In Your Face at the CIA

By MICHAEL DUFFY

If the CIA's master spooks in the 1950s had designed the perfect spy--someone they could groom from the start and then send out into the cold, only to have him return years later to save the agency at its most critical hour--he would have looked a lot like Porter Goss. Reared in Connecticut, Goss prepped at Hotchkiss, studied Greek at Yale and spent the 1960s in the agency's clandestine service, overseeing covert operations in Latin America and Europe. His years as a spy left little trace on his resume. He quit the CIA in 1971 after a mysterious case of blood poisoning nearly killed him. Goss settled down to a quiet life as a newspaper publisher on Florida's Sanibel Island for the next 17 years and then, in 1988, ran for a seat in Congress and won. His tenure in Washington was unremarkable--at least until three months ago, when George W. Bush tapped him to go back and run the CIA. Almost as if the old boys had planned it, Porter Goss was coming in from the cold.

But Goss has so far turned out to be anything but a company man. In less than two months as CIA chief, he has turned the agency's clandestine-operations wing upside down, sparking the resignations of some of its highest-ranking officers, alarming even reform-minded lawmakers on Capitol Hill and turning the heads of White House officials who prefer their housecleaners to do things quietly. It has been difficult to tell if Goss was orchestrating a loyalty purge or making an example of some of the CIA's best operatives. Either way, Goss has unleashed a costly spectacle that must at least amuse the likes of Osama bin Laden, still at large more than three years after 9/11: CIA officers and their many retired allies in the private sector working the phones and fax lines to warn the world that Goss's cure may be worse than what afflicts the nation's 57-year-old spy factory. "Anytime you've got top people dropping like flies when we're facing serious risks, you have to be concerned," says Senator Evan Bayh, an Indiana Democrat on the Senate Intelligence Committee. "Goss and his team came in thinking some substantial changes needed to be made. Even assuming that's true, it needs to be implemented in a way that doesn't impair our function in time of war."

A running gag in Washington last week held that Langley, the CIA's longtime home in Virginia, was changing its name to Fallujah--the question wasn't whether the place was eventually going to be cleared of rebels, but how many would be killed in the process. But beyond the bravado there was no joking about what was really going on and why. The turmoil at the CIA was unfolding just as Bush was consolidating his power all over Washington in classic second-term fashion. The President wasted no time after his re-election reining in the two other agencies that haven't always been on the White House's page--the State and Justice departments--by naming longtime personal aides to run them for the next four years (see following story). The CIA overhaul had actually begun a few months earlier, when Bush named Goss, 65, to succeed George Tenet, who was adored by agency personnel but resigned after seven difficult years. Tenet spent a lot of time in his final years defending the agency against criticism for a string of intelligence failures--and through a combination of charm and bluster keeping a lid on the simmering tensions between the CIA and the White House.

That was almost a full-time job. For months, the Administration, along with just about everyone else, was piling on complaints: the agency's spies failed to clearly see bin Laden's army gathering over the horizon back in 2001, failed to realize that Saddam Hussein did not have weapons of mass destruction (WMD) and underestimated the strength of the postwar insurgency in Iraq. In response, the spooks whispered that the President's aides were too quick to blame the agency for their own mistakes of judgment. The agency had repeatedly warned both the current Administration and its predecessor about bin Laden, they said; the agency's doubts about the existence of WMD were not hidden (if you looked deeply enough into the footnotes of the intelligence community's official estimates on Iraq); and although the details of the CIA's warnings have not been made public, there are indications that it predicted that a postwar Iraq would be something other than a walk in the park. "A lot of people did, by and large, warn the White House about the aftermath," says a former agency official.

The backbiting got more vicious in the final days of the presidential campaign, when the Bush camp began to mutter that the CIA was trying to undermine the President's re-election. The evidence was circumstantial at best. But many Republicans nonetheless came to believe the agency was rooting for Senator John Kerry when it cleared for publication a book, Imperial Hubris, written anonymously by Michael Scheuer, a CIA analyst and former chief of the bin Laden unit, that accused the Administration of botching the war on terrorism. Members of Tenet's staff didn't think much of Scheuer--they regarded him as a zealot who couldn't see the whole picture--but they were in a bind. CIA rules allow an officer to publish a book if he is not disclosing classified information. Since Scheuer's book included nothing sensitive, the agency couldn't halt publication. "The rules don't say you can't write dumb stuff," a former officer who worked on the case tells TIME.

Imperial Hubris hit stores in July, and that was enough for some in the Bush campaign to conclude that the agency was trying to undermine the President. Not everyone in the White House was bothered by the book, but those who were included Vice President Dick Cheney, who had tangled with the CIA endlessly over Iraq and had long grown impatient with the agency's rigid devotion to rules. "What the White House has decided, particularly Cheney," a campaign veteran told TIME, "is that the agency has been leaking on us for a year. So we don't have much to lose by cutting them loose."

Goss, meanwhile, had been quietly planning his own housecleaning for a while. He had a mandate from Bush to make the CIA more aggressive and less risk averse in general, but he had special plans for the agency's storied clandestine services branch, the supersecret Directorate of Operations (D.O.), which runs covert spies and schemes all over the world. Last June, while Goss was chairman, the House Intelligence Committee wrote a report that said the D.O. was in danger of becoming "nothing more than a stilted bureaucracy incapable of even the slightest bit of success. The nimble, flexible, core mission-oriented enterprise that D.O. once was is becoming just a fleeting memory."

Within days of Goss's arrival, a number of top CIA officials began to contemplate retirement, including acting Director John McLaughlin and Executive Director A.B. Krongard. Then, last week, came the abrupt departures of D.O. chief Stephen Kappes and his deputy, Michael Sulick, two pragmatic and tough-minded officers who were regarded almost universally as mission oriented, apolitical and aggressive--exactly the traits Goss was supposedly looking for. Kappes, who had served as station chief in Moscow and the Middle East, was best known at Langley for helping persuade Libyan leader Muammar Gaddafi to forswear terrorism and give up his rudimentary WMD program. Kappes, who made multiple trips to Tripoli to seal the deal, was one of the few CIA officers who won high marks from both Republican and Democratic members of the 9/11 commission. Sulick is another former Moscow station chief who, in the words of an ex-spy, "has a New Yorker's quick wit and cynical outlook on life. He'd more likely skewer both sides" than favor one political party over another, the officer says.

What's most unsettling about the resignations is that they seem to have grown out of petty disagreements that could easily have been avoided. The first began with a tempest over a longtime Goss aide, Michael Kostiw, whom Goss intended to name as the agency's executive director, but who lost the job after it was revealed he had left the CIA 20 years earlier when he was arrested for allegedly shoplifting a pound of bacon. (The charges were dropped after he agreed to resign.) Although CIA insiders argue that reporters could have been tipped off by a CIA alumnus who remembered Kostiw's undistinguished departure, Goss aides feared that officials in the agency leaked the bacon caper to the press to embarrass Goss upon his arrival at Langley, former officials say.

Then, on Nov. 5, Kappes and his deputy, Sulick, complained in a meeting with Goss and Patrick Murray, Goss's chief of staff, about Murray's pointed critique of a Sulick memo laying out a proposed D.O. outreach program for members of Congress. Twice in that session, Sulick tossed pieces of paper at Murray. After Goss left for another meeting, Sulick, who is in his 50s and is a Vietnam vet, told Murray, who is 40, that he wasn't going to be treated like some "f___ing Democratic Hill puke," says a CIA source. Disturbed by the episode, Murray asked Kappes a few days later to reassign Sulick. Kappes refused, and the two took their dispute to Goss, who told both men to work things out. The matter festered over a weekend, and when Kappes came to work on Monday, he told Goss he and Sulick would be resigning. Goss tried to persuade Kappes to stay on, says a CIA source, but both men quit anyway. Sulick could not be reached for response. Kappes declined to comment.

The impact of those departures was just crashing over Washington's sizable spook community when Goss sent an e-mail to the staff listing what he called "the rules of the road." Wrote Goss: "We support the Administration and its policies in our work. As Agency employees we do not identify with, support or champion opposition to the Administration or its policies. We provide the intelligence as we see it--and let the facts alone speak to the policymaker." The email was probably more clumsy than insidious, but when coupled with the departures of two senior officials, many CIA insiders saw it as a loyalty test, a warning by Goss to tailor the intelligence to fit the policies or risk decapitation. "A number of people at the agency view the changes Goss is putting in place as an attempt to bring them to heel rather than an effort to make reforms everyone agrees are necessary," says Whitley Bruner, a former D.O. officer who worked in the Middle East.

Within a few hours of the e-mail, much of the agency's clandestine arm was on war footing, e-mailing friends, dialing up agency veterans and generally lighting fires all over town, hoping some of it would stick to Murray and the rest of Goss's boarding party. If this sounded like insubordination, it was also a game the CIA has perfected over the years. "The CIA's permanent bureaucracy plays hardball," says an intelligence-committee staff member. "They're trained to do that, to undermine and spy on foreign governments, to run agents, and when they turn those talents to politics in Washington, they can be very tough and very formidable."

That behavior only strengthened White House resolve last week to bring the CIA under control. Though Bush endorsed many of the recommendations of the 9/11 commission earlier this year, including the creation of a new Director of National Intelligence with expanded powers and budget authority, it's widely known that the Pentagon resisted the move because the reforms almost certainly would have strengthened the CIA's autonomy at the Pentagon's expense. The paranoia inside the intelligence community can sometimes come unbound: some at the agency believe that Pentagon boss Donald Rumsfeld and Vice President Cheney not only oppose the commission's recommendations but also want to carve up the CIA, take away its clandestine arm altogether and move it to the Pentagon. Congress would be unlikely to go along with such a radical move, nor would Bush's father, who ran the CIA briefly in the mid-1970s and whose name hangs over the door at headquarters in Langley and who still closely follows agency matters. Congressional negotiations on the 9/11 commission reforms broke down Saturday, but Republican leaders promised to keep working until adjournment in December.

Though Goss spoke with half a dozen members of Congress to calm the waters last week, he showed no signs of backing down. A CIA source tells TIME that Goss plans to enforce rules that bar active CIA officials from profiting from their positions or commenting on policy in nongovernment publications. Goss briefs Bush six days a week when both men are in town. Goss is also planning to make a foreign trip soon and is close to recommending a new deputy for White House nomination. One candidate is Lieut. General Michael Hayden, the director of the National Security Agency and a highly regarded veteran whom many old-timers admire. "In the days and weeks ahead of us," Goss's Nov. 15 e-mail read, "I will announce a series of changes, some involving procedures, organization, senior personnel and areas of focus for our action. I understand that it is easy to be distracted by both the nature and the pace of change. I am confident, however, that you will remain deeply committed to our mission. The American people and the President on their behalf, expect nothing less." --With reporting by Timothy J. Burger, Matthew Cooper, Elaine Shannon and Adam Zagorin/Washington

With reporting by Timothy J. Burger; Matthew Cooper; Elaine Shannon; Adam Zagorin/Washington