President-Elect Barack Obama is expected to name retired Navy Adm. Dennis Blair as the nation's new National Intelligence Director shortly. But while transition and Democratic Party sources say Obama and Blair have reached agreement about Blair's nomination as the next “intelligence czar” (as predicted in this week's Newsweek), there is considerable debate behind the scenes as to what, precisely, his duties will entail.

The issue goes back to the troubled beginnings of the Office of Director of National Intelligence in 2004. In a frenzy to demonstrate they were doing something to remedy lapses in the handling of intelligence reports on al Qaeda before 9/11, Congress legislated the creation of the DNI to force historically competitive agencies like the CIA, FBI and National Security Agency to share information. Congress also wanted to bring more discipline to the largely unaccountable budgets of defense intel agencies--like NSA, which runs a worldwide electronic eavesdropping network, and the National Reconnaissance Office, which builds and operates spy satellites. Under post-World War II legislation, the director of the CIA--whose official title was Director of Central Intelligence--was supposed to be able to force agencies to share info. The CIA chief also was supposed to have some power to manage spending throughout the intelligence "community."

But successive CIA directors never succeeded in asserting dominion over Pentagon agencies, whose spending on systems like satellites and spy planes dwarfs the CIA's spending on recruitment and handling of human secret agents. Over the years the CIA director's power to force agencies to share information also atrophied. The CIA's Operations directorate--the bureau that handles undercover spying--itself became one of the "community's" most turf-conscious players, as was demonstrated when post-9/11 inquests established that CIA had been monitoring two future 9/11 hijackers since early 2000 but did little to alert the FBI when the suspects moved to the United States.

Some Bush advisors and many intelligence officials opposed post-9/11 proposals to establish a new intelligence czar. They argued that this would only create a new level of bureaucracy, and that a simpler solution would be to bolster the CIA chief's powers to require sharing and budget discipline among all spy agencies. Congress went ahead and created the DNI office anyway, although from the start questions hung over the new czar's authority over Pentagon spying budgets.

It’s generally agreed that the system began working better in 2007 after Defense Secretary Donald Rumsfeld and his hardline subordinates were replaced at the Pentagon by Robert Gates--a former Director of Central Intelligence. Since then Pentagon techno-spies have demonstrated a much greater willingness to submit themselves to the supervision of the intelligence czar's office. But at the same time, complaints have emerged that the czar's office has become a top-heavy bureaucracy that second-guesses managers in front-line agencies and slows down decision-making along the chain of command. For instance, the intelligence czar's office has made it clear that it expects foreign intelligence services, which traditionally have established direct relationships with American agencies like CIA, FBI or NSA, to check in with its officials before conducting significant business with their traditional U.S. counterparts. Also, there is a question of whether the intelligence czar has enough time to carry out his dual responsibilities as top manager of 16 competing U.S. agencies and as the President's senior intelligence advisor. The current DNI director, retired Admiral (and one-time NSA chief) Mike McConnell, spends hours early each morning preparing to personally deliver daily intelligence briefings to President Bush--an activity that has sapped the time and energy he needs to ride herd on squabbling and unruly agencies.

Members of Obama's transition team for intelligence, who have been meeting for about a month under the leadership of two former top CIA officials (John Brennan and Jami Miscik) have been examining the intelligence czar's duties and responsibilities. People close to the transition say that Blair, who while in uniform once worked at CIA headquarters as the agency's chief liaison to the Pentagon, has been participating in briefings by transition advisors about the challenges facing a new National Intelligence Director. But according to one well-informed source, Blair himself hasn't yet expressed strong opinions on how he might want to change the way the intelligence czar's office works.

Meanwhile, Obama and his advisors are still fretting about a new CIA director. Intel transition team leader Brennan was the leading candidate to assume command of his former agency until liberal bloggers complained that he had publicly defended controversial Bush Administration policies on the imprisonment and interrogation of top Al-Qaeda operatives held and roughly questioned by the CIA. Brennan then removed himself from consideration (though he stayed in charge of the transition effort). But his withdrawal raised questions as to whether anyone from CIA associated with Bush Administration policies could pass muster with Obama's political base. Democratic sources have indicated nonetheless that a leading candidate still being considered by Obama for CIA chief is the agency's current deputy director, Stephen Kappes--a veteran but media-shy spy who almost certainly was involved in the agency's handling of terrorist suspects while serving as Number Two in the Operations Directorate between 2002 and 2004. Kappes was driven out of the agency when Republican Congressman Porter Goss and a coterie of hyper-partisan Capitol Hill aides took control at Langley in 2004; he was invited back after Goss and his team were forced out by John Negroponte, then serving as Intelligence Czar. Kappes’ willingness to stand up to the Republicans may well have endeared him to Democrats who follow intelligence issues closely, and may be why Kappes' candidacy for CIA chief hasn't yet foundered on the same shoals that damaged Brennan's prospects. One person close to the transition said that Kappes' overall qualifications for CIA chief were so formidable that confronting left-wing critics over him was a fight that Obama not only ought to join but that the new president would have little difficulty winning.