Spymaster's blunders may spell end of CIA

JAMES WOOLSEY, director of the CIA, has proved beyond doubt that he is a gentleman. But his refusal to wield the axe in the wake of the Aldrich Ames affair, arguably the worst espionage case in American history, has set in motion a process which could lead to the end of the CIA, at least in its present form.

Little noticed amid the rancorous pre-electoral din issuing from Capitol Hill, the Senate last week launched a bi-partisan initiative for a commission to review the agency's entire role in the post- Cold War world. No limits have been placed on its brief. To all intents and purposes, said the New York Times, a demoralised CIA will be 'a company undergoing a court-supervised bankruptcy re- organisation'.

'Wither The CIA ?' was a question asked here well before revelation of the Ames debacle. Hitherto, the inclination had been to allow the question to be answered primarily by the agency. Now the astoundingly light in-house punishment meted out by Mr Woolsey seems to have convinced Congress and the Clinton administration that the CIA is incapable of putting its house in order.

Last week the long awaited report by the CIA inspector general, Frederick Hitz - compiled largely on the basis of what Ames himself told interrogators during months of questioning after his arrest on 21 February - laid out the appalling truth.

Between 1985 and 1993, Mr Hitz writes, he caused the loss of 'virtually all the CIA's human resources' reporting on the Soviet Union. He ruined much of its work elsewhere in Eastern Europe and revealed to Moscow the identity of scores of CIA staff working under diplomatic and civilian cover. The total damage, says Mr Hitz, was 'truly staggering', including 10 agents executed, 36 neutralised or turned, at least 55 compromised operations, plus general CIA policy and planning documents of huge value given to Soviet and Russian intelligence.

Equally staggering was the CIA's failure to catch Ames. He was lazy, frequently drunk, with a long record of 'no enthusiasm, little regard for the rules, little security consciousness . . . few good work habits, few friends and a bad reputation in terms of integrity, dependability and discretion'. All this was known, as was a lifestyle far beyond his apparent means. Yet Ames's supervisors 'cleaned up after him, found words to praise him' and promoted him to positions which might have been handpicked by the KGB.

Mr Woolsey's response has been almost to turn the other cheek. He has reprimanded only 11 CIA employees, six of them retired. No- one has been sacked or even demoted. That was 'not my way, not CIA's way and not the American way', said Mr Woolsey. An outraged Congress begs to differ.

This week, the Senate Intelligence Committee will produce its own report and recommendations. Whatever it decides, those who favour a complete revamp of the structure of American intelligence services will have more grist for their mill. The Ames disaster may have been unique, but even beforehand the CIA was reeling from troubles enough: Iran-Contra, its slowness in spotting the weaknesses of the old Soviet Union, and two lawsuits by former and present female employees claiming discrimination and abuse of women, at what they claim was little more than a hard-drinking Old Boys Club.

Suddenly the long-standing proposals to dismantle the CIA from Senator Daniel Patrick Moynihan and others, presented well before the Ames affair came to light, no longer look far-fetched. Under these blueprints, the agency's analytical and research side would go to the State Department, while the Pentagon would take over spying and paramilitary activities. The FBI, meanwhile, would exclusively handle mole-hunting.

The FBI, indeed, is one of the few to emerge with some credit from the Ames debacle. It first alerted the CIA in the mid-1980s about his suspicious contacts with Soviet officials.

At the very least, big cuts are on the way. President Bill Clinton is committed to take dollars 7bn ( pounds 4.5bn) out of the dollars 28bn annual intelligence budget by 1998.

Only dollars 3bn of this is spent on the CIA proper: the lion's share is believed to go on electronic eavesdropping. But the cost of its disgrace will be borne across the intelligence community.