Archive for September 17, 2010

Outgoing DSS Director, Kathleen (Kathy) Watson has stated in her farewell letter that the new acting Director of DSS in October when she leaves will be Barry Sterling.   -GFS

 As a start, here is what is posted on the Defense Security Service Website:

Barry E. Sterling

Chief Financial Officer

Defense Security Service

Barry E. Sterling, a member of the Senior Executive Service, is the Chief Financial Officer of the Defense Security Service. In this position, he is the primary advisor to the Director, DSS, in the areas of budget formulation, budget execution, financial management and policy, financial systems, and financial/cost reporting.  Additionally, he provides executive leadership to the agency’s safety, logistics, nationwide facility management programs, the Strategic Management Office, and manages the Base Realignment and Closure (BRAC) Program.  Prior to this assignment, Mr. Sterling was assigned to the Deputy Under Secretary of Defense for Intelligence Counterintelligence and Security (DUSD(I) CI&S) where he formulated and executed the DUSDI financial program and provided financial oversight of the Defense Security Service and The Counterintelligence Field Activity.

Mr. Sterling is a retired U. S. Air Force Officer who during his Air Force career performed management assistance services, spearheaded Wing and Command level Management Information Programs, cost and economic analysis, and developed and administered cost analysis policy for 120 analysts at Headquarters Air Education and Training Command (AETC) and its 13 bases; interpreted, clarified and supplemented Air Force guidance on budget policy and procedures, tracked congressional, DoD and Air Force budget actions and developed the AETC financial plan and oversaw the execution of over $4 Billion in multiple appropriations.

Mr. Sterling commanded the 325th Comptroller Squadron where he provided financial services, budgeting and accounting of 34 appropriations exceeding $360 million.  He also served as a Senior Financial Manager, Secretary of the Air Force Financial Management, performing strategic planning activities and conceived and managed manpower policy for all 13,000 Air Force Financial Management and Comptroller positions Air Force wide.

He served as the Comptroller and Director of Financial Management for Headquarters Air Force Office of Special Investigations (HQ AFOSI) where he developed and defended a $325 million budget supporting Counterintelligence, Counterespionage, Force Protection and Security and investigative activities.  He was the Secretary of the Air Force Inspector General’s (IG) representative to the Headquarters Air Force Resource Management program providing oversight and input to SAF/IG’s financial program and provided oversight to the (HQ AFOSI) and Air Force Inspection Agency.  He also was the SAF/IG representative to the USAF Group and USAF Board representing SAF/IG input into the Air Force Corporate Structure making resource decisions affecting all Air Force entities upon his retirement from active duty.

Prior to his military career, Mr Sterling was a Vice President/Branch Manager for a large Florida Bank managing all branch financial operations. He has had a 30-year career in financial management.  He holds a Bachelor’s degree from the University of Maryland and a Master’s degree from Central Michigan University both in business.  He also holds a Florida Bankers Association School of Banking Branch Management Institute degree.

Current as of September 2009


Here is a new blog post by Nick Schwellenbach.  Enjoy.  A link to POGO, the origin of this post, is at the bottom after DSS Director Watson’s goodbye letter.  GFS

Sep 16, 2010

Defense Security Service Director Leaving for “the Private Sector”

In an email (see below) to the staff of Defense Security Service (DSS) on Monday afternoon, the agency’s director, Kathleen M. Watson, announced she would be retiring next month “to pursue a career in the private sector,” though where exactly she did not say. If her actions are like those of some of her predecessors at DSS who have gone on to work in the private sector, she may soon be working for a government contractor whom she once oversaw in her role at DSS.

DSS is the Pentagon agency responsible for ensuring that government contractors have systems in place needed to protect classified information in accordance with the National Industrial Security Program. The little-known agency has been the subject of some of POGO’s work over the years, namely POGO’s unearthing of a Pentagon inspector general report that said the agency did not properly oversee BAE System’s protection of classified information in the Joint Strike Fighter program (JSF). The Pentagon Inspector General later retracted the report when it was found that the report’s conclusions were not fully backed up by evidence.

Looking at DSS more broadly, Congress’s investigative arm, the Government Accountability Office (GAO), has said DSS has systemic problems overseeing contractors in two reports—once in 2004 and later in 2005. In testimony before the House Armed Services Committee on April 16, 2008, DSS Director Kathleen Watson herself admitted that when she began as director in 2007, DSS was “broken across the board.”

But where is she going next? If past is prologue, then she may be gunning for a job with a government contractor.
For example, one of DSS’s previous directors, Lt. Gen. Charles J. Cunningham Jr., who left in May 2002, went to DynCorp International in November of that year to become its director of Air Force Strategic Programs, according to a DynCorp press release.

Another senior DSS official, Gregory Gwash, DSS’s deputy director until July 1997, went on to work for a company that DSS oversees: Boeing, the U.S.’s second largest defense contractor and one trusted with many of the military’s cutting edge secrets. In his farewell message, which was obtained by Steven Aftergood of the Federation of American Scientists, Gwash used the same kind of government-industry partnership rhetoric praised in the Clinton and Bush years, but now seen as helping to create the rubber stamp, “service oriented” oversight culture at agencies like the Minerals Management Service (MMS—now known as the Bureau of Ocean Energy Management, Regulation, and Enforcement) and the Federal Aviation Administration (FAA). Gwash wrote of some of the highlights of his time at DSS, including the “partnership” between government and industry and “the reinvention of the Industrial Security Program from a compliance-based activity to a service oriented, threat based program.”

No one disagrees that government and industry have to work together closely—POGO just thinks that they’ve been far too cozy for too long. When top government officials don’t want to ruin their chances for a lucrative job in private industry, how hard will they push on their potential future employers when they’re in the government?

Earlier this year, The Washington Post’s “Top Secret America” investigation did a good job exposing the extent to which private companies are handling some of our nation’s most sensitive intelligence and national security functions. But the Post‘s discovery that more contractors are handling secrets than ever before raises the question: Is the key agency overseeing how well companies protect our secrets doing its job appropriately? And is its senior management keeping an arm’s length distance from those it is overseeing?

–Nick Schwellenbach

Text from Watson’s email:

—– Original Message —–
From: Watson, Kathy, DISES, DSS
Sent: Mon Sep 13 16:42:13 2010 Subject: Farewell

It is with a tremendous amount of trepidation that I have decided to leave DSS to pursue a career in the private sector. My decision making process was long and hard because working with all of you has been enlightening, humbling and a lot of fun. I respect DSS, its mission, and more importantly, all of you. The work is rewarding, critical to our national security and a reminder of just how fragile we may be as a nation on any given day.

My last day at DSS will be 8 October. Barry Sterling, our very able CFO and colleague, will serve as the Acting Director upon my departure. I would ask that you all continue to do what you do so well — focus on the mission and keep making DSS a better place every day you come to work. We have come a long way as an organization in the last four years, but there is still much to be done. I will be watching as you all continue to accelerate and enhance the mission and image of DSS.

Thanks to all of you for the fine support, comraderie and just plain hard work. And remember, DSS is yours and will be what you make of it.

Take care and my best to all of you.

Kathy Watson

Link to original at POGO: