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On Wednesday, November 12, CIA Director Mike Hayden went to New York City to discuss Predator drone strikes inside Pakistan with its president, Asif Ali Zardari.

Hayden, 63, was a four-star Air Force general who had also been the NSA director from 1999 to 2005. He wore rimless eyeglasses that accentuated his arched eyebrows and bald head. As CIA director, he had some reservations about the drone attacks. There had been 20 against terrorist camps in Pakistan since July, when President Bush stepped up the program.

Killing senior al Qaeda leaders with drones had a debilitating impact on al Qaeda’s ability to plan, prepare and train. That counted as a big counterterrorism win.

But each strike was tactical and would not change the big picture. As an Air Force officer, Hayden knew that to get a strategic victory—to defeat al Qaeda—America had to change the facts on the ground. Otherwise, the U.S. would be doing piecemeal drone strikes forever. The great lesson of World War II and Vietnam was that attacks from the air, even massive bombings, can’t win a war.

Hayden and the CIA deputy director, Steve Kappes, were ushered into the presidential suite of the InterContinental Barclay hotel, where Zardari and the Pakistani ambassador to the U.S., Husain Haqqani, awaited them.

The Pakistani news media had been clobbering the U.S. for civilian casualties from drone strikes. But the accidental death of Pakistani citizens was only half of the story.

Many Westerners, including some U.S. passport holders, had been killed five days earlier on the Kam Sham training camp in the tribal area of North Waziristan, Hayden told the Pakistani president. But the CIA would not reveal the particulars due to the implications under American law.

A top secret CIA map detailing the attacks had been given to the Pakistanis. Missing from it was the alarming fact about the American deaths. Was al Qaeda developing a fifth column of U.S. citizens who did not need visas to pass through immigration and customs?

The CIA was not going to elaborate.

How are you choosing targets? the Pakistani ambassador asked Hayden.

The CIA is exercising the utmost care, Hayden said. Seven of the top 20 al Qaeda leaders had been killed this year alone. Al Qaeda was struggling to replace those leaders.

After an hour of conversation, the Pakistani president met one-on-one with Hayden. Zardari wanted to clear the air about the controversy over civilian deaths from drones. He had only been president since September and could afford a drop in his approval ratings. Innocent deaths were the cost of doing business against senior al Qaeda leaders.

“Kill the seniors,” Zardari said. “Collateral damage worries you Americans. It does not worry me.”

Zardari had just given the CIA an important green light. Hayden appreciated the support, but he also knew it would not achieve the goal of destroying al Qaeda.

In one of their long conversations, Obama raised the Hillary question with David Axelrod, his senior political aide and closest adviser. Axelrod, 53, was a former Chicago Tribune reporter turned campaign consultant who had embraced Obama with a convert’s zeal. When Axelrod listened to himself gush about Obama, he felt silly because he sounded like such a homer—a simpleminded hick. But “Axe” was also as hard-boiled as any strategist in the Democratic Party. A 1987 Chicago magazine profile summed up his aggressive approach with its title—“Hatchet Man.”

Axelrod braced himself. Hillary Clinton had been their nemesis during the long Democratic presidential primary, a rivalry that had grown into visceral suspicion.

“Hillary and I were friends before this started,” Obama said. “We had this very vituperative campaign, but, you know, she is smart and we ought to be able to do something with her.” She did her homework, showed up, fought hard. She was relentless. She’d make a great Supreme Court justice.

“How could you trust Hillary?” Axelrod asked. Maybe Obama was not a vengeful person and could put past grievances aside. But there had been some raw, ugly moments on the trail, with Clinton accusing Obama of not telling the truth. After a February rally in Ohio that year, she had scolded him with a line that continued to sting: “Shame on you, Barack Obama.”

“I have a really strong feeling,” Obama said. “I think I know her pretty well. If she’s going to be on the team, she’s going to be loyal.”

After all, Hillary Clinton had stood by her husband during the Monica Lewinsky scandal more than a decade earlier, and Obama was impressed by her resilience.

As he went over the list of candidates for secretary of state, Obama realized he needed someone with enough stature to be seen as a major player on the world stage. What about Hillary Clinton? What would it mean? Would she accept? What was she thinking?

Well, Axelrod said, she certainly wasn’t confiding in him.

Obama decided to find out. John Podesta passed word to Clinton’s staff that Obama wanted to discuss the possibility of her becoming secretary of state. “Think about it,” Podesta said to Clinton’s staff. “Talk to her. This is serious.”

Clinton assumed Obama had no choice but to sit down with her. She had garnered 18 million votes in the primaries, and those voters might be upset if he didn’t at least consider her for something. Just as he had faked consideration of her for vice president, he would fake consideration for State. As far as she was concerned, it was part of a bullshit political Kabuki dance.

She flew to Chicago on November 13. “Personal business,” a spokesman claimed when the media spotted her black Secret Service– driven SUV going in and out of the parking garage at Obama’s transition headquarters.

Obama made it clear he was serious. He wanted her to be his secretary of state.

Clinton returned to Washington and spoke with Podesta. Wow, he’s serious about this, she said. She was stunned, yet not convinced the position would be right for her.

Podesta was encouraging. No one else could do the job as well as you, he said. And look at the alternatives, he said. Hanging around the Senate? Seniority ruled on the Hill, and there were no leadership opportunities for her there. “Bush fucked up the world,” Podesta said, “and fucked up America’s place in the world, and digging out of that would be very tough.” No one else came close to having her clout and visibility. There was a big agenda, Podesta said, and she would be a big deal.

Clinton didn’t argue with that, but it would mean giving up her independence in the Senate. What would the relationship be like working for Obama? She knew how the White House worked. If a president wanted to control, he controlled or used his staff—or even his wife—to do it. There wasn’t exactly a reservoir of trust between her camp and his. She might find it difficult, if not impossible, to operate. “Will I really be able to do the job?” she asked.

Podesta said he could probably get a guarantee from Obama that she could pick her own deputies and staff.

Then came the various “Bill” problems. Her husband, the former president, maneuvered visibly on the world stage. What about the big-bucks donors to his presidential library, his foundation and his Clinton Global Initiative? Obama’s transition lawyers had said these enterprises could not accept foreign money if Hillary became secretary of state.

The Bill issues were a major stumbling block, she said, noting with a smile and a laugh that she wasn’t about to send Bill to live in a cave for four or even eight years.

“I’m not going to tell him to shut down operations in 26 countries that are saving people’s lives,” Clinton said. Just because someone thinks it might look bad? People would die if his charities collapsed. “It’s not worth it,” she said. Her husband had told her he would do what was necessary. “I’m not going to tell him to do it. So we’ll work it out in a way that permits that work to go forward, or I’m going to say no.”

Podesta spoke with former President Clinton. “I only have one argument,” Podesta told him. “Nobody can do this job better. It’s really important to the country that she does it.”

Oh, come on, the former president said. His own relationship with Obama from the campaign remained tense, to say the least. It had offended him that critics interpreted his comments about Obama as racist. Some political feuds, particularly those arising from the hothouse of a presidential campaign, never get settled.

“We’ll work this stuff out,” Podesta said. “It’ll cause some inconvenience, but it’s worth it.” Podesta was pleased to learn that Chelsea, the Clintons’ 28-year-old daughter, wanted her mother to accept.

“Let’s work it out,” Bill Clinton said. The former president went public on Wednesday, November 19, saying, “I’ll do whatever they want.” He agreed to release the names of 200,000 donors to his library and foundation. Previous donors were grandfathered in, meaning no money would have to be returned.

Vice President–elect Joseph R. Biden joined in the outreach to Bill Clinton, and Biden and Rahm Emanuel both spoke with Hillary.

By midweek, she decided no.

“This is never going to work,” she told Podesta. She was a Clinton. She was not an Obama acolyte. It was a matter of retaining her identity. She had submerged herself all those years as the governor’s wife in Arkansas, then for eight years as first lady, and the roles had subsumed her. Not again. “It’s too complicated, forget it.”

A formal statement was prepared that thanked Obama but announced her decision to decline. A phone call was scheduled so she could tell Obama directly, but Podesta arranged it so the two didn’t connect that night. “Let her sleep on it,” he said. Podesta knew the most intense conversations were taking place within the family—Hillary, Bill and Chelsea.

Podesta talked with her again early the next morning.

“Are you really sure I should do this?” she asked.

Absolutely, he said. No doubt. And everyone else was too, most importantly the president-elect. She would be able to pick her own people and have direct access to the president—instead of going through his national security adviser.

Podesta could see that her hard “no” had turned into a “maybe,” if not a soft “yes.”

Not quite a yes, Podesta reported to Obama.

During the course of this courtship, Clinton had exchanged e-mails and spoken by telephone with Mark Penn, the pollster and chief strategist for her failed presidential campaign. The rumpled polling guru, who as an outside consultant had controlled virtually every important policy pronouncement out of Bill Clinton’s White House during his second term, thought she should say yes.

Penn listed half a dozen reasons. It would show she was a good sport who didn’t carry a grudge—a trait often attributed to the Clintons. Being secretary of state would give her absolute bona fides in foreign policy and national security, a weakness that had become evident in the campaign. Accepting Obama’s offer would put her under the umbrella of the Democratic Party, where she and Bill had often been suspected of playing Clinton-first politics. In addition, the Senate was not as welcoming as it once had been and its leaders had turned on her during the presidential contest. No matter what her future, the top cabinet post would give her an unmatched record of public service. Also, Penn believed the people in the country, especially Democrats, wanted to see her and Obama together, on the same team. And it might be possible that Obama’s favorable press could spill over to her. As secretary she would be in the public eye all the time, and the post would once and for all establish her independence from her husband.

Penn defined diplomacy as getting someone to do something they did not want to do without shooting them—a skill she had.

With the prolonged emotional strain of the campaign over, she needed to apply her considerable energies to something, he said.

Penn always had his eye on the prize—the White House. If she did the job for four years, Obama might be in trouble and have to dump Biden and pick her to run with him as vice president. She had nearly beaten Obama and had won substantial margins in the primaries among four important constituencies—women, Latinos, the working class and seniors—voting blocs Obama would need in 2012. Her addition to the ticket might be a necessity.

In terms of 2016, Penn noted, if she served eight years at State, she could not be better positioned to run for president again. She would only be 69—the age Reagan had been when he took office. And statistically, women lived longer and generally stayed in better health during their later years.

Plus, it fit with the Clinton style, since the family motto was “We’re going to keep on going.” Say yes, Penn urged. You’re still in the game, he basically told her. It’s a “no brainer, a five-minute decision.”

Clinton later said these political considerations played no role in her decision.

When Obama called Clinton personally, he turned on all the spigots.

He said he wanted her to accept. This is a particularly momentous period in our history, he said, and you would have the authority to conduct diplomacy and to act as a major player. It was a better, more meaningful opportunity than going back to the Senate, said the former junior senator from Illinois. He needed her to do this.

It was the voice of a president asking a lot. She had heard it many times before. She said yes.

•   •   •

Admiral Michael Mullen received an important phone call several days after the election, a confirmation perhaps of the clout he hoped to have in the next administration. The president-elect wanted to speak alone in Chicago with Mullen, the chairman of the Joint Chiefs of Staff.

Though putatively the highest-ranking military man, in reality the chairman is a kind of sixth finger in the military hierarchy. By law he is the principal military adviser to the president, the secretary of defense and the National Security Council, but he is not in the all-important chain of command. The power to give orders and control wars ran from the president, as commander in chief, to the secretary of defense to combatant commanders such as CentCom’s General David Petraeus. Mullen had no actual command authority over combatant forces.

His predecessors as JCS chairman, Air Force General Richard B. Myers and Marine General Peter Pace, had been mostly irrelevant, because Secretary of Defense Rumsfeld so thoroughly dominated the Pentagon.

Mullen, 62, was something of an accidental chairman. He had been chief of naval operations in 2007, when Gates hastily decided Pace did not have the Senate votes for reappointment.

Obama’s invitation was a chance for Mullen, who was in the middle of his two-year term, to get back in the game, restore the status of the chairmanship, and establish a personal relationship with the new president. The model was Colin Powell, the Army general who held the position from 1989 to 1993 during the first Gulf War. Powell had been front and center in that war, publicly promising to “kill” Saddam Hussein’s army. He formulated the Powell Doctrine, the use of overwhelming and decisive force to minimize casualties and ensure victory.

Mullen is tall with a hearty, almost booming voice. As he speaks, his hands tend to fly around him. He had been carefully neutral in the 2008 presidential campaign. A 1968 graduate of the Naval Academy at Annapolis—ten years after Senator John McCain, the Republican presidential nominee—and the son of a Hollywood publicist, he was deferential to anyone with political power.

Right after he attended President Bush’s State of the Union address in January 2008, there was one of those moments in life, an accidental encounter, that might change everything. Mullen passed Obama on a stairwell. He thought Obama, stuck on the presidential campaign treadmill, looked like he hadn’t slept for a month.

“God,” Mullen said, taking Obama’s hand, “get some sleep!”

“My staff won’t let me,” Obama replied.

The chance meeting was a bit of good luck for Mullen. Had he encountered a sleep-deprived McCain, he would likely have said the same thing. But to politicians in the heat of a national campaign, the country is binary—either for you or against you. Mullen, in his dress blues with a breastful of ribbons and the gold braid of a full admiral—one thick and three thin around each forearm above the wrist—felt he had successfully reached out to the Illinois senator.

Obama, who had never served in the military and possibly knew as little about it as any major presidential candidate in years, called Mullen two or three times during the campaign, just to check in, say hello, not talk about anything really. Mullen believed the calls were designed to build a personal connection. The admiral could not have been more responsive, eager, gentlemanly or deferential.

In one of the presidential debates, Obama even used Mullen to back up his position, noting that the chairman himself had “acknowledged that we don’t have enough troops to deal with Afghanistan.”

The invitation to Chicago was almost as welcome as another promotion, and it could practically amount to that. On a hunch, Mullen concluded that Obama wanted to have more of a conversation and less of a briefing. Accompanied by a single aide, he arrived about 20 minutes before his noon appointment on Friday, November 21.

“I’m here to see President-elect Obama,” Mullen told a young female staffer at the Obama headquarters.

“Well, who are you?” she asked.

“Mike Mullen, Admiral Mullen.”

“Who are you?”

“Chairman of the Joint Chiefs.”

“Well, he just left for lunch,” the woman explained. She quickly got up to check.

Mullen gazed out the window as he waited. When he turned around, there was Obama three inches from his face, inviting him into his office, which was strewn with campaign memorabilia—a football, a basketball and posters.

Mark Lippert, a key Obama foreign policy aide and a lieutenant in the Navy Reserve, came in to take notes.

“I’ve been running for this bus,” Obama said, “and now I caught it.” Almost as an afterthought, he added, “And it’s a big bus.”

There is an economic crisis, Obama continued, and it would have to get most of his attention.

I got that, Mullen said, adding, as the former budget guy for the Navy, he had no expectations Defense would ever be exempt from trimming expenditures.

“I’ll give you some time here at the end,” Obama said. “I want to ask questions.”

On Afghanistan, and by extension Pakistan, he asked, what is the degree of difficulty?

The Afghanistan War has been under-resourced for years, Mullen said. In truth, there was no strategy, he added, knowing that Bush’s national security adviser, Stephen Hadley, would kill him for saying that. It was an indictment of Bush, Hadley, Gates and, in a way, himself. Mullen had testified the previous year that, “In Afghanistan, we do what we can. In Iraq, we do what we must.”

Obama made it clear that would change.

With the proper resources, Mullen said, they could succeed in Afghanistan. But there are almost no resources on the civilian side, and the U.S. embassy has a very bad relationship with just about everybody, even the military.

I want to get Afghanistan and Pakistan right, Obama said, but I don’t want to build a Jeffersonian democracy.

He said he still intended to withdraw U.S. forces from Iraq but would do so responsibly. On Iran, Obama said he would open a dialogue with the Iranians. But he also made it clear that he had no intention of pulling the military options off the table.

• • •

But Obama soon found out there were problems with the options. The existing contingency plan for Iran seemed to have dated from Jimmy Carter’s presidency. It started with 90 days of bombing before a Normandy-style invasion from World War II that involved more troops than the U.S. had in its inventory. No serious process had been in place for updating the many contingency plans a president needs.

Nor did adequate plans exist for Somalia or Yemen, two countries with a growing al Qaeda presence. And most tellingly, nothing on the shelf specifically addressed securing Pakistan’s nuclear weapons. Obama’s team would have to develop a graduated plan dealing with a range of circumstances from Pakistan losing a single nuclear weapon all the way up to the Pakistani government falling to Islamic extremists, who would then have a nuclear arsenal. Compounding the problem was a lack of knowledge about the location of all of Pakistan’s nukes. The sites were scattered across the country, with the weapons frequently moved in a classic shell game.

One of the closest held secrets of President Bush’s inner circle was that the president had lost his appetite for military contingency planning. The tough-talking, saber-rattling Bush administration had not prepared for some of the worst-case scenarios the country might face.

Obama later said he would neither confirm nor deny any specifics about contingency plans, but he acknowledged that he had inherited unfinished business from Bush. “Wars absorb so much energy on the part of any administration,” Obama told me, “that even if people are doing an outstanding job, if they’re in the middle of a war—particularly one that’s going badly, as it was, obviously, for a three-year stretch there in Iraq—that’s taking up a huge amount of energy on the part of everybody. And that means that there are some things that get left undone.”