By Siobhan Gorman, National Journal
WASHINGTON — Five days after telling Congress that the emperor had had no weapons of mass destruction, David Kay, who had recently stepped down as the chief U.S. weapons inspector in Iraq, found himself lunching just off the Oval Office with President George W. Bush. Kay’s declaration — “We were almost all wrong” in thinking that Saddam Hussein had possessed WMD — had blown apart the president’s chief reason for having gone to war (see GSN, March 7). Bush listened intently as Kay explained what went wrong: “People connected the dots without collecting the dots. The most dangerous thing you can do is connect the dots when you haven’t collected the dots. You build a universe that is fact-free.” Although Kay provided an interim report in October 2003, that 90-minute White House lunch on Feb. 2, 2004, is the only conversation he has had with Bush about Iraq’s apparent lack of weapons of mass destruction. Bush interrupted Kay frequently to probe further and “dominated the conversation,” according to Kay, even though Vice President Dick Cheney, then-national security adviser Condoleezza Rice, and White House Chief of Staff Andy Card were also there. In a recent interview with National Journal, Kay recalled being surprised that Bush displayed no anger over U.S. intelligence agencies’ failure to properly assess whether Saddam had posed an immediate threat. “It’s one thing to say that there were other reasons to go to war,” Kay said. “But that doesn’t stop one from saying, ‘I’m really pissed, and I don’t want this to happen again.’ I would not have controlled my anger — and would have used my anger to push reforms ahead” within the Central Intelligence Agency. Bush’s subdued reaction contrasts sharply with President John F. Kennedy’s response to being failed by the CIA. After the Bay of Pigs invasion turned into a fiasco in April 1961 because Cuban forces quickly crushed CIA-trained Cuban emigrants intent on toppling Fidel Castro, Kennedy fired the director of the CIA and two other top officials at the agency. But regardless of how presidents have treated the CIA, the United States has had an embarrassingly poor track record in gathering intelligence through the use of spies. Today, despite the latest wake-up calls — the CIA’s inability to prevent the Sept. 11 attacks or to know that Iraq no longer possessed WMD — the United States’ so-called “human-intelligence” capabilities are only marginally better than they were before the World Trade Center was destroyed, say ex-spies and outside experts alike. The Bush White House, according to a source familiar with its thinking, sees only “pockets of improvement” in human intelligence. And now, two years after the war in Iraq began, some intelligence veterans contend that the situation is worse than it was before Sept. 11, 2001. If, as expected, John Negroponte, now the U.S. ambassador to Iraq, is confirmed as the first director of national intelligence, he will inherit an intelligence community at war with itself and a spying operation that’s yet to break free of its Cold War mentality. Recognizing that the CIA is reeling from three and a half years of revelations about its failures, the Pentagon and the FBI have moved quickly to try to seize some CIA turf by beefing up their own spying activities. Negroponte will come to his new job armed with a fresh report on intelligence failures, courtesy of the Silberman-Robb commission, which Bush charged with investigating the intelligence failures that preceded the war in Iraq. The commission plans to report its findings and recommendations to the president later this month. Yet Kay frets that true reform of human-intelligence operations has “not really begun.” Simply installing a director of national intelligence does not ensure that the right information “dots” get collected, he says. The CIA was created in 1947 in response to the surprise Japanese attack on Pearl Harbor six years earlier. Today, the CIA and the intelligence community that has grown up around it continually monitor every country’s military moves via satellite. The obsession with high-tech tracking of military operations has persisted, even after the Soviet Union’s collapse and after outside analysts such as Paul Wolfowitz, now deputy secretary of defense, began warning in the 1990s that the United States was dangerously neglecting the sort of intelligence-gathering that can only be done by human spies — as opposed to satellites and other gadgets. The secret to improving American spying “is blindingly simple,” says John MacGaffin, a 31-year veteran of the clandestine service. The transformation must come from both the top and the bottom, he argues. At the top, the director of national intelligence will need to define the unique role that each of the 15 intelligence agencies ought to play in human-intelligence collection and will need to make sure that every agency performs its assigned role. And clear directions from on high will need to be accompanied by commonsense ground-level changes, he says, such as rewriting the rules that govern the recruitment and promotion of spies, getting more serious about language training, and being more clever about how and where spies are deployed abroad. Bush has responded to the CIA’s manifest shortcomings by directing the agency to develop a plan to increase its roster of spies — currently estimated at 1,100 — by 50 percent. Yet, former CIA agents warn that simply pushing more recruits through the existing pipeline will do nothing to ensure that the CIA or its sister agencies will be able to collect information that is any more reliable. “Fifty percent more gets you to ‘Stupid,’” MacGaffin grumbles. “You’ll get 50 percent more of what you’ve got now.” The problem, he insists, is quality, not quantity. Indeed, an important lesson from the U.S. failure to properly gauge Saddam’ Hussein’s weaponry is that ensuring that the information Washington was getting from its spies and their paid contacts was accurate and complete was not given enough priority. Human spying needs to become more-precisely targeted — toward obtaining only information that is absolutely essential and that cannot be gotten any other way. The vacuum-cleaner approach of sucking up and sending along every piece of “information” — verified or not — that’s in the air in a targeted country just hasn’t worked. As John Gannon, former chairman of the National Intelligence Council, puts it, “The solution is strategy and discipline. It’s going to mean fewer human-intelligence resources, not many more.” In Gannon’s vision of a revitalized intelligence community, human spies would make up a “smaller but richer piece” of the pie, not 50 percent more filler. A New Brand of SpyingThe first war against Iraq taught the CIA that post-Cold War spying wasn’t easy. During the Persian Gulf War, then-CIA Director William Webster’s spies recruited a few senior people in the Iraqi army. But Saddam’s inner circle was tight, and the CIA’s turncoats weren’t in a position to know specifics of Iraq’s attack plans. “In that particular situation, I thought we got more information from what we could see from the sky,” Webster recalled in a recent interview. He says that he worried about pushing the few sources he did have too far, for fear they’d get caught and probably killed, leaving the CIA with zero sources on the inside of Saddam’s regime. After that war, why didn’t the United States work to improve its spy network inside Iraq? “If you look at the pattern after World War I and World War II, we tend to be very optimistic. We conclude we don’t need those people anymore,” says Webster, who retired from the CIA in 1991. In addition, Americans aren’t fond of the idea of paying government agents to snoop, so elected officials have rarely been pushed to make the United States more proficient at spying. Within intelligence circles, the CIA is continually accused of being mired in a “Cold War mind-set.
But the CIA’s problem is actually more akin to the joke about the man looking for his keys under a streetlamp. Someone asks him why he’s looking there, and he responds, “That’s where the light is.” The intelligence community recognizes that the biggest threat to U.S. security no longer comes from another government’s secretly shifting troops or weapons around; it comes from terrorist cells under the direction of no head of state. Yet, intelligence officials still aren’t proficient at tracking or cracking terrorist cells, so they cling to tactics that worked fairly well in the old days of fighting communism. Greg Treverton, a former vice chairman of the National Intelligence Council, says bluntly, “We face an utterly different threat that we’re almost perfectly unsuited to deal with.” Counting tanks and missiles made some sense during the Cold War — though the CIA apparently long failed to grasp that the Soviet Union was headed toward collapse. Osama bin Laden has no tanks or missiles to count. And to the extent that al-Qaeda has “troop movements” to detect, the CIA has not mastered how to do it. The CIA’s first post-Cold War director, Robert Gates, was quick to shift his resources away from the Soviet Union. In his first years on the job, monitoring Moscow went from swallowing about 65 percent of CIA resources down to just 17 percent, largely because the U.S. redirected some spy satellites, notes University of Georgia international affairs professor Loch Johnson, who has served in a number of advisory capacities to intelligence agencies over the years. As the CIA was being hit with budget and personnel cuts during the 1990s, some intelligence insiders argued in vain that the United States was going to need the agency to assume new tasks. Gannon, a former deputy director for intelligence, was among those sounding the warnings. But, Gannon says, the government suffered from attention-deficit disorder. Every time he launched a project intended to develop strategies to counter emerging threats, the CIA would be told to redirect its talent toward the conflict of the day. “We wanted to do more long-term strategies, and then there would be a crisis in Bosnia, and off [my people] would go,” Gannon recalls. Likewise, the war in Iraq is now sucking up much of the CIA’s human resources, says former CIA analyst Michael Scheuer, better known as the “anonymous” author of Imperial Hubris: Why the West Is Losing the War on Terror. “What has changed since 9/11, I think, is not a lot, because of the vast diversion of resources to Iraq,” Scheuer says. “Probably two-thirds of the clandestine service is there. The idea that we have expanded human intelligence probably isn’t quite correct.” And even if every CIA spy were assigned to fighting terrorism, Scheuer says, “the conditions of looking for human intelligence are so different from the Cold War that just more money and more people doesn’t guarantee you anything.” Scheuer, who headed the CIA’s so-called “Bin Laden Unit,” points to three key differences between then and now. The first is recruitment of “assets” — locals whom the CIA enlists to steal secrets. Recruiting people on the outer ring of the Soviet government was difficult because they’d been taught to believe that communism was fairer than democracy, Scheuer says. But if a U.S. spy could hook an apparatchik, reeling him in became easier as he rose through the Soviet system and saw rampant favoritism. The difficulty in dealing with Islamic fundamentalism is the opposite, Scheuer argues. It is comparatively easy to recruit people on the periphery of terrorist cells — a group’s document-forger, for example. But as those people spend more time within the cell, they tend to become true believers with no interest in providing information to U.S. agents. Second, Scheuer says, the United States’ information needs have changed. In the Cold War, the government wanted to get its hands on schematic drawings of Soviet missiles and electrical grids. So, the CIA sought out people who had the inside track on such information. Terrorist cells limit vital information about targets and methods to a tight group within the network; even most members may not have the whole picture, so the likelihood of the CIA getting it is much lower. But terrorists don’t hold all the information the United States needs. Often, U.S. intelligence agencies also need locals who can go where Americans can’t and just describe what’s on the ground — details that are missing from outdated maps and unavailable by satellite, as U.S. soldiers learned the hard way in Afghanistan, where the mujahedeen were literally hiding in the shadows. Third, Scheuer says, policy-makers must get comfortable with making decisions about terrorists based on less than ideal information. In the Cold War, he estimates, the United States was 70 to 75 percent certain about most of its intelligence estimates. Now, he says, the CIA’s intelligence on terrorist activities and intentions is only about 20 percent “certain.” In theory, these are the kinds of issues that were addressed in the secret plan that CIA Director Porter Goss sent to the White House on Feb. 16 in response to the president’s demand for 50 percent more spies. The report is classified, but one senior intelligence official called it “an aggressive and detailed plan” that signals “a focus never really seen before.” Yet, a source close to White House officials who have read it says, “There is nothing new or very different about the plan — and certainly nothing to make anyone think it would be any more successful than before.” Food FightAs much as he doesn’t like it, David Kay understands the Pentagon’s drive for its own human-intelligence division. “I saw what happened in Iraq,” he says. Soldiers needed intelligence on the motives and intentions of the insurgency, and “the CIA had no answers.” Had Bush used the Iraq intelligence failure to mandate changes in the CIA’s intelligence-collection branch, Kay says, the Pentagon might have been willing to trust the CIA’s intelligence capability — or would at least have had a tougher time defending the creation of its new spy division, the Strategic Support Branch. Others argue that the Pentagon simply smelled blood in the water after Sept. 11 and Iraq intelligence failures. Still, even if the Pentagon’s intentions are good, Kay says, the Defense Department doesn’t appreciate the “great dangers” of creating a new intelligence agency. Since Sept. 11, a number of intelligence veterans contend, this country’s human-intelligence capability has actually declined, because the CIA has been distracted by bureaucratic battles. The grab by the Pentagon and the FBI for a larger share of U.S. spying activities abroad has caused considerable confusion among those responsible for collecting human intelligence. “There’s a vacuum in terms of organizational leadership, and some people’s uglier instincts are taking over,” says Winston Wiley, a former deputy director for intelligence who left the CIA in 2003. “You have a sort of food fight breaking out in the cafeteria.” Looking ahead, he says, “The CIA, as it was known in the past, is no longer.” The confusion and infighting that Wiley sees can damage the quality of the intelligence collected. In fact, it may have already done so. If the trend continues, at some point, the CIA and either the FBI or the Pentagon will try to penetrate the same group, and one agency will slip up and blow the other’s cover — probably getting locals or Americans killed in the process. Or, if multiple U.S. agencies are working with a foreign intelligence agency, the foreigners might play the Americans against each other. Putting aside the questions that CIA alumni raise about the Pentagon’s espionage abilities, the U.S. military’s freelancing in the spy arena could badly damage relations with U.S. allies. “Try to imagine the Special Forces marching into France without the ambassador’s knowing it,” frets one former CIA spy. Breaking up the food fight would require the time and sustained energy of both the national intelligence director and the president — at a time when Bush and Negroponte need to keep the intelligence community focused on building a cadre of spies geared toward fighting terrorism, and other threats over the horizon. Negroponte, with Bush’s full backing, needs to work out a clear division of labor within the intelligence community so that agencies concentrate on what they do best. The result, Wiley says, would be a “system of systems” in which the work of each “collection agency” complemented that of the others -—and every agency in the community could trust that it could rely on the others for the information it wasn’t collecting itself. The CIA would collect human intelligence abroad in an effort to understand U.S. enemies and their strategic plans. But, as one former spy argued, the CIA should focus its limited resources on espionage rather than on peripheral activities, such as covert action and interrogation. “It’s supposed to be the Central Intelligence Agency, not the Central Interrogation Agency,” he said pointedly. Stretched too thin, the CIA is now dispatching whomever it can to tackle the crisis of the day, the former CIA officer said. “The people we’re sending are not prepared for that. Sending some out-of-shape guy from Paris, dressing him up in Lands’ End clothing, and telling him which end to shoot from isn’t going to do it.” The Pentagon maintains that it needs its own human-intelligence capacity to support its troops and that it ought to take over for the chubby guy sent out from Paris. The Pentagon would take charge of battlefield intelligence — so-called tactical intelligence — and nothing more. The FBI would, for now, handle domestic intelligence — although questions remain about whether domestic intelligence collection will ever be the FBI’s strength. Sources close to the National Security Council say that the FBI’s intelligence products are still largely useless, and that bureau officials are more worried about the number of reports produced than about what’s in them. And an internal FBI report uncovered last week by ABC News acknowledges that, despite earlier Justice Department pronouncements about rounding up terrorists in places like Lackawanna, N.Y., “to date, we have not identified any true `sleeper’ agents in the U.S.” For its part, the FBI says that although it may not have uncovered terrorist cells, it has had success in learning about a number of terrorism-recruitment and fundraising efforts. If confirmed, Negroponte will be responsible for enforcing these clearer job descriptions, but the president will need to publicly emphasize that the intelligence community must improve the quality of its work, says former Representative Tim Roemer, D-Ind., who served on the House Intelligence Committee and the Sept. 11 commission. “He needs to use the bully pulpit to transform the CIA and hold them accountable,” Roemer adds. He said Bush’s feel-good visit to the CIA’s Langley campus last week sent exactly the wrong message. “The message out to Langley shouldn’t be, ‘You are very important, and you’re doing a good job’; it should be, ‘We need to do a better job.’” Building a Better SpyThe lesson of Iraq that David Kay presented to the president is a painfully obvious one: Your intelligence community wasn’t up to the task of collecting all of the information you needed. Indeed, the lesson of Sept. 11 was, by comparison, comforting: You’ve got all this great information; you just need to figure out how to make sense of it before it’s too late. Together, Sept. 11 and the WMD debacle brought home a daunting truth: Not only is the U.S. intelligence community incapable of figuring out what information it has, much of that information is wrong. The good news is that the government can do a lot to improve the quality of U.S. spy operations and, more generally, human intelligence-gathering. The bad news is that few of these ideas are new. Indeed, the intelligence community has tried and abandoned some of them, because they are difficult to pull off. The recommendations from those who have spent years stealing secrets fall into three broad categories: 1. Spy like a terrorist. The most frequently discussed proposal is to increase the number of spies who operate under risky “nonofficial cover,” so-called NOCs. The oft-cited reason is: Terrorists don’t go to embassy cocktail parties. NOCs are clandestine officers who pose as nongovernment agents overseas. They often work abroad, posing as anything from an investment banker to a computer-parts salesman. NOCs are expensive and difficult to support, and the CIA has used them sparingly. Such an agent must, for example, put in 14 hours a day as an investment banker and then write up intelligence reports on nights and weekends — and all on a CIA operative’s salary, not an investment banker’s. And as the Mission: Impossible television show put it, if NOCs get caught, the agency will “disavow any knowledge” of their activities. The CIA has been trying to boost its ranks of NOCs. But it is “running into a brick wall,” reports one former spy who still talks frequently with those inside the agency. The conundrum: What kind of cover do you use to position yourself to spy on an enemy who hangs out in caves? Instead, MacGaffin recommends a tougher, but potentially higher-payoff, alternative to NOCs. He says that today’s human-intelligence targets require an intelligence officer to openly put himself in a position to collect secrets, rather than pose as a computer salesman and then try to steal information that he’d never encounter while hawking computers. For example, if the CIA thinks that important activities are taking place at a port in Yemen, the traditional approach would be to place a spy or operative within a peripheral component of the port, where he would attempt to learn what he needed without getting caught. Under MacGaffin’s arrangement, the spy would establish a legitimate, profit-making enterprise that would run the port and, in the process, would have natural access to its secrets. Unfortunately, MacGaffin says, the CIA has not had the “flexibility or expertise” to establish and operate this sort of collection capability — especially if it would turn a profit and thus trigger all sorts of government restrictions. 2. Recruit for the threats of today and tomorrow. Recruitment is the most discussed problem at the CIA. The challenge is quality control. The first problem is finding the right people — those with very specialized skills, especially in Middle Eastern languages, who are willing to risk their lives in the least pleasant corners of the world for a CIA salary. In a country of 290 million people, a logical step would be to go to, say, the Detroit area, home to the country’s largest concentration of Middle Eastern immigrants, and recruit the best and brightest. Recent immigrants speak their native language, understand the culture, and have ties back home. Yet, the surest way to jeopardize one’s security clearance — and thus become ineligible to work for intelligence agencies — is to travel to the Middle East or, God forbid, to have family there. Public policy professor Amy Zegart of the University of California, Los Angeles, who specializes in intelligence, recounted a recent experience with a talented Middle Eastern student who expressed an interest in working for the CIA and asked Zegart for help. Zegart checked with her CIA contacts. “The message was, ‘Good luck. You’ll never get him through the process,’” she says. Further compounding the problem, Zegart says, is that three and a half years after Sept. 11, college students show only marginally more interest in international affairs than in the past, and the uptick is not translating into aspiring Arabists. “If you compare [enrollment in] Russian language schools in the 1950s to Arabic language programs now, it’s pathetic,” she says. According to a recent study by the Education Department’s research arm, just six U.S. students graduated in 2002 with a major in Arabic. An alternative, Kay points out, to recruiting first- and second-generation Americans to be career CIA officers is to hire as “assets” people like an Iranian-American dentist who travels to Iran every summer and probably picks up all kinds of useful information while there. 3. Align incentives with the new threat. If the CIA wants its agents to immerse themselves in the culture in which terrorists hide, it can’t expect them to rotate to another country after a few years. And if it wants to retain officers in places where “diarrhea is the default position,” as MacGaffin, who served as chief of station in several Arab countries, puts it, the government will have to pay higher salaries. The typical pay range of today’s CIA operatives — $60,000 to $70,000 a year — isn’t going to cut it, he says. Unfortunately, if a spy wants to get promoted, quantity still counts more than quality in today’s CIA, according to former officials. “People focus on numbers. This is especially true with terrorism,” says a veteran spy. Sources with close contacts inside the agency report that leaders in the directorate of operations were trying to redesign that rewards system — until Goss ousted them. But even before the intelligence community embarks on much-needed changes, says Suzanne Spaulding, who has worked in the CIA general counsel’s office as well as on intelligence panels on Capitol Hill, its leaders would be well advised to double-check its current sources to see where the intelligence gaps are located. Great ExpectationsBecause the U.S. intelligence community has a history of not knowing when it’s getting — and passing along — faulty intelligence, just adding more and better spies and cooperative locals won’t necessarily solve anything. “In some ways, our biggest challenge is dealing with the expectation that comes from watching Alias or 24 — that human intelligence, and intelligence in general, can be omnipresent and omniscient. It can’t be,” says Wiley, who doesn’t align himself with the harshest critics of the U.S. intelligence community’s human-intelligence operation. What is more realistic, Wiley says, is to aim to use human sources to help disrupt the “supply chain” for terrorism. He argues that the intelligence community could throw all of its resources at penetrating a terrorist cell and still fail. But if the goal is to learn about and disrupt activities — such as money laundering -- that might support the next terrorist strike, the chances of success are much higher. Given its limitations, human intelligence — or “humint” — works best in combination with the other “ints,” like intelligence from satellites and intercepted signals of all sorts. Indeed, there’s a technical term for this intelligence hybrid: “multi-int.” Of course, multi-int happens to some degree now, but it’s not ingrained in the system, says Gannon, who tried without success to institutionalize multi-int when he led the CIA’s directorate of intelligence in the 1990s. “Multi-int is the wave of the future,” he says. With Bush’s philosophy of pre-emption driving America’s foreign policy, spying is not only an essential tool in the fight against terrorism, it can literally determine where the United States intervenes militarily around the world. Yet, in the year since David Kay lunched with the president, the CIA and its sister agencies, by all accounts, haven’t gotten appreciably better at either collecting or connecting the intelligence dots. But Bush still hasn’t gotten angry. Perhaps that job, too, will fall to the new director of national intelligence.
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