For one of Washington's most powerful men, there's no place like California

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CARMEL VALLEY, Calif. - Leon Panetta was still director of the CIA when his old buddy from Monterey, Calif., made him an auspicious bet.During a New Year's Eve dinner party in the wine cellar of the Sardine Factory, restaurant owner Ted Balestreri sat across from Panetta and pointed to a prized $10,000 bottle of 1870 Chateau Lafite-Rothschild. Then he raised his voice to his 26 guests, some of whom had been around since Panetta washed dishes in his father's Italian restaurant in Monterey and picked walnuts at the family farm in Carmel Valley.

"I'll tell you what," Balestreri said. "I'll open that bottle of wine when Leon gets bin Laden!"

Panetta jumped out of his chair and shouted out, "You're on!"

Five months later, in May 2011, Balestreri received a call from Sylvia Panetta with a message from her husband. Turn on CNN, she told him, "and get the wine opener ready."

Now, after making history by bringing down the most notorious terrorist on the planet, carving out a remarkably progressive agenda as secretary of defense and all the while being lauded as one of the most respected men in Washington, Leon Panetta the citizen is back home.

"Washington has always been a place I worked," Panetta said in an interview from the family ranch. "This has always been and will always be home."

Home is deep in the Carmel Valley, past horse farms and wineries and vegetable stands, just beyond the funnel of coastal fog. Here, his beloved golden retriever, Bravo, who sat in on many a top-secret meeting at the CIA and Pentagon, bounds across the winter clover. Here, an old metal mailbox at the end of the driveway still bears the name, in hand-painted red letters, "C. Panetta." It's a humble homage to his Italian immigrant parents, Carmelo and Carmelina, who bought these 11 acres in 1946 and planted the walnut trees themselves.

When Leon Panetta settles in at the single-story ranch house, the 74-year-old grandfather of six will put on his jeans and pull out the tractor.

"It's great therapy to get on that tractor and be able to drive through the orchard and swing it around trees, and every once in a while you whack a tree," he said. "You're watching the crows flying near you as you're digging up the soil. Gophers are running around, and the hawks are going after the gophers. You just feel like you're part of nature again."

Until Tuesday, when Chuck Hagel was finally confirmed as his successor after weeks of partisan controversy, Panetta was one of the most powerful men Washington. In the previous five weeks alone, he made bold moves by lifting the ban on women in combat and extending military benefits to same-sex couples. As a Democratic Central Coast congressman in the late 1970s to early 1990s, his legislation created the Monterey Bay National Marine Sanctuary, banning offshore oil drilling from Hearst Castle to the Golden Gate Bridge. His efforts turned Fort Ord into Cal State Monterey Bay. In the mid-1990s, he served as director of the Office of Management and Budget before becoming White House chief of staff to President Bill Clinton.

In 1997, he came home and established the Panetta Institute for Public Policy with his wife - who had run his district congressional offices as a volunteer - to teach young people that government service is an honorable profession. Then, in 2009, President Barack Obama called him back to Washington to lead the CIA.

Panetta has been respected by colleagues on both sides of the political aisle, whether they agree with him or not.

"It doesn't mean every decision was right or without controversy," said U.S. Rep. George Miller, D-Martinez, who used to share a home with Panetta in Washington during the days when Panetta would attend 6 a.m. Mass each day at St. Peter's Catholic Church just up the block. "But he gets the benefit of the doubt. He's developed a level of trust."

The Senate confirmed him unanimously for the defense chief job in June 2011. But that didn't stop Republicans, especially Arizona Sen. John McCain, from later grilling him over troop withdrawals in Iraq, the military's response to the Benghazi, Libya, attacks and what McCain called a lack of leadership during the Syrian crisis last year.

Still, McCain said in an interview last week that Panetta "knows the issues better than anyone in the room," and despite their disagreements, "my respect and admiration for him has only increased over the years."

Panetta is "old school," someone who may disagree but is never disagreeable, McCain said. "He is one of those people who is able to separate party loyalty from the national interests. Leon Panetta leaves Washington this time with a reputation of integrity, honesty and bipartisanship that in my view is all too rare."

In all his years in Washington, Panetta has never been associated with scandal. The closest came last year when he was criticized that his frequent visits home on a military jet - 27 round trips to Monterey in less than 10 months - were costing the public too much money. At the time, Panetta said he regretted the expense, but it was "healthy to get out of Washington periodically just to get your mind straight."

Known for his easygoing nature, legendary laugh and startling humility, Panetta is one of the few politicians in Washington who doesn't like to talk about himself.

"That's the remarkable thing about Leon," said U.S. Rep. Sam Farr, who took Panetta's congressional seat. "He doesn't need public attention."

Those qualities have endeared Panetta to locals, who often spot him waiting in line at the meat counter of the Star Market in Salinas or at Bruno's Market and Deli in Carmel. When Panetta goes to Mass on Sundays at the Carmel mission, he makes no grand entrance and stands discreetly in the back.

"It's exactly his MO," said Panetta's son Jimmy, 43, a Monterey County deputy district attorney. "That's how we were raised. Don't make a spectacle of yourself, no matter what you do."

Panetta instilled a strong work ethic in his three sons, all of whom had chores on the ranch.

"My friends would make fun of me. I'd be having to paint the white on the bottom of the walnut trees or cutting grass on the side of the road," Jimmy recalled. "My friends would drive by and honk."

Leon Panetta's oldest son, Chris, would also go on to become a lawyer in the Monterey area. Carmelo, the middle son, is a cardiologist in Minneapolis.

When Jimmy was deployed to Afghanistan in 2007 as a naval reserve officer, his father sent him off with these words: "Keep your head down, do your job, come home." Over the past four years, Jimmy said, his father followed his own advice.

Leon Panetta so seldom talked about politics or himself - even at the family dinner table - that his children often learned more about their father from those he helped.

Claudia Hevia, who owns Tico's Tacos in Salinas, recently ran into Jimmy and told him that the daughter she and her husband adopted from Mexico 26 years ago might have been deported if not for his father. Bureaucratic snafus held up the paperwork that should have sailed through, Hevia said. "I don't have connections or friends for things like that, but I asked him a big favor," Hevia said.

Panetta stepped in, and within a month, the problems were resolved.

"To this day, I want to cry," said Hevia, who often reminds her 26-year-old daughter, Danielle, "You're here because of him."

Even now, Panetta said some of his greatest satisfaction came from his days as a congressman helping people like Hevia. He credits the values of his parents and his Catholic education, including his years at the Jesuit-run Santa Clara University, for "giving me a sense of right and wrong and also the sense that it was important to give something back to the country."

An enduring lesson, he said, came in 1966 during one of his first jobs in the nation's capital as an aide to U.S. Rep. Thomas Kuchel, a Republican and minority whip from California. Panetta, then a Republican, would be tempted by people trying to gain influence, Kuchel told him.

"Remember one thing," Panetta recalled Kuchel saying. "In the morning, when you get up, you have to look at yourself in the mirror."

Panetta was tested just a few years later, when he was named director of the U.S. Office for Civil Rights and the Nixon administration wanted him to "go slow" in enforcing new civil and education rights in the South. Panetta wouldn't go along. "It cost me my job," he said.

When he was appointed CIA director, he knew what to expect about the intelligence aspects of the job - he had served as an intelligence officer in the Army. "But I was not that familiar with the fact that I would be making life-and-death decisions," he said. "As a Catholic and someone who believes that it's important to do everything you can to protect life, suddenly these were not decisions that came lightly to me."

The hunt for Osama bin Laden has been immortalized in the film "Zero Dark Thirty," in which Panetta is portrayed by actor James Gandolfini. The movie shows waterboarding and other "enhanced interrogation" tactics being used to gain information about bin Laden's whereabouts.

Panetta made clear, however, that when it came to torture, "all of it happened before I became CIA director." And he said he doubts the nuggets of information gained from the tactics in the early 2000s were critical in finding bin Laden.

By the time Panetta was running the CIA, Obama had already signed an executive order banning torture during interrogations. "I never had to face that problem, thank God," Panetta said. "We were always able to do it without having to resort to those enhanced-interrogation efforts that had been used in the past."

He said he never had to face a decision that "tested my conscience in terms of right and wrong. It doesn't mean there aren't tough decisions you have to make, but I've never had one like when I was in the Office of Civil Rights, saying I can't do what they're asking me to do."

He made a risky recommendation to Obama, however, when he urged the president to proceed with a raid on the compound in Pakistan, even though he wasn't 100 percent certain bin Laden was there.

"But," Panetta said, "I always had a test - throughout my political career - which was to ask the average citizen, 'What would you do knowing what I know?' And I really felt that if the average citizen knew this was probably the best shot we had at getting bin Laden that they would say, 'Do it.' I remember saying exactly that to the president. And ultimately the president, to his credit, made the same decision.

The night of the raid, Panetta and other top intelligence officials gathered in an operations room at CIA headquarters. The 20 to 25 minutes of silence as the raid was under way, as he waited for the code word "Geronimo" to signify the Navy SEALs had gotten bin Laden, "was probably the tensest time I've gone through throughout my career in politics," Panetta said.

When he heard the SEALs had returned safely to their base, he and his deputy, Mike Morell, embraced - a moment captured in one of Panetta's favorite photos.

Later, Panetta called home, and his buddy Balestreri turned on the news. Then the Sardine Factory owner ordered shot glasses with CIA logos.

"I used to tease him when we played golf: 'Leon, you can't find your golf ball half the time, how are you going to find bin Laden?' " Balestreri said.

When Panetta accepted that New Year's bet, he later admitted, he had been tracking bin Laden for several months.

"I was set up," Balestreri said, laughing. "But I couldn't be any happier."

Months later, 72 guests celebrated with Panetta at the Monterey Peninsula Country Club, each getting a tiny taste of the fine wine in the shot glasses.

This time, Panetta hopes he's home for good. He can't think of a job that would tempt him back to Washington. "It wouldn't be half as exciting as anything I've already done," he said.

He plans to focus on the Panetta Institute, teaching the next generation that public service is a high calling, that civility and integrity matter in a democracy. And he will work on the ranch and "dig in" to whatever comes along.

He has already started. Walking across the loamy earth of the walnut orchard last week, he made plans for getting on his tractor and turning over the soil during Easter week.

"Usually between Good Friday and Holy Saturday, I'm out on the tractor," he said, looking out across the orchard at his dog sniffing along the far fence line.

"Bravo!" he called out with a whistle. "Come here, pal. Come on, Bravo."