This article by Bill Gertz needs to be seen in perspective.  During the Cold War the Soviet Union as well as a number of other countries, including China were constantly engaged in trying to acquire U.S. Technology of all types through various means from industrial espionage to bribery.  The U.S. Department of Defense (DOD) was extremely concerned about this and the subject of illicit ‘international technology transfer’ to the Soviet Bloc (as well as a few other countries) generated numerous DOD requirements to such agencies as NSA and CIA. Much of the urgency of these requirements was downgraded precipitously when the Cold War ended. Also the number of incidents of foreign powers trying to acquire U.S. technology has declined in the 21^st Century for a very sinister reason: the U.S. is no longer the sole leader in the research and development of advanced technologies that it was after WWII. Although incidents still occur, as the Chinese Huawei example shows, they are much less common than once was the case.  So DOD no doubt does not see the need for the same emphasis on loss of U.S. origin technology.

Yet financial intelligence is more than technology loss it also involves major illicit financial operations, such as money laundering, and financial operations in support of espionage and terrorism against U.S. interests. This of course includes the financial infra-structure supporting al Qaeda. If Ferguson is shutting this effort down as well he is making an unbelievable mistake.

This incident is symptomatic of an Intelligence System that is indeed out of control. In the absence of a viable strategic plan for intelligence collection, analysis, and production, every time some new crises occurs the U.S. Intelligence Community (IC) resembles an ant hill that somebody has just stepped on. In the absence any real leadership or clearly defined purpose, the big four of the IC (CIA, DIA, NGA, and NSA) will continue to waste billions of dollars for minimal returns while resisting an efforts at meaningful reforms. At the same time the IC institutional bias against using non-classified (open) source information will ensure that they will only be able to provide very small windows that are of only limited usefulness to decision makers. What a way to go!

Phi Beta Iota: We are truly surprised that someone of Jim Clapper's caliber would allow an Acting Undersecretary no one has ever heard of to be named Acting in the first place; or that such an individual would do something this dumb without clearance from the DNI.  There are a couple of variations on a theme:  a) Clapper wants to make it obvious that Treasury is in enemy hands and DoD wants nothing to do with Treasury intelligence which does not exist–Treasury, like Energy and the other non-national security departments are patronage stove-pipes receiving direction from ideological idiots–they don't do “evidence-based” policy;  b) Clapper is finally thinking about holistic intelligence in support of Whole of Government, and having DoD drop financial intelligence is a preamble to elevating the Financial Intelligence Center in some manner.  On balance, as much as we admire the DNI, we think he has blown it–he will not accomplish anything consequential in the next few years by continuing to do the wrong things righter, and that is a shame, because so much could be accomplished in a mere 90-180 days, if he would empower those with the right mind-set to do the right things, which is to say, M4IS2 simultaneously with Whole of Government intelligence-support operations and the creation of a Smart Nation.

See Also:

2010: Human Intelligence (HUMINT) Trilogy Updated