CIA Director Dennis Blair squared off in May over Blair's effort to choose his own representative at U.S. embassies to be his personal eyes and ears abroad, instead of relying on CIA station chiefs. Blair issued a directive in May declaring his intention to select his own representatives overseas. Panetta followed up shortly thereafter with a note telling agency employees that station chiefs were still in charge.and National Intelligence Director
made it all the way to national security adviser Gen. James L. Jones.
An official in Blair's organization said the White House decided the matter this week in the CIA's favor. U.S. intelligence officials described the dispute on the condition of anonymity, noting the political sensitivities involved. For the DNI's office, it was a high-profile loss to a subordinate agency that raised fresh questions about the strength of the 5-year old parent office.
Blair's May directive was described by some government officials as an attempt to shore up both the office's authority and its ability to oversee foreign operations, which has so far been stronger on paper than in practice.
Blair's office was created after the Sept. 11, 2001, terrorist attacks to better coordinate intelligence gathering and make sure critical information isn't overlooked. But former and current CIA officials warned that the plan could do just the opposite - setting up competing chains of command inside U.S. embassies and potentially fouling up intelligence operations. They also warned that it could complicate the delicate relationships between U.S. and foreign intelligence services, and leave ambassadors confused about where to turn for intelligence advice.
Blair is not the first to seek some latitude in selecting his personal representative overseas. The CIA last year successfully derailed a similar effort by the national intelligence director's office, then headed by former Adm. Mike McConnell. CIA station chiefs posted in American embassies have handled the national intelligence role abroad for the last four years.
From the DNI's perspective, the proposal would have allowed Blair to tap the most relevant intelligence officer in an embassy or foreign country to serve as his eyes and ears.
In most cases that would be the CIA station chief. The station chief system has existed for 50 years, allowing the CIA to call the shots on pursuing and managing relationships with foreign intelligence and security services, and coordinating - and sometimes constraining - the work of other U.S. intelligence agencies and military forces abroad.
The CIA warned that Blair's plan could lead to a dichotomized intelligence structure in the field that would end up with CIA station chiefs carrying out day-to-day spy operations while intelligence director representatives oversaw and reported back to Blair on the same operations. CIA veterans warned that it could complicate and slow missions that require rapid decisions.
CIA officials also said the move could confuse or degrade long-standing relationships with foreign intelligence agencies and U.S. ambassadors who would not know whether to rely on the word of the station chiefs or the national intelligence director's representatives.
But in some countries the United States has few if any spies on the ground, and it relies instead mostly on electronic eavesdropping to collect intelligence. A former senior intelligence official said that in those cases, Blair might want to have the senior National Security Agency officer instead of the station chief at the embassy serve as his personal representative.