For five years Washington’s official line on Saddam Hussein has been simple and unwavering: he must go. That was the essence of a broad secret policy statement, known as a finding, drawn up at the end of the gulf war. ““There was an absolute consensus at the top levels of the U.S. government that we were to get rid of Saddam,’’ says one senior intelligence source. The finding authorized economic warfare, propaganda, support for anti-Saddam rebels–just about everything short of assassination. But more than $20 million later, Washington’s covert war against Saddam came to nothing. And interviews with CIA operatives, State Department officers, leaders of the Iraqi opposition and senior Arab officials tell a story of failures turning to disaster.

The tallest order of all was fomenting a coup among Saddam’s intimates. One official who briefed George Bush on the question calls it ““almost impossible.’’ Still, the White House has remained upbeat about the prospects for removing Saddam, at least in dealing with others. Key Arab and European allies were led to believe that the U.S. administration was committed–and had the resources–to bring down Saddam as early as May of this year, and no later than July. Instead, last June Saddam arrested more than 100 officers and security men plotting against him, eliminating the key CIA-backed network that might have hurt him. He also forged a covert alliance of his own with one of the Kurdish factions supported by the CIA, eliminating it as a potential military threat, winning a trove of critical intelligence about CIA intentions and paving the way for the offensive he launched in northern Iraq at the end of last month. Disillusioned allies and top intelligence sources now tell NEWSWEEK of a covert war that relied on questionable proxies and may have been compromised from the start.

At the end of the gulf war, Washington’s best hope was that a palace coup or military uprising would topple a weakened Saddam, yet keep in place a stable central government. But that hope receded after Saddam put down rebellions by Kurds in the north and Shiites in the south. While some voices within the intelligence community thought an insurrection still was the best way to topple Saddam, others strongly favored a coup.

Bush’s orders, in early 1991, to take out Saddam caught the agency’s cloak-and-dagger types unprepared. They knew little of Iraqi dissidents, and neither did key U.S. allies. Some balked openly at running a covert operation as directed by the finding. ““I don’t like this,’’ one top official scribbled on a copy of the top-secret document in early 1992. A key umbrella group of the covert plan, the Iraqi National Congress (INC) had been formed several months earlier, to try to unite the opposition to Saddam. Ahmad Chalabi, an Iraqi banker based in London, presented himself as the one man who could bring together Shiite, Sunni and Kurdish opposition–and won Washington’s backing. Langley knew he was far from an ideal choice: after his family’s banks collapsed in the late 1980s, a Jordanian court sentenced him to 30 years in jail in absentia: King Hussein later offered a royal pardon.

Many opposition figures stayed away from the new front when it was formed in Vienna in 1992. Still, both Kurdish factions and an exile group called the Iraqi National Accord, known as the Wafaq, signed on. Then as now, many of Saddam’s opponents were resentful of Chalabi’s role. But even the Shiite holdouts eventually signed on after Bush widened the no-fly zone in the south in order to check Saddam’s counterinsurgency efforts there.

As Bill Clinton took office, the strategy seemed at least to be containing Saddam, if not toppling him. The Kurdish factions held elections, created a parliament and shared ministries. Under CIA Director James Woolsey, the agency contacted several disaffected Iraqi officers–all of whom were killed within a few months. But some Iraqi dissidents claim the CIA rejected their overtures. An official of the fundamentalist Dawa party says U.S. officials declined an offer to send people into the streets following Clinton’s first cruise-missile attack on Baghdad. And Saad Jabr, leader of an exile group outside the INC, says Washington declined to call in airstrikes near Baghdad as the trigger of a coup attempt proposed by members of Saddam’s security detail. Jabr also says U.S. officials were given the names of nine of the plotters–and that all of them, plus a 10th man, were arrested two days before the coup was to begin. Suspicions of a leak hurt Washington’s standing with the exiles.

The Kurdish alliance gradually was fraying under longstanding strains, but the CIA’s one major operation in the north may have spelled its doom. In September 1994, the extent of Kurdish control seems to have impressed a gung-ho CIA officer called ““Bob,’’ who toured the region with a Senate staffer. Bob lobbied successfully for creation of a base manned by about 25 agency officers and Special Forces troops in Zakho, near the Turkish border, and a smaller outpost in the mountain town of Salahuddin. Four months later, with the agency in turmoil over the Aldrich Ames scandal, Bob returned to Salahuddin, AK-47 in hand, to head the Kurdish operations. A key contact was Karim Sinjari, head of intelligence for Kurdish leader Massoud Barzani. Sinjari had an intelligence apparatus capable of running agents in Baghdad itself. ““His word was gospel to them [the CIA],’’ says a member of a rival faction. But he may have been playing a double game.

Bob proposed an audacious strategy: a Kurdish offensive against Saddam’s forces in the north. He promised air cover, a rebellion among Saddam’s Republican Guards–““all kinds of bulls–t,’’ one opposition source remembers. He even contacted an Iraqi Shiite coalition based in Tehran and encouraged it to join in. But it now appears he was winging it. At the last minute, he rescinded the offer of U.S. firepower. On the eve of the March 1 operation, Barzani pulled out. The forces of his main rival, Jalal Talabani, attacked two Iraqi divisions, capturing 700 men, but the offensive fizzled. And the coalition never recovered. Bob was called on the carpet–and so was his boss in Langley, the new chief of Mideast operations, Steve Richter. Richter, says one source, ““got himself in a box for failing to keep senior management informed.''

Langley’s most recent humiliation has played out in Jordan. King Hussein had tried rehabilitating Saddam after the war, even brokering secret Israeli-Iraqi talks. Failing that, he was persuaded to get behind a coup plot following the defection of Saddam’s son-in-law Hussein Kamel in August 1995. Although Kamel proved deranged, new standard-bearers of the opposition were found in the CIA-backed Wafaq. The exile group was given offices in Amman and a powerful transmitter brought in from Croatia. Jordanian ministers who opposed the subversion were replaced in February; U.S. and Jordanian military forces began to hold an unprecedented series of joint exercises. The Wafaq used a proven infiltration route, through the north, with the help of Barzani intelligence chief Sinjari. In February the network smuggled out a former Saddam chief of staff. Momentum toward a coup seemed to be building. Jordanian officials say the CIA promised that Saddam would fall by May. Then, when that proved unfeasible, by July. But on June 26, Saddam rolled up the network. More than 100 officers serving in his army and security forces were executed. While declining to go into details, Wafaq officials and some Jordanians now acknowledge the incident was a disaster. ““We were victims of an American, stupid policy,’’ said one source close to the king.

By August, a confident Saddam was setting his sights on the Kurds. He may have had a working arrangement with Barzani–and Barzani’s intelligence chief–long before that. As early as June 1993, Barzani told NEWSWEEK that without much more support from the West he would have to turn to Saddam. If the secret ties were longstanding, almost every major move by the CIA and the Wafaq inside Iraq would have been heavily compromised. The CIA can hardly be faulted for deploying the only weapons at hand. ““We were looking at everybody who showed up and needed help,’’ says a top CIA official. Still, the secret war against Saddam stands as a cautionary example of the perils of statecraft pursued by stealth.