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Today’s CIA serves contractors and bureaucrats—not the nation.

Suppose you were given the dark mission of spending $50 billion a year to create a global intelligence organization that would be minimally effective. You would want to keep 90 percent of the employees in their home country and incentivize senior staff to stay “close to the flagpole” to enhance their promotion prospects. Training costs should be high—$500,000 per recruit—and bureaucracy so stifling that a third of incoming officers will swiftly wash out. To keep morale low, surround those who remain with contractors—about half of the workforce—and pay the hired guns twice as much as the staff. Add a high level of corruption, routine cover-ups of malfeasance and incompetence, and you would have today’s CIA. It is, as one critic noted, “a sorry blend of Monty Python and Big Brother.”

The Sept. 11 attacks caught the Agency off guard. After the devastating budget cuts of the Clinton years, the CIA was desperately trying to rebuild its capabilities, yet it was still gripped by a Cold War mindset. The over-the-horizon threat from China figured far more prominently than terrorism or nuclear proliferation. But overnight that orientation shifted, and this sclerotic bureaucracy was tasked with becoming the leading edge in the Bush administration’s war on terror. Its budget exploded.

Many of the highly motivated but poorly prepared new hires came in without foreign-language fluency. Few had lived or worked outside the United States. Rather than being sent to overseas posts, most were shunted into CIA offices popping up like mushrooms across the United States. Even non-official cover operatives, very expensive and specially trained officers under business cover, were frequently given domestic assignments because there was no place to put them. When the National Clandestine Service needed to increase “operators” overseas—usually because some congressman was nosing around—it prescribed sightseeing and “area familiarization” trips, which the dispatched officers referred to as “Axis of Evil Tourism.” The new CIA thus became its own false front—long on numbers, short on depth.

In a stopgap move designed to buy time to train the newcomers, numerous Agency retirees were called back to the colors as contractors, their clearances renewed. But contracting quickly became a way for senior managers to featherbed their own staffs. By 2002, contractors made up one third of the burgeoning workforce. By 2006, they were more than half, and, according to some estimates, up to 70 percent in certain areas, including the Clandestine Service. Some even found positions as chiefs of station, unimaginable when the contractor program was initiated. Experienced officers, spying an opportunity, retired early to set up their own companies and return as contractors. They could collect their pensions and also get back on the payroll at much higher salaries.

Contractors are not cheap and, once introduced into a bureaucracy, they tend to grow like Topsy. The average federal government civil servant costs $128,000 per year, including benefits and legacy issues like pensions. Intelligence contractors make that much in salary alone—and sometimes significantly more because of the market value of their security clearances. The companies that employ them use a formula that multiplies the base salary by two and a half to four to come up with the figure that they charge the government. A contractor working for the CIA can easily cost taxpayers half a million dollars per year.

Ready availability of contractors to staff the myriad layers of bureaucracy in Langley encouraged the proliferation of what would be non-jobs anywhere else, what former CIA Chief of Station Milt Bearden described as headquarters’ “buggy-whip makers.” Moreover, intelligence officers who serve overseas are able to retire early by American standards because the job is high stress and, after a point, the officer burns out. Contracting takes many of these officers considered to be less effective and puts them back into the system.

Eventually the growth of contracting alarmed even Congress, and in June 2007 CIA Director Michael Hayden agreed to cut the contractor numbers by 10 percent. It now appears, however, that commitment will be achieved by a hiring freeze rather than any actual cut in positions.

But concentrating on what the CIA has become since 9/11 ignores the roots of the problem. Anyone who has ever worked for the Agency would probably concede that the CIA’s reality has never equaled its mystique. In Rome Station in the 1980s, officers, bemused by the oppressive bureaucracy and strutting incompetence of chiefs who could not speak Italian, would joke about the “real CIA,” speculating that it must exist somewhere, possibly concealed in the Department of Agriculture offices at the embassy or hidden down in the commissary behind the rack of prosciutto.

The Agency has undeniably had successes, but weighed against the cost and measured against the national interest they have been few and far between. From its founding, the CIA has been burdened by unrealistic expectations, often poorly led, politically manipulated, and sometimes corrupt. It failed to realize that even its supposed victories would bear bitter fruit—Afghanistan is a case in point. And the Agency’s ability to predict and counter threats against the United States, the purpose for which it was created by the National Security Act of 1947, has been almost nonexistent. Double agents from Russia, Cuba, China, and MI-6 all penetrated the Agency, and its old-boy culture led to the failure to identify Aldrich Ames, a traitor within its own ranks who betrayed our few agents in Moscow. Despite years of effort and billions of dollars, the CIA has never obtained policy-level information on key international adversaries. The development of nuclear weapons by the USSR and China, the Korean War, and India’s test of an atomic bomb all took the Agency by surprise. From 1969 onward, it bowed to political pressure to overestimate the size of the Russian economy.

More recently, the Agency failed to predict and stop the 9/11 attacks, and its preparation of the National Intelligence Estimate of October 2002 was wrong in every particular, leading to the disastrous war with Iraq. Currently, the Agency is unable to penetrate terrorist groups. Nearly every top-level agent employed over the course of 60 years has been a volunteer, a “walk-in,” not the product of intensive efforts to find and recruit spies.

Since the CIA works for the president, political pressure regularly trumps honest analysis. Hundreds of incomprehensible covert actions have been launched because the White House said “do something.” The overthrow of Mohammed Mossadeq in Iran in 1953 and the manipulation of elections in countries like Italy through the 1980s to keep the Communists out only encouraged corruption and inhibited positive political development. Many other operations, particularly in Latin America, did little more than install military dictators, empower leftist revolutionaries, and blacken the name of the United States.

In the wake of 9/11, the Agency failed to redeem itself. Director George Tenet grandiloquently declared war on Osama bin Laden then inexplicably failed to allocate resources to deal with the emerging terrorist threat or create career incentives to attract top officers to work in counterterrorism. He was unable to recruit Arab or Asian Americans who speak the languages and understand the cultures where terrorists germinate because the Agency’s draconian standards prevented them from getting security clearances. A consummate team player and bureaucrat who always sought to please, Tenet capped his career by slanting intelligence to support the White House’s plan for war against Iraq, famously declaring the case for WMD a “slam dunk.”

Yet the CIA always circles the wagons to protect its own. An Agency Inspector General’s report released in August 2007 recommended disciplinary action against Tenet and three of his top aides over failure to perform adequately in the lead-up to 9/11. But the recommendation was ignored by Porter Goss and Michael Hayden, the two directors who succeeded Tenet.

Examples of other mistakes abound: An officer operating in the Middle East once betrayed an entire network of agents when he tried to pass through an airport metal detector with their passports carelessly stuffed into a pocket with a steel pen. Officers in Europe in the early 1990s sent identical letters from the same mailbox on the same day to every agent in Iran, leading to the roll-up of every Agency source in that country. The agents paid with their lives; the officers involved were not punished. One became the chief of the Near East Division.

The Agency’s culture is increasingly defined by a kind of insularity, along with an unwillingness to accept criticism and a belief in its own exceptionalism. CIA analysts have been rightly rebuked for their inability to find and use open-source information. They give greater weight to reports from spies even when the information being provided is wrong. And the Agency’s obsessive secretiveness also goes beyond any rational need to protect sensitive material. It refuses even to acknowledge information already in the public record, including the location of its principal training center near Williamsburg, Virginia.

The most cult-like of the CIA’s divisions is its spy network—designated the National Clandestine Service since 2006 but generally referred to by Agency officers as the DO, an acronym of its former name, the deputy directorate for operations. The DO has its own rites of passage, its own language and expressions. Many clandestine officers believe they belong to an elite that is undertaking extraordinarily difficult and dangerous tasks—“God’s work.” But the James Bond conceit is largely a fiction as few CIA officers are ever in real danger. High internal cohesion derives less from shared peril than the moral ambiguities related to spying.

This strong group identity has led to an acceptance of extraordinary levels of mediocrity or even incompetence within the ranks. As the alcoholic and utterly inept Aldrich Ames learned, it is very hard to get hired but even harder to get fired. One officer who was recorded by a Cuban film crew nonchalantly unloading a dead drop in a Havana park not only went unpunished for his failure to operate securely, he was made chief of a large station in Europe. The dead dropped message from the agent, who was a double working for Cuban intelligence, was concealed, appropriately, in a plastic dog turd fabricated by the Office of Technical Services.

Senior officers, in denial over their own lack of language and cultural skills, frequently maintain that “an op is an op,” implying that recruiting and running spies is the same everywhere—an obvious absurdity. The Agency’s shambolic overseas assignment process means that officers often receive only minimal language training and are expected to learn the local idiom after arriving at a post, presumably through osmosis. Most fail to do so. Frequently chiefs of station cannot converse with the heads of the local intelligence services unless their counterparts happen to speak English. Officers targeting indigenous political parties or government officials often cannot read a newspaper or speak the local language. Attempts in the 1980s to require language qualification as a sine qua non for overseas assignment foundered due the sheer immensity of the problem. In 1995, only three Agency officers could speak Arabic well enough to understand an Arab speaking colloquially. Seven years after 9/11, there are only five such officers.

As the Agency evolved into what one critic called “a global military policy,” an officer corps that largely eschewed any thought of torture or secret prisons in the ’80s and ’90s now embraces these practices—and their tradecraft is so poor that they can’t even keep their war crimes secret. The 26 CIA employees who abducted radical preacher Abu Omar from a Milan street in 2003 used passports and cell phones in false names but called their families in Virginia and claimed frequent flyer miles at their hotels in their true names, enabling Italian investigators to identify nearly all of them. The major counterterrorist operation, costing millions of dollars and with a huge supporting cast of Italians and Americans, successfully “rendered” the hapless Egyptian cleric to Cairo. He was subsequently tortured into telling everything he knew, which was more or less nothing, leading to his release by the Egyptians.

A fish rots from its head. One recent director for operations was referred to derisively by a number of European intelligence services as the “Ex-Chief of Station Luxembourg” because he lacked operational experience and Luxembourg was the most senior overseas position that he had held. He was, however, a skilled operator in the headquarters bureaucracy—which in some ways made him a welcome exception. Most Agency senior officers in the clandestine service are promoted because they are believed to be effective case officers, good at recruiting and running agents, not because they are able managers. The aggressive arrogance common in agent handlers makes them ill-suited superiors. As a result, most CIA chiefs of station are regarded by their subordinates as terrible bosses whose first priority is polishing their own reputations. By 2001, even though the terrorist threat had been growing for years, many overseas stations had become paranoid and operationally paralyzed. A well-known chief of station in Rome was so insecure about his staff that he tasked a loyal officer to crawl through the halls to eavesdrop outside offices and monitor what was being said.

Another reason the wrong officers advance is that personnel policies tend to measure performance in statistical terms. It is, perhaps, a failure of the American imagination, or an adoption of a production-line mentality, that leads to the confusion of more with better. Nowhere is this truer than at the CIA. Field officers are evaluated by the number of recruitments, called “scalps,” and raw intelligence reports produced during a standard two- or three-year tour. Quality is relatively unimportant since most officers move on before the hollowness of their achievements can be fully realized by their successors. As it is extremely difficult, even impossible, to locate and recruit a terrorist, few are willing to make the effort when easier pickings can inflate the numbers. Some officers deliberately seek assignments—referred to as “recruiting tours”—in poor Third World countries where it is easy to run up the score.

Struggling to achieve within the sluggish and multilayered Agency bureaucracy, described by one critic as similar to that of the former Soviet Union, officers become more adept at working the system than collecting intelligence. In a candid moment, most retirees would admit that they never recruited an agent who actually had information vital to the United States and never produced an intelligence report that contained anything policymakers actually needed. It has been estimated that only 4 percent of finished intelligence reports originate from recruited spies, referred to as “humint.”

In the wake of 9/11, analysts realized that they must write more rather than better reports—and align themselves with the prevailing view of the White House—if they wanted to get promoted. Strategic analysis, which takes more time, requires more expertise, and does not tell the White House what is going to happen tomorrow, became a lost art. As Carl Ford, a retired senior analyst, put it, “As long as we rate intelligence more for its volume than its quality, we will continue to turn out the $40 billion pile of crap that we have become famous for.” The policymakers often agree. President Richard Nixon frequently asked what the hell “those clowns” were doing over at Langley. President George H.W. Bush, a friend of the Agency and onetime director, referred to the CIA as “both ineffective and scared.”

Unsurprisingly, rampant operational corruption has led to personal corruption. The September 2008 conviction of the Agency’s third-ranking officer, Kyle “Dusty” Foggo—who pled guilty to wire fraud after being charged with 30 separate crimes—was only the tip of the iceberg. Retired officers become contractors to take advantage of the system, while former senior personnel do even better, exploiting their international contacts to make money on a much larger scale. Several recent Clandestine Service retirees who were involved in Iraq have become partners in ventures marketing oil diverted from wells in Kirkuk and Mosul with the collusion of the Kurdish authorities. The oil is sold primarily on the black market in Eastern Europe.

Into this dysfunctional environment, President Obama has dispatched Leon Panetta—soft-spoken, judicious, wise to the ways of Washington. His lack of intelligence experience initially riled Senate Intelligence Committee chair Dianne Feinstein, who was pushing her fellow Californian, Rep. Jane Harmon. But he fielded the committee’s questions with aplomb, and the consensus among former officers is that Panetta is a good pick.

He was, in fact, the second choice. Obama had been leaning toward John Brennan, a company man and close adviser to George Tenet who was forced to withdraw from consideration amid accusations that he approved Bush-era interrogation and rendition practices.

Panetta comes with fresh eyes and a pragmatic streak. As Bill Clinton’s chief of staff, he imposed order on a slovenly West Wing. As a member of the Iraq Study Group, he saw firsthand the disastrous consequences of politicizing intelligence. A consummate insider, he carries enough weight to clear space for renovation.

High on Panetta’s to-do list should be the introduction of a requirement that entry-level hires have foreign language skills. If officers do not achieve proficiency in the language of their target country, their assignments should be canceled. More officers should be sent overseas—under business rather than embassy cover—and they should be required to complete cultural and historical studies before going. These postings should be three years minimum to enable officers to understand the working environment and local players. 

Those who undertake arduous assignments shouldn’t be penalized. Indeed, promotion should be recalibrated to gauge success relative to the difficulty of the job. An officer who works hard on terrorists but never recruits—or even meets—one should not be judged on the same scale as someone who goes to Africa and recruits a local chief of police. (In fact, there should be no reward for recruiting an African chief of police.) Moreover, senior-level assignments should no longer be plums for officers who have done their time and are just waiting to retire. And at the highest levels, officers with proven management ability should fill top posts—not necessarily people who have street skills.

These are not changes that Panetta can accomplish by himself. Bureaucracy is a sluggish beast. But he is positioned to alter CIA culture in two critical ways. He can serve as a buffer between the White House and the Agency, not a conduit for policymakers’ demands, and he can encourage risk-taking against terrorist and proliferation targets by protecting and rewarding his officers who are willing to accept the challenge. In his Feb. 5 confirmation hearing, Panetta promised to “turn the page to a new chapter in the Agency’s history.” We’ll soon see whether he has the vision, independence, and will to make good on that pledge and fix a CIA that is undeniably broken. 


Philip Giraldi, a former CIA Officer, is a fellow with the American Conservative Defense Alliance. 

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