The Incredible Shrinking CIA

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CIA Director Porter Goss listens as President Bush announces that Goss will be resigining.

The sudden and unexpected resignation of Porter Goss as Director of the Central Intelligence Agency on Friday highlights a long bureaucratic battle that's been going on behind the scenes in Washington. Ever since John Negroponte was appointed Director of National Intelligence a year ago and given the task of coordinating the nation's myriad spy agencies, he has been diluting the power and prestige of the CIA. From day one, he supplanted the CIA Director as the President's principal intelligence adviser, in charge of George W. Bush's daily briefing. Other changes followed, all originating in the law that created the DNI — and all traumatic for CIA fans. Then, earlier this week, in a little noticed move, Negroponte signaled that he would be moving still more responsibility from the CIA to his own office, including control over the analysis of terrorist groups and threats.

The President and Goss tried to put the best light on things when they jointly announced the resignation in the Oval Office. "I would like to report to you that the agency is back on a very even keel and sailing well," Goss said after Bush said that he had accepted Goss's resignation. But to use the nautical metaphor, the seas are more turbulent than Goss allowed.

In a speech in San Antonio last week, Negroponte's top deputy, Michael Hayden, declared that an office largely under Negroponte's control — the National Counterterrorism Center, or NCTC — was now in charge of dictating the role other agencies will play in terror analysis. Hayden said too many agencies were in the analysis business and that the NCTC, like a team captain," will make these calls for the entire IC [intelligence community]." This may seem like bureaucratic minutiae, but it reflects an important struggle over a key aspect of American intelligence. Even though some diminishment of the CIA was all but guaranteed by the passage of the DNI law 18 months ago, each new detail of the Negroponte's implementation has been watched for how much it may curtail the power of the once-supreme CIA.

In the speech, Hayden also said Negroponte's office would be in charge of "liaison" relationships with foreign intelligence services — long the treasured turf of the CIA — which have historically produced much of the most important intelligence, according to a former senior CIA official. Negroponte, Hayden said, "is aggressively overseeing our relationships with foreign intelligence services to help detect and prevent attacks against ourselves and our friends and allies.... As the head of our intelligence community, he routinely meets with foreign intelligence leaders, and he has visited many of our major allies" — an activity that comes easily to Negroponte as a career diplomat and ambassador.

CIA supporters are upset about what they see as the neutering of an agency that helped win the Cold War and worry that it will undermine its human spy responsibilities, of which the CIA is still in charge. "It's a huge thing going on. It's a huge drama and nobody's picking up on it," the former CIA official said of the DNI's realignment of CIA responsibilities. "CIA feels quite friendless right now. We're seeing more pieces of it just keep being moved to the door." A senior U.S. official sympathetic to the CIA warns that "if the DNI's not careful, the Agency and what it does will be different, and maybe that's what everybody wants. That's OK, but maybe the Agency won't be able to do what everybody wants."

For their part, officials in Negroponte's office have insisted they're not gutting the CIA's role, but are instead making the overall intelligence community, with between 80,000 and 100,000 employees at 16 agencies, more efficient. But there's no question that analytic talent is being sapped for DNI-run entities such as the NCTC, with a planned staff (including analysts and others) somewhere over 400. Negroponte's analysis chief, Tom Fingar, tells TIME he already has some 350 to 450 billets at the National Intelligence Council. (A DNI spokesperson said the actual figure is closer to 110.) The DNI has already taken some 90 analysts from the CIA. Now, he is siphoning off over two dozen more for NCTC from the CIA, one source tells TIME.

While the CIA is watching substantial duties and numbers of its analysts get shifted to offices under the DNI, the Pentagon has in some cases been better able to stave off such transfers. This suggests at least a partial victory for Defense Secretary Donald Rumsfeld, who originally was reluctant to back the creation of Negroponte's office. Officials tell TIME that the Pentagon's Defense Intelligence Agency has handed over far fewer analysts in response to Negroponte's call. The DIA director, Lt. Gen. Michael Maples, has insisted that because "we're at war," he can spare very few billets, one senior U.S. official said. A DIA spokesman says Maples has no such view and that "we're progressing fine from our end in meeting NCTC's support."

Will these changes improve U.S. intelligence? The great hope behind the creation of Negroponte's office was that it would streamline intelligence gathering and sharing and make it easier for the President to make smart decisions. That may yet come to pass. But many current and former national security officials warn that if the evolution is not handled smoothly, the changes could diminish and possibly destroy both the nation's proudest intelligence shop, the CIA, and its newest, the DNI. Indeed, one knowledgeable expert says DNI officials are already concerned that Fingar, Negroponte's top analysis deputy, risks having his influence over terrorism intelligence diminished because the DNI law says the NCTC chief, former Navy Admiral Scott Redd, does not report directly to Fingar, but to Negroponte or, on certain sensitive matters, to President Bush. A DNI spokesman denies this is a problem. Count on all these issues to be aired both when Bush names a successor, perhaps as early as next week, and when Congress holds hearings to confirm the new director of the nation's oldest and most beleaguered spy agency.