CIA In Free Fall

Top Officials Resign; Intelligence Reform Bill Stalled

(CBS/AP)  Insiders say the arrival of newly installed CIA Director Porter Goss has plunged the agency into turmoil unlike anything they've seen in nearly three decades, reports CBS News Correspondent Joie Chen.

In just the last few days, number two man John McLaughlin retired amid reports of sharp conflict among senior officials.

The Washington Post says chief of clandestine operations Steve Kappes offered his resignation, and the paper reports a number of top undercover operatives are thinking about getting out too.

Also rattling the senior command is a scathing critique of the nation's fight on terrorism from the former head of the unit charged with tracking down Osama bin Laden. CIA veteran Mike Scheuer quit his job Friday to go public with his charges. On Sunday's 60 Minutes he says his bosses long underestimated the threat posed by the terror mastermind.

"I think our leaders over the last decade have done the American people a disservice... continuing to characterize Osama bin Laden as a thug, as a gangster," Scheuer says.

A bill to put in place recommendations from the Sept. 11 commission has stalled heading into this week's postelection session.

Rep. Jane Harman, the top Democrat on the House Intelligence Committee, said Defense Secretary Donald H. Rumsfeld was an obstacle to a compromise because he does not want to diminish the Pentagon's overwhelming control over intelligence agencies' budgets.

"The agency seems in free-fall in Washington, and that is a very, very bad omen in the middle of a war," Harman said on CBS' "Face the Nation."

Under the current system, the CIA chief also is the director of central intelligence and has nominal oversight of the nation's security agencies, but little power to control spending.

Harman said the White House was trying to build consensus during the weekend for a bill that three-quarters of the House and almost all the Senate favor.

The bill would create a more powerful national intelligence director than was included in a House-passed measure, taking away some of the Pentagon's control of intelligence agencies' budgets.

"The president is our commander in chief. It is time — past time — for him to tell the secretary of defense to stand down on this issue so that the will of Congress and the 9/11 commission can be implemented," Harman said.

Sen. John McCain was on a presidential commission that investigated how intelligence agencies, especially the CIA, erred so abysmally with its assurances to President Bush that Iraq under Saddam Hussein had weapons of mass destruction.

"One thing that has become abundantly clear if it wasn't already: this is a dysfunctional agency and in some ways a rogue agency," McCain said in a broadcast interview.

He said the kind of shake-up that has been widely reported as causing dissent within the ranks of the CIA is absolutely necessary.

"Porter Goss is on the right track," McCain said. "He is being savaged by these people that want the status quo, and the status quo is not satisfactory."

Added Sen. Lindsey Graham: "Somebody needs to deal with the dynamic that led to us being so wrong" about Iraq. "If you have to hurt some feelings, so be it."

Graham, R-S.C., said he hopes Congress does not fail to address the issues raised by the Sept. 11 commission.

"If you've got it wrong, you need to be dealt with. That includes the Congress: we got it wrong. We need to fix our own problems, and we're not doing a very good job of it right now," Graham said.