The CIA v. Saddam Hussein
Pretty much from the beginning, the CIA was involved in what was referred to as the "Gulf War" (Operation Desert Storm—an "upgrade" from Operation Desert Shield). Early on working to disseminate propaganda (at an estimated cost of $20 million) and later to attempt to work with opposition forces (estimated at $11 million).1 After the "war" had been fought and Hussein was clearly still in command, the US government upped the covert activities of the agency.
"Budapest Rules"
To begin. There are "operational guidelines" ("legal" guidelines) that the CIA must follow in covert operations that may include "fatalities" (the president issues what is called a "fatal finding" allowing for them to proceed with certain restrictions2). One is that they must not assassinate foreign leaders (though the implication seems to be "direct" with a great deal of leeway as to what would constitute "indirect"). The other is that the CIA's propaganda and promises cannot "explicitly" give any assurance that the US will back any revolution. It is referred to as the "Budapest rules" after the failed coup designed and implemented by the Eisenhower administration in Hungary in 1956. After it began, the US announced it would not intervene. The Soviets crushed the revolution; some 20,000 people were killed.
Of course "rules" are abstract concepts that can be bent into entirely different things according to need or convenience by the intelligence community.
What to do about Hussein
The "war" hadn't deposed Hussein and sanctions weren't harming anyone other than the poor and hungry population of Iraq. The intention/goal of the conflict (see footnote 1) had been to excise Hussein and leave the government relatively intact in order to maintain stability in the region. Not only was one or more opposition forces taking over less preferred, it had up until then failed—despite US support and numerous attempts, no opposition group had managed to either launch a successful offensive or assassination of the leader.3
The US had been supporting the Iraqi National Congress (INC; itself partially organized by the CIA), which was a popular group that gave promise of a possible democratic government in the future. They were positive though US officials felt they might never succeed. Regardless, aid was given them (to the tune of $4 million annually) and by 1994, the CIA had a base of operations and was helping direct in military operations.
How much the US actually wanted to aid them is questionable—it might have been a means to destabilize things just enough to get Hussein out of power without the dreaded "separate Arab states" threat. Part of the INC's plan was to, at least temporarily, unite opposition and Kurdish groups as a military force to wrest control of the country away from Hussein. Further, one of the men in the INC, a former Iraqi general, informed Washington that the INC had lied to the CIA and was planning to get the US involved in a new war with Iraq (whether this is accurate is unclear but it certainly served its purpose to pull support from a military offensive to what was preferred: see below). The government wanted nothing to do with that, preferring to do its "warring" with other people's troops, and the INC offensive was a failure—on the other hand, it was expected to aid the preferred plan by destabilizing (at least temporarily) the military forces while the new government took power.
The preferred means to an end would be a coup d'etat from within the ranks of Hussein's own men (bearing in mind the "Budapest rule"—just because it was orchestrated and run by the CIA is to be ignored). This would allow men from the military itself to get rid of the leader but maintain control over the government and also maintaining Hussein's "regime" without his presence—something that would coincide with US interests in the region.
It was also viewed as much quicker means to accomplish the intended goals. The US was frustrated and impatient with the situation in the area (and a bit embarrassed that the "problem" had not gone away even after superior American armed force had been unleashed in Iraq).
Iraqi National Accord
This preferred plan of action was decided to be carried out through a group called Iraqi National Accord (INA), a group of exiled military personnel headed by CIA (and MI6) recruit General Adnan Nuri (interestingly the general who "informed" Washington about the INC's supposed plan to engage the US in an overt war). The INA had many members that were formerly part of Hussein's "ruling circle." The group was set up in Jordan and funded through the US, Saudi Arabia, and Jordan (as much as $6 million). They were given the impression that the US would support and recognize them as the country's new leaders (again the "Budapest rules").
From early on, it seems, Hussein and his intelligence not only knew about but had infiltrated the INA. Apparently he was aware of the coup and the proposed offensive by November 1995, months before either was to take place. In fact, apparently a member of the INC had been warned ahead of time through a contact in the security forces to "Get out and tell your friends to escape. Pull out quickly" (www.sunday-times.co.uk). As of that time, the INC had not been privileged to know about the coup plot. It passed the information, along with the claim that Iraqi intelligence had intercepted CIA communications equipment, to the US. Additionally, Hussein was thought to know the identities of the members of the coup. No action was taken.4
Coup d'etat interruptus
The INA engaged in a number of bombings and killings (" terrorist activity"), resulting in the deaths of at least 150 civilians. As the time for the coup came close (June 1996), the members prepared themselves. They were given a satellite phone (Frontline says "mobile phones") with a direct line to CIA operatives.5 But before they were able to begin the operation, Hussein's security police and military launched a blitzkrieg crackdown, rounding up the members of the coup as well as additional opposition and CIA-associated operatives ("assets"). A few hundred (at least) were arrested (many presumably tortured and probably executed) and at least eighty senior Iraqi officers were summarily killed.
Iraqi intelligence found the satellite phone and sent a message to the operatives on the other end (the CIA offices at the Jordanian US embassy, according to www.sunday-times.co.uk) including some verses from the Qur'an and order to "Go back to Langley."6
While hardly "out" of the region or considering Hussein low priority, CIA operations were scaled back a great deal and most funding dropped. Hussein, as of late 2001, remains in power.
1US support of opposition forces was always lukewarm and somewhat tentative, using them as a matter of convenience or distraction. The goals in Iraq were not to "take down" Saddam and his government, but rather dispose of him, leaving the "regime" intact. The US did not want the various factions declaring separate independences because it would not coincide with US "interests" in the region according to former CIA director, R. James Woolsey (1993-1995) on PBS's Frontline. This is partly why US troops stood by and watched Kurds being massacred by the Iraqis (no explanation why the US allows Turkey to do the same with American weapons). Iraq had to remain "intact" to serve US purposes (one fear was that one or more factions would ally with Iran).
2 President Bush (Sr.) issued one in 1991. Brent Scowcroft, the National Security Advisor, was asked by Peter Jennings of ABC if it was "fair to say from a layman's point of view that it's the nearest thing you can do to try to kill a foreign leader without saying you're going to set out to kill a foreign leader?" "That's right, yes."
3It had come close in 1991, with southern Shi'i Iraqis. Unfortunately for them, the Bush administration decided not to offer any sort of aid, allowing Iraqi forces to regroup and attack with helicopters—something US military negotiators had allowed them to keep following the war, a move later admitted to be a "mistake" (Frontline). The perceived threat to stability ("US interests") of a separate arab state being the chief reason. In 1995 and 1996 northern groups again were ready to strike but were again refused support (this time by the Clinton administration). This is not to say there was no support at all. The CIA aided all the groups to some extent. But they were basically on their own despite being given the impression (if not the "assurance"—supposedly against operational guidelines—sources claim an agent of the CIA had done so) they would receive military support.
4Some of the specifics are from "Iraquis close to the operation" (www.sunday-times.co.uk). It certainly is plausible, not only given the way events progressed but that prior to the INC offensive, Hussein's forces attacked and overwhelmed their positions, including the CIA base of operations. Agents fled the base (perhaps aware ahead of time) leaving behind a number of documents and equipment. Just what Iraqi intelligence was able to glean from its find isn't know for sure, but is highly suggestive.
5According to www.sunday-times.co.uk story, the breakdown was due to the CIA using an Egyptian "go-between" to deliver communications equipment to the group. It claims he "denounced his contacts to the Iraqi mukhabarat [the domestic security agency]." Any one of these events was enough to put the operation in serious jeopardy, if they all are true, it never had a chance. Plus, Hussein was prepared for such contingencies. As noted by Frontline: "a special unit of Iraqi intelligence has studied every coup of the 20th century." During the program, Ahmad Chalabi (leader of the opposition) stated that "Saddam is a far better plotter, a more apt and accomplished plotter, than the CIA will ever be. He is good."
6According to Frontline: "then they find the CIA's phones. An Iraqi agent intelligence officer places a call. An American agent answers. He is told, 'Your men are dead. Pack up and go home.'" A more dramatic ending; which is the correct version I am unsure.
(Sources: hardy.ocs.mq.edu.au/~control2/bay-cmls.html; www.sunday-times.co.uk/news/pages/sti/2000/04//02/stifgnmid01001.html; www.rwor.org/a/v19/940-49/945/cia.htm; infomanage.com/secrets/saddam/cia.htm; www.defencejournal.com/oct98/cia_secretwar.htm; www.thenewamerican.com/tna/1998/vo14no07/vo14no07_rules.htm; PBS Frontline "Gunning for Saddam" 8 November 2001, portions of which appeared on the earlier "The Survival of Saddam" 25 January 2000)