Law enforcement within the United States has been traditionally regarded as a local activity and not a matter for the federal government. The beginnings of what was to become a federal law enforcement bureaucracy can be traced to the formation of the Secret Service Division as the Civil War came to an end. It was set up in 1865 by the Secretary of the Treasury to detect and suppress counterfeit currency.   Secret Service agents investigated various infractions against federal laws, including the activity of the Ku Klux Klan, land fraud, smuggling and mail robbery.  

In the closing decade of the 19th century, the Secret Service offered occasional protection for the US president. This role became formalized in 1901, following the assassination of President William McKinley.

In 1908, Attorney General Charles Bonaparte – a descendent of Napoleon Bonaparte – included Secret Service agents and private detectives in a corps of Special Agents that was called the Bureau of Investigation. The Bureau was established when Congress was in recess for six months. Had Congress been in session, it probably would have been blocked as an expansion of potentially repressive federal power.  Its role during its first decade was limited to enforcing federal laws dealing with interstate crime or crime on federal property since Congress strongly opposed any kind of political surveillance.

But that mindset was to change with the fear generated by anarchist bombings and the Bolshevik Revolution and the agitation surrounding the United States’ entry into World War I.  In 1919 Attorney General A. Mitchell Palmer set up the General Intelligence Division (known as the “Radical Division”) within the Bureau of Investigation and put the 24-year-old J. Edgar Hoover in charge. Hoover became head of the entire Bureau in 1924 when it had some 650 employees. He remained the director of what was in 1935 re-named the Federal Bureau of Investigation (FBI) until his death in 1972.

Under Attorney General Palmer, Hoover drew up a list of “radicals” and before long had an index of 200,000 names. The list was instrumental in the 1919-1920 round up of mainly immigrants known as the Palmer Raids. The list was to grow to 450,000 names in the aftermath of the Raids, as the General Intelligence Division of the Bureau conducted wiretapping and break-ins.

When Attorney General, Harlan Fiske Stone elevated Hoover to head the entire Bureau in 1924, he encouraged it to shift its focus from political surveillance to criminal law enforcement. The Red Squads formed by state and local police and the vigilante activity of a private organization, the American Protective League, kept up the work of domestic spying. The FBI got back into the surveillance business as war broke out in Europe. In September 1939 President Franklin Roosevelt signed a directive authorizing the FBI to investigate matters of espionage and sabotage and asked police departments to give the FBI all the information they collect about subversive activity. 

FBI Director Hoover did not change direction once World War II was over. He considered that the directive was still operational during the Cold War and greatly expanded the FBI’s network of secret domestic surveillance. During the post World War II Red Scare a domestic intelligence bureaucracy took shape, as other federal agencies became involved in spying at home: among them the Central Intelligence Agency (established by the National Security Act in 1947), the Internal Revenue Service, the Treasury’s Secret Service, the Immigration and Naturalization Service (INS), the State Department’s Passport Office, and the National Security Agency (NSA). The secret NSA had been created by President Harry Truman in 1952 to intercept communications from the USSR but soon got involved in the domestic spying business by monitoring the communications of Americans.

Domestic surveillance during the Cold War was also carried out by the local and state police which, in 1956, formed the Law Enforcement Intelligence Unit (LEIU). It had its own Inter-state Organized Crime Index of “terrorist” individuals and groups using the computer technology of the day and its own Red Squad intelligence units, trained by the CIA. Police departments undertaking intelligence work sometimes worked closely with the FBI, foreshadowing the Joint Terrorism Task Forces of the 21st century.

In 1981 President Reagan’s Executive Order 12333 outlined the powers and responsibilities of the 16-agency US Intelligence Community. The positon of Director of National Intelligence (DNI) was established in 2004 in an effort to make the vast intelligence bureaucracy more efficient.