With his slice of the $75 billion annual intelligence budget, top U.S. spymaster Adm. Dennis Blair today issued a thick report saying that a "deeper and broader understanding of threats and opportunities" is "necessary to ensure [success]."

We wish him luck.  After all, if understanding what's going on in the world can't be bought for $75 billion a year, what good is U.S. intelligence?

The fact is, there are plenty of bright people laboring away in the analytical bowels of the CIA, Pentagon, etc.  But what gets to the President too often is hyped and biased, according to another new report on U.S. intelligence, this one from the Brookings Institute.

It's hard to find any clear winners in the new interrogations set-up confirmed by the White House on Monday, but it's easy to spot the losers: Leon Panetta and Dennis Blair.

When Steven Aftergood read Adm. Dennis C. Blair's written responses to a Senate Intelligence Committee questionnaire the other day, something looked familiar.

And indeed, it was.

The Director of National Intelligence (ODNI), had given the committee a statement about Russian attacks on American spy satellites that "was simply lifted, almost word for word," from a Moscow newspaper, Aftergood reported Thursday in Secrecy News, the must-read newsletter he's edited for many years.

"Through this unique alliance, clients will have access to advice and expertise from attorneys, diplomats, negotiators, financiers, lobbyists, policy- and opinion-makers, and intelligence analysts in Washington and around the world."

"He provided strategic policy advice on the region while serving at the White House Drug Policy Office, Office of the Secretary of Defense, the U.S. Southern Command, and the Army Staff. He also ran the Army Operations Center 24-hour Intelligence Watch, where he oversaw crisis-action support teams for Somalia, Haiti, Bosnia, and numerous disaster relief deployments. Mr. Donehoo was raised in Colombia and has lived in Costa Rica, Panama, and El Salvador..."

"In that time, he will co-teach the Studies in Grand Strategy seminar and will also teach undergraduate and graduate courses in international studies and international relations, the University said," according to the campus paper.

Word hasn't leaked yet, but I wouldn't be surprised if President-elect Barack Obama has already figured out that when he wants quick answers to what's going on in the world, the last person to ask is the head of U.S. intelligence.

The steady deterioration of personnel and standards of intelligence analysis, especially at the CIA, has been going on for decades, a number of former top intelligence officials I know say.

The tip of the rot surfaces from time to time, such as with the 9/11 surprise and the gimcrackery reports on Iraq's weapons of mass destruction.

The dogs howl and the caravan moves on. Nothing changes, many well placed former intelligence officials have been telling me.  But the current, possibly fatal dangers we face demand the problems be fixed.

We've been spending too much time chattering about the operations side of intelligence lately, they say, in particular whether Leon Panetta, the former OMB head and chief of staff to President Clinton, is up to handling the spies and back-alley guys and gals.

But officials have been reminding me that it was the dismally poor analysis of intelligence that enabled President Bush to lead the nation into the disastrous invasion of Iraq -- not faulty espionage (such as it was).   

And it's the analysis served up by the CIA and other spy agencies, they point out, that will guide President Obama's decisions on Iraq, Iran, Afghanistan, Pakistan and North Korea, among other front-burner emergencies.

And that, say many rueful former officials, is where the agencies need a severe spanking.

Can Obama do it where so many of his predecessors have failed? One can only hope that the erstwhile professor, forged by the Socratic methods of his Harvard Law School instructors, will lay the lumber on his intelligence chiefs and briefers, asking them harder questions than they're used to.

Such as, "How do you know that?" 

Now, this is a staple of a good newsroom. It's a question editors ask reporters, and good reporters ask sources, all the time. I like to think that an old-fashioned city editor would have laughed the pre-war intelligence on Iraq out of their newsrooms.

But the melancholy truth, according to my well placed sources, is that even after the  intelligence disasters of 9/11 and Iraq, President Obama has a better chance of getting up-to-the-minute information on, say, Hamas, from newspapers than he does the PDB - the President's Daily Brief - served up by the Directorate of National Intelligence and CIA.

"So," I asked a former intelligence agency head over seafood this week, "if I'm President Obama, and I call Leon Panetta into the Oval office and ask him to tell me how Hamas leaders are holding up under the Israeli assault, will he be able to tell me?"

The former official shook his head, nearly blushing.   

No.  "That's not the kind of information" they focus on.

"Well, what do they focus on?" I asked.

If the viability of Hamas isn't important right now, what is?
 
He said the CIA, State Department and Pentagon intelligence agencies do have people specializing on the Palestinians, and even Hamas. But it's not likely they would have up-to-the-minute information on whether, say, in response to Israeli military pressure, its leaders are fighting among each other, unifying, or even where they are.

They just don't have that kind of stuff, he said.

Wow.

What about the NSA? I asked. Could the CIA's Hamas guy call his NSA counterpart and get cell phone intercepts from Gaza to help fill in some holes?

"They won't give it to him, because they don't want their information to help CIA look good."

Right.

And the National Intelligence Directorate, which was set up to put an end to that kind of horse play?

A work in progress, he smiled.  

Ok then: What can CIA briefers tell Obama about Hamas next Wednesday morning?

"They would tell them what they know," said, like squids squirting ink, until they could get back to headquarters and ask around.

But even then, said this former official, Panetta or Adm. Dennis Blair, the incoming head of National Intelligence, would probably not have anyone on staff to answer such specific questions.

Unbelievable, even to me.

He agreed: Unbelievable.

He nodded. "You tell people this and they don't believe it."

This from a man who has devoted his entire adult life to U.S. intelligence.

But doesn't the CIA have guys like Robert Redford in "Three Days of the Condor"? I asked, half joking, guys who read books, who specialize in more or less arcane things?

Doesn't it have people immersing themselves in subjects like Hamas, as intelligence intellectuals? A CIA version of New York Times columnist and author Thomas Friedman, to name just one of the better known?

Not so much any more, he said. There was a time when the CIA and other agencies hired and encouraged analysts to drill down deeply in, say, Chinese wheat harvests. 

But no longer, he insisted.  And there's little intellectual curiosity in the analyst ranks today, he maintained. A roguish kind of independence among the best journalists is neither sought, nor encouraged, in U.S. intelligence these days, he said.   

Everyone in the spy agencies is feverish about "current intelligence," writing reports that might get the attention of their bosses, maybe even the President of the United States, he said.

But isn't the current leadership structure of Hamas - I kept coming back to that - "current intelligence"?

No, not necessarily, he said. "Current intelligence" is the big-picture stuff that CIA chiefs like to show off to the president -- "what we know about Iran,"  usually larded with sexy secrets -- not necessarily what the president needs to know. 

It's quite likely that the analysts' bosses might not have asked them to track the state of Hamas, he said.  And when their bosses haven't tasked them with such a challenge, the analysts then to be "passive," fixating on a hot piece of secret information that came in over the transom, no matter how incidental to the more critical question: what's Hamas up to?

After much resistance, CIA and DNI finally did set up an Open Source Center with analysts, some of whom don't even have security clearances, working from unclassified material. And they've proved to be very good, some experts say, giving the spy agency a fresh view on developments ranging from Iran to North Korea. The final verdict is far from in, but one well informed former official said that on at least one subject he was familiar with, the regular CIA analysts "couldn't hold a candle" to the Open Source Center's product.

But of course, that begs the question of exactly what the 16 agencies of the so-called U.S. intelligence community -- who still hoard information like children at day care, according to most accounts -- are actually doing with $65 billion a year.

And what, especially, should be done to fix the CIA, with all those floors upon floors of people scattered across Northern Virgina gathering and analyzing secret information?  

"Blow up the place," my lunchtime guest said, "and start over."

Unfortunately, that's not a new idea, either.

Adm. Dennis C. Blair, the former Pacific forces commander who once coordinated military operations at the CIA, is still on tap to become the nation's next top intelligence officer, despite an unexplained delay of an official announcement from President-elect Obama, sources familiar with the process say.

Blair has been touted as a shoe-in for the nomination by unnamed congressional and other anonymous sources.

But weeks have passed since his name first surfaced as a cinch for the Obama administration's director of National Intelligence.

Even in the absence of a formal announcement, however, Blair is being prepped for confirmation hearings on his expected nomination.

 "I know he's being prepared for his hearing," said a top former intelligence official, who also asked for anonymity in exchange for talking freely about the process.  

In contrast, the president-elect's national security team has had trouble finding an appropriate candidate to become the CIA's next chief.

One knowledgeable source said that the Obama team was "back to zero" on finding a CIA chief, an assertion rejected by a transition official.

Running the spy agency has become less attractive to personalities who once might have sought the position, sources say, ever since it was subsumed by the new national intelligence directorate (ODNI), set up after the surprise 9/11 attacks.  

"A lot of people don't want the job," said the source, because the CIA chief is no longer top dog in the fractious, 16-agency intelligence community, and no longer gives the President his daily briefing.  The Obama team has gone down "some blind alleys" in finding the right person, the source said.

Whereas in pre-9/11 times the job might have been a springboard to bigger things, now "it's a career ender" because it requires direct supervision of such contentious policies as renditions and interrogations.

"You've got to just really love it," a former top CIA official said,  "because it's too painful otherwise."

In 1995, Blair was appointed associate director of the CIA for military support, "responsible for direction and coordination of Intelligence Community support to military operations," acording to the agency's Web site.

"[In] reality the risks to maritime flows of oil are far smaller than is commonly assumed," Blair and Kenneth Lieberthal wrote in the May/June issue of Foreign Affairs. 

"First, tankers are much less vulnerable than conventional wisdom holds. Second, limited regional conflicts would be unlikely to seriously upset traffic, and terrorist attacks against shipping would have even less of an economic effect. Third, only a naval power of the United States' strength could seriously disrupt oil shipments."

"According to a participant who would speak only if he was not identified, that led Cambone to stalk over to Blair after the meeting, jab his finger into his chest and declare that he expected more out of him," Newsweek said.

"Blair worked on a report that helped the Air Force decide to pursue a multiyear contract for F-22 Raptor fighter jets. At the same time, he was on the board of EDO Corp., a subcontractor to Lockheed Martin on the F-22 project. After news reports about the apparent conflict of interest, Blair resigned as the head of IDA and his board seat at EDO."

The U.S. warned India, perhaps even twice, about impending attacks on Mumbai from Pakistan, according to anonymous senior officials.

But what about Pakistan?  If the reports are correct, did U.S. intelligence warn the Pakistan government that terrorists were about to launch the Mumbai assault from its territory?

If not, why not?

And if so, what did Pakistan do about it?

That seems to be the most obvious element missing from the story so far, that terrorists launched their assault from Pakistan.

The effect of saying that India was warned in advance is to portray its security officials as incompetent, if not derelict. (Some have already resigned.) 

In other words, it tends to spread at least some of the blame for the attacks to Indian officials, at least temporarily, and away from the growing conclusion that Pakistan is to blame for the tragedy.

I have no reason to doubt that a "senior U.S. official" - probably Condoleezza Rice, en route to India -- told the Associated Press that the "Bush administration warned India before last week's brutal attacks in Mumbai that terrorists appeared to be plotting a mostly waterborne assault on its financial capital."

Other unnamed officials, including "a senior counterterrorism official" and Pakstani intelligence sources, chimed in along the same lines, adding details to the allegation that at least some of the terrorists came by sea.

Some news organizations had already found Pakistanis who said they saw suspicious looking men come ashore.

"Waterborne" can only mean from Karachi, the sprawling Pakistani port teeming with al Qaeda-linked terrorists and groups backing armed assaults on India over the disputed territory of Kashmir.

Were Pakistani security forces provided with the alleged U.S. warning as well, so they could hunt down the plotters?

Or did the U.S. withhold it, on grounds that Pakistani military, intelligence and security units, riddled with extremist Muslim spies, cannot be trusted?

White House spokeswoman Dana Perino, aboard Air Force one with President Bush en route to North Carolina, declined to answer any questions about the affair.

"I'm not able to talk about any of our intelligence community -- any of their cooperation with any other country," she told reporters, according to the White House transcript.  "It would not be appropriate for me to do so, so I have to decline to comment on that."

Likewise, a CIA spokesman declined comment, saying the agency "does not, as a rule, publicly discuss exchanges with other intelligence services."

The National Intelligence Directorate did not immediately respond to e-mail inquiries.

A Pakistani spokesman said he would need more time to provide a definitive answer to the question.

Pakistani President Asif Ali Zardari, interviewed Tuesday by CNN's Larry King, said his government was "in no way responsible" for Mumbai.

"Even the White House and the American CIA have said that today," he asserted -- falsely -- according to an advance transcript.  "The state of Pakistan is of course not involved. We're part of the victims, Larry."

Zaradi also said he "would not know" if Lashkar-e-Toiba, the militant, Pakistan-based group fighting to end Indian dominance of Kashmir, was involved with the Mumbai suicide-massacre.
 

"If indeed they are involved, we would not know," he said.

"Again, they are people who operate outside the system. They operate like -- al Qaeda, for instance, is not state-oriented. They operate something on that mechanism, and we would love to -- I've already offered to India full cooperation on this incident, and we intend to do that."

Zadari also suggested no one found to be involved would be turned over to India.

"If we had the proof, we would try them in our courts, we would try them in our land and we would sentence them," he said.


(For more on this, see tonite's PBS show, WorldFocus.)

"During a collection mission on Nov. 15, 2004, Lance Cpl. Swain volunteered to assist with security by manning a vehicle mounted machine gun. As Marines prepared to enter a building, Lance Cpl. Swain identified an insurgent ambush. He immediately opened fire, alerting his fellow Marines and suppressing the ambush but exposing himself to the enemy. Lance Cpl. Swain's heroic actions saved the lives of his fellow Marines, but cost him his own life when he fell mortally wounded."

Speaking at his high school alma mater in Greenville, S.C., Director of National Intelligence Mike McConnell claimed Sunday that "dozens" of terrorist plots against the U.S. have been thwarted since 9/11.

Privately, many serious analysts of terrorist threats, both in and outside of U.S. spy agencies, question whether the figure is exaggerated -- while at the same time confirming that al Qaeda-associated terrorists continue to pose  a mortal threat to the U.S. homeland.

"As we are today - post 9/11 - just some seven short years ago, we have not suffered a similar attack. That is not because people aren't trying," said McConnell in a speech during his induction into Wade Hampton High School's "Legion of Honor," a roster of distinguished graduates. 

"My community and the community of military, and law enforcement, and intelligence officials around the globe are working every day to prevent another attack on the United States. And we have been successful dozens of times."

Responding to a request for clarification, a spokesperson for McConnell today cited four documents, including a Justice Department report on counterterrorism issued on the seventh anniversary of the 9/11 attacks. 

The report listed eight "notable" prosecutions, but suggested other plots had been disrupted by covert counterterrorism operations that did not -- or may not have been intended to -- result in arrests.

"In each of these cases, the Department has faced critical decisions on when to bring criminal charges, given that a decision to prosecute a suspect exposes the government's interest in that person and effectively ends covert intelligence investigation," it said.

Such determinations require the careful balancing of competing interests, including the immediate incapacitation of a suspect and disruption of terrorist activities through prosecution, on the one hand; and the continuation of intelligence collection about the suspect's plans, capabilities, and confederates, on the other; as well as the inherent risk that a suspect could carry out a violent act while investigators and prosecutors attempt to perfect their evidence.

An FBI spokesman declined to comment, beyond referring me to past reports on terrorist plots, including one which cited 24 incidents between 2002 and 2005 that included attacks by animal rights and white supremacist groups

A White House Fact Sheet released in Oct. 2005 named "10 plots" that had been disrupted and five "casings and infiltrations" that were either detected or disrupted.  

Such figures suggest that at least two dozen more plots had to have been thwarted in the past three years to reach McConnell's "dozens"  threshold.

A recently retired senior CIA counterterrorism officer expressed skepticism about McConnell's figure, saying it came down to "word games."

Perhaps a half dozen "serious" terrorist plots against the U.S. homeland had been disrupted by Western intelligence, he said on condition of anonymity, because the information is classified, such as the 2006 London-based plot to sabotage nine commercial airliners en route to the United States. 

But he was skeptical of McConnell's claim that "dozens" of attacks had been thwarted.

"I suppose every time they arrest a guy who had an idea for an attack and put him in jail they can claim they 'stopped an attack'," he said. 

"After all, the FBI arrested some guys and charged them with conspiracy to blow up the Sears Tower, and the closest they ever got to doing anything was driving around the building with a video camera - which the FBI gave them."

But author Ronald Kessler, a longtime intelligence specialist with close contacts in the spy agencies and White House, made the same "dozens" claim as McConnell in a recent book, "The Terrorist Watch: Inside the Desperate Race to Stop the Next Attack." 

Responding to a query Monday, Kessler cited the White House and Justice Department reports and expressed a weariness about questioning "what was a real planned attack."

"If something was not blown up, it was not a real attack," according to critics, Kessler said.

"Many more have been rolled up since then. Beyond that, because the FBI and CIA have rolled up more than 5,000 terrorists worldwide since 9/11, most of the attacks were never hatched in the first place," he said.

The draft of a new National Intelligence Estimate on Iraq says that the country is in danger of flying apart in a new spiral of violence provoked by unresolved conflicts between Sunnis, Shias, Kurds and other groups.

"U.S. officials familiar with the new National Intelligence Estimate said they were unsure when the top-secret report would be completed and whether it would be published before the Nov. 4 election," McClatchy News reports.