Official cover worked well for the duration of the Cold War, when holding a job at a U.S. Embassy enabled American spies to make contact with Soviet officials and other communist targets.
But many intelligence officials are convinced that embassy posts aren't useful against a new breed of adversaries. "Terrorists and weapons proliferators aren't going to be on the diplomatic cocktail circuit," said one government official familiar with the CIA's cover operations.
The Los Angeles Times has a good article on the way in which the CIA's post-9/11 spy program has been, well, a bust.
The front companies were created between 2002 and 2004, officials said, and most were set up to look like consulting firms or other businesses designed to be deliberately bland enough to escape attention.
About half were set up in Europe, officials said -- in part to put the agency in better position to track radical Muslim groups there, but also because of the ease of travel and comfortable living conditions. That consideration vexed some CIA veterans.
"How do you let someone have a white-collar lifestyle and be part of the blue-collar terrorist infrastructure?" said one high-ranking official who was critical of the program.