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Kicking over the hornet's nest
At the CIA, the new boss has the spies and analysts in an uproar
By Kevin Whitelaw and David E. Kaplan

To those who worked with him, Stephen Kappes seemed the perfect choice to lead the covert side of the CIA in the midst of the war on terrorism. Appointed in June, Kappes, a former marine, is a veteran CIA case officer who served in dangerous and difficult postings in Moscow and Pakistan. More recently, he reported directly to President Bush as the CIA's point man in secret high-stakes negotiations with Libya that ended the rogue state's weapons-of-mass-destruction programs.

So last week, many CIA insiders were astonished when Kappes became an early casualty under the rule of Porter Goss, the recently appointed director of central intelligence. Goss, himself a former CIA case officer who recently chaired the House Intelligence Committee, came into his job in September with a mandate to reform a troubled agency blamed for a series of grave lapses before the September 11 attacks and the Iraq war. But while Goss was widely expected to shake the place up, the departure of Kappes and his deputy, Michael Sulick, stunned intelligence veterans in Washington, who saw the pair as the most qualified team to lead the CIA's Directorate of Operations in years. "The planets lined up," says Milt Bearden, a 30-year CIA veteran who ran the agency's arming of Afghan rebels in the Soviet war. "You had the right guys in the right job at the right time." Ironically, the two men shared Goss's critique of the CIA's shortcomings. Says a former top CIA official who worked with Kappes: "These guys weren't in denial that 9/11 and Iraq were intelligence failures."

How, then, could two such widely praised officers end up as casualties in an effort at reform? Accusations swirled around Washington last week of partisan vendettas and bureaucratic turf wars. In reality, it's a complex story of bitter personality clashes that quickly spun out of control, fueled by years of mutual distrust finally playing out in a highly charged political atmosphere. With CIA morale plunging to some of the lowest levels in 25 years, the stakes could not be higher. As the nation fights wars on multiple fronts, the episode has left many questioning Goss's weeks-old reign and his ability to manage the far-flung intelligence community on the front lines of the nation's defense.

"The Hitler youth." When Goss arrived at the CIA, he brought with him four longtime Republican aides from the House Intelligence Committee to make up his inner circle. Led by his former staff director, Patrick Murray, the group was notorious at the CIA, where many viewed them as arrogant, partisan, and caught up in micromanaging marginal programs. At CIA headquarters, the Goss aides soon acquired a nickname: "the Hitler youth."

On Capitol Hill, many on the intelligence committees saw an agency in denial over the extent of its problems and possessing a reflexive disdain for outsiders. "They are completely shut off from reality," says a Republican congressional source. Repeated leaks about Goss's progress at the CIA only confirmed to many in Congress that the agency is an entrenched bureaucracy mainly interested in protecting its own.

The incident that sparked the departure of Kappes and Sulick unfolded in just a day, according to accounts from more than a dozen current and former intelligence officials. Kappes and Sulick had grown concerned about the authority that Murray was apparently claiming--including authority to appoint chiefs of CIA stations overseas. After Murray allegedly blamed one of Sulick's deputies for a damaging leak about an old shoplifting charge against another one of Goss's aides, Sulick and Kappes sought a meeting with Goss. The new director backed Murray, with Goss saying that he doesn't do personnel issues. He then left the meeting, and things turned ugly, with Sulick warning Murray not to treat senior CIA managers the way they used to treat Democratic congressional staff "pukes," according to these accounts. Soon after, Murray demanded that Kappes fire Sulick. Kappes refused and resigned, along with Sulick.

Poisoned atmosphere. A certain amount of friction was probably inevitable, given the conflicting cultures that were thrown together in the CIA's seventh-floor executive suites. Many at the CIA resented having to take orders from a group of former Hill staffers whom they regard as inexperienced. Three of Goss's aides spent time working at the CIA, but all left early in their careers. (One of them, Jay Jakub, earned four commendations for his work there.) The fourth, Murray, Goss's chief of staff, spent most of his career at the Justice Department and on Capitol Hill.

Making matters worse was a political environment in which Republicans have blamed CIA officials for a series of pre-election leaks. Goss's key staffers also came in with something close to scorn for many of the CIA's current leaders. Rumors that they had assembled a "hit list" of officials slated for ouster swept through the CIA. One aide, Jakub, had penned a section of a bill earlier this year blasting the CIA for failing to reform: "After years of trying to convince, suggest, urge, entice, cajole, and pressure CIA to make wide-reaching changes to the way it conducts its [human intelligence] mission, however, CIA, in the committee's view, continues down a road leading over a proverbial cliff."

CIA veterans are particularly puzzled by reports from their former colleagues that Goss, a savvy politician, has seemed so aloof from much of the CIA staff, leaving key decisions to aides. They also worry that Goss's awkward opening weeks could endanger his reform agenda. "This is the worst moment in history to have this kind of fight," says a former senior CIA manager, "and this is the worst fight I've seen inside the agency."

And it could get worse. A dozen of the CIA's most experienced spies may be plotting their exit, insiders say. One CIA veteran described "a terrible atmosphere, with everybody running around nervous and averting eye contact." Adds a visitor to the CIA's seventh floor last week, "I have never seen so much emotion in that place."

Goss made a belated attempt at damage control last week with an agency wide E-mail, but his note only sparked more controversy. While the CIA should stick to the facts, he stressed, its ultimate customer should never be in doubt. "We support the administration and its policies in our work," he wrote. "As agency employees, we do not identify with, support, or champion opposition to the administration or its policies." Many at the CIA interpreted this as a shot across the bow, warning employees to hew to the party line; others insisted that when Goss mentioned "support," he meant intelligence support.

Goss also warned in his memo of further personnel changes. Next on the chopping block, say insiders, are officials at the CIA's Directorate of Intelligence, responsible for analysis and under fire for their flawed reports on Iraqi weapons of mass destruction. Some veterans fear that a politically tinged purge is in the offing, despite denials from Goss backers. If a political hit is coming, veterans say, a key place to watch is the National Intelligence Council, which oversees the intelligence community's weighty estimates on major issues.

The conflict over the CIA, meanwhile, is playing out amid a broader debate over reform of the entire intelligence community, a sprawling $40 billion complex of 15 agencies. Reformers have pushed hard to create a new post of national intelligence director. Until now, they argue, no one has really been in charge. But many were chagrined to watch opposition from the Pentagon (which controls roughly 85 percent of the intelligence community's budget) undercut the chances for legislation to create the post. The Pentagon's allies on Capitol Hill opposed giving a new national intelligence director control over the budgets of key agencies the military runs now.

Even if the position is eventually created, real reform will depend on the backing of the White House and the personality of the new director, veterans warn. "It all comes down to whom they pick," says one reformer. Among the leading candidates for the job: Porter Goss.

This is a one-sided account and hence suspect. I have been close to several political transitions, and only one of them was done well. Does the agency need massive clearance or selective pruning? Who should go and who should stay? How are ongoing operations to be protected against disruption? Do you have replacements lined up and ready to go to work? What explanations will you offer for resignations and firings? What about political fallout? It all depends on the particulars of the situation, which are hard to judge from the outside and hard to get right if you are in charge.

Nevertheless, we know that the CIA is packed with liberals, often ineffective or wrong, and anti-Bush to the point of disloyalty, so Goss and his people need to make major changes in personnel and policies that go against the agency's sclerotic institutional culture. Are the correct people being dumped? There is no way for us to tell, but I am suspect of the praise being heaped on those who resigned. More than once I have heard people whom I knew to be dolts and rotters publicly praised in the papers as they quit in a huff or were fired, the purpose of the praise being to weaken the resolve of the incoming administration.

My concern is that Goss and his people have not shown canniness in easing their adversaries out without provoking them. As Churchill once said, sometimes in politics it is best to call "Here, kitty, kitty" while reaching for a rock. The fallout from these stories may have the effect intended by the CIA sources and their media allies: make Goss and his people less willing to make necessary changes in personnel and operations. I hope that is not the case, for whatever the merits of the departed CIA officials, their loss is insignificant against the handicap that the country would suffer in having a gelding for a CIA director.