The influential number two executive at the CIA, Steve Kappes, is stepping down.  In a memo to CIA employees today, director Leon Panetta announced that Kappes will retire in May. "Steve is a one-of-a-kind professional who has dedicated himself to the CIA.  He has helped me tremendously in guiding this great organization.  Having worked side-by-side on some of the toughest issues around, I'm proud to call him a friend," Panetta wrote in the message.

When President Obama chose Panetta to be his CIA director, members of Congress blanched, saying they had not been consulted. They worried openly that Panetta lacked the institutional connection to the CIA that previously successful directors had possessed.  By way of compromise, Obama asked Kappes to stay on as Panetta's deputy, even though Kappes, 59, was known by Obama's transition team to be an uncompromising advocate of the harsh interrogation and rendition policies that Obama publicly opposed. 

Kappes enjoyed solid relationships with congressional overseers, particularly Sen. Diane Feinstein, now the chair of the Senate intelligence committee, and Sen. Jay Rockefeller, the former chair. It was thought that his re-appointment would send a signal that the incoming Democratic president, with little or no experience in the world of secret intelligence, wanted to establish a solid relationship with career CIA employees.

"The fact that the Obama administration kept him on was a clear sign that he knew that Kappes was not a political guy, and that there was a sense of progress and stability needed at the agency when you're switching out everyone else," said Timothy Sample, a former staff director for the House Intelligence Committee.  

Kappes had left the CIA, ostensibly for good, in 2004, after a dispute with then CIA director Porter Goss. He re-joined the CIA in 2006.

"His return [in 2006]  did a lot to recreate morale and to center a ship that was leaning and kind of get it back to focus on where it's business is supposed to be," Sample said.

He's known as a case officer's case officer, and helped Panetta to understand the equities that the CIA's National Clandestine Service hold in the nation's intelligence structure. His relationship with intelligence overseers in the office of the Director of National Intelligence was strained as the DNI, Adm. Dennis Blair (ret.), moved to better integrate covert operations with President's national intelligence strategy.  

"Throughout his life, Steve has put the needs of others first, as he did in returning to the CIA in the summer of 2006.  He hadn't planned on so lengthy a stay this time around.  So when he told me a few months ago that it was time for him to move on, I understood," Panetta said in today's message.

Replacing Kappes will be Michael Morell, now the CIA's chief of intelligence and a former presidential intelligence briefer. Morell is known as a top-flight intelligence analyst. It has not escaped the attention of CIA observers that Morell is a "DI guy" -- that is, an analyst, rather than a "DO guy" -- a case officer. Morell may be in a better position to work with the DNI on cross-government intelligence collaboration.  The CIA's current National Clandestine Service director, Michael Sulick, remains an ardent advocate for CIA case officers, and he has no plans to retire, agency officials said.  

Fran Moore, the deputy director for intelligence, takes Morell's place as director for intelligence.

Kappes was in the public eye most recently as the subject of an unflattering accusation that he helped to cover up the death of an inmate in CIA custody in Afghanistan in 2002. The C.I.A. vigorously disputed the charge, published in Washingtonian magazine, but the article generated rumors that Kappes's enemies within the intelligence establishment were trying to force him to resign.  

A CIA official said that Kappes had notified Panetta about his intention to retire six months ago.

"This is his decision, and I'm sure that if they could keep him longer, they would," said Michael Hayden, who brought Kappes back to the agency in 2006.

Note that Sulick and Morell were also re-recruited by Hayden, which suggests that the young Obama administration was fairly comfortable with the CIA as they found it, in terms of its senior leadership, its effectiveness, and the lawfulness of its operations.

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