The CIA has often been criticized for covert operations in the domestic politics of foreign countries. The agency was heavily involved in the failed 1961 Bay of Pigs invasion of Cuba, deeply embarrassing the United States. In 1971 the U.S. government acknowledged that the CIA had recruited and paid an army fighting in Laos. In 1973 the CIA came under congressional investigation for its role in the Pentagon Papers case. The agency had provided members of the White House staff, on request, with a personality profile of Daniel Ellsberg, defendant in the Pentagon Papers trial in 1973, and had indirectly aided the White House "Plumbers," the special unit established to investigate internal security leaks. This direct violation of the National Security Act's prohibition led Congress to strengthen provisions barring the agency from domestic operations.

Its foreign operations came under attack in 1974 for involvement in Chilean internal affairs during the administration of Salvador Allende, and in 1986 it was shown to be involved in the Iran-Contra affair. Diminished in the early 1990s after the end of the cold war, it began rebuilding later in the decade, accelerating the process after the terror attacks of Sept. 11, 2001. It was subsequently hurt, however, by the revelation that Director George Tenet had insisted, prior to the Iraq invasion of 2003, that Iraq possessed weapons of mass destruction, and the quality of the intelligence that it had provided was criticized. One result of the intelligence failures relating to Sept., 2001, and Iraq was the reorganization of 2004, which demoted the director of the CIA and made the CIA one of several agencies overseen by the new position of director of national intelligence.