director ever exerted central control over the other twelve government entities in the U.S. intelligence community.
Known to insiders as "The Agency" or "The Company," the CIA consisted of four directorates. The Directorate of Operations (DO) supervised official and nonofficial agents in conducting human intelligence collection, covert operations, and counterintelligence. The DO was divided into geographic units and also contained the Center for Counterterrorism. The Directorate of Administration managed the CIA's daily administrative affairs and housed the Office of Security (OS). Created in 1952, the Directorate of Intelligence conducted research in intelligence sources and analysis of the results. It produced the "President's Daily Brief" and worked with the National Intelligence Council in preparing estimates and studies. The Directorate of Science and Technology, created in 1963, was responsible for development and operation of reconnaissance aircraft and satellites, operation and funding of ground stations to intercept Soviet missile telemetry, and analysis of foreign nuclear and space programs. It also operated the Foreign Broadcast Information Service (FBIS), which monitored and analyzed all foreign media outlets.
During its first years, the CIA had difficulty prevailing in bureaucratic battles over authority and funding. For example, the State Department required CIA personnel abroad to operate under a U.S. ambassador. Walter Bedell Smith, who replaced Donovan in 1950, was an effective director, but the CIA's power increased greatly after Allen W. Dulles, brother of Secretary of State John Foster Dulles, became director in 1953. An 80 percent increase in the agency's budget led to the hiring of 50 percent more agents and a major expansion of covert operations.
The CIA played a key role in the overthrow of allegedly radical governments in Iran in 1953 and Guatemala in 1954. With the advice of CIA operative Edward G. Lansdale, Philippine Secretary of National Defense Ramon Magsaysay during 1950–1954 crushed the Hukbalahap uprising in his country. CIA agents in South Vietnam infiltrated the Michigan State University Advisory Group that trained police and administrators during 1955–1962 as a basis for nation building. In Laos, the CIA operated Air America and supported rightist politicians, while Donovan, who became U.S. ambassador to Thailand, organized Thai paramilitary units to fight communist forces in neighboring countries.
President John F. Kennedy lost confidence in the CIA after the disastrous Bay of Pigs invasion, which failed to oust Cuba's Fidel Castro in 1961. The CIA nonetheless continued to devise imaginative but somewhat improbable schemes to assassinate or discredit Castro, efforts suspended during the Cuban Missile Crisis. In 1961, however, a Soviet military intelligence (GRU) officer began providing the CIA with information on Soviet strategic capabilities, nuclear targeting policies, and medium-range ballistic missiles that would prove critical in the 1962 Cuban Missile Crisis. The CIA also penetrated the Soviet Foreign Ministry, the Defense Ministry and General Staff, the GRU, and the Komitet Gosudarstvennoi Bezopasnosti (KGB). But its covert activities—especially its operations to kill Castro and its involvement in the murders of South Vietnam's Ngo Dinh Diem and later the Congo's Patrice Lumumba—soon caused much of the world community to view the agency as a sinister force. Although the agency instigated a rebellion in Indonesia that failed to topple Sukarno's regime in 1958, claims that it engineered his ouster in 1965 were false.
As direct American military action in Indochina grew, covert operations became less important, but by 1968 they witnessed a resurgence in the Phoenix Program that called for assassination of communist operatives. Debate continues over CIA involvement in the 1970 coup in Cambodia but not on its role in ousting Chile's Salvador Allende in 1973.
In 1975 public revelations of CIA assassination plots and an illegal operation to spy on American citizens protesting the Vietnam War led to the creation of the President's Intelligence Oversight Board as well as an Intelligence Committee in each house of Congress. In 1977, President Jimmy Carter increased oversight of the CIA and reduced its budget but reversed course after the 1979 Soviet invasion of Afghanistan. Meanwhile, the CIA had failed to predict the 1979 rebellion overthrowing Mohammad Reza Shah Pahlavi of Iran.
During the presidency of Ronald Reagan, the CIA used its renewed power and clout to undermine communist regimes worldwide, providing support for Afghan rebel forces that included Osama bin Laden. Ignoring statutory limits, the CIA also participated in the secret sale of arms to Iran and used the proceeds to fund covert actions against Nicaragua's leftist government. In 1991 Congress passed a new oversight law to prevent another Iran-Contra Affair.
In 1991, the CIA correctly forecast a coup against Soviet leader Mikhail Gorbachev. But the sudden collapse of the Soviet Union beginning in August 1991 came as a complete surprise. Two-and-a-half years later, in February 1994, the arrest of agent Aldrich H. Ames for selling secrets for many years to the Soviets and compromising operatives provided critics with more evidence to back charges that the CIA had prolonged rather than helped to win the Cold War.
James I. Matray
Jeffreys-Jones, Rhodri. The CIA and American Democracy. 2nd ed. New Haven, CT: Yale University Press, 1998.; Prados, John. Presidents' Secret Wars: CIA and Pentagon Covert Operations from World War II through the Persian Gulf. Chicago. IL: Ivan R. Dee, 1996.; Ranelagh, John. The Agency: The Rise and Decline of the CIA, from Wild Bill Donovan to William Casey. New York: Simon and Schuster, 1986.; Woodward, Bob. Veil: The Secret Wars of the CIA, 1981–1987. New York: Simon and Schuster, 1987.