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. Last Updated: 07/27/2016

U.S. Spends Unintelligently

U.S. spy agencies are spending more money on obtaining intelligence than the rest of the world put together. Considerably more. But to what extent they are providing value for money is an open question.

“Sometimes we are getting our money’s worth,” says John Pike, director of, a Washington think tank. “Sometimes I think it would be better to truck the money we spend to a large parking lot and set fire to it.”

The biggest post-Cold War miss of the sprawling intelligence community was its failure to connect the dots of separate warnings about the impending attack on New York and Washington on Sept. 11, 2001. It also laid bare a persistent flaw in a system swamped by a tsunami of data collected through high-tech electronic means: not enough linguists to analyze information.

That problem was thrown into sharp focus by the government’s disclosure — long after Sept. 11 — that it had a 123,000-hour backlog of pre-attack, taped-message traffic in Middle Eastern languages, clear evidence of a system drowning in its own information.

The overall amount of money spent on the collection and analysis of intelligence as well as on covert actions and counterintelligence by civilian agencies and the military was long shrouded in secrecy. It was disclosed in September by Dennis Blair, then-President Barack Obama’s director of national intelligence: $75 billion a year.

No other country comes even close, and no other country has as many people working in the intelligence industry — at least 200,000, counting private contractors. Russia and China lag behind.

“Nobody is quite as ambitious as the United States because nobody is trying to project global power as much as the U.S.,” said Steven Aftergood, an expert on intelligence spending who heads the Federation of American Scientists’ Project on Government Secrecy.

There are few public estimates of its global size, but a recent study by Christian Hippner for the department of intelligence studies at Mercyhurst College in Pennsylvania estimated global spending on intelligence at $106 billion a year and the number of people — working for 246 different agencies around the world — at 1.13 million.

Put into context, the United States, with about 5 percent of the world’s population and 23 percent of its economic output, accounts for almost two-thirds of global spending on intelligence. This is more than at the height of the Cold War, when annual spending, a closely held secret at the time, was estimated at about $15 billion a year in today’s dollars.

The Soviet Union roughly matched U.S. spending, according to estimates at the time, and had more spies, counterspies and analysts than the Americans.

Oleg Kalugin, a former KGB general and head of foreign counterintelligence, said in a radio interview this month that the KGB had employed 496,000 people before the 1991 collapse of the Soviet Union.

That vast shadow army did not keep the Soviet leadership from misreading U.S. capabilities and intentions as badly as the United States misread the Soviet Union, whose military might it consistently overestimated and whose disintegration took Washington by surprise.

The main lesson drawn from the Sept. 11 mass murder was that the U.S. intelligence community was too focused on dealing with the threat of nuclear or conventional attack from nation states, and not enough on terrorist groups, despite attacks on U.S. targets in the Middle East and Africa.

The 2004 Intelligence Reform and Terrorism Prevention Act, flagged as the most significant reform since 1947, was supposed to get the balance right. It added a new post, director of national intelligence and yet another level of bureaucracy. Regular budget increases continued.

Should one expect improved performance as a consequence of more money? In an analysis of the reform five years after it was enacted, the Congressional Research Service, the research arm of Congress, cautioned against high expectations: “It should be remembered that intelligence analysis is an intellectual exercise. It is not possible to increase budgets by 50 percent and receive 50 percent better analysis in the next fiscal year.”

Or the year after, or the year after that.

Bernd Debusmann is a Reuters columnist. The opinions expressed are his own.