WASHINGTON INSIGHT

SPY FALLOUT: Although CIA Director R. James Woolsey has promised reforms, the Aldrich H. Ames spy case is costing the agency severely on Capitol Hill. Start with the CIA’s secret budget, estimated at $30 billion a year. Many in the intelligence community argue that the Ames affair--in which the Russians are said to have paid an accused “mole” more than $2 million for national security secrets--proves the need for continued high-budget spying and counter-spying. But key lawmakers say they believe that the case demonstrates the need to slash CIA waste and inefficiency. “We’re pounding money down a mole hole,” one aide grumped. . . . Also in trouble is CIA-backed legislation to give the FBI access to bank records of CIA employees without notifying them. An aide said lawmakers “feel you can’t legislate these problems away; they are part of the culture of secrecy that must be fixed with new leadership.” . . . Congressional discontent with Woolsey is strong. In a closed session with the Senate Intelligence Committee, he was blistered for failing to bring in new management blood the way Louis J. Freeh did when he became FBI director last year.

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WINDY DAYS ARE HERE AGAIN? Daring to return to the scene of one of the party’s historic disasters, Democrats appear certain to hold their 1996 national convention in Chicago. Although four other cities are in the running, sources indicate that the Windy City clinched the deal with a monster reception thrown by Mayor Richard M. Daley for top Democratic officials, including Chicagoan David Wilhelm, the party’s national chairman. The mayor served up mountains of Chicago-style hot dogs, deep-dish pizza, chocolate cheesecake--and a 16-piece jazz ensemble. . . . Daley is untroubled at the prospect of reviving unpleasant memories of the politically ruinous convention of 1968, when his late father, the former mayor, was the focus of outrage as Vietnam War protesters clashed with police in the streets. “Vietnam is over,” the younger Daley told a reporter. “They lifted the embargo.”

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NO SALE: The Clinton White House has taken a brisk broom to more than just the chefs, ushers and travel agents there. Now it has swept away a small business that sells, to the White House staff and press corps, a wide range of items bearing an official-looking White House crest. . . . All through the Ronald Reagan and George Bush presidencies, no one complained about the sale of these curios, ranging from crystal glasses to golf club covers. In fact, Bush and his wife sent many handwritten notes to Taddese Ghebremeschel, owner of G.M.L. Design Inc. of Arlington, Va., thanking him for shirts and jackets carrying the words “White House” above an eagle similar to the one on the presidential seal. Ghebremeschel says he also had “verbal permission” from Reagan and Bush lawyers to operate. . . . But Clinton counsel Marvin Krislov has demanded in a letter to G.M.L. that it cease sales because they violate “longstanding White House policy” regarding use of the White House logo. Ghebremeschel is going out of business with bitter words: “I thought President Clinton was supposed to be for the little guy.” . . . Commented presidential spokesman Arthur Jones: “We do everything we can to avoid commercialization of White House property.”

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EARLY BLOOMER: Uriah Milton Rose, who in 1865 founded the Rose law firm of Whitewater fame, is one of two Arkansans immortalized in marble in Statuary Hall at the Capitol.