Intelligence Agencies: Adapting to New Threats

The end of the Cold War in 1989 disori­entated intelligence agencies across the world. Accustomed to monitoring security threats against a backdrop of Great Power rivalry, they suddenly had to redefine organizational missions. In the West, such agencies no longer had a ‘main enemy’ against which to focus intelligence collec­tion, and began adding new issues to their list of intelligence targets. The net effect was to stretch intelligence resources, in both collection and analysis, to an extent that made coverage superficial. Accompa­nying this trend was a revolution in open source intelligence. As countries within the former Soviet bloc democratized, intel­ligence analysts were swamped with data from previously ‘denied’ regions, at a rate which exceeded their capacity to monitor.

Meanwhile, non-state actors were unobtru­sively empowered by globalization, which allowed them to study their external en­vironment and adapt accordingly. One of these was al-Qaida. Many of its founding members were already familiar with intel­ligence techniques, having been pursued by Arab security services since the 1980s. After finding sanctuary in Afghanistan in 1996, they combined this knowledge with strate­gic reconnaissance to plan attacks upon the West. Although their activities were moni­tored by Western governments, the latter could not acquire ‘actionable’ information about terrorist plots. This failure hit home on 11 September 2001.

Terrorism as a conceptualizer

Since 2001, terrorism has had two direct impacts on Western intelligence. One is to compel governments to increase agency resources and legal powers, and the other is to enhance information sharing domesti­cally and internationally. To take the former aspect first: the attacks have focused col­lection efforts onto a common threat once again – international terrorism. The analyti­cal drift which characterized threat assess­ments during the 1990s is gone. Violent transnational actors, foremost of which is al-Qaida, have become the new ‘main ene­my’ and fill in the role previously held by the Soviet Union. A massive effort is underway within Western states to build capabilities that would optimize intelligence agencies for the detection, pursuit and neutralization of terrorists.

As part of this process, intelligence re­sources have been increased. Between 2001 and 2006, the Central Intelligence Agency’s clandestine service tripled in size. The Federal Bureau of Investigation in­creased its analytical cadre by 100 %. Brit­ain’s security service MI5 has more than doubled in size from 1,800 personnel in 2001 to approximately 4,000 today. How­ever, the expansion has been accompanied by problems. MI5 has met with limited success when recruiting among religious minorities, the very groups whose support is most essential to counterterrorism. In 2007, only 5 % of its staff came from a mi­nority background. The CIA and FBI face an even more serious challenge: that of ter­rorist penetration through Arab-speaking double agents. In one case, a Lebanese-origin CIA official was discovered sending classified data to the militant group Hiz­bollah. Such developments indicate a need to balance proactive intelligence collection with organizational security.

Also, as part of the new focus on counter­terrorism post 9/11, intelligence agencies have been given enhanced legal author­ity for domestic technical surveillance. This has led to concerns about privacy violations; concerns which are yet to be fully resolved given the clandestine nature of technical interception. In any case, privacy infringement is integral to surveillance, due to the ‘domino effect’ of interpersonal con­nections. For instance, although 125,000 Italian citizens were subjected to legally-authorized wiretapping in 2007, the actual number of people recorded was closer to 1.5 million, since each target would speak with nearly 50 different people.

Hoping to prevent civil rights violations by intelligence agencies, many governments have introduced oversight processes, or strengthened existing ones. France has placed its intelligence community under nominal parliamentary oversight, while Britain has strengthened its oversight mechanism in response to public skepticism over the integrity of intelligence proc­esses. Such skepticism stemmed partly from erroneous estimates of Iraqi WMD capabilities, released by the government in 2002 in a bid to boost public support for war. Given that the United States has a much more elaborate system of legisla­tive oversight and yet could not prevent the politicization of intelligence prior to the 2003 Iraq War, there is little reason to believe that misuse can be completely avoided.

Comparing the US intelligence system with those of European states is generally difficult, due to the much bigger scale of American intelligence resources and policy concerns. There are differences in counter­terrorist policies as well. The US security establishment views terrorism as a pre­dominantly foreign terrorist threat, with only about one in every 30,000 American Muslims thought to be susceptible to ji­hadist propaganda. Accordingly, it has fo­cused on protecting the US homeland by immigration control and computerized profiling. Its vast technical collection ap­paratus, capable of intercepting 1.7 billion electronic communications daily, consti­tutes the vanguard of counterterrorist efforts. The CIA meanwhile, is hunting down terrorist cadres overseas, includ­ing through drone strikes in Pakistan. Eu­ropean governments on the other hand, perceive terrorism as a more home-grown threat. As a result, their counterterrorist efforts are more domestically-oriented and rely heavily on police informers. These serve as tripwires for detecting pockets of radicalization. There is also no policy of targeting terrorist leaders abroad through covert strikes.

Information sharing

Another major impact that 9/11 has had on intelligence structures is in informa­tion sharing. Critics have pilloried the CIA for not watchlisting two of the al-Qaida terrorists involved in the attacks, about whom it had previously collected infor­mation. The lapse has been attributed to turf warfare, feeding a belief that failures of ‘dot connection’ allowed the attacks to occur. Accordingly, efforts were made to consolidate counterterrorism data, resulting in the formation of the Terror­ist Threat Integration Center in 2003 (re­named the National Counterterrorism Center in 2004). The FBI has also expand­ed its domestic and overseas presence, setting up fusion centers within the US and adding 31 overseas liaison offices to the 44 which already existed in Septem­ber 2001.

Britain has followed suit, establishing the Joint Terrorism Analysis Centre in 2003, and developing Regional Intelli­gence Centres across the country, where MI5 staff pool information with local law enforcement. Since the vast majority of its counterterrorism cases have overseas components, MI5 cooperates extensively with the Secret Intelligence Service and General Communications Headquarters (the British foreign intelligence and signal intelligence agencies). Germany has mir­rored these developments, creating a Joint Counterterrorism Center in 2004 that fa­cilitates information sharing between 40 federal and provincial security agencies. Since 2007, it has been operating a Joint Anti-Terror Database which pools informa­tion from all agencies, both intelligence and police. The Swiss government has gone even further, merging its domestic and foreign intelligence agencies into one monolithic structure in order to facilitate information sharing.

Besides these efforts at consolidating data domestically, initiatives have been set up to facilitate information sharing at bilateral and multilateral levels. These have met with mixed success. At the bi­lateral level, intelligence liaison is plagued by latent clashes of interest. Currently, ar­rangements exist to share time-sensitive warnings on specific terrorist plots, but little progress has been made in sharing operational-grade information for offen­sive use. A partial exception here is Paki­stan, which under diplomatic pressure has cooperated with the CIA in pursuing ter­rorist leaders.

At the multilateral level, European govern­ments have been prompted to share infor­mation on terrorism, organized crime and immigration, not least due to the loosen­ing of border controls within the European Union and adoption of a common currency. The most important forum for intelligence cooperation is the Berne Club, which was established in 1971 and currently brings to­gether intelligence chiefs of 27 countries (most EU member states plus Norway and Switzerland). The Club has its own commu­nications network and facilitates joint train­ing of intelligence personnel. An independ­ent body established in November 2001, known as the Counterterrorism Group, also includes the United States as a member. The Group aims to create a biographical database of suspected terrorists and crimi­nals within Europe. Although this is a posi­tive step, experts believe that the group’s deliberations have thus far had little policy impact, and that even information sharing is limited. Intelligence agencies of larger European states in particular, are reluctant to share information with smaller partners since they get little in return.

There is also reason to doubt whether the above-described measures will suffice to prevent the continued evolution of terror­ist threats. Al-Qaida and its affiliates are now exploiting a new vulnerability that has appeared in Western intelligence sys­tems since the 1990s: information overload. The consolidation of data is threatening to overwhelm even the expanded analytical capabilities of intelligence agencies, mak­ing it likely that warning signs of an attack will not be interpreted in time. By flooding analysts with misleading electronic chatter, terrorists can generate ‘noise’ that would disguise the signals pertinent to an im­pending attack on Western targets.

New and re-emerging threats

Even as counterterrorism consumes the bulk of policy attention and intelligence resources, fresh tensions are emerging between state actors. Spy scandals and frequent attacks by Chinese hackers have convinced Western intelligence agencies of the need to refocus attention on coun­terespionage and information security. The latter means that the ‘need to share’, hitherto considered a credo of the 21^st cen­tury intelligence environment, could be replaced by the more traditional ‘need to know’. Furthermore, conventional methods of intelligence collection, long considered outdated or unsuitable for counterterror­ism, might return in a modified form.

Foremost among these is signals intelli­gence. Established wisdom holds that in­tercepts are of limited use against terror­ist groups. The latter are supposedly more vulnerable to human intelligence and psychological operations guided by open source intelligence. Irrespective of whether this is true, the return of state versus state competition suggests that technical col­lection will remain central to intelligence activities. Espionage conducted under commercial and diplomatic cover is also likely to return to the levels of the Cold War. This is in part due to the global power shift from West to East.

Emerging powers such as China are be­lieved to be using both human and tech­nical sources to acquire commercial se­crets from Western businesses. They have been aided by the proliferation of digital technology, which permits the surrepti­tious copying of corporate records onto electronic storage devices. Such infor­mation, once stolen, can be passed on to either rival companies or foreign gov­ernments. In the case of China, the two are often intertwined, given the Chinese military’s substantial business interests. Furthermore, globalization itself has facili­tated the process of knowledge transfer. According to one rough estimate, 60 % of the secret information collected by for­eign intelligence agencies comes through sources inside the local offices of multina­tional corporations.

The low labor costs of many developing countries, coupled with their growing ex­pertise in science and technology, make economic espionage a long-term threat to Western societies. By stealing trade se­crets, state-supported businesses across the world can bypass years of wasted re­search and produce under-priced goods that Western ones cannot compete with. They can also rig competitive tenders in their favor, through cultivating decision-makers within the relevant governments. It would be incorrect however, to presume that the threat is limited to developing countries. In the current economic climate, with Europe reeling under an unprece­dented austerity drive and slow economic recovery, the temptation to engage in eco­nomic espionage is likely to prove over­whelming for some governments.

Not only is such espionage damaging to domestic business, but it potentially has military implications, given that many technologies have both military and civil­ian uses. A great deal of scientific research remains unclassified in its initial stages, so as to benefit from similar research being conducted elsewhere in the world. During this phase, designs for a promising new technology can be copied with relative ease by an employee with only minimal security clearance. Many recent spy cases in the United States have involved naturalized immigrants and foreign scientists, who have passed on non-classified data to their countries of origin.

This trend poses a challenge for intelli­gence agencies, since it does not fit into the systems and processes that have been established post 9/11. Human intelligence efforts aimed at penetrating al-Qaida take place in vastly different geographic and cultural milieus from economic espio­nage. Suspect profiles differ considerably, and efforts have to be made to lockdown data in the private sector. As part of such efforts, MI5 has recently warned 300 Brit­ish firms that their cyber-infrastructure is vulnerable to attacks by Chinese hackers. Such attacks cannot be easily attributed to state sponsorship, thus complicating the task of fashioning a policy response. Combating both, states and non-state ac­tors simultaneously, is likely to prove chal­lenging for intelligence agencies, especial­ly considering political pressure to focus on the latter.

Given the dependence of modern gov­ernments and militaries on computer systems, particularly in the context of network-centric warfare, cyber-espionage is likely to pose a serious security risk. This emerging threat would have multiple di­mensions, being able not just to disrupt command and control systems during wartime, but also steal sensitive diplo­matic and political data during peacetime. Countering it would require intelligence agencies to recruit technical specialists who can command large salaries in the private sector, and whose skills would therefore, be costly to retain.

Strategic tradeoffs

Given the global economic downturn and fading public memories of 9/11, there are doubts whether the large intelligence budgets of the last decade are politically sustainable. A search is on for ways to optimize the allocation of intelligence re­sources, such that short-term concerns do not crowd out long-term perspectives. Hitherto, a common criticism of intelli­gence agencies has been that they failed to engage in strategic analysis of the al-Qaida threat during the 1990s. A similar process might now be underway, as an all-consuming focus on terrorism causes tac­tical intelligence on the subject to domi­nate at the expense of horizon-scanning for new threats.

With many European governments cut­ting back defense expenditure, military power is being gradually replaced by intelligence power as the currency of Machtpolitik. Anticipating threats and pre-empting them is becoming central to national defense policies, in contrast to the Cold War when the emphasis was on building large retaliatory capabilities. Although Western intelligence agen­cies have been reasonably successful in preventing large-scale terrorist attacks since 2001, they shall still need to adapt to changes in the international threat en­vironment if they are to avoid being sur­prised again. As long as this environment remains fluid, intelligence agencies will have to be dynamic in responding to the operational challenges that it poses.