Newsweek has a piece on Freeman's exit that jibes pretty well with how I understand things to have played out. Pelosi was reportedly dismayed by the pick, and though she didn't object publicly, there were rumors that she might if the appointment wasn't withdrawn. That's the gist of the reporting in Newsweek:
Chas Freeman, the Obama administration's choice to serve in a key U.S. intelligence post, abruptly withdrew Tuesday after House Speaker Nancy Pelosi and numerous other congressional leaders complained to the White House that he was too closely tied to Saudi and Chinese government interests. The resignation of Freeman represents another serious "vetting" embarrassment for the White House and a personal blow to Dennis Blair, President Obama's national intelligence director. After choosing Freeman to head the National Intelligence Council, Blair had publicly defended his choice and insisted as recently as this week that he had no intention of withdrawing the selection. On Monday, Freeman himself was telling people on Capitol Hill that the more criticism was heaped on him, the more intent he was on fighting to stay at the intelligence council.... ...Pelosi's objections reportedly focused on Freeman's ties to China. A well-placed Democratic source said Pelosi, a strong supporter of the Chinese human rights movement, was incensed about public remarks that Freeman once made that seemed to justify the violent 1989 Chinese government crackdown on democracy protestors at Tiananmen Square. The source, who asked not to be identified, said Pelosi thought Freeman's views were "indefensible" and complained directly to President Obama about his selection.
Schumer's blustering aside, it's far more likely that Pelosi and her views on China were decisive, not Schumer and his views on Israel, or the "Lobby" and its alleged campaign against Freeman. Also, Blair was badly damaged in this, and the NIEs and other IC products that come out of his office will have less credibility because of it. Perhaps this administration has learned the lesson of the Bush years -- that a renegade intelligence community can bite you. Regardless, Blair revealed his true colors by hiring Freeman. From here on out, every intel product will be treated as suspect. The Obama administration's attempt to politicize the intelligence process has badly muddied the waters. Republicans on the various intelligence committees should be prepared to call for independent commissions and panels and assessments by the dozens, and indeed they might threaten to do this even now. The Freeeman appointment raises serious questions not just about Blair, but also what's happening to the intel analysis process.