Spies for Hire

by Tim Shorrock

  In 2003, Carlyle invested $73 million to buy a 33 percent stake in QinetiQ.* The Ministry of Defence retained the other 66 percent. But in an unusual arrangement, Carlyle was granted 51 percent of the voting shares, which meant that Carlyle and its appointed executives had effective control over the company. After this, under the close supervision of Carlyle, QinetiQ moved aggressively into North America, buying up five U.S. companies. Carlyle sold off its remaining shares in February 2007, making a $470 million profit on its original investment. In accepting his appointment at QinetiQ, Tenet said he was “especially interested in the capacity of the company’s technologies to meet a number of the challenges faced by our nations’ military and intelligence personnel.”32 According to QinetiQ’s annual report and accounts for 2006, nonexecutive directors such as Tenet are paid a minimum of $70, 000, with some paid up to more than a quarter-million dollars (we will learn more about QinetiQ later).

  Here, too, Tenet profited from involvement in Iraq and the broader war on terror. QinetiQ’s other acquisitions in the U.S. market include defense contractor Foster-Miller Inc., which makes the so-called TALON robots used by U.S. forces in Iraq to neutralize IEDs, improvised explosive devices. QinetiQ also controls Analex Corp., an information technology and engineering company that earns 70 percent of its revenue from the Pentagon. Among the clients listed on Analex’s Web site are the National Reconnaissance Office, which manages the nation’s spy satellites, and the Pentagon’s Counterintelligence Field Activity office—a secretive agency that has been criticized by members of Congress for collecting intelligence on American antiwar activists. At QinetiQ, Tenet is working with Duane Andrews, a former assistant secretary of defense who was the chief intelligence adviser to Dick Cheney when he was secretary of defense in the early 1990s.33 Prior to joining QinetiQ North America (QNA) as its CEO, Andrews served for thirteen years as a senior executive with intelligence contractor Science Applications International Corporation.

  Also in 2006, Tenet joined the board of directors of Guidance Software. One of Guidance’s products, EnCase, has been used extensively by U.S. law enforcement, intelligence, and military agencies to collect evidence in criminal and counterterrorism cases, including the prosecution of Enron executives and the British “shoe bomber,” Richard Reid. Tenet’s “years of experience fighting terrorism and extensive knowledge of potential and existing threats will expand Guidance’s unparalleled expertise in computer forensics and network investigations,” the company noted in a press release.34 According to SEC records, Tenet earned $58, 112 in 2006 as a director and, in 2007, held 9, 700 shares of company stock worth more than $124, 000.

  In his 2007 memoir At the Center of the Storm, Tenet doesn’t mention his new post-government career as an intelligence contractor and adviser.

  The companies that work for the CIA include both big names and the relatively unknown, and range in size from large systems integrators like SAIC and Booz Allen to smaller shops like TAC and SpecTal. No matter what their size, all of these companies have one thing in common: they are extremely secretive about what they do for the agency. CIA companies, in fact, are even less willing to talk about their classified work than companies that contract for the National Security Agency, long considered the most secretive of the sixteen agencies in the Intelligence Community. Only in rare exceptions, as in the recent bribery investigation of the CIA contractor MZM Inc., does the government admit that a company has a relationship with the CIA. Obtaining useful details about the contractors working for what is often called the “other government agency,” or OGA, is frustrating and almost impossible. To obtain the brief background interview with a CIA spokesperson I described earlier, I had to call the agency’s press office more than a dozen times.

  Part of that opaqueness reflects the CIA’s own cult of secrecy. The agency, unlike the NSA, has never issued a press release or given a press conference to publicly discuss a major contract. And CIA director Michael Hayden, who presided over the NSA’s opening to the private sector and allowed his top aides to brief the press about major outsourcing projects at the agency, has shown no willingness to do the same at the CIA. Within the intelligence industry, the CIA is also notorious for its refusal to acknowledge that it even employed a specific person. This has become problematic for agencies and contractors trying to obtain or confirm security clearances for new employees. Former CIA officers who obtained their security clearance from the CIA often find that the agency has refused to confirm the fact that they once had a CIA clearance, even when the employer seeking the information is the NSA. “They really carry secrecy to extremes,” a contractor who deals with both agencies told me.

  The CIA’s secrecy carries over to the information that contractors share with the public. While the NSA, the DIA, the NRO, and the National Geospatial-Intelligence Agency are frequently listed as customers on contractor Web sites and in investor information, the name of the CIA almost never appears on these sites. CACI International is a rare exception to the rule: in a slide presentation for investors in 2007, it listed the CIA among its intelligence customers. Its Web site, however, provided no details about its work with the CIA; yet, as we’ll see further on, CACI’s work in signals intelligence is discussed in detail on its site. Providing information about the CIA is clearly off-limits for the company. Asked in 2003 on CNN’s Moneyline what CACI does for the CIA, CEO Jack London replied, a little testily: “I wouldn’t dare tell you.”* Despite these obstacles, however, it is possible to describe, in some detail, what some private companies do for the CIA. We’ll start with the obvious companies—the systems integrators.

  One of the few companies to go public about its contracting relationship with the CIA is General Dynamics, the nation’s fourth largest federal contractor. Best known as a defense conglomerate that makes destroyers, submarines, tanks, and armored combat vehicles, General Dynamics in recent years has branched out heavily into intelligence and information technology. In 2006, it acquired Anteon International Corp., a major intelligence and IT company that ranked as the twelfth largest federal contractor in 2006. Anteon, whose contracts included training U.S. military interrogators and managing NATO’s intelligence network, was combined with General Dynamics’ existing IT units to create General Dynamics Information Technology. It employs over 4, 500 cleared employees and is now the fastest-growing unit within General Dynamics, earning 37 percent of the company’s $7.8 billion in revenue in 2005.35 According to General Dynamics Information Technology literature I obtained at an industry conference, the IT unit “provides qualified, cleared staff to augment the US Central Intelligence Agency (CIA) critical intelligence missions.” The pamphlet is unusual in the detail it provides about the company’s work for the CIA and what the agency has outsourced in recent years.

  General Dynamics’ contracts with the CIA are held by its Mission Support Group, a “customer-focused organization of over 200 professional personnel, with full lifestyle polygraph clearances, who directly support and complement CIA’s mission support specialists on 26 different programs.” The company’s clients in the CIA, the pamphlet says, include the Directorates of Intelligence, Operations, and Science and Technology; the chief information officer; the Offices of Facilities Management and Human Resources Management; and the Office of Logistics. General Dynamics contractors offer expertise in a variety of tasks across the agency, including network engineers, project managers, document analysts, logisticians, financial analysts, machinists, and desk officers. While most of the work is done at CIA headquarters, “some programs and personnel support CIA’s global mission in the field.” The company’s “cleared professional personnel” also provide support to mission managers and, in a direct address to government officials, “augmentation to your operational staff. We work with you to identify your specific mission needs and to develop solutions for your success. Our mission support services include analysis support, administrative, logistics, and operations support functions.” General Dynamics IT, in other words, is
a mini-CIA, offering everything that one of the nation’s oldest intelligence agencies needs at a time when its attrition rate is at the highest level in its history and the demands for its services within government are straining its resources (General Dynamics would not comment on its intelligence work).

  The two systems integrators most closely identified with the CIA are Booz Allen Hamilton and SAIC, the San Diego–based defense and intelligence contractor. SAIC’s private operatives, the company says on its Web site, work with U.S. defense and intelligence agencies to “build an integrated intelligence picture, allowing them to be more agile and dynamic in chaotic environments and produce actionable intelligence.” SAIC’s largest and most well-known customer in the Intelligence Community is the NSA; so many NSA officials have gone to work at SAIC that intelligence insiders call the company “NSA West.”36 But SAIC also does a significant amount of work for the CIA, where it is among the top five contractors.

  Unlike General Dynamics, however, SAIC does not broadcast what it does for the agency. Nothing about the CIA can be found on its Web site or in the few documents the company has filed with the Securities and Exchange Commission since it went public in 2006. And SAIC spokesman Ronald M. Zollars made it clear to me that the company would not comment on its intelligence work (“We will not be participating in an interview,” he wrote in a terse e-mail after I sent a series of questions based on comments SAIC executives made at a conference I attended). A 2006 article in SAIC’s in-house magazine, however, does mention that the company was part of an NGA team that received a Meritorious Unit Citation in 2004 from CIA director Tenet for its efforts in “developing and deploying a capability making theater airborne imagery available to a wide range of defense and intelligence users.”37

  This may have been Tenet’s way of recognizing SAIC’s role in a famous incident during the early stages of the war against Al Qaeda, when CIA officers, with Tenet in the room, fired a missile from a CIA Predator flying above Yemen, killing a key member of Al Qaeda and one of his American accomplices. According to a recent profile of SAIC in Vanity Fair, the CIA relies on SAIC to spy on its own workforce. “If the C.I.A. needs an outside expert to quietly check whether its employees are using their computers for personal business, it calls on SAIC.”38

  SAIC employs large numbers of former CIA officials. Leo Hazlewood, the senior vice president for SAIC’s Mission Integration business unit, which works with the NGA, joined the company in 2000 after a twenty-three-year career with the CIA. His positions there included comptroller, director of the National Photographic Interpretation Center (later merged into the NGA), and deputy director for operations. Other former high-level CIA officials working for SAIC include chief technology officer Andy Palowitch, who previously served as director of the CIA’s Central Intelligence Systems Engineering Center, and vice president for corporate development Gordon Oehler, who retired from the CIA in 1997 after twenty-five years of service, including a stint as director of the CIA’s Nonproliferation Center. That center was also an area where SAIC held contracts. Peter Brookes, a senior fellow for national security affairs at the conservative Heritage Foundation, was detailed to the CIA’s NPC to work on issues related to arms control treaties and the proliferation of weapons of mass destruction while working for SAIC.39 Other former CIA officials who have worked for SAIC in the past include John Deutch, President Clinton’s second CIA director, and Bobby Ray Inman, the CIA’s former deputy director. Both men served for a time on SAIC’s board of directors.40

  Another large CIA contractor is BAE Systems Information Technology, the North American subsidiary of the British defense giant. BAE Systems has long been known as a CIA contractor but has kept its classified contracts under wraps. Its cover was temporarily blown in July 2006 when BAE fired a CIA software contractor named Christine Axsmith for posting a message on Intelink, the Intelligence Community’s classified Intranet system, criticizing the Bush administration’s policies on torture. In her work for BAE at the CIA’s software development shop, Axsmith told the Washington Post, she had conducted “performance and stress training” on computer programs. Earlier, as a BAE employee, she had also worked at the National Counterterrorism Center.41 BAE is well structured to attract work from the CIA. Among its outside directors are Richard Kerr, the CIA’s former deputy director, who spent thirty-two years at the agency and headed a small team of CIA analysts who assessed the intelligence produced prior to the Iraq War; and Kenneth Minihan, the former director of the NSA (both men also sit on the board of intelligence contractor ManTech International). Joanne Isham, the vice president of strategic development for BAE’s National Security Solutions business, is a twenty-year CIA veteran and the former deputy director of the CIA’s science and technology division.

  But the man with the closest ties to the agency is John Gannon, BAE Systems’ vice president for global analysis. He joined the CIA in the early 1980s after earning a Ph.D. in Latin American studies, and quickly worked his way up the agency’s analytic chain of command, where he served as director of European analysis and deputy director for intelligence. Between 1997 and 2001, he was chairman of the National Intelligence Council, where he was responsible for producing the National Intelligence Estimates that (theoretically) reflect the consensus of the Intelligence Community on key national security issues. After leaving the CIA, he developed the analytic workforce for Intellibridge Corporation, one of the first producers of outsourced analysis for the CIA. Before joining BAE, he worked for the Department of Homeland Security and for Congress as staff director of the Homeland Security Committee of the House of Representatives.

  Gannon’s Global Analysis unit, which employs a staff of more than eight hundred analysts with security clearances, is a miniature version of the U.S. Intelligence Community. “The demand for experienced, skilled, and cleared analysts—and for the best systems to manage them—has never been greater across the Intelligence and Defense Communities, in the field and among federal, state, and local agencies responsible for national and homeland security,” BAE says in a new brochure distributed at a geospatial intelligence conference in San Antonio in October 2007. BAE’s mission, therefore, “is to provide policymakers, warfighters, and law enforcement officials with analysts to help them understand the complex intelligence threats they face, and work force management programs to improve the skills and expertise of analysts.” At the bottom of the brochure is a series of photographs illustrating BAE’s broad reach: a group of analysts monitoring a bank of computers; three employees studying a map of Europe, the Middle East, and the Horn of Africa; the outlines of two related social networks that have been mapped out to show how their members are linked; a bearded man, apparently from the Middle East and presumably a terrorist; the fiery image of a car bomb after it exploded in Iraq; and four white radar domes (known as radomes) of the type used by the NSA to monitor global communications from dozens of bases and facilities around the world.42

  Gannon is an interesting figure in the world of outsourced intelligence. Unlike many of his colleagues, he is willing to speak to reporters on the record, as we saw earlier in this chapter. And he is not afraid to voice opinions that go against conventional wisdom. In testimony before the Senate Judiciary Committee in 2006, for example, he voiced deep concerns about the expansion of the Pentagon’s role in intelligence under Donald Rumsfeld, a subject few contractors are willing to touch (“The DoD turf grab further wounded a weakened CIA and eventually raised concerns about military involvement in domestic intelligence,” he told the panel).43 In written testimony, he told the committee that the “core problem” in U.S. intelligence today “is that there is minimal executive branch supervision…and inadequate congressional oversight”—a perspective frequently voiced by liberal critics of U.S. policy.

  When I interviewed Gannon in the fall of 2006, I was surprised to hear him say that contracting had probably gone too far in intelligence. When Congress responded to 9/11 by creating new structures, such as the National Co
unterterrorism Center and the Office of the DNI, “it was inevitable that the Intelligence Community was going to have to fill the seats from some other source other than the inside,” he told me. “That is what generated this unprecedented alliance with contractors.” Eventually, he said, contracting would have to be “reined in,” and when it is, “it will be a much more surgical approach, where it relates to programs that are competently managed by the government and where contractors are not a substitute for management.” He also warned me against simplifying the issue, saying that contracting “shouldn’t be portrayed as an undifferentiated mass, and particularly as an undifferentiated mass that is a positive force. It is not. A lot of it is bad, and there’s a lot of real hucksters out there. It does need greater oversight and more stringent management to be effective and so we can rein in some of the abuses.” When it came to saying anything about his company and what it does, for the CIA or anybody else, Gannon was adamant: he is contractually bound not to talk. “I cannot finger particular companies or talk about the inside,” he said.

  Two of the largest CIA contractors are companies few people have ever heard of: Abraxas and Scitor. Abraxas was founded by a group of former high-ranking CIA officials, led by CEO Richard “Hollis” Helms, a thirty-year veteran of the CIA who retired in 1999. Helms had served the CIA for twelve years overseas, mostly in the Middle East. He was also head of the National Resources division of the Directorate of Operations, which is responsible for the U.S. activities of the directorate. In the months after the 9/11 attacks, he began taking notice of the many retired intelligence officers who were being hired by defense contractors. “Most contractors did not understand the uniqueness of the problems, nor the potential these people represented,” he said in a 2005 interview with Entrepreneur Weekly. “So I seized the moment, because I could identify extraordinary people who were available.”44