Wrong Spy for the Job

By DOUGLAS WALLER/WASHINGTON

All along, James Woolsey wanted to be not the director of central intelligence but the Secretary of Defense. And what finally cost him his job, associates say, was that he spent too much time playing a defensive game. He got into fights with Senators over minor items in the $28 billion intelligence budget and gave out meager punishments to officials who had ignored warning signs that agent Aldrich Ames was a Soviet mole. Even worse, large parts of the CIA's operation bored Woolsey, and its insular culture frustrated him. He once complained to an associate that the agency "needed a psychiatrist, not a manager." Senior agency hands were miffed when he put a cipher lock on the door to his already heavily guarded office suite, signaling to them that he wouldn't be accessible. Months ago a senior White House official concluded, "Woolsey has been miscast."

The CIA director apparently came to the same conclusion last week. Under fire for his handling of the Ames spy scandal and fed up with bureaucratic battles, he telephoned President Clinton on the day after Christmas and announced his leave taking. He then typed out a resignation letter, videotaped a message to CIA employees that was aired after Clinton made the announcement Wednesday, and headed for a vacation in the Caribbean.

The timing caught the White House by surprise, but the resignation was not unwelcome. Woolsey had barely been on speaking terms the past two years with outgoing Senate Intelligence Committee chairman Dennis DeConcini. Earlier this fall, sources told TIME, eight Republican and Democratic Senators on the committee secretly debated going to the White House to ask that Woolsey be fired. "He wasn't pushed," insisted a Clinton aide. But that was only because Clinton had lately been occupied replacing the departing Secretaries of the Treasury and Agriculture, the Democratic Party chairman and several top White House officials. White House aides won't say how long it will take Clinton to name a replacement for Woolsey, who has offered to remain in the post until the end of January.

Both the Administration and Congress had high hopes for Woolsey when he took over the CIA in February 1993. On Capitol Hill he was known as "the Republicans' favorite Democrat" because of his conservative views on defense. He was picked for the job not because he was close to Clinton but because of his resume. A former Navy Under Secretary and arms-control negotiator, Woolsey was seen as the perfect man to shake up what had become a bloated intelligence bureaucracy.

Instead, Woolsey seemed more interested in fiercely defending the status quo. At his first secret hearing with the Senate Intelligence Committee in the spring of 1993, he stunned the Senators by pounding his fist on the table and accusing them of "decimating" the intelligence budget. The Senators, who had been voting for deep cuts in the defense budget, had asked only that spending for intelligence operations at the CIA, the Pentagon and other agencies remain at the previous year's level of about $28 billion. "Woolsey felt like he knew best, and nobody could tell him otherwise," says DeConcini.

Woolsey's relations with lawmakers may have suffered, oddly enough, because he spent too much time in their face. His own aides complained that as much as five hours of Woolsey's working day would be consumed with telephoning or visiting Congressmen. He became a compulsive micromanager on any legislation dealing with intelligence. When Republican Senator John Warner wrote to Clinton last June urging that an independent commission be asked to examine the agency's future, CIA officials told TIME, Woolsey tried unsuccessfully to retrieve the letter from the White House mailroom so he could talk Warner into rewriting it.

When the Ames case broke, Woolsey acted like a lawyer defending a client rather than a director intent on cleaning up the worst spy scandal in the agency's history. Woolsey has estimated that Ames compromised more than 100 operations, which led to the death of at least 10 Soviet agents who had been working for the U.S. A CIA inspector general's report last September accused the agency's operations directorate of gross mismanagement for taking so long to uncover Ames. Senior CIA officials privately urged Woolsey to fire or demote some agency officers even before the inspector general finished his investigations. "It was the biggest espionage case we ever had," one of the officials told TIME. "We told him, 'You have to set some of these people aside.' But he wouldn't do it." Instead, Woolsey issued letters of reprimand to 11 active and retired CIA officials.

These lax punishments enraged Congress and devastated morale in the agency. Young case officers had chafed under the CIA's authoritarian bureaucracy and had been privately demanding a housecleaning. Sept. 28, the date Woolsey announced his punishments in the case, was dubbed "Whitewash Wednesday" by the disgruntled spies. After the announcement, the operations directorate opened a secret hotline so case officers could vent their complaints. It was flooded with so many angry calls that embarrassed officials shut it down after 24 hours.

Supporters of Woolsey argue that he inherited many of the CIA's worst problems. Ames' spying did not occur on his watch. Nor did decades of sexual discrimination in the agency, which prompted 100 female case officers to threaten a class-action lawsuit. The CIA recently settled for $410,000 a suit by a senior female officer who charged that she was harassed by its old-boy network after she exposed carousing, wife beating and drunken behavior among male officers in the agency's Jamaica station. During his tenure, Woolsey worked to promote more women into the upper ranks.

Woolsey made other improvements as well. He forced CIA analysts to write crisper intelligence reports for the White House. He oversaw plans for cutting almost 25% of the CIA's work force of more than 20,000 by the end of the decade, ahead of the schedule the Administration set for the reductions. "Jim Woolsey was a sincere and decent man who had an impossible task," says Angelo Codevilla, an intelligence expert with the Hoover Institution. "He was a much better director than the CIA was an agency."

The agency's challenge in the post-cold war era is to reinvent its role by fighting such new threats as terrorism, nuclear proliferation and organized crime. So far, the agency has scored some successes. Before the Persian Gulf War, intelligence provided by CIA spies prevented some 120 terrorists from launching attacks, say agency officials. Signal intercepts, along with CIA informants in China, have alerted U.S. officials to chemical weapons-related shipments the Beijing government has tried to make to Iran. The agency has also succeeded in placing agents in the Cali drug cartel.

But where the spies go depends on where the policymakers want to send them. Critics complain that the White House has provided little direction. The CIA launched a charm offensive immediately after Clinton was elected, sending its top analysts to Arkansas to brief the new President and letting him know that they were staying in one of Little Rock's cheapest motels. But Clinton has kept his distance from the agency. Woolsey complained that he was cut out of the White House inner circle. "People want the intelligence community to shrink, but at the same time they have more and more things they want it to be on top of," says former CIA director William Webster. In leading the agency into the future, the next director will have to decide, more than anything eelse, what secrets the U.S. can afford not to know.

With reporting by James Carney and Elaine Shannon/Washington