It’s about time!  Here is a very interesting piece from Steven Lee on a part of our huge government mess!  -GFS




Congress demands full account of intelligence outsourcing mess – and it’s a mess


Link to original:


July 13, 9:41 a.m.

By Steven Lee, CIA Examiner


After eight years of acquiescence to the executive branch on intelligence matters, Congress is finally getting around to questioning the intelligence community’s trend of secret outsourcing. Legislators are going to find a mess of wrongdoing and incompetence.

The Intelligence Authorization Act for Fiscal Year 2010 recently made headlines after the Obama White House threatened to veto it if it contained provisions that would expand legislative branch oversight of intelligence operations.


Nonetheless, other provisions of the bill promise to expand Congress’ visibility into how the intelligence community does business.  The House Intelligence Committee is especially interested in intelligence contracting.


Provisions in the bill would require Director of National Intelligence to submit a comprehensive report on intelligence contracting. Such which could begin to expose the tangle of ethical conflicts, waste, and corruption that results from the intelligence community’s secretive, unaccountable system of classified outsourcing.


The intelligence contracting report required in the legislation would force CIA and other intelligence agencies to total up the numbers on contracts, contract costs, and contractor personnel currently supporting agency operations. The report also requires cost-benefit analysis of contracts, as well as comparative analysis of contractor and government employee compensation and an assessment of how the upswing in intelligence contracting since 9/11 has impacted the intelligence workforce.


The outsourcing of intelligence has impacted nearly every aspect of intelligence operations, and Congress wants to how and why. Other parts of the Intelligence Authorization Act also examine how other, specific aspects of intelligence outsourcing have impacted core intelligence activities. For example, Congress wants a separate report on the intelligence community’s foreign language capabilities, with a specific focus on determining how much agencies rely on contractors for core language capabilities.


Another provision of the Intelligence Authorization Acts bans contractors from participating in “interrogations involving persons in the custody of the Central Intelligence Agency.”


That language takes unambiguous aim at Mitchell, Jessen & Associates, a contractor firm believed to have designed and partly executed CIA’s torture program.   CIA Director Panetta fired the firm in April, but the revelation that contractors played a key role in the controversial torture programs is a reminder that persistent problems with intelligence contracting are yet another major problem that the Obama national security team cannot sweep under the rug. 


As Congress peers into the murky world of intelligence contracting, three major problem areas will become apparent. 


First, CIA’s over-reliance on contractors and the takeover of core intelligence missions by contractors is reducing the overall effectiveness of CIA and other agencies, and maybe even introducing new weaknesses.


One fundamental problem is that the rapid growth of intelligence contracting has decimated the spy workforce. Marc Ambinder reported earlier this year that the ranks of mid-level intelligence officers are currently thin, with a majority of intelligence employees at the beginning or ends of their careers.


Where have all those mid-career intelligence officers gone? They have been recruited by contractors, who offer higher pay and slightly more felicitous working conditions.


The employee recruiting, or poaching, problem got so bad that by late 2004, intelligence contractors started seeing stringent contract provisions that circumscribed when and where contractors could court new applicants. No more job interviews in the CIA cafeteria.


Internally, CIA has taken steps to dissuade employees from leaving government service for the filthy lucre offered by its contractors. A kind of non-compete clause prohibits departing employees from accepting a job with an intelligence contractor for a period of 18 months.


While intelligence officials downplay the bite that contracting has taken out of the intelligence workforce, outsourcing is complicating the already tricky business of conducting covert intelligence operations.


Mitchell, Jessen & Associates is not the only intelligence contractor embroiled in CIA’s rendition and torture programs. The American Civil Liberties Union brought a civil suit against Jeppesen Dataplan, a subsidiary of Boeing, for its role in facilitating rendition flights on behalf of former detainees Binyam Mohamed, Abou Elkassim Britel, Ahmed Agiza, Mohamed Farag Ahmad Bashmilah, and Bisher al-Rawi. 


Jeppesen files flight plans, obtains flight and landing permits, and arranges refueling and other services for international flights for aircraft operators. A 2006 New Yorker article by Jane Mayer reported that a senior Jeppesen manager boasted, “We do all of the extraordinary rendition flights—you know, the torture flights.”


A Federal judge recently ruled that so-called State Secrets protections don’t apply to private firm Jeppesen, which could make the firm liable for damages against Mohamed and other complainants because it facilitated their torture and illegal imprisonment.  The Jeppesen case, currently in review, could end up in the Supreme Court


But the upshot is that an intelligence contractor could be held financially responsible for CIA’s detention and torture program—even though it did not design the program, and participated indirectly in only one aspect of the program.


The Jeppesen case casts doubt on CIA’s contract management and contract security practices.  Most significantly, CIA created a single point of failure by relying on a contractor for a high-risk mission need. Even if Jeppesen hadn’t mishandled or leaked information about CIA operations, managers in charge of hiding CIA aviation operations in the plain sight of international civilian air traffic probably overestimated Jeppesen’s ability to keep CIA’s flight data under wraps. What Jeppesen does for its clients is facilitate the bureaucracy of air transport—including filing flight plans, obtaining permits, and expediting fee payments—with the US FAA and foreign governments’ civil aviation authorities. In most countries, including the US, civil aviation records and transactions are a matter of more or less public record.


This isn’t the first time that slipshod CIA contracting has been out of sync with the agency’s operational needs.  


In 2007, for example, the Iraqi government effectively brought operations at CIA’s Baghdad station to a standstill after it suspended the US State Department contractor Blackwater (now called Xe), according to Pajamas Media. Apparently, CIA had become solely dependent on Blackwater security for its Iraq operations, prompting speculation that anti-US elements in the Iraqi government engineered the Blackwater ban—ostensibly, the result of a Baghdad shootout that left dozens of Iraqis dead—to hobble CIA activity in the country.


In short, CIA has opened the door for its operations to be compromised with its poorly managed, bet-the-farm approach to outsourcing.


A second problem area in CIA contracting is ethics conflicts and fraud.  Investigative reporter Tim Shorrock’s comprehensive study of intelligence contracting, Spies For Hire, documents the revolving door that connects the executive offices of major intelligence contractors with the executive offices of US intelligence agencies.


Former Director of National Intelligence Mike McConnell is the poster child for how intelligence chiefs and intelligence contractor executives are more or less interchangeable. McConnell worked his way up through Naval intelligence ranks to become the Director of the National Security Agency. Upon retirement, he became a senior executive at Booz-Allen and Hamilton, and headed up the Intelligence and National Security Alliance, a secretive industry and lobbying group that represents intelligence contractors. From Booz-Allen and INSA, he moved on to become the second DNI in the Bush administration. He promptly returned to Booz-Allen upon the arrival of the Obama administration.


With a former Booz-Allen exec and INSA president at the helm, it should come as no surprise that contractors made up 50 percent or more of the workforce at the Office of the DNI’s top unit, the National Counterterrorist Center.


The contractor influence on intelligence policy has continued right on into the Obama administration. Obama’s top pick for CIA Director was John Brennan, who had been a campaign adviser on national security issues. Like McConnell, Brennan was also a former INSA chairman and an executive at The Analysis Corporation, or TAC, a prominent intelligence contractor.


Ultimately, Brennan’s nomination for CIA Director came undone. While cheetos-eating bloggers have been blamed for calling attention to Brennan’s on-camera endorsement in Bush-era torture policies, the Washington Post reported in January that Brennan’s contractor ties had also raised red flags.


But Brennan is still in the picture, serving as top counterterrorism adviser in the National Security Council. He has reportedly severed all financial ties with TAC.


Meanwhile, INSA soldiers on. The group boasts a board and membership consisting of both contractor executives and government officials.  At best, INSA has the appearance of a conflict of interest that can be explained away by national security exigency.  


More likely, INSA is a hotbed of collusion and anti-competitive practices that would be intolerable were it not for the veil of official secrecy surrounding INSA’s activities.  


Put another way: officials of the National Park Service or the Social Security Administration would never be allowed, under Federal Acquisition Regulations, to form a special club and meet in secret with select contractor executives—and exclude other contractor executives who aren’t ‘in the club’—for undocumented discussions of upcoming contracts and competitions. But that’s business as usual for INSA and the intelligence agencies.


Not that whispered tips of upcoming contract opportunities are the exclusive province of the senior-most contractor execs and government officials. When CIA’s Executive Director, Dusty Foggo, was convicted on fraud charges, court documents offered a glimpse into the world of low-level CIA contracting impropriety.


While still a mid-level CIA officer, Foggo used his government contracting authority to make a lucrative sweetheart logistics deal with his childhood friend, Brent Wilkes. Under the deal, Wilkes’ company Archer Defense Technologies supplied bottled water and household goods for an undisclosed CIA overseas location. Wilkes’ nephew, Joel Combs, an ADT employee, stated in deposition that Foggo rigged a sham contract competition to award ADT the logistics support contract.  Combs’ deposition describes how ADT ordered goods from Sears,, and other US retailers, arranged for shipment to the undisclosed CIA overseas location, and charged the US government a markup of up to 60 percent.


Other documents in the case show Wilkes returned the favor by providing Foggo with lavish vacations, meals at pricey Washington restaurants, and other blandishments. Foggo told his co-workers that he expected to join Wilkes as a business partner upon retirement.


Foggo never succeeded in delivering his big score to Wilkes, though. Foggo attempted to ramrod through CIA’s secret contracting process an aviation services contract for Wilkes worth hundreds of millions. Another witness in the case—a senior operations chief in charge of air operations—called Wilkes’ proposed aviation services solution “unwieldy, cumbersome, and lacking a real understanding of what the Agency needed…If implemented as presented, I believed the proposals would be wasteful, misguided, and contrived.” Nonetheless, CIA would likely have accepted Wilkes’ subpar aviation services, if not for the FBI investigation that brought Foggo down.


That it took an FBI investigation to get to Foggo is a troubling fact on its own: CIA’s own contracting and ethics enforcement mechanisms did not stop Foggo from making sweetheart deals with taxpayer money. 


The sprawling FBI investigation of corrupt California Congressman Randy “Duke” Cunningham led to Wilkes and eventually Foggo. The CIA Inspector General appears to have launched its own investigation of Foggo in response to FBI’s investigative interest, but not because it had pro-actively investigated or suspected Foggo.


The laxity of CIA’s internal safeguards is apparent throughout the court documents, and several deposed witnesses mentioned that they knew of Foggo’s friendship with Wilkes, yet there is no indication that the agency took corrective action.


In my own experience around CIA contracting, I came to realize that cronyism—sometimes coincidence, usually not—underlay many contract awards.


Major intelligence contractors regularly assign managers to proposals based on their personal affinity to government contracting officials or decisionmakers—even though such managers might be otherwise poorly qualified.


In numerous instances that I recall, CIA contracting personnel maintained various levels of close, continuing personal relationships with contractor personnel, ranging from friendship to marriage.  Add to that CIA’s practice of awarding contracts in secret, with minimal opportunity for outside review or disclosure, and the result is an environment ripe for corruption, fraud, and waste.


If Congress is wants to usher in a new regime of accountability in US intelligence, there will need to be a systematic effort to prevent CIA employees from whispering tips about new contracts into the ears of friends and loved ones who could benefit, or creating contracting opportunities for themselves and confederates, much as Foggo had done with Wilkes.


A third and final problem with evident in CIA’s and other Federal agencies’ classified contracting is how both contractors and government agencies such as CIA use these secret processes, with their obstacles to redress and transparency, to evade accountability and oversight.


Contractors working in the classified arena have a history of hiding behind their government sponsors’ real or perceived need for secrecy and discretion.  In one famous case, for example, a tiny defense contractor called Crater developed a device that could be used by the Navy for submarine intelligence gathering. Lucent, a well-known and well-resourced defense contractor took Crater under its wing as a subcontractor. When Lucent took Crater’s technology directly to the Navy and cut Crater out of the picture, Crater sued. The Navy had the case thrown out, citing the state secrets privilege.


The Crater case shows that classified contracting favors large, established intelligence and defense contractors who enjoy cozy relationships with their classified government sponsors. But the reality is that those cozy relationships introduce dynamics into the business of classified government contracting that don’t exist conventional, open government procurement.


On one hand, classified contractors are more willing than their non-classified counterparts to absorb minor liabilities on behalf of their classified government clients—such as claims by mistreated employees or aggrieved subcontractors or vendors. 

At large contractors where I have worked, corporate attorneys and program managers frequently authorized cash settlements to keep potential litigation from “touching” classified clients. Such an approach has the effect of introducing additional waste to the classified contracting process.


But if the stakes are high enough, contractors will attempt to intimidate judges and litigants with an actual or threatened assertion of the state secrets privilege.


Since January, for example, the Las Vegas Sun has been reporting that pilots and flight attendants of Las Vegas-based Vision Airlines are embroiled in a lawsuit claiming the company owed them $21 million in unpaid for hazardous duty pay they earned on classified charter flights to Baghdad and Afghanistan. According to various press reports, Vision’s charter flights have been linked to CIA, and one plaintiff in the case told the Las Vegas Sun “passengers typically included CIA and State Department personnel.”


Vision’s attorneys sought to have the case sealed, and later sought a dismissal, apparently based on their own country courthouse version of the “state secret” privilege. The judge overruled the dismissal motion, and the case, which may now be moved to a Federal court, is still pending. 


(As an aside, it’s more than a little worrying that an airline on contract to the government may be endangering intelligence personnel by shortcutting pilot pay.)


Government officials are also misusing classified contracting to evade accountability and reduce transparency.


The reliance on intelligence contractors for the post 9/11 buildup of intelligence agencies like CIA and ODNI is itself a kind of bureaucratic sidestep. Intelligence managers expend less bureaucratic effort letting a contract to build up a particular intelligence capability than they would organizing a new unit, seeking authorization for hiring and staffing, and then hiring and staffing the new unit. 


But that reduced effort doesn’t translate into lower cost to the taxpayer—witness security personnel who earn $800 to $1000 per day in Iraq and Afghanistan, while their civil service counterparts probably would be lucky to earn $300 per day, after travel and hardship allowances. 


The involvement of Mitchell, Jessen & Associates in CIA torture illustrates one way that classified contracting dilutes the culpability of government officials in controversial activities. A variety of high-profile press reports detailed how CIA ‘fired’ Mitchell, Jessen & Associates earlier this spring, as if to visibly demonstrate that Panetta’s CIA had solved the torture problem by throwing the responsible parties off the island. 


In my own experience with CIA contracting, I have witnessed numerous instances of CIA officials shifting blame on to contractors when things went wrong. In one program I managed, my CIA sponsors were in a hurry to station a team of my company’s skilled technicians on a classified facility. Unfortunately, my skilled team had Department of Defense clearances, not CIA clearances, so my CIA sponsors made a special exception to allow the team into the secret facility. When a new CIA security officer took charge at the secret facility, the security rules abruptly changed, and our special security exception was revoked. My skilled team was out on the street, and my CIA sponsors and the new security officer blamed my company for the security exception they themselves had made.


An affidavit recently submitted by CIA Director Leon Panetta to fend off an American Civil Liberties Union FOIA request on documents related to CIA’s torture program included the justification that contractors’ names could not be disclosed under FOIA because of individual privacy concerns.  


Federal contract law does not allow privacy protections of contractors beyond those that cover such personal data elements as social security numbers, bank account numbers and the like.


Put another way, if officials of the National Park Service or the Social Security Administration were faced with a FOIA request or a Congressional inquiry into contractors involved in official wrongdoing, they would not be allowed to withhold contractor names to protect their privacy.


Indeed, under Federal Acquisition Regulations and FOIA, there’s very little contract information that’s not releasable to the public—when the contracts are unclassified. 


But CIA managers routinely abuse classification and “need-to-know” principal when it comes to classified contracts. Contractors who bid on competitive CIA contracts and lose are entitled to receive post-award briefings—detailed reports of how the winner won and how the losers lost. Often, CIA’s post-award briefings are paltry in comparison to post-award briefings that are given by other agencies on non-classified contract awards. 


The reason given by CIA contracting officers: protection of sources and methods. They even give that reason when everyone in the room has a clearance. But few contractors complain, for fear of being blackballed out of the next lucrative CIA contracting opportunity.


Congress’ demand for more accountability on secret contracting is likely to become a serious headache for Panetta, who promised transparency and cooperation with the legislative branch.


Such a closed system invites corruption and abuse. As congress moves forward in learning more about outsourcing in the Intelligence Community, CIA can be fully expected to resist meaningful scrutiny and reform of its contracting.


And if recent Obama administration efforts to defend the national security status quo are any indication, Panetta and his CIA will be leading the charge to resist transparency and accountability.