This segment was originally broadcast on Dec. 16, 2007. It was updated on July 9, 2008.
One of Bill Clinton's first acts as president was to propose that gay servicemen and women be allowed to serve openly. That was 15 years ago, and it almost derailed his presidency.
Instead, the military adopted a policy called "Don't Ask, Don't Tell," where gays can serve as long as they remain in the closet. The Pentagon says it's been a success. But 12,000 military men and women have been discharged under the policy.
Now something curious is happening. As correspondent Lesley Stahl first reported last December, discharges of gay soldiers are dropping, dramatically: from over 1,200 a year in 2001 to barely 600. With the military struggling to fight two wars, there are growing calls to repeal the policy and growing evidence that some commanders could care less about sexual orientation.
Army Sergeant Darren Manzella, a medical liaison for his division, is in Kuwait on his second deployment of the Iraq war. He spoke to 60 Minutes without permission.
Manzella served as a medic with a field artillery unit in Baghdad back in 2005, earning a combat medal for rendering treatment under fire. "I've treated everything from blast injuries to gunshot wounds," he tells Stahl.
Manzella was out to his Army buddies and even introduced them to his boyfriend A.J. But then, he started getting anonymous e-mails, saying he was being watched, and warning him to "turn down the flame."
"As in flamingly gay?" Stahl asks.
"Yes," Manzella says.
He went for help to his commanding officer, and in the process, told him - as in don't ask don't tell - that he was gay. The officer in turn told Manzella he'd have to report him.
"He did report me, yes," Manzella says. "I had to go see my battalion commander, who read me my rights."
"So, what you did, in effect, by telling him, was trigger the investigation you feared was underway?" Stahl asks.
"I did. And I felt more comfortable with that. I felt more comfortable bein' the one to say, 'This is the truth. This is what is real,'" he says.
"What a Catch-22. You go and tell your lieutenant the truth and now you violated the Army's rule," Stahl remarks.
"I didn't know how else to do it and keep my sanity," Manzella explains.
Manzella didn't hold anything back in the investigation, submitting photos of himself and A.J., and a video of a road trip, including passionate kissing. But when the investigation ended, Manzella says he was told to go back to work. "There was no evidence of homosexuality and go back to work," he says.
"Wait a minute. You've given them photographs of you and A.J.," Stahl remarks.
"Yes, and then they're like, 'Go back to work. You're not gay," Manzella says.
"So, no one ever said anything to you about the -- I don't even know what word to use, absurdity, confusing response?" Stahl asks.
"The closest thing that I was given by my superiors was, "I don't care if you're gay or not."
Cholene Espinoza was an Air Force captain who flew combat missions. Now she works with the Servicemembers Legal Defense Network, a group pushing to repeal "Don't Ask, Don't Tell."
"Darren is in a critical field. He's a medic. His commander needs him," Espinoza says. "He's a known quantity. He gets along with others. He does what he's supposed to. He goes above and beyond. Why do I want to lose Darren?"
Espinoza, who's now a captain for a commercial airline, left the Air Force after eight years so she could live openly as a lesbian.
"You're saying that you think these commanders are looking the other way?" Stahl asks.
"I think they have to," Espinoza says.
She says she knows of at least 500 such cases. To her mind, retaining these soldiers especially in Iraq is a no-brainer. "Something that's often overlooked is the number of deployments, you know. I met a man who missed the birth of his child and he's been there three times. It's like, 'Why not allow a gay soldier to ease that burden?' They want to serve. They can serve," she says.