by Tim Shorrock
ManTech’s IPO was a huge success. Originally, the company had planned to raise $90 million by selling six million shares to the public. But sensing strong demand, particularly from large institutional investors, ManTech’s underwriter increased the size of the deal, and raised more than $115 million.12 (CEO George Pedersen, however, continued to control the company by virtue of his command of over 90 percent of ManTech’s stock.) With its newly raised cash, ManTech went on an acquisition spree, buying seven companies over the next five years and raising its ranking to twenty-first among the top one hundred federal contractors by 2006. ManTech’s success set off a stream of IPOs by many of the companies we have classified as pure plays, including SI International (November 2002), MTC Technologies (June 2002), Veridian Corp. (June 2002), and Anteon International (March 2002). These same companies have consolidated the industry and are now at the core of a broad defense-intelligence industry. Here are their stories, starting with the largest of the pure plays, CACI International.
CACI: Preemption and Counterterrorism
In 2006, Iraq for Sale: The War Profiteers, a film made by Hollywood producer Robert Greenwald, began circulating around the country in DVD form. Financed with over $350, 000 in donations from liberal activists, it portrayed four U.S. military contractors in Iraq—Halliburton, Blackwater, CACI International, and Titan—as greedy, opportunistic corporations oblivious to the human suffering caused by their actions. One of the film’s most devastating segments used footage from former military interrogators and Iraqi prisoners to detail what Greenwald called one of his “most shocking and troubling discoveries”—how CACI “profiteered” by torturing Iraqis at the notorious Abu Ghraib prison.
Jack London, CACI’s CEO, personally pocketed “over $22 million” from the Abu Ghraib contract, the film claimed. London, who had refused numerous requests from Greenwald for an interview, lashed out after the film was released, calling Greenwald’s accusations “maliciously false” and labeling the film “a classic example of the ‘big lie’ propaganda technique.” The company also challenged the idea that its growth came solely from its business in Iraq, saying that its Abu Ghraib contracts were less than one percent of total worldwide revenue.13* In fact, CACI’s contracts for its work at Abu Ghraib were worth about $40 million to the company, which in 2004 earned $1.1 billion from dozens of government contracts, ranging from signals intelligence work for the NSA to managing documents for the Department of Justice.
In that narrow context, therefore, the company was right: antiwar activists, journalists, and filmmakers critical of CACI have vastly underestimated its role in U.S. foreign policy and the war on terror. By focusing exclusively on CACI’s role at Abu Ghraib—abysmal as it was—journalists and antiwar activists have obscured a much larger picture: CACI is one of the world’s largest private intelligence services providers and deeply involved in classified black operations everywhere on the globe where U.S. military forces are active.
The best way to describe CACI is as a private supplier of signals intelligence, human intelligence, imagery, and black ops, all rolled into one enterprise. “We support all four of the intelligence community’s priority focus areas: analysis, collection, user outcomes, and management,” CACI stated in its 2006 annual report. CACI’s intelligence contracts now make up 35 percent of the company’s revenues, 95 percent of which is earned from the federal government. London rattled off the company’s clients in a conference call with analysts in February 2007: “the Department of Defense, all the military services, the intelligence community at the strategic level. That’d be your CIA, your NRO, your NSA, DIA, and NGA.” CACI’s primary intelligence customer, he said, is the Army. “We know what’s happening out there in terms of the global war on terrorism threat,” he said. “And that is primarily being supported in the military from the United States Army’s perspective as well as the United States Marine Corps.”14
CACI’s services, London constantly reminds investors, are perfectly aligned with the Pentagon’s. “As the fight against terrorism and the Islamofascists continues, technologies will keep evolving to collect, analyze and disseminate vital intelligence to support the war fighter and the national security authorities,” he said in 2006. “Information and intelligence is where the growth is likely to be for the simple reason that, in the final analysis, accurate information from quality sources, communicated through secure channels to the right people, will trump all other weapons of war. In this environment, CACI is at the forefront.”15
CACI’s most important asset is its ten-thousand-person workforce, two-thirds of whom hold security clearances. Of those ten thousand, CACI’s Web site says, “about 2, 000 have top-secret sensitive compartmented information clearances,” one of the highest possible clearances attainable in the Intelligence Community. CACI’s employees are stationed throughout the world, including Iraq and Afghanistan, Kosovo, Bahrain, Kuwait, Belgium, Bosnia, Hungary, Germany, Italy, the U.K., and Japan.16 Recent job postings also show that CACI performs classified work in South Korea and Colombia, where U.S. intelligence agencies have extensive electronic warfare and eavesdropping operations.
CACI views itself as a virtual extension of the Bush administration’s foreign policy and the global war on terror. “CACI supplies one of the most vital weapons in the war on terrorism: cleared, qualified experts in intelligence gathering, analysis, operations and support,” the company declared in its 2004 annual report. “Working with the intelligence community in its mission to preempt, disrupt, and defeat terrorism worldwide”—notice the careful placement of that word preempt, lifted directly from the Bush lexicon—“our people provide counter-terrorism intelligence analysis and terrorist targeting support. They assist with intelligence collection. And their unique skills help thwart terrorist attacks against the United States.”
From the first days of the invasion of Iraq, CACI positioned itself as utility player for the Department of Defense, which provides the company with more than 70 percent of its revenue. Days before U.S. troops rolled into Iraq in 2003, London boasted to the Washington Post that CACI is “playing a role in a large choreography to make sure the president and Rumsfeld have the right information at the right time and can disseminate their decisions back to the battlefield. We’ll be ahead of the enemy’s ability to outmaneuver us.”17 This included “enemies” at home as well. One of CACI’s key Pentagon clients is the Counterintelligence Field Activity office, which uses CACI’s HighView document and records management software to “help combat the growing foreign adversary intelligence collection threat,” according to CACI’s Web site. In 2005, Rumsfeld’s office rewarded CACI for its contribution to the war effort with two contracts worth nearly $20 million to streamline its IT operations. The two one-year projects supported the Pentagon’s transformation initiatives and allowed Rumsfeld’s staff to manage its classified and unclassified computer networks supporting homeland security and the war on terror.18
London’s political philosophy closely matched the imperial visions of Rumsfeld and the neocons he brought into the Pentagon. His world is a Manichaean one, divided between the United States and the forces of evil. He stands out among his peers in the business of intelligence for his almost religious allegiance to the Bush-Cheney agenda of preemptive war and global military dominance. Like George Bush, he sees evil lurking throughout the developing world, where he points to a “rising environment” of extremist individuals and organizations. “It seems that nobody [in the Middle East] has organizational self-control; everything flips into an aggressive violent reaction,” he told Washington’s WMAL radio in 2006.19
In 2002, London came up with a “simpler way” to define the asymmetric warfare practiced by the Palestinians and other Arab groups in their resistance to the United States and Israel: “Not fighting fair.” He added: “Precisely, asymmetric warfare means facing a cunning and conniving adversary of inferior strength, who finds ways to exploit vulnerabilities to radical extreme, and frequently with frightening psycho
logical effect.”20 In a speech to the Northern Virginia Technology Council, which has honored him twice for his contributions to IT, London laid out his analysis of the war on terror. Today, he said, “instead of warring against a single empire, we’re facing” not only Al Qaeda but “groups like the Islamic Resistance Group, or Hamas; the Islamic Jihad; Hizbullah; the Liberation Tigers of Sri Lanka”—as if they were all connected. He informed his audience that “some of the Al Qaeda leadership is now believed to be in Lebanon with the Hizbullah.”21 If so, that would be news to U.S. intelligence, which has never mentioned any such connection.
London traces the origins of today’s troubles to the Iranian revolution of 1979, and argues that the current confrontation between the United States and Islamic groups in the Middle East is “not only a global war but a culture clashing kind of situation.” He seems easily frightened by the prospect of even peaceable protest. In 2006, alerted by a friend, he watched a Web site broadcast from London of a demonstration by Muslims carrying “incredible placards and posters” about “what Islam meant and how it was going to resist Western culture, and ‘don’t pick on us.’ It was a very scary kind of thing. That’s a small group of people, but it’s an idea that is taking hold and getting some traction and is a serious concern for us going forward.” CACI’s position as a contractor in the Intelligence Community, he went on, is to “provide solutions that the politicians and military organizations can use to either suppress or redirect some of those aggressive energies.”22
One of the “solutions” embraced by London is Social Network Analysis, which the company describes as “an increasingly crucial aspect of counterintelligence and counterterrorism.”23 This school of analysis was first developed by Israel’s military intelligence services in their efforts to defeat the Palestinian intifada in the West Bank and Gaza, and was recently employed by the Israeli Defense Forces in Lebanon and the U.S. military in Iraq. It involves tracking the relationships between resistance fighters and their family and community network, and—in Israel’s case—destroying the social infrastructure that supports both.
Toward that end, CACI claims that its “intelligence experts” have developed a modeling program that “maps relationships among members of highly complex human networks—like terrorist cells or extremist groups—and analyzes how the network might behave when faced with various changes.”24 One such program, advertised on CACI’s Web site, is called URWARS, for Urban Warfare Simulation. It was built by CACI for the U.S. Marine Corps to prepare soldiers for urban warfare, and helps them locate buildings, highways, roads, sewers, and “subterranean entries, subways and tunnels and waterways” used by insurgents. The Marine Corps would not say how the program was used, but it is likely that URWARS saw action when CACI intelligence specialists were deployed with the Marines at Fallujah, as several CACI employees have attested.
London has integrated Israel’s experience into CACI’s operations. In 2004, at a time when CACI interrogators at Abu Ghraib were trying to break the anti–United States resistance in Iraq, London traveled to Israel as part of the first annual Defense Aerospace Homeland Security Mission of Peace to Israel and Jordan. His visit was sponsored by the Jerusalem Fund of Aish HaTorah, a pro-Israel lobbying and funding group, and Greenberg Traurig LLP, a powerful Washington lobby group. While in Tel Aviv, London accepted an award on behalf of CACI “as a provider of information technologies for helping fight the war on terrorism and transform the Middle East from a source of global instability into a peaceful, stable region,” according to a CACI press release.25 The award was presented by Israel’s defense minister at the time, Shaul Mofaz, a hard-liner who had quit the Likud Party to join the right-wing government of Ariel Sharon.*
According to CACI’s Web site, a secondary purpose of London’s visit was to promote opportunities for strategic partnerships between U.S. and Israeli defense and homeland security firms and to attend “high-level briefings and demonstrations on innovative technologies and their application to homeland security, counter-terrorism and national defense.” While in Israel, according to an itinerary obtained by Lebanon’s Daily Star newspaper, London visited the Beit Horon military base, which the Daily Star described as “the central training camp for the anti-terrorist forces of the Israeli police.” There, London was briefed by top counterterrorism experts and witnessed exercises “related to anti-terror warfare.”26
CACI didn’t start out as an intelligence company. From the time of its founding in 1962 until the late 1990s, CACI grew primarily by selling proprietary software, including an optical scanning technology it developed for the Navy, to various agencies of the federal government, including the Departments of Justice, Commerce, and Transportation. In 1972, the company transferred its headquarters from California to Washington, D.C., and hired London, a former Navy pilot, as a program manager. A year later, it shortened its name from California Analysis Center Inc. to CACI International. London headed steadily up the company’s ranks and was named president and CEO in 1984. He moved methodically to capture software markets in the areas of law enforcement and the military. He also gave the company its motto: “Ever Vigilant.”
CACI’s optical scanning technology has been a particularly profitable niche. Used extensively by the Justice Department and the FBI, it can scan up to 26 million documents a month, transform the data into digitized information, translate foreign text into English, and then search for concepts and ideas within the data. “What it does is eliminate the need for a person to actually look at the stuff and try to interpret it,” says Dave Dragics, CACI’s vice president for investor relations. “So they can do analysis a lot quicker than they did before.”27* After U.S. forces invaded Afghanistan in 2001, CACI’s technology was used to read and analyze the thousands of Al Qaeda documents found in caves and other hiding places, CACI has said.28
London first began eyeing the intelligence market in the late 1990s, when his company identified defense outsourcing as a “business opportunity trend line” and made a specific decision to move into the area of classified intelligence contracts.29 His first major acquisition in the intelligence sphere took place in 1998, when CACI paid $42 million to buy a company called QuesTech Inc., which was involved in “very important information warfare and intelligence markets,” according to the Washington Post.30 Another acquisition, worth $415 million, was the defense intelligence business of AMS, a major IT contractor whose customers included all the major defense intelligence agencies as well as the Air Force, Army, and Navy. When that sale went through in 2004, CACI added several thousand employees with security clearances to its roster, increasing the company’s cleared workforce to 9, 400. Altogether, CACI made nearly three dozen acquisitions between the late 1990s and 2007, pushing its cleared workforce to more than ten thousand.
As he bought into the intelligence market, London began hiring as advisers people with extensive experience in defense and covert operations. His first big catch was Richard Armitage, who served on CACI’s board of directors from 1999 to 2001. At the time, Armitage was a member of the Pentagon’s Defense Policy Board and, as described earlier, had recently joined the private sector after a long career in defense, intelligence, and covert operations. Price Floyd, who was Armitage’s press officer when he was in the State Department under George W. Bush, told me that Armitage played only a minor role at CACI and “didn’t consult with CACI on its contracts.” But the company itself has indicated otherwise. After Armitage joined the Bush administration as deputy secretary of state in 2001, CACI proudly described Armitage’s role as providing “valuable guidance on CACI’s strategic growth plans and the federal government and Defense Department markets.”31
Once CACI was committed to defense, it changed the makeup of its board of directors. London’s board recruits included retired Navy Admiral Gregory G. Johnson, the former commander-in-chief of NATO forces in southern Europe; Arthur Money, a former assistant secretary of defense for command, control, communications, and intelligence; Larry Welch,
the former chief of staff of the Air Force and former commander-in-chief of the Strategic Air Command; former NSA deputy director Barbara McNamara; and retired Army General Hugh Shelton, the former chairman of the Joint Chiefs of Staff. (Shelton’s “unsurpassed knowledge of our military markets and clients will be extremely valuable as an asset to CACI,” London told investors after his appointment in 2007. Shelton was also a director of Anteon before it was sold to General Dynamics.)
Meanwhile, as the Defense Intelligence Agency expanded its outsourced activities during the Rumsfeld years, CACI concentrated heavily on building relationships with that agency. In January 2006, CACI appointed Lowell “Jake” Jacoby, a former Navy admiral and former DIA director, to be executive vice president for strategic intelligence opportunities. A year later, CACI hired Louis Andre, Jacoby’s chief of staff at the DIA, to be Jacoby’s deputy—in effect, transferring the former top two officials at the DIA to CACI (Andre’s official title is senior vice president of intelligence business strategy). Jacoby was a valuable asset: as DIA director under Stephen Cambone, Rumsfeld’s assistant secretary for intelligence, he was in charge of managing all HUMINT within the Department of Defense and played a key role in managing the Pentagon’s intelligence reporting for the war in Iraq, including the DIA’s assessment that Iraq possessed weapons of mass destruction. Jacoby also played an instrumental role at DIA in establishing the Joint Intelligence Task Force—Combating Terrorism (JITF-CT), a special interagency unit that consolidates terrorism-related intelligence at the national level.*
Both Jacoby and Andre had intimate knowledge of the Pentagon’s strategic plans for years into the future, and their CACI appointments have paid off in significant ways. In the spring of 2007, CACI obtained a contract from the DIA to build a “terrorist screening database,” and was recruiting for analysts to work with the Joint Intelligence Task Force to search data sets for information on known or suspected terrorists and “warn of pending attacks” on U.S. forces, according to job advertisements placed in IntelligenceCareers.com. In June 2007, CACI won a $75-million task order from the U.S. Army to manage the development and maintenance of the DIA’s “knowledge management and visualization efforts.”33 Around the same time, CACI was awarded a two-year, $33-million contract to furnish geographic information system technology to the DIA.34
