Always secretive and wary, the mood at CIA headquarters lately has been sullen. “The intelligence community feels undervalued, a little bit picked on,” says John Deutch, the CIA’s new director. The agency lacks a clear sense of mission after the cold war, and recent headlines have all been about scandals. The most spectacular was the Ames case, but other embarrassments include a lawsuit by a female station chief who was slandered by male subordinates who claimed she was a drunken minx, as well as a controversy over a Guatemalan colonel accused of committing human-rights abuses against Americans–while he was on the CIA payroll (chart).

The CIA bureaucracy has been known to simply wait out would-be reformers, and Deutch, a former deputy secretary of defense, may last only 18 months if President Clinton is not re-elected. But less than a month into hi s job, the new director is making it clear that he is no caretaker. He replaced the top management of the agency as soon as he arrived. The deputy director of operations quit before he could be fired; it did not go unnoticed in the agency’s notoriously macho culture that the new DDO will have to report to Deutch through a woman–Nora Slatkin, a former assistant secretary of the Navy.

Deutch is used to getting his way. “I’ve never felt any problem asserting control,” he told NEWSWEEK. In his paneled office on the seventh floor at Langley, the agency’s vast suburban Virginia headquarters, Deutch seemed bemused and cheerfully cocky. But his first reaction to being crossed by subordinates, says an aide, “is to erupt.” At the Pentagon, he was known for his contempt for aimless briefings and no-accountability task forces. At the CIA, he has startled employees by coming to work through the front door (the director usually enters in a private elevator from the garage) and by pushing his own tray in the cafeteria line.

The scandals, however, aren’t over. Deutch predicts investigators will find more evidence of cover-up in the Guatemala case. Agency officials were slow to inform Congress that one of their assets, Col. Julio Alpirez, was linked to the torture of dissidents in Guatemala in the ’80s and early ’90s. Although the moviegoing public thinks of the CIA as a bunch of cowboys, Deutch’s real problem may be that the agency has become too cautious. After years of congressional investigations and exposes, “the CIA has become mainly bureaucratic, protective of itself,” says David Boren, the former chairman of the Senate intelligence committee. In 1989 President Bush wanted the agency to overthrow Manuel Antonio Noriega, the narcoboss of Panama. But CIA officials feared that Noriega would be killed, violating Executive Order 11905, which prohibits the CIA from engaging in assassinations. If shooting broke out and Noriega was killed, would the agency be breaking the law? “We spent a hell of lot of hours with a hell of a lot of lawyers trying to figure that out,” remembers Gates, who was CIA director at the time. The agency ended up supporting a halfhearted coup plot that failed. In the end, Bush had to invade Panama with 24,000 troops to depose Noriega.

These days, Deutch wants the CIA to be more aggressive–“forward-leaning,” as he puts it–about using covert action against renegade nations such as Iran. But some outsiders charge that the modern CIA is not up to its new tasks of countering terrorism and stopping the spread of drugs and nuclear weapons. “There is an aura of incompetence,” says Sen. Arlen Specter, chairman of the intelligence committee. In 1988 the Iranians eliminated nearly every CIA agent in the country (by threatening to roll over the first one they captured with a tank). After the cold war, it was discovered that most of the CIA’s agents in East Germany were “doubles” working for the communists.

In some ways, the CIA has a tougher task than it used to. “In the cold war,” says one agent, “we knew our adversary, and the rules were clear.” Neither side killed the case officers of the other, and much of the recruiting took place at embassy cocktail parties. Penetrating terrorist cells or the governments of rogue states is more difficult. An undercover agent seeking to join Islamic Jihad might have to prove his loyalty by murdering someone, which would be against agency rules. “Americans want to know what’s going on in the whorehouse, but you can’t find out by talking to Mother Teresa,” said former defense secretary Les Aspin, who was heading up a commission to reform the intelligence community before he died last month. How much human intelligence does the CIA now get out of Iran, Iraq, North Korea and Libya? “Not much,” replied Aspin.

The definition of the ideal CIA case officer has changed over time. In the wars against the KGB, it was Blackford Oakes, William F. Buckley’s fictional hero–a brave, suave Yale boy. “In large parts of the world today,” says Deutch, “you’re better off if you don’t look like you went to Yale.” The agency has tried to recruit African-Americans, but they sometimes balk at being assigned to Africa, which is regarded as an undesirable posting. The agency sorely needs Middle Easterners fluent in the local languages, and aggressively recruits possible hires all over the United States. “But Arab-Americans are too sunny and cheerful,” one former top official says with a rueful smile. “They wouldn’t make it in Hizbullah.” Edward Lee Howard, a case officer with a rocky personal life and a drinking problem, was dismissed in the early ’80s–and promptly defected to Moscow. Thereafter, the agency weeded out unconventional types. “We ended up with a lot of Mormons,” says an official. “They had language skills and a lot of foreign travel, but they didn’t do well in smoky bars.”

The low morale of younger CIA officers worries Deutch. New recruits object to the quaint lessons still taught at the CIA’s “farm” at Camp Peary, Va. In one exercise, young trainees pretend to seduce a potential agent, usually played by the middle-aged spouse of an instructor. And some female case officers balk at playing the Mata Hari role in the field, where their potential targets assume they are interested in a sexual relationship.

American spy satellites can listen in on phone conversations all over the world. So some wonder if human spies are worth the hassle. Gen. William Odom, former head of the National Security Agency, which handles spy satellites, suggests disbanding the Directorate of Operations. “They should have a big cavalry parade, declare victory and strike the colors,” he said. But others, like the late Aspin and former senator Boren, insisted that the United States will need more, not less, human intelligence in a world where terrorists can steal weapons of mass destruction. It is very unlikely, in any case, that the president and Congress will disband the CIA. The real trick is to use it wisely.

CUBA 1987

Adefector reveals that nearly every CIA-recruited spy in Castro’s country is working as a double agent, passing false information to the agency.

After officials ignore warnings that radio transmissions are “not secure,” the Iranians, under Khomeini, intercept messages and hunt down agents.

Examining secret police records after the Berlin wall’s fall, the agency learns all but a handful of its East German spies were double agents.

The agency discovers Ames, a mediocre agent who was regularly promoted, is a longtime Soviet spy whose treason led to the deaths of 10 CIA assets.

The CIA settles a discrimination suit with Janine Brookner for $410,000. the agent was denied a promotion after male subordinates slandered her.

A station chief is removed when it is learned a Guatemalan colonel who terrorized thousands, including Americans, was on CIa payroll.