I'm having a hard time figuring out how to even start with this. I really like your post! You have a cool card concept. You've playtested it and you already know why the current iteration is flawed. You seem very open to changes and new ideas. I really want to help you! The problem is that I can't think of a simple fix and if I were to create a whole new card with this concept, I would probably want it for my own set!
But that's sort of a cop-out, so I'll try to at least analyze the card. I think putting Treasure into your opponents' hands is probably not going to work. Silver for them is way too good. Copper is sort of a wash; sometimes it will help them and sometimes not. There's no middle ground between Copper and Silver. How about if each opponent draws a card, then you get some benefit depending on how many cards the player to your right has in hand. I say the player to your right because if he has fewer than 5 cards in his hand to start, you have only yourself to blame for playing that Militia or what have you. Yeah, it would be cooler if the bonus were a unique one rather than Council Room's bonus, but I think the rest of the card will be interesting enough that it won't matter.
If you choose to go this route, I think disappearing money (+1 Action, +$X) is perhaps the way to go for the main action portion. Then the on-trash bonus could be something like "draw until you have as many cards in hand as the player to your right". So something like
Double Agent
Types: Action
Cost: $4
+1 Action. +$3. Each other player draws a card. You may trash this. If you do, draw until you have as many cards in hand as the player to your right.
Another thing I can do is share a similar experience I've had recently. As background, I have a card in my set originally designed primarily as a card that would dig for an Attack to play. The current iteration looks like this:
Barracks
Types: Action
Cost: $5
+1 Action. Choose one: gain 2 Conscripts from the Conscripts pile; or reveal cards from your deck until you reveal an Attack card, put that Attack card into your hand, and discard the rest.
Conscripts
Types: Action – Attack
Cost: $0*
+1 Action. +$2. Return this to the Conscripts pile. Each other player discards down to 3 cards in hand. If he did not discard any cards, he gains a Curse. (This is not in the Supply.)
In the process of changing my set from a 12 cards to 25 cards, I wanted another card that used Conscripts. I had the idea for a card that would give the opponents Conscripts, but then make you happy that they had them. So I came up with a bunch of iterations of cards that would benefit from being attacked, like cards that rewarded you for having a small hand or for having Curses in your hand or discard pile. They were all clunky and seemed swingy, especially the ones that benefitted from a small hand. What if the other players didn't play their Conscripts the turn before you played this? You'd be double sad. In the "end" (although the card could easily be changed or scrapped), I let go of the idea of a card that benefits from having a bad hand/deck, and the current iteration just looks like this:
Profiteer
Types: Action
Cost: $4
Gain a Gold, putting it on top of your deck. Each other player gains a Conscripts from the Conscripts pile.
Anyway, I hope some portion of that was helpful. I'm interested to see where Double Agent goes from here, and also to see the rest of the Diplomacy set.