UPDATE 1-Shifting account of CIA's Libya talking points fuels Rice controversy

* CIA says it took out al Qaeda reference

* "Never any effort or intent to mislead or deceive..."

-official

(Updates with intelligence official comment, details)

WASHINGTON, Nov 28 (Reuters) - When U.S. intelligence

officials testified behind closed doors two weeks ago, they were

asked point blank whether they had altered the talking points on

which U.N. Ambassador Susan Rice based her comments about the

Benghazi attacks that have turned into a political firestorm.

Director of National Intelligence James Clapper, acting CIA

Director Michael Morell and National Counterterrorism Center

Director Matthew Olsen each said no, according to two

congressional sources who spoke on condition of anonymity.

The next day, Nov. 16, former CIA director David Petraeus

testified before the same congressional intelligence committees

and also replied no to the question of whether he had changed

the talking points, three congressional sources said.

The CIA on Tuesday told lawmakers that it had in fact

changed the wording of the unclassified talking points to delete

a reference to al Qaeda, according to senators who met with

Morell on Tuesday. It appeared to be the first time that the CIA

acknowledged it was the agency that made that change,

congressional sources said.

"There was never any effort or intent to mislead or deceive.

This was a complicated and imperfect coordination process, and

no single person had all the information on the edits," a senior

U.S. intelligence official said. "At the end of that process,

however, the final version was signed off on by all the

appropriate people at CIA and throughout the interagency."

Officials pointed out that the top intelligence officials

would not necessarily have known when every edit to the talking

points were made along the way.

At the Nov. 15 hearing, Morell and Clapper were asked how

each of the edits to the talking points were made, they each

answered they did not know, but agreed to look into the editing

and coordination process, officials said.

Petraeus a day later told lawmakers he had OK'd the final

version of the talking points, which did not include the

reference to al Qaeda, officials said.

The Obama administration's shifting explanations of who

changed the talking points - which were the basis for its early,

flawed public explanation of the attacks in Libya - have fueled

Republican anger, and could prevent Rice, and maybe even Morell,

from getting promotions.

"This is the fourth story about who changed the talking

points and the third reason why - after all the agencies

appeared under oath and said, 'I don't know who changed the

talking points.' To say I'm disappointed, confused, is an

understatement," Senator Lindsey Graham, a le ading critic of the

White House's handling of Benghazi, told Reuters on Wednesday.

Rice has said she relied on the talking points from the

intelligence agencies when she did a round of Sunday talk shows

days after the Sept. 11 attack on the U.S. diplomatic compound

and a CIA base in Benghazi. In those appearances, she said the

violence arose spontaneously from a protest of an anti-Islam

film rather than a premeditated strike.

U.S. intelligence officials have since said that militants

with ties to al Qaeda affiliates were likely involved in the

attacks that killed the U.S. ambassador to Libya and three other

Americans. In a statement on Tuesday, Rice acknowledged there

never had been a protest.

Republicans have criticized Rice's earlier comments as an

attempt by the administration to play down al Qaeda connections

to the attack ahead of the presidential elections, to avoid

denting President Barack Obama's image on fighting terrorism.

During the election campaign, Obama angrily denied that.

INTELLIGENCE CZAR REVIEW

The Office of the Director of National Intelligence, which

oversees the CIA and the other spy agencies, is reviewing who

made the changes to the talking points from the original set

that was drafted by the CIA on Sept. 14, congressional sources

said.

On Nov. 1, two weeks before the top intelligence officials

testified at the closed-door hearings, congressional sources

said, a CIA staffer had told a staff-level meeting of the

congressional intelligence committees that the talking points

drafted by her unit were changed after leaving their hands,

leading to the early impression that the CIA had not been

involved in changing the original language.

The CIA staffer was unaware of edits made to the document at

the spy agency after it left her hands, other officials said. At

another meeting on Capitol Hill later in November, the staffer

clarified that al Qaeda was still in the version when it left

her hands and she concurred with the near final version that did

not include al Qaeda in it.

The initial draft referred to "attacks" carried out by

"extremists with ties to al Qaeda." But by the time Rice

received them before she went on the talk shows Sept. 16.,

"attacks" had changed to "demonstrations" and "with ties to al

Qaeda" had been deleted, multiple U.S. sources have said.

The question of who altered the talking points has been

repeatedly asked of the White House and intelligence agencies.

Deputy White House national security adviser Ben Rhodes told

reporters onboard Air Force One en route to Thailand on Nov. 17

that the White House made only minor adjustments to the talking

points to change the reference to the diplomatic facility as a

"consulate" because it was not formally a consulate. "The only

edit ... made by the White House was the factual edit as to how

to refer to the facility," he said.

Because the question has become such a flashpoint, some

lawmakers who met with the CIA's Morell, who accompanied Rice to

Capitol Hill on Tuesday, were flabbergasted that he told them -

inaccurately - in their morning meeting that the FBI had altered

the wording. The CIA later corrected his statement.

"CIA officials contacted us and indicated that Acting

Director Morell misspoke in our earlier meeting. The CIA now

says that it deleted the al-Qaeda references, not the FBI. They

were unable to give a reason as to why," Graham and two other

Republican senators said in a statement on Tuesday.

"This was an honest mistake and it was corrected as soon as

it was realized. There is nothing more to this," an

intelligence official said about Morell's fumble.

A MORELL NOMINATION?

Graham has suggested he would hold up the nomination of

Morell if Obama nominates him to be the new CIA director, as

well as that of Rice if she is nominated to be Secretary of

State, because of the administration's response to the Benghazi

events. Morell and Rice are both believed to be on Obama's short

list for those jobs.

But Morell appears to be fairly popular on Capitol Hill.

Senator Saxby Chambliss, the senior Republican on the Senate

Intelligence Committee, doubted that Morell's reported verbal

stumble on the talking points would disqualify him for a

promotion should Obama choose him.

"I'm not sure that in and of itself would keep him from ever

being confirmed," Chambliss told Reuters. The Senate must

approve such appointments.

"Mike was actually not the director when this (the attack on

Benghazi) took place. And he's kind of putting Humpty Dumpty

back together again," Chambliss added, calling Morell a "smart,

straightforward guy."

(Additional reporting by Susan Cornwell and Jeff Mason; Editing

by Warren Strobel and Eric Walsh)

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