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Up in his seventh-floor office at CIA headquarters in Langley, Virginia, Director Michael Hayden had been stewing for months, waiting in frustration to be contacted by Obama. But Hayden had been cut out of the loop with the next first customer.

During the summer, candidate Obama had asked to see him. On June 18, Hayden was being driven to Capitol Hill for their meeting when his phone rang. Obama apologized, explaining he had to cancel. The memorial service for NBC newscaster Tim Russert, who had died of a heart attack the week before, had unexpectedly run late.

“General, I really want to talk with you,” Obama said. “I feel really bad.” They would get together. We’ll do lunch, he in effect promised.

Obama never rescheduled. Hayden tried to pretend he didn’t take the slight personally, concluding it showed that Obama didn’t understand the importance of the CIA. But being stiff-armed for months bruised his ego. He figured he was being blocked from Obama, refused a chance to advertise his achievements as director.

Hayden had built his career around selling his intelligence wares person to person. Able to think and talk about 20 percent faster than most people, Hayden seemed to have an edge in any debate.

When he became CIA director in 2006, Hayden had inherited an agency suffering from what he called “battered child syndrome.” There was the botched intelligence that mistakenly concluded Iraq had weapons of mass destruction, the main premise of the Iraq War, and the accusations that the CIA’s enhanced interrogation techniques, such as waterboarding or simulated drowning, amounted to torture. Hayden felt he was restoring morale, putting the CIA on the road to recovery. During the controversy about the interrogation methods—techniques Obama had promised to abolish—Hayden had persuaded President Bush to drop the harshest practices. He was eager to brief Obama, convinced he could sell the next president on the need for an independent CIA interrogation program that played by more flexible rules than the U.S. military.

Hayden also hoped to stay on as CIA director, at least for six more months. He thought he deserved to be asked, even though his wife, Jeanine, reminded him that this was unrealistic. Hayden believed he could provide continuity during the first year of the new presidency—a time of maximum vulnerability. The first bombing of the World Trade Center had been in 1993, at the start of the Clinton administration. And 9/11 occurred during Bush’s rookie year. With a large foreign policy agenda and two wars, Obama would need the CIA. “No contact,” Hayden complained. “I’m in absolute limbo. No one’s talking.”

Obama’s closest national security advisers from the campaign, Denis McDonough and Mark Lippert—whom Obama affectionately referred to with the Dr. Seuss book nicknames of Thing One and Thing Two—had told Hayden they would reach out to him during the transition. But weeks of silence had passed.

“We do covert action at the CIA,” Hayden reminded them, convinced they underestimated the importance of these missions—the stuff of spy thrillers—that were specifically designed to disguise America’s hand. By law, the president authorized covert actions in a “finding,” a document stating that the action was necessary for national security.

“It is authorized by the office of the president, not the person,” Hayden explained. “So everything we do will be popping at 4 P.M., January 20”—just hours after Obama would take the oath of office. “If there are changes the president-elect wants to make, I need to brief him on the active covert action programs.”

One of Hayden’s top CIA deputies went to McDonough and Lippert to ask again, what about Hayden?

Tell the general not to worry, we will reach out to him, they said. That meeting was finally arranged in Chicago for December 9.

Hayden did not alert or invite DNI McConnell, who found out about the meeting on his own.

McConnell worried that the temptation of covert action might entrance Obama. Any president, especially a new, relatively inexperienced one, could be vulnerable. Imagine the allure of solving a foreign policy problem by secretly funding a regime change—literally buying a country’s government. As Richard Helms, the CIA director from 1966 to 1973 during Vietnam and Watergate, once said, “Covert action is like a damn good drug. It works, but if you take too much of it, it will kill you.”

The CIA did some spectacular work, McConnell knew. It essentially recruited people to betray their countries through espionage. Recruitment was a delicate art, fraught with opportunity and peril. The one target the CIA loved to recruit was the American president, to unfurl the secrets and wonders of spying for the first customer. The CIA wanted no one between it and the White House.

McConnell phoned the CIA chief when he heard about the December 9, 2008, Obama briefing.

Did Hayden plan to discuss RDI, meaning Rendition, Detention and Interrogation, the controversial CIA counterterrorist programs? McConnell asked.

Hayden said he would because they were covert actions. The CIA director was certain the president-elect would be impressed that the modified interrogation techniques made sense and were legal.

“I will be there,” McConnell said, giving an RSVP to the invite he should have received.

“Well, that’d be nice,” Hayden replied.

On the morning of Tuesday, December 9, Hayden and McConnell were in Chicago, ready to have the president-elect focus for two hours on the CIA’s covert actions. A somewhat astonished and distracted Obama greeted them.

“They just arrested the governor for trying to sell my seat,” he said. The FBI had taken Illinois Governor Rod Blagojevich into custody that morning after wiretaps showed he was asking various politicians for money in exchange for being appointed to the Senate seat Obama had resigned.

The entourage of intelligence and administration officials crammed into the Sensitive Compartmented Information Facility, or SCIF.

Hayden sat directly across from Obama at a table so narrow that they were uncomfortably close to each other. His bald head was about 30 inches from the president-elect’s face. Vice President–elect Joe Biden, Jim Jones, Greg Craig, the designated White House counsel, and several others sat on Obama’s side.

“Mr. President-elect,” said McConnell, who was next to Hayden, “we’re going to give you the background on the findings and covert actions, where we are and how it’s working. We talked to you about this in summary terms when we briefed you in September. We gave you a little more detail in November. But now we’re going to get down to more sources and methods.”

Hayden jumped at this opening, practically brushing McConnell aside, several from the Obama camp noticed. This was his opportunity and he wanted to create what he called an “oh, shit moment” to prove how grave the threats were and to show how seriously the CIA was taking them. He had brought a chart the size of two dinner place mats. It listed 14 highly classified covert actions, the nature of those actions, and the written findings from Bush and other presidents. Referring to the chart he spread in front of Obama, Hayden said the current covert actions were authorized to:

• Conduct clandestine, lethal counterterrorism operations and other programs to stop terrorists worldwide. Operations were active in more than 60 countries. Bush senior signed the initial finding, which his son, the current president, later modified. If al Qaeda planned to detonate a nuclear weapon in an American city or launch an influenza pandemic by using a biological agent, these covert actions are all you’ve really got to try to stop them, Hayden explained. The finding included unmanned aerial Predator drone strikes on terrorists and terrorist camps worldwide.

“How much are you doing in Pakistan?” Obama asked.

Hayden said about 80 percent of America’s worldwide attacks were there. We own the sky. The drones take off and land at secret bases in Pakistan. Al Qaeda is training people in the tribal areas who, if you saw them in the visa line at Dulles, you would not recognize as potential threats.

• Stop or impede Iran from developing nuclear weapons.

The CIA director described a range of secret operations and techniques—some of which had been effective, some of which had yet to work. After stopping attacks from terrorists, the covert efforts against Iran were President Bush’s top priority.

• Deter North Korea from building more nuclear weapons. The regime headed by Kim Jong Il, among the world’s most erratic and irrational leaders, probably had enough weapons-grade plutonium for another six bombs. This finding was supported by an array of clandestine intelligence gathering operations aimed at that closed and oppressive society.

• Conduct anti-proliferation operations in other countries to prevent them from acquiring weapons of mass destruction.

• Carry out lethal and other operations independently or in support of the U.S. military in Afghanistan. This included the unmanned aerial drone attacks and the CIA’s 3,000-man army of Counter-terrorism Pursuit Teams (CTPT).

• Run an array of lethal operations and other programs in Iraq. The CIA had a continuing and deep involvement with the Iraqi government and the Iraqi security forces. Hayden claimed they “owned” certain entities and people.

Greg Craig, for one, was shocked by the term. He thought Hayden might be overstating it. The director was showboating, he concluded, and could have conveyed the same degree of influence without resorting to “We own them.”

In addition, Hayden said the CIA pumped tens of millions of dollars into a number of foreign intelligence services, such as the Jordanian General Intelligence Department, which he said the CIA also “owned.”

• Support clandestine efforts to stop genocide in the Darfur region of Sudan. President George W. Bush, who signed the finding, had said, “I want to fix Sudan and stop the slaughter.”

• Provide Turkey with intelligence and other support to stop the Kurdistan Workers’ Party (PKK) in northern Iraq from setting up a separatist enclave inside Turkey.

The Turks had deployed about 100,000 troops along the Iraqi border in late 2007 and threatened to clean out the PKK camps. That could have opened another front in the Iraq War. Vast portions of the U.S. air cargo and fuel flowed through Turkey.

“Do something,” President Bush had ordered. The small-scale covert operation appeared to be the lowest cost option to help Turkey conduct limited air strikes and force the PKK back into Iraq.

Hayden also described several covert actions, including counter-narcotics and propaganda operations. Disclosure of these could hamper U.S. foreign relations and possibly jeopardize the lives of operatives and others, so they are not revealed here.

The last on the list of covert actions was Rendition, Detention and Interrogation (RDI). This was what Hayden was itching to explain.

Rendition—picking up suspected terrorists abroad and transporting them to another country or the United States for interrogation or prosecution under American law—had first been used in the Clinton administration and remained in effect. The suspects might be transported to various countries in the Middle East.

Biden interrupted Hayden right there, almost as if the CIA director was testifying before the Senate Committee on Foreign Relations.

“General,” Biden said, “suppose we send somebody to Egypt or so forth, and they torture him. You know if you send them to that country they’re going to be tortured.”

“No, no, no,” Hayden said, insisting the CIA received assurances there would be no torture. The legal standard was that they had to have the highest confidence there would be no torture.

Biden and several others stared skeptically at him.

Hayden then noted that the secret overseas CIA detention facilities had been closed and all the prisoners transferred to Guantánamo Bay, Cuba—a facility that President Bush said he wanted to shut down. During the presidential campaign Obama had repeatedly said he would close the prison.

On enhanced interrogation techniques, Hayden said only six remained. A participant at the meeting later said that because sleep deprivation appeared to be the lone technique that worked on hard-core terrorists, these six methods were to prevent a detainee from falling asleep. President Bush had approved them in 2006, supplanting the earlier finding that authorized additional harsher techniques. That finding included sleep deprivation for up to 96 hours, which could be extended under exceptional circumstances.

“I want to talk about that,” Obama said. “What are they?”

Hayden said: Isolation of the detainee; noise or loud music; and lights in the cells 24 hours a day. There was limited use of shackles when moving a prisoner or when the prisoner was a danger. In addition, blindfolds were used when moving prisoners or when the prisoners might gain information that could compromise the security of the facility.

“David, stand up please,” Hayden said to David Shedd, the DNI’s deputy director for policy. Shedd rose. Hayden gently slapped his face, then shook the deputy DNI.

It was as rough as what might happen in “Little League football,” Hayden said. The key to a successful interrogation was to make it intimate, not violent. By subjecting suspected terrorists to these methods, he said, it took less than a week to break them. This entailed getting them to a point where they feel that Allah can release them, that they’ve endured enough and can now tell their story. Hayden said that the revised interrogation program was essential to fighting terrorism.

McConnell thought Hayden’s presentation conveyed the impression that this was all the CIA had ever done.

“Okay,” Obama said, “what used to be on the list?”

There had been 13, Hayden said, including waterboarding one terrorist 183 times (see chapter notes for full details).

Several of the techniques described were new to Obama. He seemed transfixed. McConnell detected a trace of disbelief in the president-elect’s stoic face.

Hayden, too, looked hard at Obama. He was accustomed to Bush, who in a briefing would spontaneously let you know how you were doing and react, often emotionally. Obama offered no clear reaction other than an acknowledgment that the transmission had been received.

“I’m going to have Greg come talk to you about this,” Obama said, referring to designated White House counsel Greg Craig.

Obama then thanked McConnell, Hayden and the others for coming to Chicago. Now, he noted, he had to go back to the pressing issues of the transition, which suddenly included the arrest of the Illinois governor.

As best Hayden could tell, he had made the sale on the whole package of covert actions. He believed that the reduced interrogation program would win broad support inside the new White House. And he believed that the very existence of the interrogation program was more important than its content. Terrorists would know they faced a more severe interrogation if picked up by the CIA than by the military, which used the Army Field Manual.

On the way out, the CIA director told McConnell that he thought he had surprised Obama and his team by showing that the interrogation tactics were strictly limited. The bad stuff was gone. He had aced the exam.

Not so fast, McConnell thought. Hayden had gotten cocky, a little flippant. He had misread the audience.

Hayden spoke confidently about making a sale.

“We’ll see. I hope so, Mike,” McConnell said.

Later as president, Obama abolished the CIA’s enhanced interrogation program—even in its reduced form. The agency would have to follow what was in the Army Field Manual.

When I asked the president about this covert action briefing, he said, “I’m not going to comment on my reaction to our deep secrets.”

In discussions with Jones, McDonough and Lippert, DNI McConnell urged that the Obama administration come up with some intelligence professionals for the top jobs. “If you’re not going with Hayden and me, at least pick a professional—an apolitical professional, someone who grew up in that world,” he said. Hayden and he had 74 years of combined experience, and experience mattered. It was too easy to get misled or sidetracked if you didn’t know about the hardware, personnel, special language, rituals, protocols and the traditions—good and bad—of the secretive and turf-conscious intelligence agencies.

Put people in charge who have lived in that world. It’s different than anything else. You can’t learn it overnight. It would make no sense and might have a tragic outcome to use the top intelligence posts for political appointees.

The Obama team responded politely, but indicated that the president-elect had a different agenda. They had to get people confirmed, and a large part of the Obama win had turned on the country’s attitude toward President Bush. In their eyes, they made it clear, Bush had tarnished the image of the nation, especially with the enhanced interrogation techniques and expansive electronic eavesdropping.

At minimum, McConnell said the law on intelligence had to be rewritten so someone was clearly in charge. The 2004 reform law didn’t make the DNI the boss of the CIA director, who still had authority on covert actions and reported to the president on them. They needed a Department of Intelligence just as they had a Department of Defense and the Department of State. He and Hayden had worked it out. But it was an uneasy alliance among old hands, and with the wrong people it could spin out of control.

If you don’t fix it, he warned, you will pay an enormous price.

But neither McConnell nor Hayden was given the opportunity to talk to Obama about the basic dysfunction of the intelligence organization. As the transition of government proceeded, neither requested a chance to explain to the president-elect how intelligence was not working.

Obama had told Podesta the kind of person he wanted in his administration. “I don’t want just the same old crowd in Washington who do the same old things the same old way,” he said. Change would be the dominant factor.

The selection of Clinton, Gates and to some extent Jones contradicted this approach. No one better represented the same old crowd than Republican Gates and Clinton, the wife of the former two-term president. Filling the two top intelligence posts would give Obama a chance to repot the plant, find people of broad experience and proven capability, and thrust them squarely in the middle of the espionage game. This was an opportunity to emphasize the “change” theme as the president-elect rounded out his national security team.

Rahm Emanuel had an idea for CIA director. In his view, one of the strongest men in the Democratic Party was Leon Panetta, a former California congressman and Clinton White House chief of staff. Their friendship went back to the mid-1980s, when Panetta was in the House and Emanuel was political director of the Democratic Congressional Campaign Committee.

Podesta had previously thought Panetta could be Gates’s deputy at the Pentagon. Because Gates was a Republican, the White House would need someone with Democratic credentials. “A guy on our team,” as Podesta put it. But after Obama had selected Bill Lynn, an executive at defense contractor Raytheon, as deputy secretary of defense, Emanuel felt there was still room for the 70-year-old Panetta. If he could do Pentagon deputy, why couldn’t he do CIA?

Podesta called Panetta. “Your name’s come up for CIA director.”

“You’re kidding me,” Panetta replied. The idea floored him. Panetta had said he was ready to serve in the new administration if something came up, not that he expected it would. But the CIA? Was this a genuine offer?

It’s serious, Podesta said. Will you come back out to talk? The reasoning: Panetta knew the intelligence programs from his time as chief of staff and had considerable exposure to national security issues, having served on the Iraq Study Group, which examined the war in 2006. Panetta was not a political or bureaucratic naïf. And Obama needed someone with unquestioned integrity who could pick up, reorient, reenergize and redefine the CIA.

Obama phoned Panetta, who was in Minneapolis visiting his son.

“Leon,” he said, “I really want you to take the job of CIA director.”

“I’m honored that you would ask me,” Panetta replied. “You should know that my record in office is to be very truthful and to not pull any punches.”

“That’s exactly why I want you in that job.”

By that time, the Obama team had publicly floated a replacement for McConnell as DNI, though it had yet to be made official. Dennis Blair—a Rhodes Scholar and retired four-star admiral—had an impressive résumé and none of the associations with the Bush administration that McConnell had.

Blair was astonished to be under consideration. “Before the election of last November, I had a grand total of one conversation with then Senator Obama,” he said in a later speech to the U.S. Chamber of Commerce. It was an hour-and-a-half meeting when Blair had been head of the U.S. Pacific Command. “But I was, at any rate, quite surprised to receive a phone call the day of the election asking me to join his team.”

Podesta had known Blair from work both had done for the CIA during 1995, when Podesta consulted for the CIA director and Blair was the agency’s associate director for military support.

On Monday, January 5, 2009, Hayden read an online Washington Post story confirming the rumors he had heard the day before about Panetta succeeding him as CIA director. “Rahm Emanuel’s goombah,” he said in disgust. Being replaced by a politico was a personal humiliation, as was learning about it from a newspaper.

Steve Kappes, Hayden’s deputy at the CIA, called the transition office to say, “Is anybody ever going to talk to Mike Hayden?”

That next evening, Obama phoned Hayden. “General, this will make it easier for us to focus on the way ahead … to look forward, not backward,” he said. “I will have pressure on me, and this will make it easier for me.”

After the Panetta nomination was announced, Hayden and Panetta met at transition headquarters. Panetta can exude congeniality and breaks easily into giddy laughter. Among the political class, his ability to build personal relations might be equaled, though it probably was not exceeded. But Hayden was there to brief his successor, not to make a new friend. The CIA director pulled out a 3x5-inch card.

“Number one, Leon—don’t know if you expect this—but you are the nation’s combatant commander in the global war on terrorism,” Hayden said. “You’re going to be making some interesting decisions.” The word “interesting” was a sufficiently vague substitute for “lethal.” The CIA director had Predator drones to attack terrorists and a 3,000-man army inside Afghanistan. Panetta would have to help settle the rules for how the agency captured, transported and interrogated terrorists, the outcome of which might stop a terrorist attack.

Yeah, yeah, Panetta agreed.

“Number two,” Hayden said. “You have the best staff in the federal government. If you give them half a chance, they—like they did for me—will not let you fail.”

Panetta indicated that he revered the CIA.

“Number three, I’ve read some of your writings while you’ve been out of government,” Hayden said. “Don’t ever use the words ‘CIA’ and ‘torture’ in the same paragraph again.”

Panetta said nothing.

“Torture is a felony, Leon,” Hayden said. “Say you don’t like it. Say it offends you. I don’t care. But just don’t say it’s torture. It’s a felony.” The Justice Department had approved what the CIA did in long, detailed memos, so—legally—the CIA had not tortured anyone.

Again, Panetta did not respond.

McConnell had drafted an order that he knew could exacerbate tensions between the CIA and DNI. The order declared that the DNI, not the CIA director, would decide the senior intelligence representative in each foreign country. This power had traditionally belonged to the CIA station chief. While McConnell knew the station chief would remain the intelligence representative about 99 percent of the time, the intelligence issues in some countries were mostly military. For example, with 28,500 troops stationed in South Korea, it would be logical for the top U.S. intelligence person to be the J-2, the military intelligence chief, of the Korean command. That was where the critical intelligence issues resided.

McConnell had told Hayden, “I won’t break CIA. I won’t push it to the point where they lose face or stature.” He thought he was getting close to persuading Hayden. So in transition meetings between Bush National Security Adviser Steve Hadley and Jones, he announced he was close to issuing the directive.

“This will be a knife fight,” said Steve Kappes, who was likely to stay on as Panetta’s deputy.

McConnell talked to Blair, who was going to replace him as DNI, and explained his plan. “This is a fight. CIA believes they’re losing manhood. … I am prepared to sign it and walk out the door … blame it on me.”

“You leave it for me,” Blair said. “I’ll work it out with Leon. We can solve this.” They were friends.

“Okay, it’s your call. I’ll take the heat or leave it for you.”

“Leave it for me,” Blair said confidently.

McConnell was blunt, “You have to understand the battle you’re going to have with the CIA, because they see you as the enemy, as taking their birthright. And any way they can, they’ll cut you off at the knees.”