President Truman persuaded a reluctant Hillenkoetter, then a
rear admiral, to become
Director of Central Intelligence (DCI), and run the
Central Intelligence Group (September 1947). Under the
National Security Act of 1947 he was nominated and confirmed by the
U.S. Senate as DCI, now in charge of the newly established
Central Intelligence Agency (December 1947). At first, the
U.S. State Department directed the new CIA's
covert operations component, and
George F. Kennan chose
Frank Wisner to be its director. Hillenkoetter expressed doubt that the same agency could be effective at both covert action and intelligence analysis. As DCI, Hillenkoetter was periodically called to testify before
Congress. One instance concerned the CIA's first major
Soviet intelligence failure, the failure to predict the Soviet
atomic bomb test (August 29, 1949). In the weeks following the test, but prior to the CIA's detection of it, Hillenkoetter released the September 20, 1949
National Intelligence Estimate (NIE) stating, "the earliest possible date by which the USSR might be expected to produce an atomic bomb is mid-1950 and the most probable date is mid-1953." Hillenkoetter was called before the
Joint Committee on Atomic Energy (JCAE) to explain how the CIA not only failed to predict the test, but also how they did not even detect it after it occurred. JCAE members were steaming that the CIA could be taken by such surprise. Hillenkoetter imprecisely replied that the CIA knew it would take the Soviets approximately five years to build the bomb, but the CIA misjudged when they started: We knew that they were working on it, and we started here, and this organization [CIA] was set up after the war and we started in the middle and we didn't know when they had started and it had to be picked up from what we could get along there. That is what I say: this thing of getting a fact that you definitely have on the exploding of this bomb has helped us in going back and looking over what we had before, and it will help us in what we get in the future. But you picked up in the mid-air on the thing, and we didn't know when they started, sir. The JCAE was not satisfied with Hillenkoetter's answer, and his and the CIA's reputation suffered among government heads in Washington, even though the press did not write about the CIA's first Soviet intelligence failure. The
U.S. government had no intelligence warning of
North Korea's invasion (June 25, 1950) of South Korea. DCI Hillenkoetter convened an ad hoc group to prepare estimates of likely
communist behavior on the Korean peninsula; it worked well enough that his successor institutionalized it. Two days prior to North Korea's invasion of South Korea, Hillenkoetter went before Congress (the
House Foreign Affairs Committee) and testified that the CIA had good sources in Korea, implying that the CIA would be able to provide warning before any invasion. Following the invasion, the press suspected the administration was surprised by it, and wondered whether Hillenkoetter would be removed. The DCI was not influential with President
Harry S. Truman, but Hillenkoetter insisted to the President that as the Director of Central Intelligence, it would be politically advantageous to testify before Congress to try to remedy the situation. After the testimony, some Senators told the Washington Post that Hillenkoetter confused them when explaining the CIA did not predict when North Korea would invade by saying it was not the CIA's job to analyze intelligence, just to pass it on to high-ranking policymakers. Even though most senators believed Hillenkoetter ably explained the CIA's performance, many at the CIA were embarrassed by the news reports, and by mid-August the rumors of Hillenkoetter's removal were confirmed when President Truman announced that General
Walter Bedell "Beetle" Smith would replace him as DCI. President Truman installed a new DCI in October.
Nebraska Congressman
Howard Buffett alleged that Hillenkoetter's classified testimony before the
Senate Armed Services Committee "established American responsibility for the
Korean outbreak," and sought to have it declassified until his death in 1964. ==Resumption of active military duty==