Feb. 5 (Bloomberg) -- Leon Panetta, President Barack Obama’s pick to head the Central Intelligence Agency, said he wouldn’t send terrorist suspects to countries that might torture them or to secret prisons where they could be held indefinitely.

Panetta said today that such transfers, known as renditions, as well as detainment in secret centers known as “black sites” conflict with executive orders Obama signed last month. Only high-level terrorist suspects -- those involved in planning attacks or overall strategy -- might be held at overseas sites temporarily so they could be questioned, he said.

“I do not believe we should use renditions to send people to black sites” where the U.S. couldn’t provide “the kind of oversight” such operations require, he told the Senate Intelligence Committee during its hearing on his nomination.

Panetta, 70, a former Democratic House member from California, was chief of staff and budget director in President Bill Clinton’s White House. He is a critic of harsh interrogation tactics. While the Senate is expected to confirm him, some Republicans have said they’re concerned by his lack of intelligence experience.

New Obama Orders

If confirmed, Panetta will be one of the senior officials to carry out executive orders Obama signed last month that closed the secret prisons and directed all interrogators, including the CIA, to follow the Army Field Manual’s guidance banning the use of threats and physical abuse.

Senator Christopher Bond of Missouri, ranking Republican on the committee, said some of the banned methods yielded helpful information, so the CIA must boost other operations to compensate.

“This makes it even more imperative that the CIA improve its capabilities in other areas, including” the use of spies, “covert action and covert influence,” Bond said.

Panetta was pressed by Bond on whether he had firsthand knowledge of the CIA transferring people to other countries so they could be tortured. Panetta said he did not.

CIA Director Michael Hayden said in 2007 that whenever the agency turned over a suspect to a foreign government, it did so with the understanding that international law would be followed.

The committee plans to continue its hearing tomorrow.

Democrats have clashed with Republicans over whether the CIA can go beyond the manual’s guidance on interrogations and whether it can use secret prisons. Democrats say the programs and techniques led to torture.

Waterboarding

The CIA has admitted to using waterboarding, or simulated drowning, in questioning suspects such as Khalid Sheikh Mohammed, mastermind of the Sept. 11 attacks. The agency has since discontinued the practice.

Defenders of harsh tactics have said that they’re necessary if an attack is imminent. In such a situation, Panetta said, “I would not hesitate to go to the president” to get authority for using different, legal interrogation methods.

Panetta also said that he would seek to eliminate the use of contractors, some of whom have been blamed by Democrats for interrogation abuses.

“We have a responsibility to bring a lot of those responsibilities in-house,” Panetta said. “I get very nervous” about who can hold the CIA contractors accountable.

Latest CIA Scandal

Questions from senators centered on how Panetta would run an agency that has been buffeted by scandals over the past eight years. The latest occurred Jan. 28 when media reports disclosed that the agency’s station chief in Algeria was under investigation for allegedly raping at least two women.

Senators said they were frustrated that they didn’t know about the situation until it was reported by the media. Panetta said the panel should have been informed by the CIA in October and that the employee should have been fired.

Panetta also has faced questions from senators about his finances.

EduCap Inc., a McLean, Virginia-based student-loan company, reported by the Washington Post to be under investigation by the Internal Revenue Service, contributed money to the Leon & Sylvia Panetta Institute for Public Policy. Panetta set up the Seaside, California-based public-policy group after he left the Clinton administration.

In written responses to questions posed by Bond, Panetta said that he accompanied Catherine B. Reynolds, CEO of EduCap, on her plane “on one or two occasions.” He said the one trip he remembered involved going to a meeting of Zenith National Insurance Corp.’s board, of which they were both members. “Mr. Panetta acted in full compliance with applicable tax laws,” according to the answers provided to the committee.

Unaware of Donations

Panetta, in his written response, said he was unaware of any donations from EduCap to his foundation. EduCap’s 2006 tax form lists a $25,000 contribution to the foundation’s lecture series.

The Senate Finance Committee had been looking into whether entertainment services that EduCap provided to Tom Daschle, and his wife, Linda, should be reported as income.

On Feb. 3, Daschle, a former South Dakota Democratic senator, withdrew his name from consideration as secretary of Health and Human Services after it was revealed that he had to pay more than $140,000 in back taxes and interest for free use of a car service.

Republicans also raised questions about Director of National Intelligence Dennis Blair appointing former CIA director John Deutch, who lost his security clearance for keeping classified information on his home computer, to an advisory panel on spy satellites.

“What kind of message do you think that appointment sends to the men and women of the CIA, who work every day to collect and protect the most sensitive intelligence,” said Senator Tom Coburn, an Oklahoma Republican.

Clinton Pardon

Clinton pardoned Deutch before leaving office in 2001. Richard Willing, a spokesman for Blair, said the appointment was an attempt to get a broad range of advice.

“Director Blair is seeking to benefit from the technical expertise of some national experts, and Mr. Deutch is among those who will be called on from time to time,” Willing said in an e- mailed statement.

To contact the reporter on this story: Jeff Bliss in Washington jbliss@bloomberg.net.

Last Updated: February 5, 2009 21:13 EST