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: