The agency celebrated when George H. W. Bush was sworn in as president on January 20, 1989. He was one of them. He loved them. He understood them. He was, in truth, the first and only commander in chief who knew how the CIA worked.
Bush became his own director of central intelligence. He respected Judge Webster, but he knew the troops did not, and he shut him out of his inner circle. Bush wanted daily briefings from professionals, and if they did not satisfy him, he wanted raw reports. If something was cooking in Peru or Poland, he wanted to hear from the station chief, pronto. His faith in the agency bordered on religious belief.
It was sorely tested in Panama. On the campaign trail in 1988, Bush denied that he had ever met General Manuel Noriega, that nation's notorious dictator. But there were pictures that proved it. Noriega had been on the CIA payroll for many years. Bill Casey had welcomed the general at headquarters annually and had flown down to Panama at least once to see him. "Casey saw him as a protege," said Arthur H. Davis, Jr., the American ambassador to Panama under Reagan and Bush.
In February 1988, the general was indicted in Florida as a cocaine kingpin, but he remained in power, sneering at the United States. By then it was public knowledge that Noriega was a murderer as well as a long-standing friend of the CIA. The impasse was excruciating. "The CIA, who had dealt with him for so long, didn't want to end the relationship," said the National Security Council staffer Robert Pastorino, who had met for many hours with Noriega as a senior Pentagon civilian during the 1980s.
After the indictment, the Reagan White House twice ordered the agency to find a way to dislodge Noriega, and shortly after his inauguration, President Bush again instructed the CIA to overthrow the dictator. Each time the agency balked. General Vernon Walters, then the American ambassador to the United Nations, was particularly wary. "As a former deputy director of the CIA--just like some people in the Pentagon who had been at Southcom, the U.S. Forces Southern Command--he was not eager to see Noriega brought to the U.S. and put on trial for anything," said Stephen Dachi, who knew both General Walters and General Noriega personally and served as the number-two man at the American embassy in Panama during 1989. Noriega's old friends in the agency and the military did not want him testifying about them under oath in an American courtroom.
On President Bush's orders, the agency spent $10 million backing the opposition in a May 1989 election. Noriega outmaneuvered the CIA's fourth operation against him. President Bush approved a fifth covert action against Noriega, including paramilitary support for a coup. Forget about it, the covert operators said: only a full-scale military invasion could dislodge Noriega. Some of the agency's most experienced Latin America hands--including the station chief in Panama, Don Winters--were loath to go up against the general.
Furious, Bush let it be known that he was learning more about events in Panama from CNN than CIA. That was the end of William Webster's standing as director of central intelligence. From then on, the president made plans to topple Noriega in concert with Defense Secretary Dick Cheney, whose skepticism about the agency deepened with every passing day.
The CIA's failure to unseat its old ally in secret forced the United States to mount its biggest military operation since the fall of Saigon. During Christmas week of 1989, smart bombs blasted Panama City slums into rubble while Special Forces soldiers fought their way through the capital. Twenty-three Americans and hundreds of innocent Panamanian civilians died in the two weeks it took to arrest Noriega and to bring him in chains to Miami.
The CIA's Don Winters testified for the defense at Noriega's trial, where the United States admitted paying the dictator at least $320,000 through the agency and the American military. Winters described Noriega as the CIA's trusted liaison between the United States and Fidel Castro, a loyal ally in the war against communism in Central America, and a linchpin for American foreign policy--he had even sheltered the exiled shah of Iran. Noriega was convicted on eight counts of drug trafficking and racketeering. Thanks in great part to posttrial testimony by Winters, Noriega's sentence as a prisoner of war was reduced by a decade and his parole date was reset to September 2007.
"I CAN NEVER TRUST CIA AGAIN"
In 1990, another dictator challenged the United States: Saddam Hussein.
During the eight-year Iran-Iraq war, President Reagan had dispatched Don Rumsfeld as his personal envoy to Baghdad to shake Saddam's hand and offer him American support. The agency had given Saddam military intelligence, including battlefield data from spy satellites, and the United States granted him high-technology export licenses, which Iraq used to try to build weapons of mass destruction.
Skewed intelligence from Bill Casey and the CIA was a decisive factor in these decisions. "Saddam Hussein was known to be a brutal dictator, but many thought he was the lesser of two evils," said Philip Wilcox, the State Department liaison to the agency. "There were intelligence estimates about the threat from Iran that, in retrospect, exaggerated Iran's ability to prevail in that war...."
"We did indeed tilt toward Iraq," he said. "We provided Iraq with intelligence, took Baghdad off the list of state sponsors of terrorism, and viewed positively comments from Saddam Hussein suggesting that he supported an Arab-Israeli peace process. Many began to view Iraq optimistically as a potential factor for stability, and Saddam Hussein as a man with whom we could work."
The return on the investment in Iraq was exceedingly slight. No intelligence flowed back. The agency never penetrated the Iraqi police state. It had next to no firsthand knowledge about the regime. Its network of Iraqi agents consisted of a handful of diplomats and trade officials at overseas embassies. These men had little insight on the secret councils of Baghdad. At one point, the CIA was reduced to recruiting an Iraqi hotel clerk in Germany.
The CIA still maintained a network of more than forty Iranian agents, including midlevel military officers who knew something about the Iraqi army. The CIA's station in Frankfurt communicated with them through the ancient technique of invisible ink. But in the fall of 1989 a CIA clerk mailed letters to all of the agents, all at the same time, all from the same mailbox, all in the same handwriting, all to the same address. When one of the agents was unmasked, the whole network was exposed. It was a failure of Tradecraft 101. Every one of the CIA's Iranian spies was imprisoned, and many were executed for treason.
"The arrested agents were tortured to death," said Phil Giraldi, then the deputy chief of base in Istanbul. "Nobody in CIA was punished," he said, "and the chief of the field element responsible was, in fact, promoted." The collapse of the agent network closed the CIA's window both on Iraq and on Iran.
In the spring of 1990, when Saddam began mobilizing his military again, the CIA missed it. The agency sent a special national intelligence estimate to the White House saying that Iraq's armed forces were exhausted, that they would need years to recover from the war with Iran, and that Saddam was unlikely to embark on any military adventures in the near future. Then, on July 24, 1990, Judge Webster brought spy satellite images to President Bush showing two Republican Guard divisions--tens of thousands of Iraqi troops--massing at the border of Kuwait. The headline on the CIA's National Intelligence Daily the next day read: "Is Iraq Bluffing?"
Only one prominent CIA analyst, Charles Allen, the national intelligence officer for warning, judged the chances for war at better than even. "I did sound the warning bell," Allen said. "Surprisingly, there were very few listeners."
On July 31, the CIA called an invasion unlikely; Saddam might make a limited grab for some oil fields or a handful of islands, but no more. Not until the next day--twenty hours before the invasion--did Deputy Director of Central Intelligence Richard J. Kerr warn the White House that an Iraqi attack was imminent.
President Bush did not believe his CIA. He speed-dialed the president of Egypt, the king of Saudi Arabia, and the emir of Kuwait, and they all told him Saddam would never invade. King Hussein of Jordan told the president, "On the Iraqi side, they send their best regards and highest esteem to you, sir." Bush went to sleep reassured. Hours later, the first wave of 140,000 Iraqi soldiers poured over the border to seize Kuwait.
The president's most trusted intelligence adviser, Bob Gates, was having a family picnic outside Washington. A friend of his wife's joined him. What are you doing here? she asked. What are you talking about? Gates replied. The invasion, she said. What invasion? Gates asked. In short, "there wasn't much intelligence on what was going on inside Iraq," noted Secretary of State James Baker.
For the next two months, the CIA "behaved in an unfortunately quite typical pattern," said Chas W. Freeman, Jr., the American ambassador to Saudi Arabia. It swung to the opposite extreme. On August 5, it reported that Saddam would attack Saudi Arabia. He never did. It assured the president that Iraq did not have chemical warheads for its short-range and medium-range missiles. Then it asserted with increasing confidence that Iraq did have chemical warheads--and Saddam was likely to use them. There was no hard evidence behind the warnings. Saddam never came close to using chemical weapons during the Gulf War. But there was great fear when Iraqi Scud missiles started falling on Riyadh and Tel Aviv.
In the weeks before the seven-week air war on Iraq began on January 17, 1991, the Pentagon invited the CIA to pick bombing targets. The agency selected, among many other sites, an underground military bunker in Baghdad. On February 13, the air force blew it up, but the bunker was being used as a civilian air raid shelter. Hundreds of women and children died. The agency was not called upon to pick targets after that.
Then a brutal argument broke out between the CIA and the American commander of Operation Desert Storm, General Norman Schwarzkopf. The fight was over the battle-damage assessment--the daily reports on the military and political impact of the bombing. It was imperative for the Pentagon to assure the White House that American bombers had destroyed enough Iraqi missile launchers to protect Israel and Saudi Arabia, and enough Iraqi tanks and armor to protect American ground forces. The general assured the president and the public that the job was well done. The CIA's analysts told the president that he was exaggerating the damage done to Iraqi forces--and they were right. But the agency broke its sword when it challenged Schwarzkopf. The agency was banned from conducting battle-damage assessments. The Pentagon took away the job of interpreting spy-satellite photos. Congress forced the agency to assume a subservient role in its relations with the American military. After the war it was compelled to create a new office of military affairs to serve solely as second-echelon support for the Pentagon. The CIA spent the next decade answering thousands of questions from military men: How wide is that road? How strong is that bridge? What's over that hill? For forty-five years, the CIA had answered to civilian leaders, not uniformed officers. It had lost its independence from the military chain of command.
The war ended with Saddam still in power but the CIA weakened. The agency, taking the word of Iraqi exiles, reported the potential for a rebellion against the dictator. President Bush called on the Iraqi people to rise up and overthrow him. The Shiites of the south and the Kurds in the north took Bush at his word. The agency used every means at its disposal--chiefly propaganda and psychological warfare--to promote an uprising. Over the next seven weeks, Saddam crushed the Kurds and Shiites mercilessly, murdering thousands and sending thousands more fleeing into exile. The CIA began working with the leaders of those exiles in London and Amman and Washington, building networks for the next coup, and the next.
After the war, a United Nations Special Commission went into Iraq looking for chemical, biological, and nuclear weapons. Its investigators included CIA officers carrying the United Nations flag. Richard Clarke, an unusually intense National Security Council staffer, remembered their raid on the Iraqi agricultural ministry, where they discovered the core of Saddam's nuclear weapons directorate. "We went there, broke down doors, blew off locks, got into the sanctum sanctorum," Clarke recalled fifteen years later for aFrontline television documentary. "The Iraqis immediately reacted, surrounded the facility and prevented the U.N. inspectors from getting out. We thought that might happen, too, so we had given them satellite telephones. They translated the nuclear reports on-site into English from the Arabic and read them to us over the satellite telephones." They determined that Iraq was probably nine to eighteen months away from having its first nuclear weapon detonation.
"CIA had totally missed it," Clarke said. "We had bombed everything we could bomb in Iraq, but missed an enormous nuclear-weapons development facility. Didn't know it was there, never dropped one bomb on it. Dick Cheney looked at that report and said, 'Here's what the Iraqis themselves are saying: that there's this huge facility that was never hit during the war; that they were very close to making a nuclear bomb, and CIA didn't know it.'"
Clarke concluded: "I'm sure he said to himself, 'I can never trust CIA again to tell me when a country is about to make a nuclear bomb.' There's no doubt that the Dick Cheney who comes back into office nine years later has that as one of the things burnt into his memory: 'Iraq wants a nuclear weapon. Iraq was that close to getting a nuclear weapon. And CIA hadn't a clue.'"
"AND NOW THE MISSION IS OVER"
The CIA "had no idea in January 1989 that a tidal wave of history was about to break upon us," said Bob Gates, who had left headquarters that month--for good, he thought--to become President Bush's deputy national security adviser.
The agency had pronounced the dictatorship of the Soviet Union untouched and untouchable at the hour it was starting to vanish. On December 1, 1988, the month before Bush came to office, the CIA issued a formal report confidently stating that "the basic elements of Soviet defense policy and practice thus far have not been changed by Gorbachev's reform campaign." Six days later, Mikhail Gorbachev stood at the podium of the United Nations and offered a unilateral cut of 500,000 troops in the Soviet military. It was unthinkable, Doug MacEachin, then the CIA's chief of Soviet analysis, told Congress the next week: even if the CIA had concluded that such earthshaking changes were about to sweep the Soviet Union, "we never would have been able to publish it, quite frankly," he said. "Had we done so, people would have been calling for my head."
While the Soviet state withered away, the CIA was "constantly reporting that the Soviet economy was growing," said Mark Palmer, one of the Bush administration's most experienced Kremlinologists. "They used to simply take what the Soviets officially announced, discount it a percent, and put it out. And it was just wrong, and anybody who had spent time in the Soviet Union, in the villages and towns, could look around and see that this was just crazy." This was the work of the CIA's best thinkers--like Bob Gates, for years the chief Soviet analyst--and Palmer found that fact infuriating. "He'd never actually been to the Soviet Union! He'd never once been there, and he was the top so-called expert in the CIA!"
The agency had somehow missed the fact that its main enemy was dying. "They talked about the Soviet Union as if they weren't reading the newspapers, much less developed clandestine intelligence," said Admiral William J. Crowe, Jr., chairman of the Joint Chiefs of Staff under Bush. When the first deep cracks in the Soviet republics started to develop in the spring of 1989, the CIA did indeed get its information from reading the local papers. They were three weeks old when they arrived.
No one at the agency asked the question that Vernon Walters, Bush's newly appointed ambassador to Germany, put to his officers in May 1989: "What are we going to do when the Wall comes down?"
The Berlin Wall had stood for nearly thirty years, the greatest symbol of the cold war. When it began to crack one night in November 1989, the chief of the Soviet division of the clandestine service, Milt Bearden, sat speechless at headquarters, staring at CNN. The upstart network had become a huge problem for the agency. In a crisis, it provided what passed for real-time intelligence. How could the CIA top that? Now the White House was on the line: What's happening in Moscow? What are our spies telling us? It was hard to confess that there were no Soviet spies worth a damn--they all had been rounded up and killed, and no one at the CIA knew why.
The agency wanted to drive eastward like conquering heroes and capture the intelligence services of Czechoslovakia, Poland, and East Germany, but the White House advised caution. The best the CIA could do at first was to train the security staffs of new leaders such as the Czech playwright Vaclav Havel, and to bid the highest dollar for the purloined files of the Stasi, which started floating out a window in East Berlin one fine day, tossed into the streets by a ransacking crowd overthrowing the secret police.
The intelligence services of Soviet communism were enormous and precise instruments of repression. They had served above all to spy on their own citizens, to terrify them, to try to control them. Bigger and more ruthless than the CIA, they had beaten their enemies in many battles overseas, but they lost the war, undone by the brutality and the banality of the Soviet state.
The loss of the Soviets tore out the CIA's heart. How could the agency live without its enemy? "It was easy, once upon a time, for the CIA to be unique and mystical," Milt Bearden said. "It was not an institution. It was a mission. And the mission was a crusade. Then you took the Soviet Union away from us and there wasn't anything else. We don't have a history. We don't have a hero. Even our medals are secret. And now the mission is over. Fini."
Hundreds of veterans of the clandestine service declared victory and pulled out. One among many was Phil Giraldi, who had started out as a field officer in Rome and ended up sixteen years later as chief of base in Barcelona. His partner in the Rome station had been a Ph.D. in Italian politics. In Barcelona, she was an English major who spoke no Spanish.
"The ultimate tragedy is spiritual," he said. "Most of the younger officers I knew have resigned. These were the best and the brightest. Eighty or ninety percent of the people I knew, halfway through their careers, have packed it in. There was very little motivation left. The enthusiasm was gone. When I joined the agency, back in '76, there was a tribalism. The esprit de corps that the agency had was created by this tribalism, and it served a good purpose." And now it was gone, and most of the clandestine service was gone with it.
As early as 1990, "this was rapidly evolving into a very bad situation," said Arnold Donahue, an agency veteran in charge of national-security budgets under Bush. Whenever the White House wanted "ten or fifteen more clandestine people on the ground to find out what was happening" in Somalia or the Balkans--wherever the crisis of the moment arose--it asked the CIA: "Is there a cadre of people ready to go?" And the answer was always: "Absolutely not."
"ADJUST OR DIE"
On May 8, 1991, President Bush called Bob Gates up to the front cabin aboard Air Force One and asked him to take the job of director of central intelligence. Gates was both thrilled and slightly terrified. His confirmation hearings became a bloodbath; the ordeal went on for six months. He was battered for Bill Casey's sins and belittled by his own people. Gates had wanted to address the future of the CIA, but the hearings became a battle about its past. They gave voice to an angry crowd of analysts whom Gates and Casey had whipsawed for years. Their anger was professional and personal. They attacked a culture of deceit and self-deception at the CIA. Harold Ford, who had served with distinction over the course of forty years, said that Gates--and the CIA itself--had been "dead wrong" on the facts of life inside the Soviet Union. Those two words called into question the rationale for the Central Intelligence Agency.
Badly shaken, Gates felt like a prizefighter barely able to answer the bell for the next round. But he managed to convince the senators that they would be his partner in "a not-to-be-missed opportunity to reassess the role, mission, priorities and structure of American intelligence." He owed the votes he won in no small part to the staff director and stage manager of the Senate intelligence committee, the future director of central intelligence George J. Tenet. Thirty-seven years old, fantastically ambitious, ferociously gregarious, the son of Greek immigrants who ran a hamburger joint on the edge of Queens called the 20th Century Diner, Tenet was the quintessential staff man: hardworking, loyal to his bosses, eager to please. He marshaled the evidence for the senators who only wanted proof that Gates would cede them power to gain a measure of his own.
While Gates agonized in Washington, the CIA experienced some dizzying moments overseas. In August 1991, as a coup against Gorbachev fizzled and the Soviet Union began to fall, the CIA was reporting live from Moscow, from the best seat in the house--Soviet intelligence headquarters in Dzerzhinsky Square. One of the stars of the Soviet division, Michael Sulick, drove into Lithuania as it proclaimed its independence, becoming the first CIA officer to set foot in a former Soviet republic. He openly introduced himself to the fledgling nation's new leaders and offered to help them create an intelligence service. He found himself invited to work in the offices of the new vice president, Karol Motieka. "Sitting alone in the vice president's office was surrealistic for a CIA officer who had spent his entire career combating the Soviet Union," Sulick wrote in the agency's journal. "If I had been alone just months before in the office of the vice president of a Soviet republic, I would have thought I had struck an intelligence mother lode. As I sat behind Motieka's desk, documents strewn about, my only purpose was to phone Warsaw."
The bits and pieces of intelligence so painstakingly smuggled out by spies had never come close to providing a big picture of the Soviet Union. Over the whole course of the cold war, the CIA had controlled precisely three agents who were able to provide secrets of lasting value on the Soviet military threat, and all of them had been arrested and executed. Spy satellites had counted tanks and missiles precisely but the numbers now seemed immaterial. Bugs and taps had picked up billions of words, and now they had lost their meaning.
"New world out there. Adjust or die," Gates wrote on a notepad before two days of meetings with the leaders of the clandestine service on November 7 and 8, 1991, immediately after he was sworn in as director of central intelligence. The next week, Bush sent a signed order to the members of his cabinet, labeled National Security Review 29. Gates had drafted it over the past five months. It called on every arm of the government to define what it wanted from American intelligence for the next fifteen years. "This effort," Gates announced to an audience of hundreds of CIA employees, was "a monumental and historic undertaking."
The national security review carried Bush's signature. But it was a plea from Gates to the rest of the government: just tell us what you want. He knew the agency had to be seen to change in order to survive. Richard Kerr, the deputy director of central intelligence for four years under Bush, wondered aloud whether there was going to be a CIA in days to come. The agency was "in as much of a revolution as the former Soviet Union," he said. "We have lost the simplicity of purpose or cohesion that essentially has driven not only intelligence but has driven this country for forty-plus years." The consensus on where American interests lay and how the CIA might serve them was gone.
Gates put out a press release calling the national-security review "the most far-reaching directive to assess future intelligence needs and priorities since 1947." But what were those needs? During the cold war, no president and no director of central intelligence ever had to ask. Should the CIA now focus on the wretched of the earth or the rise of global markets? What was more threatening, terrorism or technology? Over the winter, Gates compiled his to-do list for the new world, completed it in February, and presented it to Congress on April 2, 1992. The final draft included 176 threats, from climate change to cybercrime. At the top were nuclear, chemical, and biological weapons. Then came narcotics and terrorism--the two were twinned as "drugs and thugs" terrorism was still a second-tier issue--and after that, world trade and technological surprise. But they did not add up to the immensity of the Soviet Union.
President Bush decided to reduce the size and refocus the scope of the agency. Gates agreed. It was a reasonable response to the end of the cold war. So the power of the CIA was diminished by design. Everyone thought the CIA would be smarter if it were smaller. The intelligence budget began going down in 1991, and it fell for the next six years. The cuts were taking a toll in 1992, at the moment when the CIA was instructed to dramatically increase its support for day-to-day military operations. More than twenty CIA outposts were shuttered, some large stations in major capitals downsized by more than 60 percent, and the number of clandestine service officers working overseas plummeted. The analysts were hit harder. Doug MacEachin, now their chief, said he found it hard to do serious analysis with "a bunch of 19-year-olds on two-year rotations." That was something of an exaggeration, but not much.
"Tensions rising as budget pinches," Gates wrote in a private work diary not long after his swearing-in. The cuts kept coming, and in years to come, Bush and many others blamed them on knee-jerk liberals. The record shows they were equally his work. They were in the spirit of the times, captured in a television commercial Bill Colby taped for an advocacy group called the Coalition for Democratic Values as the 1992 election season started.
"I'm William Colby, and I was head of the CIA," he said. "The job of intelligence is to warn us of dangers to our military. Now the cold war is over, and the military threat is far less. Now it is time to cut our military spending by fifty percent and invest that money in our schools, health care and our economy." This was the famous peace dividend.
But this peace proved as fleeting as it had been after World War II, and this time there were no victory parades, and the cold war's veterans had cause to mourn the vanquished enemy.
"If you're going to be involved with espionage you've got to be motivated," Richard Helms once said to me, his eyes narrowed and his voice low and urgent. "It's not fun and games. It's dirty and dangerous. There's always a chance you're going to get burned. In World War Two, in the OSS, we knew what our motivation was: to beat the goddamn Nazis. In the cold war, we knew what our motivation was: to beat the goddamn Russians. Suddenly the cold war is over, and what is the motivation? What would compel someone to spend their lives doing this kind of thing?"
Gates spent a year trying to answer those questions--days on end testifying on Capitol Hill, shoring up political support, making public speeches, leading task forces and roundtables, promising more intelligence for the military, less political pressure on analysts, an all-out attack on the top ten threats, a new CIA, a better CIA. He never had time to realize any of these visions. He had been in office for ten months when he had to set his work aside to fly to Little Rock and brief the man who would be the next president of the United States.