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Why Obama Picked Panetta To Run the CIAHe's clean, he knows where the line items are buried, and the director isn't the chief spook anymore.

By Fred KaplanPosted Tuesday, Jan. 6, 2009, at 6:54 PM ET

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To have any chance of success, Panetta will need a deputy director who garners some trust from the inside, and that's why a number of specialists, including Clarke (and also Sen. John D. Rockefeller IV, the departing chairman of the Senate intelligence committee), are suggesting that Obama retain Steven Kappes in that slot.

Kappes was the longtime deputy director of clandestine operations until Bush named Rep. Porter Goss to run the CIA in 2004, at which point he resigned in disgust—along with many other professional agency veterans—over the heavy-handed campaign, by Goss and his goons, to turn Langley into a cheering section for Bush's policies. When Goss left in disgrace two years later, one of the first moves that his successor, Gen. Michael Hayden, made was to bring back Kappes as his deputy—which did much to restore morale. (Bonus: In part because of his absence, Kappes eluded association with Bush's darkest deeds—or so it is believed.)

At the same time, it's a fair guess that the CIA's collective happiness doesn't rank too high on Obama's list of priorities. In this regard, Panetta's appointment may—and, again, I stress may—be a sign that the incoming president plans to elevate the role of the national director of intelligence, which will reportedly be filled by retired Adm. Dennis Blair.

The NDI is a post that Bush created reluctantly, at the urging of the 9/11 commission, which envisioned a supra-entity that would coordinate the hodgepodge of 16 agencies that make up the U.S. "intelligence community." Its directors—first John Negroponte, then Mike McConnell—have done much to expand the office, but it remains more an extra bureaucratic layer than a centralizing force.

Though a seasoned pol and former White House chief like Panetta probably insisted on presidential access as a condition of taking the job (his early endorsement of Obama wouldn't have hurt here), he may well accede to Adm. Blair's higher authority—without the rancor or bitterness that might afflict an insider.

Much depends on Obama's plans for reforming U.S. intelligence. His Web site, which spells out detailed programs on other issues, offers only the vaguest guidance here. His book The Audacity of Hope: Thoughts on Reclaiming the American Dream says next to nothing about the subject.

One good proposal was laid out in a 2004 New York Times op-ed by Flynt Leverett, a former CIA analyst now at the New America Foundation. Leverett described the bricklike wall that has long divided the agency's analytical branch and its clandestine branch, making it nearly impossible for either to share information with the other, much less with competing departments such as the FBI.

To maneuver around this wall, Leverett suggested setting up joint intelligence commands for specific "targets." There might be specific commands to provide intelligence on, say, al-Qaida, nuclear proliferation, Middle Eastern stability, and so forth. The national intelligence director would have the power to draw on personnel and resources from all the intelligence agencies to work together within each of those commands—the heads of which would report directly to him.

The model for this idea was the 1986 Goldwater-Nichols Act, which dramatically reformed the armed forces. It made the chairman of the Joint Chiefs of Staff, until then little more than an administrative post, into the president's chief military adviser, and it created interservice operational commands defined by region and mission. Goldwater-Nichols is what allowed the creation of Central Command, which controls all U.S. forces around the Persian Gulf, and Special Forces Command, which unified the individual services' special-forces units. On a day-to-day basis, the old structure of the three services prevails, but in crucial matters—like fighting wars—the chairman and the operational commands truly rule. The United States fights wars more effectively as a result. If the intelligence community were reorganized in similar fashion, it might gather data and detect threats more effectively, too.

Adm. Blair's last official job was as the head of one of these commands, in the Pacific. He bucked heads with then-Secretary of Defense Donald Rumsfeld over the issue of military cooperation with China. It was for that reason, many believe, that Blair was not promoted to chairman of the JCS. (When he didn't get that job, he resigned from the Navy.) Blair might be keen to set up a parallel structure within the intelligence world if Obama wanted one. With his diverse background, and precisely because he has no special allegiance to Langley, Panetta might be open to the notion, too.

This might be the beginning of a team.