The NewsHour with Jim Lehrer

RAY SUAREZ: Good evening. I'm Ray Suarez. Jim Lehrer is on vacation. On the NewsHour tonight, our summary of the news; White House reporters on the latest cabinet resignations; an assessment of Colin Powell's tenure at the State Department; an update of the fighting in Iraq; and a look at the upheavals at the CIA

NEWS SUMMARY

RAY SUAREZ: Secretary of State Colin Powell announced today he's resigning. He submitted his letter of resignation to President Bush last Friday. In it, he said with the election settled, the time has come to step down. Powell is 67 years old. He told reporters today he'd made it clear to the president he never planned to stay longer.

COLIN POWELL: In the course of the year, frankly, we have talked about the second term. And I always indicated to him that I thought I would serve for one term. And as we got closer to the election and the immediate aftermath of the election, it seemed the appropriate time, we were in mutual agreement that it was the appropriate time for me to move on.

RAY SUAREZ: Powell said he would stay until his replacement is confirmed. The Associated Press reported National Security Adviser Condoleezza Rice was the likely choice. It was unclear when the president might make an announcement. White House officials also announced the resignations of three other cabinet members today. Education Secretary Rod Paige was best known for helping implement the No Child Left Behind Act in the nation's public schools. Energy Secretary Spencer Abraham pressed Congress, unsuccessfully, to pass the administration's energy plan. And Agriculture Secretary Ann Veneman was the first woman to serve as head of her department. That makes six out of fifteen cabinet members who have announced plans to resign since the election. We'll have more on Secretary Powell and the rest of the cabinet resignations, right after this News Summary. In Iraq today, U.S. commanderssaid they control most of Fallujah after a week of fighting, and Iraq's interior minister declared victory. He said, "This thing is over." But there was still stiff resistance in places, and U.S. forces called in more air strikes and artillery. A Marine commander in the city said small groups of militants were lying in wait inside buildings. He said, "They're dying pretty hard. This is their last-ditch effort." On Sunday, U.S. Marines in Fallujah found the mutilated body of a western woman. It was unclear if the victim was Margaret Hassan, the director of CARE International in Iraq. She's been missing for several weeks. As of today, U.S. officials said 38 American soldiers and Marines have been killed in the Fallujah operation, with another 320 wounded. About 130 of the wounded have already returned to duty. Six Iraqi soldiers have been killed, along with an estimated 1,200 insurgents. There is no official estimate of civilian casualties. Relief organizations reported today they've been unable to gain access to Fallujah. The Iraq Red Crescent said an aid convoy turned back today because it was still too dangerous. A U.S. Army officer said relief efforts are part of the mission.

CAPT. ADAM COLLILER: The situation on this side of the river is fairly stable. On the other side, there's still fighting going on in the city, and we're waiting until it's safe to open up the two bridges across the river so that we can move into the city from this side and also that will allow any casualties that under the city to come out and be treated in the hospital.

RAY SUAREZ: A terrorist leader warned today U.S. forces will target other cities in Iraq, unless guerrillas strike first. The warning was in an audio message, said to be from Abu Musab al-Zarqawi. It came as militants staged attacks in a number of Iraqi cities. The worst was in and around Baqouba, northeast of Baghdad. Gunmen overran a police station and attacked a U.S. patrol. U.S. forces killed at least 20 of the rebels. To the West and South, in Ramadi and Suwayrah, car bombings and firefights killed at least seven Iraqi troops and wounded nine Americans. And there were more explosions in Mosul, the scene of heavy fighting since last week. The U.S. commander there said the situation was "tense, but certainly not desperate." We'll have more on Iraq later in the program. Israel said today it might consult Palestinians over a planned pullout from Gaza. The Israelis had refused to negotiate the issue with Yasser Arafat. Now that he's dead, the Israeli foreign minister said talks are possible, if the new Palestinian leaders are willing to rein in terror. The U.N. nuclear watchdog agency today praised an announcement by Iran. The government in Tehran said yesterday it will suspend efforts to enrich uranium for now. It was part of a deal with Britain, Germany, and France. The agreement could head off any move toward U.N. sanctions against Iran. The U.S. has pressed for tough action to stop Iran from developing nuclear weapons. On Wall Street today, the Dow Jones Industrial Average gained 11 points to close at 10,550. The NASDAQ rose more than eight points to close at 2094. That's it for the News Summary tonight. Now it's on to the cabinet resignations; Powell's tenure; an Iraq update; and the CIA

FOCUS - CABINET RESIGNATIONS

RAY SUAREZ: Now, to the latest round of cabinet resignations, and to Terence Smith.

TERENCE SMITH: Joining me now are David Sanger, White House correspondent for the New York Times, and Alexis Simendinger, White House correspondent for the National Journal. Welcome toyou both. Welcome to you both. The president is moving pretty quickly, it seems, to reshape his cabinet. Alexis, how much of this was expected, how much a surprise?

ALEXIS SIMENDINGER: I think a lot of it was expected. I know my publication started doing some work on this back during the Republican National Convention and we worked hard on it in October. And a lot of this is panning out to be exactly as we were hearing. The one thing I might add -- and I think David might second this -- is how stable this cabinet has been as opposed to thinking of this as a dramatic shakeup. The idea is really that this has been a very stable cabinet for four years, compared to previous presidents, and that the transitions are not only somewhat expected but actually maybe in some cases overdue, 9/11 made people stay longer than they might have otherwise.

TERENCE SMITH: David, the big headline of course involves Secretary of State Powell. Give me your read on that and what officials in the White House are telling you.

DAVID SANGER: This certainly was expected, Secretary Powell had made it fairly clear if you read his body language, if not his words, that he was going to be around for only one term. What's interesting is that this gives the president now this opportunity to go shape the State Department and bring it in, in a way that it really had not under Secretary Powell, a man he respected deeply but who he didn't really connect with, and many in the White House make that point. And that's why the rumor this evening that Condoleezza Rice who is probably the closest person to the president in the White House now would go to that department is so interesting because it would create a direct line between the president and a State Department he's always been a little bit suspicious of and a connection that was not there in the first term.

TERENCE SMITH: But there's been talk, hasn't there, Alexis, of Condoleezza Rice possibly going to the Pentagon, rather than the State Department?

ALEXIS SIMENDINGER: You know, there was discussion about that because Dr. Rice has a history of knowing a lot about, for instance, the Russian military, the Soviet military, and there was some thinking that the State Department or at least her friends told me at one time was not really her first coveted position in the cabinet because it's kind of a culture management job that she gave Secretary Powell a lot of credit for, but maybe not something she herself relished doing. And in fact the interesting thing is, I think, if the president is going to be sending her to State, then in fact she has a seeded to something maybe she thought initially she didn't want to do and she wants to stay in Washington because there was some talk that she definitely wanted to leave the National Security Council but wasn't so sure that maybe she didn't want to go all the way back to California or go back into the private sector in some way or academia.

TERENCE SMITH: Is there a hidden message in that, David, as to the future for Secretary of Defense Rumsfeld?

DAVID SANGER: Well, it could be, because Secretary Rumsfeld and Dr. Rice have certainly had their clashes in the past year or two, particularly over Abu Ghraib and the prison abuses. But also at that moment when Dr. Rice absorbed into the National Security Council the plan to run post-war Iraq, which initially you'll recall had been a Defense Department task, and they made no secret of the fact that they didn't see eye to eye on this. It will be interesting to see what happens if she is sitting over at the State Department, because the whole subtext of everything that's happened in this administration in foreign policy for the past three or four years has been this daily struggle between the Defense Department and the State Department and whether that changes with Dr. Rice, particularly given her connection to the president and her experience in dealing with Secretary Rumsfeld. The guesswork is that Secretary Rumsfeld will probably stay around for a while but not for the entire term by a long shot.

TERENCE SMITH: And that might explain why the open position, secretary of state,

might be attractive.

ALEXIS SIMENDINGER: Absolutely. And, you know, there was discussion in the White House that the president would be reluctant to let Dr. Rice leave too far. And I think one of the interesting things to think about is abroad how if she is the pick, how she is viewed, because the one thing she would have going for her that Secretary Powell didn't have, as David pointed out, is that direct line to the president. There would be no equivocation or confusion about whether she spoke for the president of the United States.

TERENCE SMITH: If that is the case, and we have to stress -

ALEXIS SIMENDINGER: Right.

TERENCE SMITH: -- this is still speculative, it would be something of a repeat of the model of Henry Kissinger who was first the national security advisor and later secretary of state.

DAVID SANGER: Yeah. He of course for a while held both portfolios and that didn't work out quite that well. But one of the interesting issues here is what happens to the National Security Council at that moment that its former director becomes the secretary. Does it diminish in power or not? The assumption is that it would be run by Dr. Rice's deputy Steve Hadley who is enormously capable man, but obviously has alliances with her and also with Vice President Cheney.

TERENCE SMITH: What's the impact of all this on the White House? Because these changes are coming quickly, of course we haven't mentioned John Ashcroft, and Don Evans, two others who have announced their resignations even earlier, and there must be some turmoil there.

ALEXIS SIMENDINGER: You know, I think the story line is more about continuity, because these are as chief of staff Andy Card talks about them as old shoes. Some of these people we're talking about are familiar faces to the president. In fact, if this model of staff members moving out to the rewards and the cabinet holds up, Alberto Gonzales f course is the nominee to go to Justice, the talk is for education, for instance, the president's education advisor Margaret Spelling could be his pick to move to succeed Rod Paige. The story line there is that we're not seeing a huge transition in thinking or the drive towards policy, but a loyalty to the president's agenda and a commitment to fulfill it in whatever time he has before he becomes that lame duck.

TERENCE SMITH: Do you see it as continuity as well?

DAVID SANGER: I do, but I also think that this is a White House that as Alexis said earlier had delayed some changes probably longer than they wanted. It's also a White House that four years ago we were told was going to be spreading power out to the cabinet secretaries. And in fact it didn't work out that way. You know, for all that we heard about the MBA presidency and all that, in the end, this was the most run from headquarters centralized operation that we've seen in a long, long time. When you move people who are close to the president and have their own set opinions out into these departments, it will be interesting to see if that changes.

TERENCE SMITH: Now the other two that we haven't mentioned, Anne Veneman and Spencer Abraham both stepping down. What the read on that, and possible successors?

ALEXIS SIMENDINGER: You know, our read at National Journal is that these were expected and in part because of their performance over four years, that it was some sense maybe not so much from within the White House but certainly within the affected community that these departments have to deal with, the lobbyists, the special interest groups, they were sending word back that they would like a change in both of these situations. There are a number of names for agriculture, I know National Journal has a terrific Ag reporter, Jerry Hagstrom, and he was telling me today that the odds on favorite name is somebody we've never heard of but Charles Cruz who happens to be the president of the Missouri Farm Bureau. And he's often called as Jerry reminded me, Karl Rove's favorite farmer, and in fact Andy Card has supposedly talked to him and the FBI is looking at him. But there are other names, Charlie Stenholm, who was just defeated for his office -

TERENCE SMITH: A Democrat.

ALEXIS SIMENDINGER: -- a Democrat -- if the president wants to put a Democrat back and one quick name that's emerged for energy might be Tom Coon who happens to be the president of the Edison Electric Institute, but why would his name come up? Because he's a Yale buddy of George Bush's and he raised a lot of money for him.

TERENCE SMITH: And very finally, very quickly, Rod Paige, his departure, he was controversial at times.

DAVID SANGER: He was, he is the man who at one point referred to the NEA as a terror organization, he apologized for it quickly. His legacy was the no child left behind law, which was very innovative. The down side of his legacy is many who struck the deal say that the administration never came through with the funding. And so I think that his legacy may be a while before we know how it worked out.

TERENCE SMITH: Okay, David Sanger, Alexis Simendinger, thank you both very much.

ALEXIS SIMENDINGER: Thanks, Terry.

DAVID SANGER: Thank you.

FOCUS - POWELL DEPARTURE

RAY SUAREZ: Now, the Powell story. The outgoing secretary of state talked to reporters at the State Department this afternoon. Here's an excerpt.

COLIN POWELL: It has been my great honor and privilege to have once again been given the opportunity to serve my nation, and I will always treasure the four years that I have spent with President Bush and with the wonderful men and women of the Department of State. I think we've accomplished a great deal. Now, I'm not leaving today. I just offered my resignation, and I would expect to act fully as secretary of state until the day that I do leave. And I suspect that will be a number of weeks or a month or two, as my replacement goes through the confirmation process.

REPORTER: What do you think are the biggest pieces of unfinished business, business that has to be addressed, maybe on an urgent basis?

COLIN POWELL: We have to make sure that we continue to pursue the global war against terror, we have to consolidate the very significant gains we've seen in Afghanistan, and we have to make sure we defeat this insurgency in Iraq. I think a new opportunity has presented itself in the Middle East, and President Bush has spoken to this. And hopefully over the next few weeks I'll be able to see much... how much potential there is in this new opportunity in the Middle East, with the passing of Chairman Arafat. And beyond that, I think we have to just keep working on the broad agenda that we have had for the past four years: Strengthening our alliances. We have solid alliances in Asia with Japan and South Korea and the Philippines and Thailand and Australia; make sure that we use our alliances in Asia, and the partnerships we have in Asia, to keep pressing to find a solution to the North Korean nuclear program. We have to work with our European Union friends and with the IAEA to find a solution to the Iranian nuclear program, and we have seen a little bit of progress, hopefully, over the last 24 hours. We've got good relations with China, the best perhaps in decades; good relations with India, with Pakistan, with the Russian Federation. And all of this, I think, is the result of our foreign policy efforts over the last four years under President Bush's leadership.

REPORTER: Mr. Secretary, to what extent do you feel that your resignation now will affect your ability to carry out what you intend to carry out over the next few weeks? And what do you intend to do next?

COLIN POWELL: With respect to the first question, I'm still the secretary of state and, as President Bush has made it clear, I operate with his full authority. And so I think that will be recognized by the people that I deal with around the world. And I have good relations with most of the leaders in the nations that I will be working with and visiting, so I think I'll be able to be quite effective for the remaining period of my term. And what am I going to do next? Well, I don't know.

RAY SUAREZ: More now on Powell's departure, and what it may mean for future U.S. foreign policy. We're joined by Raymond Tanter, who served on the National Security Council staff under the Reagan and first Bush administrations; Nancy Soderberg, who held senior positions on the national security staff and the U.S. delegation to the U.N. under President Clinton; and Richard Perle, who was an assistant secretary of defense in the Reagan administration. Welcome to you all.

Today the president's spokesman said in response to questions about Secretary Powell's departure the president is going to move as quickly as possible, to name a replacement, and build on the great work that Secretary Powell has done.

Richard Perle, does Colin Powell prepare to leave where the administration thinking that he's done great work?

RICHARD PERLE: I think he's done great work. It was his fate to be the nation's top diplomat, at a time when some of the urgent problems we faced could not be dealt with by diplomatic means. There was no way to deal diplomatically with Osama bin Laden or with the Taliban in Afghanistan, or with Saddam Hussein. And, so in the end, you can only take diplomacy so far, and the president was forced reluctantly to resort to the use of force where diplomacy couldn't be effective. But Colin Powell himself was a wonderfully articulate and effective representative of American policy.

RAY SUAREZ: Raymond Tanter do you agree with that analysis and you do think Colin Powell leaves thinking that he's been an effective secretary of state?

RAYMOND TANTER: Well, Ray, my take is that the president made the right choice at the right time in accepting Powell's resignation. Why? Because the president traded diversity of opinion on one hand for coherence of policy on the other hand. When you're dealing with World War IV, the war on global terrorism you need to send coherent signals to people like Osama bin Laden, to the Moammar Qaddafi's of the world, to the rogue states if you will, and when you have someone who is singing a moderate song at foggy bottom, clashing with someone at defense and at the White House who is talking in a muscular foreign policy tone, that sends mixed signals, Ray.

RAY SUAREZ: Nancy Soderberg, was the United States sending mixed signals during the last four years?

NANCY SODERBERG: Yes, unfortunately they were. I mean, Secretary Powell had a realist approach to the world, and tried to engage us in the search for an end to the nuclear weapons programs in North Korea and a search for peace in the Middle East and was consistently undercut by this administration. That said, his whole life has been dedicated to public service and he leaves with a fine record on that level. But the last four years as secretary of state will not have been seen to be among his shining moments. He simply was never given the confidence of the White House for power to drive American foreign policy.

RAY SUAREZ: So you say he leaves with a sterling record, you don't see him as a person who was reduced by this last job on his federal resume, if you compare today to his confirmation hearing to the cabinet rock star status he had before 9/11, you still see him as that kind of towering figure?

NANCY SODERBERG: I think his overall public service is one that will leave him a place in history; as I said the last four years as secretary of state will not be what puts until that place. He's been consistently undermined by a White House who believed the myth that we could go it alone or without our allies, and Colin Powell was consistently a voice of reason trying to push the administration to deal with reality and was consistently overruled. Now, this resignation comes at a time when you have a very full in box on foreign policy, the war on terrorism, the mess in Iraq, but you also have a new need to engage in the Middle East peace process following the death of Yasser Arafat. There was an agreement on the Iranian nuclear weapons program today that will need to be followed up on. And the big danger out there of North Korea's nuclear weapons program has been put aside for the last four years and you need to move that forward. So all of these issues have not been addressed as strongly as they would have had Colin Powell had a say in where American foreign policy was going, larger than the one White House enabled him. So, yes, his star is tarnished, although it's a very bright star, he's done enormous service to this country, but on foreign policy the White House has really undermined his ability to get things done and his reputation.

RAY SUAREZ: Richard Perle, maybe you could weigh in on what Nancy Soderberg referred to as the undermining. Publicly, both Pentagon officials and State Department people would say, being quoted by name, that there was nothing to it; that the rifts were exaggerated, that there are always tensions between the two cabinet departments, but privately and without names attached, terrible infighting was being talked about. What do you have memories of those times?

RICHARD PERLE: Well, I certainly disagree with the idea that Colin Powell was undermined by the president he served. Colin Powell as the nation's top diplomat did what all diplomats do. He tried to find political and diplomatic solutions to very difficult problems, some of which were simply not amenable to diplomacy or politics. And so it is quite wrong and unfair to Colin Powell to describe as a failure on his part. It is also unfair to describe the president as undermining Colin Powell when the president concluded that diplomacy could not be effective and he would have to turn instead to the use of force as he believed was necessary in Afghanistan, in Iraq, and in the war on terrorism. So I think Colin Powell did as fine a job as it was possible to do, dealing with problems that were intractable and not amenable to diplomatic solutions.

RAY SUAREZ: Raymond Tanter did Colin Powell think he was being undermined?

RAYMOND TANTER: I don't think so. I've had the privilege of knowing Colin Powell and Condoleezza Rice and Donald Rumsfeld and I think they served the president very well from the point of view of sending multiple points of view forward. Let me take issue with something Nancy Soderberg just said. She said that Bush administration's first term was characterized by unilateralism. There's a fundamental difference between a multilateral approach of say going through the U.N. and going through NATO, institutions if you will, formal institutions, on one hand, and having a coalition of the willing on the other hand. You can have multilateralism, Ray, without going through formal institutions. That said, the administration went the last mile through a set of formal institutions, the U. N. Security Council, before it launched the attack in 2003 in Iraq.

RAY SUAREZ: Indeed, Nancy Soderberg, Colin Powell was widely credited as forcing the administration to turn to the U. N. in that case; how did it work out?

NANCY SODERBERG: Well, I think he did deserve credit and largely the full credit for getting the administration to go to the U.N., but it was a very short lived victory, as they quickly pulled the plug on that effort. And I think the case of Iraq shows the myth of the superpower and that you can go it alone without allies. It's not a real coalition in Iraq, and ultimately the administration has come back to the U.N., has come back to the international community to try and move things forward. I think the real test right now for the Bush administration is, does it want to continue on this course of unilateralism, and it's beyond just Iraq and Afghanistan, I agree with Richard that the military solution there wasn't really Colin Powell's to get involved with. But there's a whole host of other international arms control treaties, the North Korea problem, the Iran problem, obviously the Middle East problem where diplomacy and working with others to help share those burdens is essential. Now, if as expected Rice goes to the State Department, Rumsfeld, who was widely thought to be on his way out, appears to be staying, depending on who replaces Rice at the White House, you may end up having a group of ideologues running the foreign policy without the voice of reason that Powell brought. And we'll see where that leads us. It will be very much determined by the personalities that the president chooses for his second term, and early indications are that it will be more like Rice than Powell.

RAY SUAREZ: Well, Ray Tanter was vigorously shaking his head.

RAYMOND TANTER: I can't buy this, Ray. There are no ideologues who are running policy amuck. George W. Bush is the president of the United States and it is his policy in Iraq for example that I think is by and large succeeding. From the point of view of transfer of authority to the interim government that was done in June and elections are coming up. From the point of view of security, the South is relatively secure, the North is relatively secure. I think some 80 percent of the Iraqi population is secure, waiting for the elections in January. Reconstruction aid is going forward. Some of the reconstruction aid is being diverted to security, there's a constitutional basis for the Iraq War being laid. Take a look at this glass of water; it's half full as far as I'm concerned. Nancy may think it's half empty.

RAY SUAREZ: Well, Colin Powell himself, Richard Perle, today when he was announcing his departure, ran down a list of places in the world that he thought were in better shape or at least had many more hopeful signs than when his administration came to office. Do you agree with that, is the world in better shape than it was in January 2001?

RICHARD PERLE: I certainly do agree with that. Remember, that after January 2001 the country was faced with the urgent necessity to deal with a radical terrorist movement that had demonstrated its ability to kill a large number of Americans, and that was determined to repeat that process, possibly with weapons of mass destruction. And it is quite extraordinary that this administration with Colin Powell and Don Rumsfeld and the president and Condi Rice have succeeded first of all in preventing that next attack, which we had every reason to fear. It has now demonstrated that we will not tolerate governments who give sanctuary to terrorists; the president broke with all previous policy in doing that. It was bound to ruffle some feathers; it was bound to create some opposition. It was bound to be characterized as unilateralism. But it was absolutely necessary, because we had compiled a record of not responding to acts of terror, and that emboldened the terrorists until we got to Sept. 11. So it's a huge accomplishment to have started an effective response to the terrorist threat and to have done so in the way that I believe and the American people clearly believed on Election Day has been in the best interest of this country.

RAY SUAREZ: And very briefly, Nancy Soderberg, how about you on that same point, does Colin Powell leave the world a safer and possibly more peaceful place than he found it in January 2001? He ran down a list, Iraq, MidEast, China, North Korea.

NANCY SODERBERG: Well, I certainly think that Colin Powell helped shape the administration's policies in a more reasoned way than they might have had he not been part of this. The question is: Could we do better in the next term, and how are they going to move that forward. I think having left the Middle East peace process aside for four years has not made us safer. I think the animosity that's been generated around the world where seven out of eight Muslim countries think we're a threat to their nature has not made us safer, and I think the failure to solve the North Korea nuclear crisis has not made us safer. I do believe that we are moving on the al-Qaida front with the overthrow of Afghanistan, but that is still much to be done there. So I think that we are not safer after four years. But I'm not sure that is Colin Powell's fault. I think he's tried to do the

right thing and has made it better because of his presence certainly.

RAY SUAREZ: Nancy Soderberg, guests, thank you all.

RAY SUAREZ: Still to come on the NewsHour tonight, the battles for Fallujah and other Iraqi cities, and the battles inside the CIA.

FOCUS - BATTLE FOR IRAQ

RAY SUAREZ: Our Iraq report comes from Edward Wong of the New York Times. Jeffrey Brown talked with him earlier this evening.

JEFFREY BROWN: Edward, welcome. How are Iraqi and American officials there viewing the outcome of the fighting in Fallujah?

EDWARD WONG: I think a lot of the American commanders are saying that Fallujah was a tactical success. They basically completed their offensive on the schedule that they had laid out. The level of resistance from the insurgents was around the same level that they anticipated. And I think they believe the number of casualties that they took... there's been around roughly 40 American troops have been killed, where what they expected for an offensive like this. But the commanders also acknowledge that they have a lot of work to do in the weeks and the months ahead. Tactically winning Fallujah denies a safe haven to the insurgents, but it doesn't solve a lot of longer-term issues like how to get Sunni Arabs who are hostile to the Americans to take part in the political process, or how to win the confidence of entire cities that have turned against Americans. So that's something that they're going to be working on. And perhaps their most daunting short-term task is to set up the Iraqi security forces, the police and the National Guard, so that they can defend a city like Fallujah on their own and not be intimidated by the guerrillas.

JEFFREY BROWN: Well, staying with Fallujah for a moment, is there a plan to have a long-term U.S. Military presence there?

EDWARD WONG: I think the commanders right now are wary about withdrawing too quickly, because they think that that might give insurgents an opportunity to come back in. We saw that happen with several cities where Americans recently launched offensives, most notably Samarra in the North which now is rife with guerrillas again. And I think the commanders are wary, but at the same time, they need to put an Iraqi face on the government and on the security forces right now. So they're sort of caught in a tough spot about whether to withdraw or to stay put.

JEFFREY BROWN: Now, the rise of insurgent activity in other cities, Mosul, Baqouba, and elsewhere, is this being seen this as a direct response to what happened in Fallujah?

EDWARD WONG: There are some reports that this might be a loosely coordinated counteroffensive to Fallujah. We've seen insurgents mount coordinated offensives before across the country, especially in that Sunni Triangle area. And I think that there's no doubt that commanders, especially in Mosul, think that this was a reaction to Fallujah. In Baqouba today, we saw two police stations attacked in the area, the insurgents tried to take up positions on rooftops, the Americans had to call in an air strike, dropping two 500- pound bombs, and one American official tells me they killed up to 20 guerrillas over there in that combat.

JEFFREY BROWN: Do commanders there think that many of the insurgents left Fallujah and went to some of these other cities?

EDWARD WONG: They do. They think that a lot of the insurgents cleared out, that they had plenty of warning before the attack came, and also that insurgents of this caliber, especially former officers from the Iraqi army, would be smart enough not to stand and fight in the face of such overwhelming American firepower; that they would have cleared out. And as has been the case throughout history, guerrillas regularly do this; they rarely stand a fight in a conventional battle.

JEFFREY BROWN: So is Fallujah now being seen then as a first step, and the expectation is that there will be urban fighting in some of these other cities next?

EDWARD WONG: I'm not sure that other cities necessarily qualify in the same level as Fallujah for an offensive like this. The thing is that in these other cities, Baqouba and Mosul, American forces do go through parts of the city regularly. None of them are no-go zones for the Americans. But there are neighborhoods within these cities which are very dangerous for the Americans. For example, the southern suburb of Baqouba that's called Baritz has been very troublesome. And there are some southern parts in Mosul where American patrols are very wary about going into, and they often do get attacked when they do go into there. So they might try some concentrated operations there.

JEFFREY BROWN: Edward, have you been able to gauge any opinion among Iraqis in Baghdad concerning the offensive in Fallujah? How is it being seen there?

EDWARD WONG: I think it... overall, Iraqis are a little bit displeased that it had to come to such an offensive in order to try and pacify the city and drive out some of the Mujahadeen. I think there are some Iraqis who do support the offensive, especially among some Shiites and Kurds who are trying to drive out the Sunni insurgents. But also, I think whenever Americans do do violence, especially such overwhelming violence to fellow Iraqis, there is some reluctance on the part of people here.

JEFFREY BROWN: And finally, Edward, three relatives of Prime Minister Allawi were recently kidnapped. Two have now been released, one still held. Do you have any new information about the releases or the persons still being held?

EDWARD WONG: We don't have that much new information. We know that there was a group named Ansar al Jihad, or the army of... Jihad army of holy war that posted an Internet message saying they were holding the hostages. So it's presumed that this group was the one that freed the two hostages. But there's no word on the third person who is Mr. Allawi's cousin-- he's 75 years old-- and we're not sure what's going on with him right now.

JEFFREY BROWN: And has this kidnapping raised the anxiety level there in Baghdad?

EDWARD WONG: I don't think it's raised it any more than it already is. It's fairly high right now, so you can't get much more paranoid than people are already here, especially among the foreigners and among officials who work with the government. But I think it adds enormous personal pressure on Dr. Allawi, who is trying to juggle a lot of different political and military strategies right now.

JEFFREY BROWN: Okay, Edward Wong of the New York Times, thanks very much for joining us.

EDWARD WONG: Great, thanks a lot.

FOCUS - CIA TURMOIL

RAY SUAREZ: Turmoil inside the CIA: Margaret Warner has that story.

MARGARET WARNER: Something of a war has broken out between the new head of the CIA, former Republican Congressman Porter Goss, and some high-level officials in the agency, and the leaks and counter-leaks of housecleaning, purges, and partisanship are flying. On Friday, 32-year CIA veteran John McLaughlin, who was acting director for two months last summer, resigned. Another reported resignation: The deputy director of the agency's clandestine branch, the directorate of operations, Stephen Kappes, though news accounts said Goss and the White House asked Kappes to reconsider. The same news reports said McLaughlin and Kappes quit after warning Goss that four aides he brought from Capitol Hill two months ago were treating senior CIA managers so disrespectfully that wider resignations could follow. The former chief of the bin Laden unit also quit last week.

For more on this early Goss-era turmoil, and whether it will help or hurt U.S. Intelligence capabilities, we turn to two people who have worked closely with Porter Goss on Capitol Hill: Congresswoman Jane Harman, the senior Democrat on the House Intelligence Committee, and Sen. Saxby Chambliss, a Republican member of the Senate Intelligence Committee. Welcome to you both.

Jane Harman, let me begin with you. You've known Porter Goss a long time, you have oversight responsibilities for this agency. Yesterday you said you thought perhaps it was in freefall. What is going on over there?

REP. JANE HARMAN: Well, I'm not consulted about these changes, Margaret. But I am very disturbed by them. I think Porter Goss has every right as the president's nominee and someone confirmed overwhelmingly by the Senate to change the agency. And I might like those changes or I might not, but he has a right to make them. It's the way he's making them that concerns me. It's also where he's making them. The directorate of operations, which is the spy service of the CIA, is not the crowd that wrote the national intelligence estimate on Iraq, that was wrong, and it's not the crowd that lost the clues leading up to 9/11, either. It's the crowd that has people in the field, with whom I visited last week, who are excellent, and who are our eyes and ears in the Middle East, for example, trying to figure out why this insurgency is going in Iraq, and what we can expect in Pakistan and Afghanistan, and what we should be doing with respect to Israel and Palestine now that we have an opportunity for peace. I want these folks to succeed. And with all this turmoil here, I worry that they're being undermined.

MARGARET WARNER: Sen. Chambliss, what's your take on what's going on?

SEN. SAXBY CHAMBLISS: Well, what Jane and I both know is that the number-one problem at the central intelligence agency today is the fact that we're pretty risk adverse out there. We're not doing a very good job of gathering intelligence through human assets. Porter Goss has committed himself during the hearing process to rebuild our human asset part of the Central Intelligence Agency from an intelligence-gathering standpoint. I don't know how he needs to do that. But I know this: I know what we've got out there in the last several years is not working. We know that we've had massive intelligence failures, and Jane and I both talked about this on TV, and virtually every member of the oversight committees in the House and Senate have talked about. So there are changes that must be made to correct the problems out there. Who should go and who should stay is up to the management, and I don't think it's up to the oversight committee. So I'm fully supportive of Chairman Goss and his capacity now as director of the CIA to make sure that we rebuild that human... our human intelligence aspect of the CIA, and to make what changes are necessary to accomplish that.

MARGARET WARNER: All right. Let me ask you that. I take your point that you think the directorate of operations -- there are problems in that, in the spy wing. Have you seen evidence, just from your position, that in fact Porter Goss has taken action to hold certain people accountable? I mean, has he actually fired anyone, for instance, or removed anyone?

SEN. SAXBY CHAMBLISS: I'm like Jane, I have not been there, I have not been consulted by these folks as to the type of action that they're taking, and we shouldn't be. And, you know, this is an inside baseball game within a very secretive agency, and it must remain that way. But the fact of the matter is that he has vast experience in the intelligence community both from a legislative standpoint, as well as having been a former... or being a former CIA operative himself. So he well knows what changes need to be made. And if he's asked for resignations, I'm sure it's from the right people.

REP. JANE HARMAN: Well, let me add to that, though, Margaret. He did ask for the resignation of the... I think he's called the chiefof staff of the agency, a few weeks ago, a guy named Buzzy Krongard who was a business fellow brought in by George Tenet, and he proposed to replace him with one these former staffers the House Intelligence Committee. It then leaked that this particular fellow had some dirty linen in his closet...

MARGARET WARNER: Was this the one who had a shoplifting arrest 20 years ago?

REP. JANE HARMAN: This is the fellow named Mike Costy, whom Saxby and I both worked with, I believe, when we were in the House Committee together. By the way, we were on the House Committee together at a time when the committee was extremely bipartisan. We worked with some of these staffers, the ones that went over with Porter Goss, but not with all of them. And the staff at that time functioned very well on a bipartisan basis, so it's not that it's impossible to happen. It broke down in the last two years, maybe it's because Saxby Chambliss went to the Senate, I'm not quite sure.

MARGARET WARNER: Well, Congresswoman, let me ask you about that staff, because yesterday on one talk show or other you said that... and of course a lot of the criticism is that they've been sort of arrogant and ham-handed and they're inexperienced, and you have got a lot of anonymous leaking, let's be clear about that, going on. And you said you all on the Hill weren't sorry to see them go. Why not?

REP. JANE HARMAN: Well, this group of four that are in the news were a little unit over in the House side after Sen. Chambliss left. And they are, and I really don't want to make this more personal than I have, I said that they were inexperienced managers who had ruffled a lot of feathers on the Hill on a bipartisan basis, and I stand by those comments. That's what they are. And they came over with Porter Goss as a unit, and they are his management staff. And that has ruffled a lot more feathers. Maybe what needs to happen is for this team to be augmented with more experienced managers, some of which are within the CIA ranks now. That might make these changes, that Porter Goss has a right to make, go down better. And it isn't clear to me, by the way, exactly where he's headed with these changes. I just want to say one thing about the human service, the spy service. It is true that we had an inadequate human intelligence capability in the '90s. I'm sure Saxby and I, we always have agreed on this and we still agree. But it is also true that this is being fixed since 9/11, and we're recruiting a lot more good people. I just saw those people in the field in the Middle East, in Pakistan, Afghanistan, Saudi Arabia, Qatar, Jordan and Israel last week. I saw the new recruits and I saw the chiefs of station in these states, and what I'm saying to you, Margaret, is they're doing a lot better. And to have folks making a much more successful effort to penetrate the tough targets, now have to think about whether they're heads are going to roll, I think is the wrong way to go. I think personnel changes are fine, reorganization is fine. Most of us support a massive intelligence reorganization bill that's winding its way through conference right now. But sending signals that there are vendettas and all kinds of abrasive treatment of people is, I think, wrong when we're in the midst of a war and we're finally growing a new crop of good people.

MARGARET WARNER: Sen. Chambliss, let me ask you, too, about another angle on this story that again has been mostly from leaking former and current officials, but has made its way into news accounts and also columns, one by David Brooks just last Saturday, that Porter Goss is under direction from the White House to clean out the anti-Bush agency folks who have been leaking reports that have been critical of, for instance, the president's handling of Iraq. Do you and, first of all, do you and other Republicans, and do you know if Porter Goss feels, that in fact there is a problem in the agency, and that there has been a kind of secret guerrilla war against the president, and that those people should be pushed out?

SEN. SAXBY CHAMBLISS: Well, I'm sure there are some folks at CIA who didn't vote for George Bush. But I'm sure that that's the same case in every other federal agency. So, you know, that's a great thing about our country: You can do your job and you can have your own political beliefs. You shouldn't carry them to the job with you, and I have no reason to think that that's happened at the CIA. That's not what this is all about. It's not anti-Bush. This is about doing what's necessary to rebuild the morale at the CIA, to rebuild the human aspect of our intelligence-gathering agency, and to do whatever is necessary to make sure that we're in a position to do the best job of the gathering intelligence around the world. And I don't think there are any vendettas being carried out. I know the four staffers personally, one of them was my personal staff director on the committee that Jane and I headed, and he's a good guy, and he's a smart guy, and he's tough, and he has the best interest of the United States at heart and the best interest of the agency at heart. So this always happens when you have an upheaval. You have some folks who are moved out of a position who may not understand why they've been moved. But, you know, I think when you have leaks and anonymous sources going to the press and complaining about being moved around, let go, whatever it may be, that pretty well tells you the character of that person. That tells you why they're being moved around.

MARGARET WARNER: Congresswoman, do you have any evidence, or has anyone come to you that tells you that there is a kind of partisan purge going on here?

REP. JANE HARMAN: I hope not. I would agree with Saxby's comments. I think that the people working at the CIA are true patriots and they take enormous risks, especially those in the field. And I always try to thank them personally when I'm out there, and we both did that together many times, and I try to do it from here as well. So, no, I don't think that's going on, but leaks have been a problem for years. They didn't start in this election.

MARGARET WARNER: But, I mean, do you think that some of those people are targets now of either the Bush White House or Director Goss because of those leaks?

REP. JANE HARMAN: Well, I don't know. I would say again that leaking is bad. I don't know which rumors to believe, and I am hoping that this is part of a sensible plan. But at the moment, what it looks like, sadly, Margaret, is that the directorate of operations, which is a spy service which has begun to heal itself since 9/11, is the target of this purge, and it doesn't make much sense to me, given the fact that these are not the folks who brought us the faulty intelligence reports that led up to 9/11, or led to the mistaken view that they were stockpiles of chemical and biological weapons in Iran... in Iraq.

MARGARET WARNER: So senator, what do you say to that point the congresswoman has made a couple times now that whomever is at fault here, that this kind of turmoil, the morale problems it causes are the wrong thing to have going on right now when the U.S. is really occupied in this not only war on terrorism, but a war in Iraq and a complicated operation in Afghanistan?

SEN. SAXBY CHAMBLISS: Well, sometimes you have to make tough decisions, and those tough decisions create some turmoil immediately in the short range. But in the long range, they help morale, they boost the morale of those folks who are in the field as well as those folks at the headquarters, in this case of the CIA I don't know whether there's been any immediate upheaval other than from those folks who are the anonymous people that are going to the media. I have not seen any indication of that. On the Senate Intelligence Committee, as well as the House Intelligence Committee, we have frequent contact with CIA personnel, both at the field level as well as at the headquarters level. And I simply have not seen that. So I hope that what's going on is the necessary purging that we need to have of those folks who are not doing their job, not for political reasons, but for the reason we're not protecting Americans in the way we should be.

MARGARET WARNER: Okay, we only have 30 seconds. I want to ask you quickly, if your old friend Porter Goss were to call and to say, you know, "this is sort of getting out of control, what should I do," what would be the two-sentence answer you'd give him, Congresswoman beginning with you?

REP. JANE HARMAN: Well, I'd tell him to build a stronger management team. He's a guy who, at least to quote him in the newspaper yesterday, says he doesn't do personnel. Well, this whole reform effort that he's undertaking is about personnel. So if he doesn't do personnel, he needs a support system that does personnel with some finesse, rather than a sledge hammer. That would be my advice. And one more thing. There's an accountability review that is in the IG's office at the CIA that Congress has asked for; it names names. I'd love to get that up to the Hill so we can see the individual people who actually did play a role in the problems leading up to 9/11. Maybe those are the folks who should be moved out.

MARGARET WARNER: And Senator, what would be your brief word of advice to Porter Goss?

SEN. SAXBY CHAMBLISS: I would say, "Porter, when you took this job you knew that outside of being president it's the toughest job in Washington, DC. You're going to have more hard and tough decisions to make, and you're going to catch more flack from the media, both inside and outside the agency. I hope you'll make the right decisions, and I hope you'll do the best job of making sure that my children and grandchildren live in a safe and secure America, because I know that you're going to do it."

MARGARET WARNER: All right. Senator, Congresswoman, thank you both.

REP. JANE HARMAN: Thank you, Margaret.

SEN. SAXBY CHAMBLISS: Thanks.

RECAP

RAY SUAREZ: Again, the major developments of this day: Secretary of State Colin Powell announced he's resigning, along with three other cabinet members. And U.S. commanders said they control most of Fallujah, after a week of fighting.

RAY SUAREZ: And again, to our honor roll of American service personnel killed in Iraq. We add them as their deaths are made official and as photographs become available. Here, in silence, are 20 more.

RAY SUAREZ: We'll see you online, and again here tomorrow evening. I'm Ray Suarez. Thanks for joining us, good night.