Caution and Years of Budget Cuts Are Seen to Limit C.I.A.

WASHINGTON, May 10 - Even now, 32 months after the Sept. 11 attacks, America's clandestine intelligence service has fewer than 1,100 case officers posted overseas, fewer than the number of F.B.I. agents assigned to the New York City field office alone, government officials say.

Since George J. Tenet took charge of the Central Intelligence Agency seven years ago, rebuilding that service has been his top priority. This year, more new case officers will graduate from a year-long course at Camp Peary in Virginia than in any year since the Vietnam War. They are the products of aggressive new recruiting aimed in particular at speakers of Arabic and others capable of operating in the Middle East and South Asia.

But it will be an additional five years, Mr. Tenet and others have warned, before the rebuilding is complete and the United States has the network it needs to adequately confront a global threat posed by terrorist groups and hostile foreign governments. In an interview on April 30, James L. Pavitt, who as the C.I.A.'s deputy director for operations oversees the clandestine service, said he still needed 30 to 35 percent more people, including officers based overseas and in the United States, supervisors and support workers.

"I need hundreds and hundreds, thousands," Mr. Pavitt said. At a time when the United States is fighting a war on terrorism and a war in Iraq, he said, "we are running hard to get the resources we need."

On Capitol Hill and among former intelligence officers, most experts agree that the clandestine service needs improvement, but there is some debate about whether the agency is addressing the right problems.

"The question is, should you require better before you get bigger?" said a senior Congressional official, describing a question on Capitol Hill that he said had been prompted by inquiries into intelligence failures involving Iraq and the Sept. 11 attacks.

The size and scope of the clandestine service, whose overseas officers recruit and supervise spies and work with foreign intelligence services but rarely try to infiltrate foreign targets themselves, has always been among the government's most closely guarded secrets.

But as the dimensions of the intelligence failures on Iraq and Sept. 11 have come to light in recent months, so too has a picture of American spying operations stretched thin through the 1990's and only now recovering.

In numbers, Mr. Pavitt said in the interview, the clandestine service hit a low point in 1999, when its ranks had been trimmed by 20 percent from its highs during the cold war. And in morale and sense of mission, other experts say, the clandestine service suffered through the 1990's because it was slow to shift its sights from cold war targets, and in some ways became more cautious.

"I cannot tell you the amount of information we didn't get, the operations we didn't undertake, the number of good sources we didn't recruit," Representative Porter J. Goss, the Florida Republican and former C.I.A. case officer who is chairman of the House intelligence committee, said of the 1990's. "We did hurt ourselves."

From the agency's failure to anticipate India's nuclear test in 1998 to the as yet unsubstantiated reports about Iraq's illicit weapons capabilities, the weakness of the agency's human intelligence operations has been manifest in repeated embarrassments. At critical junctures, intelligence officials have acknowledged in recent testimony and interviews, the C.I.A. has proved unable to recruit agents who could provide reliable information about Saddam Hussein's government and Al Qaeda, and has had to rely extensively on foreign intelligence services whose information is often unreliable.

A year before the invasion of Iraq, a top intelligence target for more than a decade, the C.I.A. had just four human sources of intelligence in the Iraqi government, senior intelligence officials now acknowledge.

"If we had been able to successfully penetrate Al Qaeda, imagine what that would have meant!" said Jeffrey H. Smith, a former general counsel of the agency. "If we had been able to penetrate Saddam Hussein's government, imagine what that would have meant!"

In his own recent public remarks, Mr. Tenet has blended defiance with candor. "To be sure, we had difficulty penetrating the Iraqi regime with human sources, but a blanket indictment of our human intelligence around the world is simply wrong," he said in a speech in February at Georgetown University in which he called attention to the role played by human intelligence in the capture of leading Qaeda figures.

Still, in testimony this month before the independent commission on the Sept. 11 attacks, Mr. Tenet was scathing in describing the clandestine service he inherited when he took charge in 1997. "The infrastructure to recruit, train and sustain officers for our clandestine services - the nation's human intelligence capability - was in disarray," he said.

In interviews, current and former intelligence officials along with senior Republican and Democratic lawmakers were blunt in acknowledging weaknesses of human intelligence operations stemming from the Clinton administration, even as they insisted that improvements were being made and praised the courage and sacrifices of clandestine officers abroad. The officials and lawmakers said they understood that it would take time to complete the overhaul.

They said the problems were a product in part of inadequate personnel, after a six-year stretch of Congressional budget cutting during the early and mid-1990's in which some C.I.A. stations and bases overseas were closed and the number of officers was slashed.

But they also cited a culture of "risk aversion" that was intensified by a 1995 directive by Mr. Tenet's predecessor, John M. Deutch, amid a scandal over C.I.A. activities in Guatemala. The order was widely interpreted by the agency's officers as a warning against consorting with unsavory individuals.

"I'm not going to succeed against terrorism unless I recruit terrorists," Mr. Pavitt said. "I'm not going to succeed in terms of the tough issues in this business unless I'm right in the middle of it."

The officials also pointed to a lack of nimbleness within what is still a highly bureaucratic organization, whose clandestine officers remain primarily white men posted in embassies overseas. In the large majority of cases they pose as diplomats or other government officials under what is known as official cover, an arrangement that some critics say limits the officers' ability to operate outside diplomatic circles.

"Ideally, within 10 years, 50 percent of case officers should be under nonofficial cover," said Reuel Marc Gerecht, a former C.I.A. officer who referred to a more elaborate arrangement in which officers assume identities as bankers, consultants or other professionals. Mr. Gerecht, who served in the Middle East, has criticized the embassy-centered structure for its lack of success in recruiting spies capable of penetrating terrorist groups.

Mr. Smith, who served as the C.I.A.'s general counsel under Mr. Deutch and who drafted the guidelines for him, said the guidelines had been intended as a "hunting license" to establish a formal process for the recruiting of questionable new agents and allow case officers to work with them without worrying about being disciplined. But in retrospect, Mr. Smith said, he regarded the guidelines as a mistake, in part because "many in the field resented the guidelines and some may have used them as an excuse when they were not able to recruit sources in terrorist groups."

"Management tried to address this by encouraging risk," Mr. Smith said, "but were not successful because it became a kind of mantra that the guidelines were a tremendous hindrance to recruiting. My understanding is that post 9/11, that's all in the past."

The directorate of operations "is aggressively recruiting and management is fully supporting their efforts, including encouraging great risk taking,'' he continued. "To my mind, this shows the folly of trying to manage intelligence activities by looking at scandals in the rear view mirror. We tried to fix one problem and created another one. Hopefully, it's now been solved."

Even now, intelligence officials acknowledge, the agency's success in hiring case officers fluent in critical languages and comfortable in foreign cultures has been limited by a system that generally requires that new officers be no older than 35 and that they qualify for a top secret security clearance. That entails a background check that takes at least six months and in which recent drug use, a criminal record or questionable integrity can be disqualifying.

The intelligence officials also said the impact of the aggressive hiring has not been felt immediately because of the time it takes to teach new hires, which includes not only the course at Camp Peary but often extensive language training, sometimes overseas. Some former intelligence officials said that at least some of these rules should be loosened, but in an interview, a senior intelligence official said a decision had been made "not to lower the bar."

Because even the C.I.A.'s overall budget and staffing levels remain classified, agency officials declined in interviews to say how much the agency or the clandestine service had grown in recent years.

By all other accounts, there has been an extraordinary surge in spending and hiring since the Sept. 11 attacks across the vast intelligence community, which spans some 15 agencies and has an overall budget that is nearing $40 billion a year.

"Budgets and recruitment efforts are dramatically improved, but I don't think we are where we need to be," said Representative Jane Harman of California, the top Democrat on the House intelligence committee.

Still, recent public statements by Mr. Tenet and others, along with comments made by Mr. Pavitt in the interview, have described a major turnabout since 1995, when Mr. Tenet came to the agency as deputy director and found that only 25 new officers were emerging from that year's two graduating classes - a rate Mr. Tenet publicly called "unbelievably low." In the last year, more than 300 people have graduated, former intelligence officials say.

The C.I.A. will not confirm that number, or even the existence of the training facility at Camp Peary. But in an interview, officials in charge of recruiting at the agency, including Bob Rebello, the chief human resources officer, said that the number of hires into the clandestine service was still rising, at a rate at least 20 percent a year for the last two years.

The directorate of operations, with an overall staff estimated at 5,000, is only one of the C.I.A.'s three main branches. (The others include the directorate of science and technology, and the directorate of intelligence, which is in charge of analysis.) Along with case officers and others who recruit and supervise agents, the directorate includes professional and support staff and groups responsible for covert and paramilitary operations and other so-called "special activities."

But the role played by its case officers is regarded by intelligence professionals as particularly critical, in that their mission aims to obtain from human sources the kind of information that no spy satellite or listening device can provide.

"Having reliable sources that can get to the plans and intentions information is the core mission; it always has been," Representative Goss said.

It was Mr. Pavitt, a career spy with bushy white hair who has spent more than 30 years at the C.I.A., who recently provided the clearest indication of how limited the agency's overseas foreign presence remains.

"We cover a terrorist target around this globe using a cadre of case officers that is smaller than the number of F.B.I. officers who work in New York City alone," Mr. Pavitt said in a "written statement for the record" that accompanied his testimony on April 14 to the Sept. 11 commission. It was rare public testimony from a clandestine service chief.

An F.B.I. spokesman said that about 1,100 agents are assigned to the New York field office, which includes the city's five boroughs, Long Island and six counties north of the city. In the interview on April 30, Mr. Pavitt declined to expand on his written statement, but other officials confirmed that fewer than 1,100 officers were assigned overseas.

Today, Mr. Pavitt said, 50 percent of the funding in the directorate of operations and 30 percent of personnel within the clandestine service are focused on terrorism, representing an enormous change from 15 years ago, when the vast bulk of the agency was oriented to the Soviet Union. "Every station in the clandestine service has counterterrorism as its top priority," Mr. Pavitt said in his April 14 testimony.

In the interview, Mr. Pavitt said it would be wrong to regard the agency as risk-averse. But he also described as "unnecessary" the directive that was issued by Mr. Deutch, which was rescinded under Mr. Tenet in 2002. Mr. Pavitt said the C.I.A. was only now "turning around" what he called a mistaken perception among some officers that they could not deal with criminals and other unsavory individuals.

"I worry immensely that there are people who are trying to kill us as we sit here and talk," Mr. Pavitt added. "It is an extraordinary threat."

"In his own recent public remarks, Mr. Tenet has blended defiance with candor. "To be sure, we had difficulty penetrating the Iraqi regime with human sources, but a blanket indictment of our human intelligence around the world is simply wrong," he said in a speech in February at Georgetown University in which he called attention to the role played by human intelligence in the capture of leading Qaeda figures.

"Still, in testimony this month before the independent commission on the Sept. 11 attacks, Mr. Tenet was scathing in describing the clandestine service he inherited when he took charge in 1997. "The infrastructure to recruit, train and sustain officers for our clandestine services - the nation's human intelligence capability - was in disarray," he said.

"In interviews, current and former intelligence officials along with senior Republican and Democratic lawmakers were blunt in acknowledging weaknesses of human intelligence operations stemming from the Clinton administration, even as they insisted that improvements were being made and praised the courage and sacrifices of clandestine officers abroad."

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