By Tim Starks
CQ Weekly
January 12, 2009

Barack Obama experienced his first sustained dose of Washington second-guessing last week when news leaked that Leon E. Panetta was his pick to head the CIA.

Some agency veterans complained that the nomination of a director without any intelligence background was another blow to the stature of the CIA, which has come off a string of high-profile controversies and the largely failed tenure of Porter J. Goss, the would-be reformer who directed the spy agency from 2004 to 2006.

Senior Democrats on the Senate Select Intelligence Committee also aired their displeasure with Panetta’s outsider status and complained about Obama’s failure to notify them of the Panetta pick in advance. But the Senate Select Intelligence Committee’s incoming chairwoman, California Democrat Dianne Feinstein, came out in favor of the pick after Obama assured her that Panetta would surround himself with agency veterans.

Still, as the dust from the Panetta pick settled a bit, the Obama team was left with the dilemmas that many past administrations have faced in trying to introduce change at the CIA. Would Panetta — known for his managerial skills as both White House chief of staff and director of the Office of Management and Budget (OMB) during the Clinton administration — command the respect of deputies and station chiefs who would have preferred an intelligence insider at the agency’s helm? And could he leverage his political skills into an effective bid to overhaul some of the CIA’s more controversial practices, such as extraordinary rendition of terrorist suspects abroad and enhanced interrogation techniques that some critics — Panetta among them — denounce as torture?

One thing appears certain — Panetta was tapped as a change candidate, even if he wasn’t Obama’s first choice. That honor went to the campaign’s intelligence adviser, John Brennan, a former assistant to the agency’s deputy director, who boasted a long intelligence resume but came under fire from left-wing critics for his past association with Bush administration interrogation and surveillance policies. As the pushback against Brennan gained momentum, he bowed out of the running after “some prompting from the transition folks,” according to a former senior intelligence official familiar with the decision. Obama later named Brennan as his top homeland security and counterterrorism adviser.
By contrast, Panetta has denounced the use of torture “under any circumstances.”
Outsider Foibles and Fortes

Panetta’s backers point out that he is no stranger to the processing of intelligence at the executive level. As both OMB director and Bill Clinton’s chief of staff, he read most of the intelligence presented to the president. But critics counter that, as a longtime Democratic Party loyalist, Panetta runs the risk of politicizing the agency’s work.

An aide to West Virginia Democrat John D. Rockefeller IV said the outgoing chairman of the Senate Select Intelligence Committee believes “this has always been a position that should be outside of the political realm.”

But historians of the CIA contend that directors coming from outside the intelligence world have not performed any worse than their more experienced counterparts. “We’ve had outsiders who have done well and outsiders who have done poorly,” said John Diamond, author of “The CIA and the Culture of Failure.” “It’s hard to make a generalization here.”

For example, agency scholars credit John A. McCone, a former industrialist and head of the Atomic Energy Commission who led the CIA during the Kennedy and Johnson administrations, with recognizing early on the threat posed by the placement of Soviet missiles in Cuba. Then there was Jimmy Carter’s CIA chief, former Adm. Stansfield Turner, who reined in many CIA programs in the aftermath of the Watergate scandal and who de-emphasized human intelligence in favor of signal surveillance. Today, Turner is widely regarded as a poor spy master who worried more about political correctness than raw information-gathering, Diamond said.

Other agency observers note that an extensive intelligence background is no guarantee against the politicization of the CIA’s intelligence work. William J. Casey worked in the CIA’s precursor agency, the Office of Strategic Services, during World War II, but when he took over the agency in 1981 under the Reagan administration, he quickly became a consummate White House insider.

“He was the most ideological intelligence director we’ve had by far, as far as political passions and slant are concerned,” said Paul Pillar, a CIA veteran who retired from intelligence work after 28 years of service in 2005. “That’s what you want to avoid.”

Panetta’s outsider status can work to his advantage, intelligence experts say, especially if he can rely upon the counsel of seasoned deputies. They add that Panetta is also in a better position than an insider to reclaim the public support that the agency lost after it inflated the threat of weapons of mass destruction in the run-up to the 2003 Iraq invasion.

“What his strength will be is he brings an outsider’s perspective to the intelligence community,” said Lee H. Hamilton, a former chairman of the House Foreign Affairs Committee who worked with Panetta on the Iraq Study Group. “The intelligence community is not perceived well in the general public.”
The Inside Line

Opinion about the Panetta pick is divided within CIA ranks. John McLaughlin, a former interim CIA director, says it is not surprising that some agency personnel prefer one of their own in the director’s seat. But in an e-mail, McLaughlin added that critics who make an issue of Panetta’s outsider status “have not worked inside the agency and have little understanding of its culture.” People at the CIA would rather have an effective director, regardless of his or her background, he noted.
Agency veterans say Panetta’s opponents tend to cluster in the CIA’s clandestine service, which collects intelligence.

Charles “Sam” Faddis, a 20-year covert operator who retired from the CIA in May, said the rank and file’s response to the choice of Panetta has been “overwhelmingly negative.”

“These are people who are sweating blood every day to make things happen and living for the day that somebody is going to come in, institute real reform and turn the CIA into the vital, effective organization it should be,” Faddis said. “To them, this choice just says that no such changes are pending and that all they can look forward to is business as usual.”

At the same time, those in the directorate of intelligence, the CIA’s analytical branch, are generally more open to Panetta’s nomination.

Melvin Goodman, a former agency analyst who supports the Panetta pick and campaigned in Op-Ed commentaries against Brennan, said the analytical corps shares a liberal academic mind-set, while the clandestine service has a more conservative outlook.

Potentially complicating this schism, observers suggest, will be pressure from some lawmakers on Panetta to investigate intelligence abuses during the Bush years.

“Will there also be a very critical investigative look back, a sort of housecleaning?” Diamond asked. “If that is what develops, there could be a real problem with the rank and file at the agency. If the administration doesn’t do that, there will be pressure from the base of Obama’s constituency that says, ‘We just can’t let this go.’ ”

Meanwhile, some regard Panetta as the one to reverse the agency’s diminished power profile since 2004, when the newly created Office of the Director of National Intelligence (DNI) took over the CIA’s traditional role as lead agency for the intelligence community.

Sources familiar with the Obama team’s view of intelligence matters say that the incoming administration is interested in reducing the role of the DNI. And some CIA veterans believe that with Panetta at the helm of the CIA and retired Adm. Dennis Blair serving as the director of national intelligence, such a readjustment is inevitable. Blair, who has a background in military intelligence, appears likely to be cast as the intelligence professional to Panetta’s savvy bureaucrat. Pillar said he would have expected their roles to be reversed.

Panetta would be well-suited to win greater influence for the CIA, observers say. “I don’t think a guy like Blair is in the same league as a guy like Panetta,” Goodman said. “He’s a pretty sophisticated political operative.”

But McLaughlin cautions that political savvy will count for less than will Panetta’s ability to advocate for reviving an agency whose luster has dimmed considerably during the Bush years.
Panetta’s reputation among CIA insiders will hinge on “whether he shows an ability to advance the agency’s mission and represent it effectively in various arenas,” he said. “They will want him to succeed and will help him do so; they have been through failed directors and know that it’s bad for everyone.”


Jeff Stein contributed to this story.

For Further Reading: Intelligence reshuffle, 2008 CQ Weekly, p. 1166; CIA subcontracting problem, 2007 CQ Weekly, p. 3396; investigation of Iraq-Niger story, p. 1330.
Source: CQ Weekly
The definitive source for news about Congress.
© 2009 Congressional Quarterly Inc. All Rights Reserved.