Jan. 6 (Bloomberg) -- Leon Panetta’s selection by President- elect Barack Obama to become CIA chief surprised two top Democrats on the Senate intelligence panel, who expressed reservations about his lack of background in the spy world.

Senator Dianne Feinstein, who will head the Select Committee on Intelligence during confirmation hearings for the CIA job, and Senator Jay Rockefeller, the current chairman, said they weren’t informed about the choice. Panetta is a former U.S. representative from California and chief of staff and budget director in President Bill Clinton’s White House.

Feinstein said in a statement she knew “nothing” about the selection of Panetta until media reports yesterday. An aide to Rockefeller who spoke to the senator said the West Virginia Democrat wasn’t consulted. Feinstein said she wants an “intelligence professional” in the post. Rockefeller also expressed concern about Panetta’s lack of experience, his aide said.

A number of other experts in intelligence -- including former Central Intelligence Agency director George Tenet and Lee Hamilton, co-chairman of the 9-11 Commission -- praised the choice and dismissed the reservations of Feinstein and Rockefeller.

Tenet, CIA director during President George W. Bush’s first term, said Panetta was “a great choice.”

“He will bring stature and leadership to the agency,” Tenet said in an interview.

Report to Blair

Panetta would report to Retired Admiral Dennis Blair, who, if confirmed as director of national intelligence, would oversee the 16 U.S. intelligence agencies, which have a combined budget of at least $47.5 billion. Blair’s selection was reported last month.

Blair, 61, is a 34-year Navy veteran who was head of the U.S. Pacific Command following the Sept. 11 attacks. He oversaw operations across more than 100 million square miles and has been credited by some for developing the staff and strategy to weaken Islamic insurgents in the Philippines.

In a statement today, Feinstein said she intended to have the committee “move quickly to get Admiral Blair confirmed.”

“His experience gives him valuable insight into the many challenges facing the intelligence community and makes him a strong nominee,” she said. Still, “we will do our due diligence in reviewing his record and views,” she said.

Difficult Choice

Panetta, 70, is the first of Obama’s selections for a major administration post to run into resistance from his fellow Democrats.

The CIA job has been a difficult one to fill. John Brennan, a former CIA counterterrorism chief who was an adviser to Obama’s campaign, was considered the frontrunner to head the agency. He withdrew in November after some Democrats voiced concerns about his links to the agency under Bush.

Panetta would take over the Central Intelligence Agency as Obama is promising to break from Bush’s policies regarding interrogations and surveillance in the war against terrorism.

Under Bush, the CIA has faced criticism that it tortured suspected terrorists or sent them to countries known for rough interrogation tactics.

Supporters of the choice said Panetta would offer a clear break from Bush’s policies.

Senator Ron Wyden, member of the intelligence panel, said Panetta is a “savvy” Washington veteran who can change the agency.

‘Dubious Programs’

Panetta’s “challenge is to get the CIA out of the business of dubious programs of questionable effectiveness and legality and get it back to the business of fighting terrorism ferociously,” said Wyden, an Oregon Democrat who served with Panetta in the House.

Wyden said that he was consulted on the choice and that Panetta would be “well received” in the Senate.

Senator Evan Bayh, another committee member, said he would support Panetta and wanted Steve Kappes, the deputy director of the CIA, to continue in his role. Kappes had been mentioned by some intelligence analysts as a possible nominee for director.

“I hope we can convince both Mr. Panetta and Mr. Kappes to work together at the CIA for the sake of our country’s national security,” said Bayh, an Indiana Democrat.

‘Needed Perspective’

Hamilton, who once headed the House Foreign Affairs Committee, said Panetta’s lack of experience in intelligence gathering operations isn’t a hindrance in running the agency.

“He will bring a very needed perspective, an outside perspective, to the CIA at a critical time in the agency’s history,” Hamilton, now president of the Washington-based Woodrow Wilson International Center, said in an interview.

Hamilton said Panetta would have dealt with intelligence material “on a daily basis” while serving as White House chief of staff and also in his work on the Iraq Study Group, an independent commission that studied U.S. policy in Iraq. Hamilton was co-chairman of that group.

Milt Bearden, a former CIA official who was the agency’s station chief in Pakistan during the 1980s, said Panetta’s lack of an intelligence background may be a benefit.

Bearden said that, with retired Marine General James Jones serving as Obama’s national security adviser, Panetta would help offset the influence of the military.

“I have nothing against the military, but there’s absolutely nothing wrong with having a civilian balance in the national security establishment,” he said. During his service in Pakistan, Bearden was in charge of the CIA’s program of supporting and supplying Afghan fighters battling Soviet forces in their country.

‘Too Political’

Still, Panetta, for all his skills, may be “too political a figure” for the CIA job, said Ellen Laipson, who was vice chairwoman of the National Intelligence Council during the Clinton administration.

While Laipson praised Panetta’s leadership abilities, she said that his “considerable skills on domestic issues and politics at the highest level just don’t seem to be a great match for this position.”

The CIA “is in strategic decline and managing morale and mission there is actually a very hard job,” Laipson, now president of the Washington-based Stimson Center, said in an e- mailed message.

At various points in its history -- most recently in the run-up to the 2003 U.S. invasion of Iraq -- the CIA has faced criticism that the intelligence process became politicized as agency officials sought to keep in favor with the president.

Jen Psaki, an Obama spokeswoman, declined to comment on the selection process. Panetta didn’t return phone messages left with the Panetta Institute at California State University, Monterey Bay. Panetta created the institute in 1997 to serve as a non- profit, nonpartisan study center for the advancement of public policy, according to its Web site.

To contact the reporters on this story: Jeff Bliss in Washington jbliss@bloomberg.net; Ken Fireman in Washington at kfireman1@bloomberg.net

Last Updated: January 6, 2009 13:19 EST