Spies for Hire

by Tim Shorrock

  What is clear is INSA’s desire to stay below the radar screen. In the “trusted environment” it has created, it’s difficult to tell who is from the government and who represents the private sector. On a section of its Web site listing INSA’s board, only the names of directors appear—not their business and government affiliations. Board members, Sample explained, are “selected for their expertise and understanding of intelligence and national security, and serve only in their personal capacities.” That may be true; but their government agency and corporate affiliations are exactly why they’re in the organization. Because only someone on extremely familiar terms with the Intelligence Community would even recognize their names, the nondisclosure looks much more like an attempt to conceal than anything else.

  INSA, in fact, is one of the only business associations in Washington that include current government officials on their board of directors. Kello stoutly denies this: “There’s government officials on the board of the Boy Scouts, AMA, on all kinds of nonprofits,” he says. But in those organizations, the high-ranking government officials are there in ceremonial, honorary roles, and don’t play a role in decision making. Major business organizations, such as the U.S. Chamber of Commerce and the Business Roundtable, are led by corporate executives—Fortune 500 types—not by government bureaucrats. The three other associations representing intelligence contractors, including the Armed Forces Communications and Electronics Association (AFCEA), the United States Geospatial Intelligence Foundation (USGIF), and the National Defense Industrial Association (NDIA), are all managed by boards of directors composed only of corporate executives. Government agencies may belong as dues-paying members, but their representatives don’t hold positions as directors.

  Yet at INSA, they make up a huge proportion of the board. The CIA holds two seats; also represented are the Defense Intelligence Agency, the Office of the Secretary of Defense, Army Counterintelligence, the NSA, the Department of Homeland Security, and the FBI.* In addition to the founding companies named earlier, the board also includes representatives from The Analysis Corporation, SI International, SRA International, CACI International, Northrop Grumman, Microsoft, and Hewlett-Packard. In recent years, the INSA board has included a number of “seniors” within the wider intelligence community and some of the most well-connected contractors in the private sector. Among them are quite a few people we will encounter later in this book: Robert A. Coleman, the chairman of ManTech; Harry Gatanas, a former NSA acquisitions official, now with the NSA contractor SI International; and Barbara McNamara, the former deputy director of the NSA, now on the board of directors of CACI International. Booz Allen has been particularly well represented: INSA’s board now includes Booz Allen vice presidents Keith Hall, the former director of the NRO; Leo A. Hazlewood, a former top imagery analyst with the CIA who helped found the NGA; and Joan Dempsey.

  In 2007, as part of its efforts to broaden its impact within the wider Intelligence Community, INSA incorporated into its membership the National Correlation Working Group, a shadowy organization of military intelligence operatives led by retired Air Force Lieutenant General Lincoln D. Faurer, who directed the NSA from 1981 to 1985. The correlation group, which is now a council within INSA, keeps a low profile: it doesn’t have a Web site, and Google searches about the group yield virtually nothing. According to Jason Kello, it sponsors classified-level conferences and symposiums that focus on putting real-time intelligence into strategic use on the battlefield. An NCWG pamphlet in his office described its members as “highly experienced professionals, well-versed in defense tactics and combat decision-making, and dedicated to getting verified information to the warfighter with absolute speed and with no compromise to informational integrity.”

  Many of the group’s members are retired Air Force generals. And like INSA, its board of directors is dominated by contractors: Faurer, the working group’s chairman, sits on the board of directors of Analex Inc., a company owned by the British firm QinetiQ that does extensive business with the CIA and NSA. William R. Usher, the former Air Force general who chairs INSA’s NCWG Council, was for many years the director of Lockheed Martin’s Washington Special Projects Office; he now runs his own eponymous consulting firm. Other board members with deep roots in the industry include Larry Cox, a former NSA technician now working for SAIC, and William Crowell, the former deputy director of the NSA under McConnell, and a senior executive with Narus Inc., a Silicon Valley firm well known in the telecom industry for its eavesdropping technologies. Jeffrey K. Harris, one of its board members, previously served with the CIA and as director of the NRO and is now a senior executive with Lockheed Martin. The working group, said Kello, used to be part of the National Defense Industrial Association but “decided to move over to INSA because we fit more with their mission, which was to be a public policy forum. We were part of a thought-leadership effort, as opposed to an industrial effort.”

  The well-connected executives and former officials who make up INSA’s leadership have collectively decided that INSA should act as a kind of promoter for the DNI. One of INSA’s first projects, launched while McConnell was chairman, was to work with the DNI to improve the “information sharing environment” within the Intelligence Community. This was one of the recommendations made by the National Commission on Terrorist Attacks upon the United States (also known as the 9/11 Commission), and it was written into the 2004 intelligence reform bill that created the DNI. According to an INSA press release from February 2006, Booz Allen was hired in August 2005 to support the government “with research and analysis to help identify solutions to critical issues” involving information sharing. Based on this research, the DNI was to submit an information sharing plan to Congress, and “INSA and Booz Allen will support the plan’s construction.” According to the plan, as outlined in the press release, the information sharing would “go beyond the IC” to include federal, state, and local governments.

  To further its mission along, INSA launched the Council on Domestic Intelligence in the fall of 2006. The idea behind the council, Sample told me, was to “help promote the right debate so we can aim toward the right level of oversight.” The council is co-chaired by two INSA board members, retired Army Major General Robert A. Harding and Kathleen L. Kiernan. Harding, another former DIA official, runs a consulting firm that works closely with the DIA and has, according to company literature, “become the premier government contractor for counterintelligence, human intelligence, homeland security and MASINT solutions to support our country’s fight against terrorism” (MASINT is measurement and signatures intelligence, a highly classified school of intelligence that can, through the use of sensors, detect chemicals and other materials in the air). Kiernan, the former assistant director for strategic intelligence for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), also runs her own consulting firm. According to Sample, INSA’s domestic security council includes both industry and intelligence officials, and is “sanctioned by the FBI.”

  The council is a transparent attempt to shape public discussions about civil liberties and issues related to domestic surveillance. This, I think, is what Sample meant by having “the right debate.” Once you say domestic intelligence, he observed, you read stories about “whether it’s what NSA’s doing, or what information phone companies are giving out, right? Usually these things are played out in the media, and people speaking on them are usually at the extremes of the issues, and you rarely get a substantive basis for the argument. And you rarely get a good solid debate on what we should be doing.” At the same time, he says, in polls taken after the New York Times disclosed the NSA’s warrantless domestic surveillance program, “generally the American people thought it was not such a bad thing if it catches terrorists.” That’s why INSA wants to “promote the right debate,” he repeated. With a membership that includes many of the companies that provide technical support to the NSA’s eavesdropping and data mining capabilities, it’s not hard to guess what the debate, or the proper c
onclusions, should be.

  In the spring of 2007, after Brennan was elected chairman of INSA and McConnell was firmly in control at the DNI, the pace of cooperation between the Office of the DNI and INSA stepped up dramatically. Since that time, the ODNI and INSA have jointly sponsored a series of “outreach workshops,” most of them open only to government officials and contractors holding security clearances, on a wide range of subjects relevant to the Intelligence Community. On May 30, 2007, for example, the ODNI and INSA held a workshop on “insider threats” that “ODNI has identified as issues on which it seeks engagement, including insider criminal vulnerability, insider criminal activities, insider economic espionage, and insider terrorist activity,” INSA explained in the announcement for the event, posted on its Web site. Companies interested in the DNI workshop were asked to send their information to INSA.

  In June 2007, the ODNI and INSA co-sponsored a DNI Industry Day, where contractors were invited to hear DNI officials “address budget priorities and the near-term and long-term strategy,” and “learn from the ODNI about how your company can help achieve the national intelligence strategy alignment.” The event, sponsored in part by BAE Systems, Booz Allen, ManTech, Microsoft, SAIC, and Raytheon, cost $350 for INSA members and $425 for nonmembers. It was open to government agencies and contractors with secret clearances; “innovative companies” who did not have clearances were invited to attend a separate event with agency procurement officials. The speakers included most of the leadership of the Intelligence Community, including NSA director Lieutenant General Keith B. Alexander, NRO director Donald Kerr, DIA director Lieutenant General Michael Maples, and NGA director Vice Admiral Robert B. Murrett (Alden Munson, the new acquisitions man at the DNI, also made an appearance).

  Other ODNI-INSA events have focused on open source intelligence gained from analyzing information openly published in other countries, such as local newspapers and scientific journals; political and economic stability in India and China; and intelligence, surveillance, and reconnaissance. In September 2007, INSA was the chief sponsor of a week of events commemorating the sixtieth anniversary of the National Security Act of 1947 “and the creation of our nation’s modern intelligence and national security establishments.” It included an “anniversary gala” at Georgetown University—where INSA has endowed a special chair on intelligence studies—that was co-sponsored by the Office of the DNI (the anniversary events and the open source conference were both open to the public).

  Although INSA is a nonprofit, some of these activities are moneymaking ventures that bring in considerable revenue to INSA (the organization’s 2005 tax return shows program services revenues of $1.4 million for the year). Yet there is no competition for these contracts; they are essentially sole-source contracts that appear to be awarded at the discretion of the DNI (the DNI press office would not comment on the DNI’s ties with INSA). Moreover, these projects seem to make INSA itself a contractor—something that the organization strenuously denies. “INSA is a nonprofit,” Kello, INSA’s spokesperson, stressed to me. While the organization collects sponsorship and attendance fees, “ODNI does not pay us,” he said. “We help promote the mission INSA has, which is as a forum for enhancing intelligence policy.”

  INSA’s joint programs with the DNI have alarmed some intelligence veterans, who wonder if INSA has become a way for contractors and intelligence officials to create policy in secret, without oversight from Congress. “Evidently, DNI McConnell has made it an early priority to stand up INSA as the preeminent nonprofit association serving the ODNI,” an industry insider told me, on condition of anonymity. “While INSA has created multiple levels of memberships and a large connected board of both government and industry leaders, the real control remains with the big-dollar founding primes. I wonder if it’s even legal for these officials to sit on an actual board of an industry trade association.”

  That is not entirely clear. Scott Amey, the counsel for the Project on Government Oversight, a public interest group that monitors federal contracting, said the DNI’s relationship with INSA certainly raises serious ethical questions. If government officials are attending INSA meetings on a regular basis, he said, those meetings may be subject to open meeting rules, which would require them to be open to the public. The fact that contractors and intelligence officials are meeting under the cover of a business association—despite the fact that they are supposedly there as individuals—points to the need to expand the oversight of intelligence to include contracting. “This sounds like a self-policing program,” said Amey. “At that point, who’s really minding the store?”41

  That’s a question that will be raised again and again as we investigate the secret world of intelligence outsourcing. Before we open those doors, however, let’s take a journey into the origins of intelligence outsourcing, and try to understand why so many spies are working for hire these days.

  3

  A Short History of Intelligence Outsourcing

  “I remember when NSA stood for No Such Agency. I remember a time before newspapers had reporters regularly assigned to the intelligence beat. I remember a time when congressional oversight consisted of an hour’s worth of conversation with the friendly House and Senate Armed Forces Committee chairmen. I even knew a time when the idea of using ‘contractors’ to help solve intelligence gathering or analytical problems was regarded with disdain.”

  —ANN CARACRISTI, THE FORMER DEPUTY DIRECTOR OF THE NATIONAL SECURITY AGENCY, ACCEPTING THE WILLIAM O. BAKER AWARD FOR LIFELONG CONTRIBUTIONS TO THE INTELLIGENCE COMMUNITY, MAY 27, 1999

  IT’S BECOME AN article of faith on the American left today that the outsourcing of government and military services is intrinsically part of a “Bush agenda,” rooted in part in a neoconservative drive to siphon U.S. spending on defense, national security, and social programs to large corporations friendly with the Bush administration. While there’s some truth to this trope, it’s a misleading analysis of the dynamics of capitalism and the peculiar way state and capital have mixed in the national security arena in the years before and after 9/11. American corporations have rarely acquiesced to political dictates, either from the right or the left. Instead, they grasp opportunities presented by government policy, and then move as quickly as possible to maximize profits and minimize risk in a given market. And in the case of the defense and intelligence industries, those opportunities appeared long before George W. Bush was elected president and 9/11 brought terrorism to the top of the national security agenda.

  The big government contractors of today are the direct beneficiaries of privatization policies set in motion by the Reagan and Clinton administrations, sanctioned by the Department of Defense and the Intelligence Community, and embraced and ultimately funded by a Republican-led Congress anxious to bring market discipline to government agencies. Bill Clinton, one of the most liberal presidents in the nation’s history, picked up the privatization cudgel where the conservative Ronald Reagan left off and—for reasons we will explore in this chapter—took it deep into services once considered inherently governmental, including high-risk military operations and intelligence functions once reserved only for government agencies. By the end of his term, more than 100, 000 Pentagon jobs had been transferred to companies in the private sector—among them thousands of jobs in intelligence.

  “People forget what happened under President Clinton,” says Stan Soloway, the president of the Professional Services Council, the chief Washington lobbyist for U.S. government contractors. “I’m not trying to brag here, but in the Clinton administration, we did a substantial amount [of privatization] and the current Bush administration took it to the next level. That’s the reality.”1 Soloway speaks from personal experience. As president of the PSC, he represents some of the nation’s largest intelligence contractors, from Booz Allen Hamilton to Northrop Grumman to L-3’s Titan Group. During the Clinton administration, he was the deputy undersecretary of defense for acquisition, where he played an important role in the Pentagon’
s campaign to streamline its operations by privatizing agencies and outsourcing functions no longer deemed important enough for government work.

  In arguing that intelligence outsourcing got its start during the Clinton administration, I don’t intend to minimize the subsequent actions of the Bush administration. As we’ve already seen, outsourcing and contracting of essential national security functions has risen dramatically under President Bush, and without a doubt Vice President Dick Cheney’s old employer, Halliburton, and dozens of companies with close ties to the administration, benefited handsomely from the radical brand of foreign policy practiced by Bush and his neoconservative allies in government. But the evidence is clear that Bush and Cheney pursued policies that built on Clinton’s legacy of outsourcing and privatization to siphon billions of dollars in federal money to the private sector. Let’s start from the beginning.

  In a sense, outsourcing has always been part of the U.S. spying enterprise. Former CIA director George Tenet, who now earns a significant amount of his income from companies involved in intelligence contracting, knows that history well. “Our private sector has stepped forward for over half a century to offer the best technology and expertise” to the Intelligence Community, he said in a speech to intelligence professionals in 2003. “They are part of our intelligence family because they share our same passion for our mission—to safeguard the freedoms that make America great. Throughout our history, American industry has given every DCI the tools needed to solve our greatest challenges—and we need them now more than ever.”2