-Caveat Lector-
http://www.globalresearch.ca/index.php?context=viewArticle&code=SHO20070603&articleId=5868
The corporate takeover of U.S. intelligence
by Tim Shorrock
Global Research, June 3, 2007
Salon.com - 2007-06-01
The U.S. government now outsources a vast portion of its spying
operations to private firms -- with zero public accountability.
More than five years into the global "war on terror," spying has
become one of the fastest-growing private industries in the United
States. The federal government relies more than ever on outsourcing
for some of its most sensitive work, though it has kept details about
its use of private contractors a closely guarded secret. Intelligence
experts, and even the government itself, have warned of a critical
lack of oversight for the booming intelligence business.
On May 14, at an industry conference in Colorado sponsored by the
Defense Intelligence Agency, the U.S. government revealed for the
first time how much of its classified intelligence budget is spent on
private contracts: a whopping 70 percent. Based on this year?s
estimated budget of at least $48 billion, that would come to at least
$34 billion in contracts. The figure was disclosed by Terri Everett, a
senior procurement executive in the Office of the Director of National
Intelligence, the agency established by Congress in 2004 to oversee
the 16 agencies that make up the U.S. intelligence infrastructure. A
copy of Everett's unclassified PowerPoint slide presentation, titled
"Procuring the Future" and dated May 25, was obtained by Salon. (It
has since become available on the DIA's Web site.) "We can't spy ...
If we can't buy!" one of the slides proclaims, underscoring the
enormous dependence of U.S. intelligence agencies on private sector
contracts.
The DNI figures show that the aggregate number of private contracts
awarded by intelligence agencies rose by about 38 percent from the
mid-1990s to 2005. But the surge in outsourcing has been far more
dramatic measured in dollars: Over the same period of time, the total
value of intelligence contracts more than doubled, from about $18
billion in 1995 to about $42 billion in 2005.
"Those numbers are startling," said Steven Aftergood, the director of
the Project on Government Secrecy at the Federation of American
Scientists and an expert on the U.S. intelligence budget. "They
represent a transformation of the Cold War intelligence bureaucracy
into something new and different that is literally dominated by
contractor interests."
Because of the cloak of secrecy thrown over the intelligence budgets,
there is no way for the American public, or even much of Congress, to
know how those contractors are getting the money, what they are doing
with it, or how effectively they are using it. The explosion in
outsourcing has taken place against a backdrop of intelligence
failures for which the Bush administration has been hammered by
critics, from Saddam Hussein's fictional weapons of mass destruction
to abusive interrogations that have involved employees of private
contractors operating in Iraq, Afghanistan and Guantánamo Bay, Cuba.
Aftergood and other experts also warn that the lack of transparency
creates conditions ripe for corruption.
Trey Brown, a DNI press officer, told Salon that the 70 percent figure
disclosed by Everett refers to everything that U.S. intelligence
agencies buy, from pencils to buildings to "whatever devices we use to
collect intelligence." Asked how much of the money doled out goes
toward big-ticket items like military spy satellites, he replied, "We
can't really talk about those kinds of things."
The media has reported on some contracting figures for individual
agencies, but never before for the entire U.S. intelligence
enterprise. In 2006, the Washington Post reported that a "significant
majority" of the employees at two key agencies, the National
Counterterrrorism Center and the Pentagon's Counter-Intelligence Field
Activity office, were contractors (at CIFA, the number was more than
70 percent). More recently, former officers with the Central
Intelligence Agency have said the CIA's workforce is about 60 percent
contractors.
But the statistics alone don't even show the degree to which
outsourcing has penetrated U.S. intelligence -- many tasks and
services once reserved exclusively for government employees are being
handled by civilians. For example, private contractors analyze much of
the intelligence collected by satellites and low-flying unmanned
aerial vehicles, and they write reports that are passed up to the line
to high-ranking government officials. They supply and maintain
software programs that can manipulate and depict data used to track
terrorist suspects, both at home and abroad, and determine what
targets to hit in hot spots in Iraq and Afghanistan. Such data is also
at the heart of the National Security Agency's massive eavesdropping
programs and may be one reason the DNI is pushing Congress to grant
immunity to corporations that may have cooperated with the NSA over
the past five years. Contractors also provide collaboration tools to
help individual agencies communicate with each other, and they supply
security tools to protect intelligence networks from outside tampering.
Outsourcing has also spread into the realm of human intelligence. At
the CIA, contractors help staff overseas stations and provide
disguises used by agents working under cover. According to Robert
Baer, the former CIA officer who was the inspiration for the character
played by George Clooney in the film "Syriana," a contractor stationed
in Iraq even supervises where CIA agents go in Baghdad and whom they
meet. "It's a completely different culture from the way the CIA used
to be run, when a case officer determined where and when agents would
go," he told me in a recent interview. "Everyone I know in the CIA is
leaving and going into contracting whether they're retired or not."
The DNI itself has voiced doubts about the efficiency and
effectiveness of outsourcing. In a public report released last fall,
the agency said the intelligence community increasingly "finds itself
in competition with its contractors for our own employees." Faced with
arbitrary staffing limits and uncertain funding, the report said,
intelligence agencies are forced "to use contractors for work that may
be borderline 'inherently governmental'" -- meaning the agencies have
no clear idea about what work should remain exclusively inside the
government versus work that can be done by civilians working for
private firms. The DNI also found that "those same contractors recruit
our own employees, already cleared and trained at government expense,
and then 'lease' them back to us at considerably greater expense."
A Senate Intelligence Committee report released on Thursday spells out
the costs to taxpayers. It estimates that the average annual cost for
a government intelligence officer is $126,500, compared to the average
$250,000 (including overhead) paid by the government for an
intelligence contractor. "Given this cost disparity," the report
concluded, "the Committee believes that the Intelligence Community
should strive in the long-term to reduce its dependence upon
contractors."
The DNI began an intensive study of contracting last year, but when
its "IC Core Contractor Inventory" report was sent to Congress in
April, DNI officials refused to release its findings to the public,
citing risks to national security. The next month, a report from the
House Permanent Select Committee on Intelligence rebuked the DNI in
unusually strong language, concluding that U.S. officials "do not have
an adequate understanding of the size and composition of the
contractor work force, a consistent and well-articulated method for
assessing contractor performance, or strategies for managing a
combined staff-contractor workforce."
U.S. intelligence budgets are classified, and all discussions about
them in Congress are held in secret. Much of the information, however,
is available to intelligence contractors, who are at liberty to lobby
members of Congress about the budgets, potentially skewing policy in
favor of the contractors. For example, Science Applications
International Corp., one of the nation's largest intelligence
contractors, spent $1,330,000 in their congressional lobbying efforts
in 2006, which included a focus on the intelligence and defense
budgets, according to records filed with the Senate's Office of Public
Records.
The public, of course, is completely excluded from these discussions.
"It's not like a debate when someone loses," said Aftergood. "There is
no debate. And the more work that migrates to the private sector, the
less effective congressional oversight is going to be." From that
secretive process, he added, "there's only a short distance to the
Duke Cunninghams of the world and the corruption of the process in the
interest of private corporations." In March 2006, Randy "Duke"
Cunningham, R-Calif., who had resigned from Congress several months
earlier, was sentenced to eight years in prison after being convicted
of accepting more than $2 million in bribes from executives with MZM,
a prominent San Diego defense contractor. In return for the bribes,
Cunningham used his position on the House appropriations and
intelligence committees to win tens of millions of dollars' worth of
contracts for MZM at the CIA and the Pentagon's CIFA office, which has
been criticized by Congress for spying on American citizens. The MZM
case deepened earlier this month when Kyle "Dusty" Foggo, the former
deputy director of the CIA, was indicted for conspiring with former
MZM CEO Brent Wilkes to steer contracts toward the company.
U.S. intelligence agencies have always relied on private companies for
technology and hardware. Lockheed built the famous U-2 spy plane under
specifications from the CIA, and dozens of companies, from TRW to
Polaroid to Raytheon, helped develop the high-resolution cameras and
satellites that beamed information back to Washington about the Soviet
Union and its military and missile installations. The National
Security Agency, which was founded in the early 1950s to monitor
foreign communications and telephone calls, hired IBM, Cray and other
companies to make the supercomputers that helped the agency break
encryption codes and transform millions of bits of data into
meaningful intelligence.
By the 1990s, however, commercial developments in encryption,
information technology, imagery and satellites had outpaced the
government's ability to keep up, and intelligence agencies began to
turn to the private sector for technologies they once made in-house.
Agencies also turned to outsourcing after Congress, as part of the
"peace dividend" that followed the end of the Cold War, cut defense
and intelligence budgets by about 30 percent.
When the National Geospatial-Intelligence Agency was created in 1995
as the primary collection agency for imagery and mapping, for example,
it immediately began buying its software and much of its satellite
imagery from commercial vendors; today, half of its 14,000 workers are
full-time equivalent contractors who work inside NGA facilities but
collect their paychecks from companies like Booz Allen Hamilton and
Lockheed Martin. In the late 1990s, the NSA began outsourcing its
internal telecommunications and even some of its signals analysis to
private companies, such as Computer Services Corp. and SAIC.
Outsourcing increased dramatically after 9/11. The Bush administration
and Congress, determined to prevent further terrorist attacks, ordered
a major increase in intelligence spending and organized new
institutions to fight the war on terror, such as the National
Counterterrorism Center. To beef up these organizations, the CIA and
other agencies were authorized to hire thousands of analysts and human
intelligence specialists. Partly because of the big cuts of the 1990s,
however, many of the people with the skills and security clearances to
do that work were working in the private sector. As a result,
contracting grew quickly as intelligence agencies rushed to fill the
gap.
That increase can be seen in the DNI documents showing contract award
dollars: Contract spending, based on the DNI data and estimates from
this period, remained fairly steady from 1995 to 2001, at about $20
billion a year. In 2002, the first year after the attacks on New York
and Washington, contracts jumped to about $32 billion. In 2003 they
jumped again, reaching about $42 billion. They have remained steady
since then through 2006 (the DNI data is current as of last August).
Because nearly 90 percent of intelligence contracts are classified and
the budgets kept secret, it's difficult to draw up a list of top
contractors and their revenues derived from intelligence work. Based
on publicly available information, including filings from publicly
traded companies with the Securities and Exchange Commission and
company press releases and Web sites, the current top five
intelligence contractors appear to be Lockheed Martin, Northrop
Grumman, SAIC, General Dynamics and L-3 Communications. Other major
contractors include Booz Allen Hamilton, CACI International, DRS
Technologies and Mantech International. The industry's growth and
dependence on government budgets has made intelligence contracting an
attractive market for former high-ranking national security officials,
like former CIA director George Tenet, who now earns millions of
dollars working as a director and advisor to four companies that hold
contracts with U.S. intelligence agencies and do big business in Iraq
and elsewhere.
Congress, meanwhile, is beginning to ask serious questions about
intelligence outsourcing and how lawmakers influence the intelligence
budget process. Some of that interest has been generated by the
Cunningham scandal. In another recent case, Rep. Rick Renzi, a
Republican from Arizona, resigned from the House Intelligence
Committee in April because he is under federal investigation for
introducing legislation that may have benefited Mantech International,
a major intelligence contractor where Renzi's father works in a senior
executive position.
In the Cunningham case, many of MZM's illegal contracts were funded by
"earmarks" that he inserted in intelligence bills. Earmarks, typically
budget items placed by lawmakers to benefit projects or companies in
their district, are often difficult to find amid the dense verbiage of
legislation -- and in the "black" intelligence budgets, they are even
harder to find. In its recent budget report, the House Intelligence
Committee listed 26 separate earmarks for intelligence contracts,
along with the sponsor's name and the dollar amount of the contract.
The names of the contractors, however, were not included in the list.
Both the House and Senate are now considering intelligence spending
bills that require the DNI, starting next year, to provide extensive
information on contractors. The House version requires an annual
report on contractors that might be committing waste and fraud, as
well as reviews on its "accountability mechanisms" for contractors and
the effect of contractors on the intelligence workforce. The amendment
was drafted by Rep. David Price, D-N.C., who introduced a similar bill
last year that passed the House but was quashed by the Senate. In a
statement on the House floor on May 10, Price explained that he was
seeking answers to several simple questions: "Should (contractors) be
involved in intelligence collection? Should they be involved in
analysis? What about interrogations or covert operations? Are there
some activities that are so sensitive they should only be performed by
highly trained Intelligence Community professionals?"
If either of the House or Senate intelligence bills pass in their
present form, the overall U.S. intelligence budget will be made
public. Such transparency is critical as contracting continues to
expand, said Paul Cox, Price's press secretary. "As a nation," he
said, "we really need to take a look and decide what's appropriate to
contract and what's inherently governmental."
*
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