Spooked! How betrayal, inertia, and disaster felled the CIA

"My organisation, not in good shape when I joined, is in the process of imploding, collapsing due to its mediocrity. Simply put, we have ceased to exist as a serious organisation. We actually died, I think, quite a long time ago, but the enemy behind the Berlin Wall kept us going. It excused and camouflaged our gross inadequacies."

The organisation is the CIA; the speaker, Rupert Cohen, an imaginary agent in A Firing Offense, a new novel by David Ignatius. His last novel, Agents of Innocence, is described on the CIA's Internet website as "a novel but not fiction". Cohen's bitingly convincing assessment of the state of America's external spy agency similarly blurs the lines between truth and fantasy.

Here are the real-life words of Daniel Patrick Moynihan, the venerable Democratic senator from New York, in a television interview last weekend. Asked whether he held to the view he once expressed that the CIA should be abolished, he replied: "There is a sense in which it has been abolished. There have been seven directors, or acting directors, in six years. That's not an organisation. That's an institutional collapse."

The senator's Republican colleagues in the upper house of Congress did little to remedy matters last week when they bullied Anthony Lake, President Clinton's nominee for the vacant post of CIA director, into withdrawing his candidacy. The chairman of his confirmation hearing at the Senate seized the opportunity publicly to lash the Clinton White House over the long-running scandal over election campaign funds, while entirely omitting to explore the rather more pertinent question of how Mr Lake proposed to go about reforming the agency he aspired to lead. On Tuesday he wrote to the President, whom he served for four years as National Security Adviser, saying he wanted out. Washington, he complained, had "gone haywire".

To avoid another fiasco Mr Clinton promptly nominated a party-political neutral untainted by association with the scandal-ridden White House for America's top intelligence job. The betting is that George Tenet, the CIA's last deputy director, will glide through his Senate hearings. But he may struggle to win the confidence of the Rupert Cohens in the CIA's battered ranks.

David Wise, a Washington-based author who has written eight non-fiction books about the CIA, notes that the agency's employees had been happy with Mr Clinton's first choice. "Lake had access to the President, which is very important," he says. "It's probably the number one qualification for the job."

George Tenet, by contrast, will come into the job burdened by the sense that he will be perceived by at least some of his subordinates as the President's choice of last resort, possibly as yet another caretaker boss. Which suggests he may not be best positioned for the all-important task of restoring the morale of an organisation that according to Milton Bearden, a 30-year veteran of the CIA writing recently in the Los Angeles Times, has drifted so perilously that "only the Internal Revenue Service is held in lower esteem".

Since the devastating revelation in 1994 that the drunken sybarite Aldrich Ames, a senior CIA officer, had sold secrets to the KGB which led directly to the executions of at least 10 CIA informers in Russia, the agency has been afflicted by one disaster after another. Earlier this month Harold Nicholson, who was more senior than the now jailed Ames, also confessed to having sold secrets to the Russians. Before that there were the flaps in France and Germany after the CIA's clumsy efforts to branch out into economic espionage were exposed; the report that a Guatemalan colonel implicated in the murder of a US citizen had been on the CIA payroll; the agency's links to human rights violations in Honduras; the publication of the CIA's "torture manual"; and much more.

Under interim director John Deutch, who quit in December, an effort was made to clean out the stables. The outcome, as revealed two weeks ago, was that 1,000 of the CIA's 3,000 overseas informants have been "scrubbed" off the books, about 100 of them - mostly Latin Americans - because they had engaged in torture, kidnapping and murder.

All in all, it is hard to imagine too many CIA employees today suffering from an excess of self-esteem. What needs to be done, as every intelligence expert will tell you, is to redefine the CIA's raison d'etre. "The Cold War is over but it's not at all clear that the CIA has retooled," says Mr Wise, whose latest book is titled Night Mover - How Aldrich Ames Sold the CIA to the KGB for $4.6 million. "The mind-set remains fixed on the Cold War Soviet target, now the Russian target. They are not very experienced at dealing with terrorism, organised crime, narcotics traffic or nuclear proliferation, all of which are cited as areas they might concentrate on."

The CIA has recently set up counter-terrorist and counter-narcotics units but these are hampered by the agency's legal inability to effect arrests and by potential conflicts with the FBI and the Drug Enforcement Agency. As for Russia - described as America's "partner" by Mr Clinton after his meeting last week with Boris Yeltsin - Mr Bearden noted that what is required now is a working relationship to combat the "Dr No" threat - international terrorism and organised crime. "Slipping back into a spy vs spy contest with Russian intelligence degenerates into seedy sport with senseless casualties."

The trouble here, intelligence sources say, is that Russian intelligence has no more shed its Cold War mind-set than the CIA.

In the meantime some of the CIA's rudderless and dispirited souls may be tempted to follow the example of Rupert Cohen. Rebelling against a "world of make-believe intelligence" where "mediocrity is shielded by secrecy", Cohen transforms himself at the end of the book - in Mr Ignatius's pithily appropriate definition - into a "journo-anarchist". The CIA spy makes a seamless transition to a job as a muck-raking reporter on tabloid TV.

Next week: Phil Reeves on Russia's spies