From m.morrissey@asco.comlink.apc.org Sun Feb 2 105248 1992 THE BLACK BUDGET BLACKER THAN

 From m.morrissey@asco.comlink.apc.org Sun Feb  2 10:52:48 1992

             THE BLACK BUDGET: BLACKER THAN WE THINK

                       by Michael Morrissey
                         October 16, 1991

Somehow, somewhere, the figure of $30 billion to represent the
U.S. intelligence budget has been written onto the menu of lies
the corporate media are presenting for public consumption. A year
and a half ago Time said:

"About half of the classified fund, estimated at $30 billion for
1990, is earmarked for tactical and military intelligence. The
CIA, NSA, DIA and civilian intelligence groups share the remainder
(4/23/90)."

This "information" from the world's largest magazine, published by
the world's largest media conglomerate, was seemingly confirmed
the same year by a book published by another Time Warner company
(Warner Books), Tim Weiner's Blank Check, which put the
intelligence bill plus the cost of all other secret programs
hidden in the Pentagon budget at $34-36 billion:

"But I can say with assurance that the black budget peaked at
about $36 billion a year in 1988 and 1989. This year, in the
fiscal 1991 Pentagon request, the declassification of the costs of
the Stealth bomber and MILSTAR [a military satellite system
designed to coordinate a protracted nuclear war] brought the black
budget back down toward $34 billion (p. 16)."

A year and a half later, Newsweek can mention "the $30 billion
annual U.S. intelligence budget" (9/9/91:20) in passing, treating
it as a revealed truth.

$100 million a day of taxpayers' money spent secretly is bad
enough, but if Big Brother's mouthpieces are set on having us
swallow this much, we can be reasonably sure that the whole truth
is even less palatable. (This is what the spooks call a "limited
hangout.") The few reliable sources available on the subject
corroborate the suspicion. In The CIA and the Cult of Intelligence
(NY: Alfred Knopf, 1974, p. 61, 81) Victor Marchetti and John
Marks put the overall intelligence budget at $6.228 billion for
1973, of which the CIA disposed of $750 million. Sean Gervasi
extrapolates from this and other sources to arrive at an estimated
$1.5 billion CIA budget for 1978 (CAIB 7, 12/9-1/80, p. 18), which
would put the overall budget proportionally at $12.456 billion.
This is a conservative estimate, since according to David Wise the
overall intelligence budget was already at $12 billion in 1975:

"In 1975 the entire CIA budget was hidden within a $2 billion
appropriation for "Other Procurement, Air Force." The $12 billion
total for all U.S. intelligence, much higher than previous
estimates, was indicated in the report of the Senate intelligence
committee" (The American Police State, 1976, NY: Random House, p.
185)."

The figure of $12.456 for 1978 represents an increase of exactly
100% over a period of five years, which corresponds remarkably
well to Newsweek's report in 1983 that the CIA budget had
increased at a rate of 17% annually since 1980 (10/10/83:30). The
following figures, then, suggest themselves:

     Overall Intelligence          CIA

 1973    $ 6.228 billion      $ 750 million
 1978     12.456 billion        1.5 billion
 1983     24.912 billion        3.0 billion
 1988     49.824 billion        6.0 billion


 This would predict a 1993 overall budget of $99.648 billion and
$12 billion for the CIA. The figures for 1991 would be
approximately $83.04 billion (overall) and $10 billion (CIA). This
conforms with CAIB's own 1990 estimate of the CIA budget at $10-12
billion (35, Fall 1990, p. 2).

If Marchetti and Marks' breakdown is still correct, about 34.7% of
the CIA's budget is spent on covert action, supplemented
indirectly by about 60% of the allocations officially designated
for the Science and Technology and Administration directorates,
about one-third of the covert action funds going for media and
propaganda activities. On this basis, Gervasi estimates the total
cost of covert propaganda in 1978 to be $265 million, or about $10
million more than the combined budgets of Reuters, U.P.I., and
A.P. The same calculation for 1991 would put CIA propaganda
expenditures at $1.767 billion, for 1989 $1.237 billion, making
the CIA a major media mogul (Time Warner being No. 1, with 1989
sales of $7.642 billion.) In other words, the CIA's propaganda
budget is more than three times that of the largest magazine in
the world (Time's revenue for 1989 was $373.4 million).

The structure of the CIA (especially with the addition of a fifth
economics directorate) and the intelligence community has changed
since 1973, but since there is little else to go on, let us see,
just out of curiosity, what Marchetti and Marks' breakdown might
look like in 1991:


Intelligence Agency          1991 Estimated Budget
                                   (in millions)
State Department                     $    107
Treasury Department                       133
Atomic Energy Commission                  267
FBI                                       533
Defense Intelligence Agency             2,667

CIA                                    10,000
  Director                             (  133)
  Intelligence                         (  933)
  Administration                       (1,467)
  Science and Technology               (1,600)
  Operations                           (5,867)

National Security Agency               16,000
National Reconnaissance Office
 and Military Intelligence             53,333
  _____________________________________________

                            Total   $  83,040


The bucks do not stop here, though. The CIA budget, whatever the
amount is, does not include two other major sources of income
which are virtually limitless: proprietaries and transfers of
funds (as well as men and materiel) from other government
agencies. In 1973, for example, the CIA was "the owner of one of
the biggest--if not the biggest--fleets of 'commercial' airplanes
in the world" (Marchetti and Marks, p. 137). The profits from such
proprietaries--companies secretly owned or controlled by the
CIA--not only disappear without a trace into the black hole of
non-accountable CIA coffers, but much of the money comes from
government contracts. For example, in 1972 Southern Air Transport
had a $2 million AID contract to fly relief supplies to
Bangladesh, and in 1973 Air America had $41.4 million worth of DOD
contracts ((Marchetti and Marks, p. 142). Thus the taxpayer pays
twice for his secret police--first through direct black budget
appropriations, and secondly by government contracts awarded to
CIA proprietaries.

The CIA Act of 1949, in blatant violation of the U.S.
Constitution, states:

"(a) Notwithstanding any other provisions of law, sums made
available to the Agency by appropriation or otherwise may be
exended for purposes necessary to carry out its functons,
including--(1) personal services, including personal services
without regard to limitations on types of persons to be
employed...(2) supplies, equipment, and personnel and contractual
services otherwise authorized by law and regulations, when
approved by the Director. (b) The sums made available to the
Agency may be expended without regard to the provisions of law and
regulations relating to the expenditure of Government funds; and
for objects of a confidential, extraordinary, or emergency nature,
such expenditures to be accounted for solely on the certificate of
the Director... (Par. 403j)."

In other words, the CIA can spend its money however it likes and
doesn't have to to tell anybody about it, the Constitution be
damned. The "provisions of law" which this law annihilates are the
right of the taxpayer to know what the government is doing with
his money, a right which the framers of the Constitution thought
they were establishing when they wrote:

"No money shall be drawn from the Treasury, but in Consequence of
Appropriations made by law; and a regular Statement and Account of
the Receipts and Expenditures of all public Money shall be
published from time to time (Article 1, Section 9)."

The sums "otherwise" made available to the CIA include, besides
income from proprietaries, what L. Fletcher Prouty calls
"horizontal financing," which is also anchored in the
unconstitutional CIA Act and allows the CIA to

"...transfer to and receive from other government agencies such
sums as may be approved by the Office of Management and Budget,
for the performance of any functions or activities
authorized...and any government agency is authorized to transfer
or receive from the agency such sums without regard to any
provisions of law limiting or prohibiting transfers between
appropriations. Sums transferred to the agency in accordance with
this paragraph may be expended for the purposes and under the
authority...of this title without regard to limitations of
appropriations from which transferred."

In other words, millions or billions of dollars appropriated by
congress for one purpose can easily end up being used by the CIA
for something quite different. Prouty knows from his personal
experience of many years as Air Force liaison officer with the CIA
that terms like "authorization" in practice mean little, since

"...under high classification few people know that this is going
on, and few want to become involved even if they find out. Also,
the Agency works long and hard to get its own people, or entirely
sympathetic people, into the key jobs where such things as this
take place, and they see that the controls of the law do not bind
at any point (The Secret Team, NJ: Prentice-Hall, 1973, p. 383)."

We should not forget that we are talking here about funds that are
acquired more or less legally, since the CIA Act, however
unconstitutional and fascistic, is law. But this is just the tip
of the iceberg. The myriad financial scandals (Iran-contra, S & L,
BCCI) in which the CIA is endlessly implicated but never quite
nailed (an Ollie North scapegoat or two normally sufficing to
quell the outrage of the corporate media) provide an occasional
glimpse of the network of "ties" between the CIA and industry--
both legal and illegal. The CIA's pork barrel is not only black
and bottomless but directly connected to gigantic reservoirs of
legitimate and illegitimate private capital, creating a coalition
of power that is staggering to contemplate: big bucks doing what
they like while government (and the lapdog press) look the other
way in the name of "national security."

This has been the CIA's game for a long time, and it has it's
"entirely sympathetic people," as Prouty puts it, not only
throughout the government but everywhere. It has its Robert Maheus
with Mafia connections to get rid of Castro or its (former
director) John McCones on the board of ITT to oust Allende when it
needs them, but even without these "assets" (in spookese) the
coalition of interests would be enough to get done what needs to
be done--Castro being an exception, so far--all in the service of
Mammon, and the richest 1% or so of the population.

Michael Morrissey
Am Ruesteberg 6, W-3501 Niestetal, Germany
Tel: 0561-527327, FAX 0561-8043341

RSVP e-mail: m.morrissey@asco.zer.de (I'd like to know where this
is being read.)