By Greg Miller
Washington Post Staff Writer
Thursday, April 15, 2010; A03
CIA Deputy Director Stephen R. Kappes, a veteran spy who has played a major role in overseeing the agency's counterterrorism operations since the attacks of Sept. 11, 2001, will retire in May and be replaced by the service's top analyst, CIA officials said Wednesday.
Michael J. Morell, 51, will take over the No. 2 position at a time when the CIA is battering the al-Qaeda terrorist network with an escalating campaign of drone strikes in Pakistan but also enduring severe setbacks, including a suicide bombing that killed seven agency employees and contractors near the Afghan city of Khost in December.
CIA officials portrayed the personnel moves as part of a long-expected transition. Kappes has made clear his desire to retire and was talked out of doing so twice by President Obama, officials said.
The elevation of Morell, the officials added, will maintain continuity in leadership ranks at an agency that endured a series of morale-draining shake-ups in the years following the Sept. 11 attacks.
In a message to CIA employees, Director Leon E. Panetta described Morell as a 30-year CIA veteran who "understands intelligence as few others do -- from collection and analysis to interaction with our customers."
Morell served as a top briefer to Presidents Bill Clinton and George W. Bush and was with Bush in Florida on the morning of the Sept. 11 attacks. From 2006 to 2008, he served as associate deputy director, the No. 3 position at the CIA, making him responsible for day-to-day operations.
The appointment was applauded by members of Congress and agency veterans, although some said the change would mean less expertise in the executive ranks on overseas operations -- a core mission that has often been a source of controversy for the CIA.
"Michael will bring some knowledge of the nuts-and-bolts functioning of the agency," said a former senior CIA official who worked with Kappes and Morell. But aside from Kappes, the former official said, "no one in the executive suite has ever run a source."
As a result, Panetta may rely more heavily on Michael J. Sulick, the head of the CIA's clandestine service. Sulick, a close colleague of Kappes, has also been the subject of recent retirement rumors. But officials said that, for the time being, Sulick is not expected to leave.
Other former officials said that the agency might see subtle changes under Morell, a scholarly figure who lives in the Virginia suburbs with his wife and three children.
"He may get the agency back to having analysis drive collection instead of vice versa," said Patrick Murray, who served as chief of staff at the CIA under then-Director Porter J. Goss. "It also probably positions Morell to be the next director, if and when Panetta decides to leave."
The son of an autoworker from Akron, Ohio, Morell joined the agency in 1980 and went on to become a top analyst on Asia and Latin America.
He spent three years on a CIA assignment in London before returning in 2006. He has traveled overseas with Panetta, and he was tasked with helping to find ways to avoid a repeat of the intelligence breakdowns that nearly led to the bombing of a Detroit-bound airliner on Christmas Day.
Kappes's retirement will mark the close of a distinguished, but not uncontroversial, career.
Since the Sept. 11 attacks, he has held more high-level positions at the agency than any other CIA officer, giving him significant measure of responsibility for operations ranging from the Predator drone campaign in Pakistan to the agency's use of harsh interrogation methods at secret overseas prisons.
Exposure of the secret prisons triggered a series of investigations, including an ongoing criminal probe by the Justice Department. Although some at the agency have been disqualified for prominent jobs by their association with such controversial CIA programs, the inquiries did not slow Kappes's career.
When Obama selected Panetta, a former congressman with little background in intelligence to be CIA director, key lawmakers signaled that they would object to the appointment if Kappes did not stay.
Sen. Dianne Feinstein (D-Calif.), the chairwoman of the Senate Intelligence Committee, said Wednesday that Kappes had "maintained stability at the agency and been a great help and resource for Director Panetta over the past year."
With broad shoulders, a bald head and penetrating stare, Kappes was often dispatched overseas for difficult conversations with allies as well as adversaries. He made repeated trips to Pakistan to pressure that nation's intelligence service to sever its ties to the Afghan Taliban, and he traveled to Libya to persuade Moammar Gaddafi to abandon his country's pursuit of illicit weapons.
Kappes's name surfaced publicly most prominently when he and Sulick resigned from the agency in 2004 after clashing with senior aides to then-Director Goss. Both were persuaded to return two years later when Goss was replaced by Michael V. Hayden.
Staff writer Walter Pincus and staff researcher Julie Tate contributed to this report.