Pay Any Price: Greed, Power, and Endless War

by James Risen

  In 2008, Abbe Lowell, the Washington attorney representing Gibbons, announced that Gibbons had been cleared of wrongdoing and that prosecutors had told him that he would not be charged in the corruption investigation. Lowell said, “It should be crystal clear that the only persons who should be investigated or charged are those who made false allegations of wrongdoing and who tried to fuel this investigation for their own private purposes,” according to an account of his statement in the Associated Press. Gibbons added that “today, I am exceedingly pleased that the FBI and the Justice Department have vindicated me from the allegations and claims of Mr. Montgomery.”

  Montgomery was able to recover from his battle with Trepp once he landed another wealthy patron, Edra Blixseth, the wife of billionaire Tim Blixseth. Tim Blixseth had made his fortune in timber land swaps in the Pacific Northwest, and then turned his focus to developing a mountain resort for the uber-rich in Montana called the Yellowstone Club. Set in the Rocky Mountains not far north of Yellowstone National Park, the 13,600-acre club was said to be the only private ski resort in the world. It attracted jet-setters who were willing to pay to avoid mixing with the rabble at public ski resorts.

  Developing the Yellowstone Club helped to secure for Tim Blixseth the ultimate status symbol—a spot on the Forbes 400. Tim and Edra enjoyed all of the perks of the super-rich—among many other things, they owned a private jet, a yacht, and a massive estate in Rancho Mirage, California, called Porcupine Creek, which came with its own private golf course. Their wealth and ownership of the Yellowstone Club also meant that the Blixseths were networking with some of the most famous and powerful people in the world, from Bill Gates to Jack Kemp to Benjamin Netanyahu.

  Edra Blixseth was Dennis Montgomery’s latest mark. After being introduced to him by a former Microsoft executive and then hearing Montgomery explain his software, she agreed in 2006 to bankroll Montgomery to launch a new company, to be called Blxware. Montgomery needed new government contracts for Blxware, and Edra Blixseth had the money and contacts to try to make it happen. Jack Kemp, the former congressman and onetime Republican vice presidential candidate, was a member of the Yellowstone Club, and in 2006 he helped to arrange a White House meeting for Montgomery to push his technology. Thanks to Kemp, Montgomery met with Samantha Ravich, a national security aide to Vice President Dick Cheney, who was an old friend of Kemp. Montgomery explained his technology to Ravich and then tried to convince her that Cheney should support his bid for more government funding. But unlike other officials who had dealt with Montgomery in the past, Ravich demanded proof. She told Montgomery that she could not do anything for him unless some technical experts in the government vouched for his technology. He was never able to get anyone from the Pentagon to call Ravich on his behalf, and so she dropped the matter. She said in an interview that she never tried to help him obtain any new government business.

  Montgomery also sought to convince Israeli officials to use his technology, but, like Samantha Ravich, the Israelis were unimpressed and rejected his offer. Still, Montgomery continued to find ways to get Pentagon contracts. He says that his technology was often used to provide targeting information in raids in Iraq and Afghanistan, and that he was given access to the Predator Operations Center at Nellis Air Force Base—a sign that his work was playing a role in Predator strikes. “Months of testing and validation at Nellis,” as well as at other bases, “confirmed the value of the technology,” insists Montgomery.

  Edra Blixseth refused a request for an interview.

  Montgomery continued to get defense contracts even during the Obama administration. In 2009, Montgomery was awarded another air force contract, and later claimed that he had provided the government with warning of a threatened Somali terrorist attack against President Obama’s inauguration. Joseph Liberatore, an air force official who described himself as one of “the believers” in Montgomery and his technology, e-mailed Montgomery and said he had heard from “various federal agencies thanking us” for the support Montgomery and his company provided during Obama’s inauguration. The threat, however, later proved to be a hoax.

  Inevitably, Montgomery had a falling out with Edra Blixseth. He then turned to Tim Blixseth to invest and back his operation. By then, Tim and Edra Blixseth were going through an extremely bitter divorce, and Montgomery became caught up in their legal battles. Mysteriously, government lawyers sometimes sought to intervene in their court cases, with vague references to the need to keep classified information stemming from Montgomery’s work with the intelligence community out of the public record.

  When Montgomery approached him, Tim Blixseth had no intention of giving money to Montgomery, his ex-wife’s erstwhile partner. Blixseth was interested in finding out what Montgomery was really doing, however, and so he played along when Montgomery called desperate for money. At one point, Montgomery’s wife even called Blixseth to plead for help with bail after Montgomery was arrested for passing bad checks at Caesar’s Palace in Las Vegas. (Eventually, Montgomery was forced into personal bankruptcy proceedings.) Blixseth refused to help but kept talking to Montgomery.

  In 2010, Blixseth finally went to see Montgomery’s latest computer software operation, hidden away in a nondescript warehouse near Palm Springs. Blixseth says that throughout the darkened office, Montgomery had mounted at least eight large-screen televisions, all tuned to Al Jazeera and all tied in to a computer in the middle of the room.

  Dennis Montgomery was once again using his top-secret decoding technology to scour Al Jazeera broadcasts. Montgomery had not given up on his secret project, despite being abandoned by the CIA. As Blixseth took in the bizarre scene, Montgomery proudly told him that his Al Jazeera data was all being fed “straight to the Pentagon.”

  In fact, Montgomery says that his focus on Al Jazeera was unwavering. He claims that he recorded every minute of Al Jazeera’s network broadcast nonstop from February 2004 until the London Olympics in the summer of 2012. “That’s over 8 billion frames.”

  Today, Dennis Montgomery continues to argue that he is not a fraud, that his technology is genuine, and that he performed highly sensitive and valuable work for the CIA and the Pentagon. After former NSA contractor Edward Snowden leaked documents about the NSA’s domestic surveillance operations in 2013, Montgomery suggested to me that he could provide the documents that would prove not only that he had been telling the truth, but that he had also been used by top U.S. intelligence officials in highly questionable intelligence operations.

  But Montgomery has never provided the documents to back up his assertions.*

  3

  The New Oligarchs

  Dennis Montgomery is, of course, an extreme example of the new kind of counterterrorism entrepreneur who prospered in the shadows of 9/11. But he was hardly alone in recognizing the lucrative business opportunities that the war on terror has presented. In fact, as trillions of dollars have poured into the nation’s new homeland security–industrial complex, the corporate leaders at its vanguard can rightly be considered the true winners of the war on terror.

  From the sky high above, the outlines of Neal Blue’s beachfront estate in La Jolla, California, certainly look impressive. His house sits just a few yards away from the Pacific Ocean. Assessed by San Diego County at $8.4 million in 2012, the house on La Jolla Farms Road is listed on county property records as having more than 10,000 square feet of space, not including a large rectangular pool that is clearly visible from the air.

  Still, the images of the estate taken from thousands of feet above the ground cannot possibly do it justice. They show the roof but little else about the home itself. In fact, pulling back with a wider view, it is hard to distinguish Blue’s roof from the roofs of the other, equally impressive homes that crowd the Southern California beach. From the air, the home of the chairman of General Atomics, the manufacturer of the Predator drone, the signature weapon of the global war on terror, could be confused with any one of the houses scattered along the beach, like the one two doors dow
n owned by Ron Burkle, the wealthy investor and longtime friend of former President Bill Clinton.

  Such confusion doesn’t matter in La Jolla, one of the wealthiest and safest enclaves in America. Antiwar protesters from Code Pink once made an appearance outside Blue’s house, but otherwise Blue’s personal security and privacy have remained undisturbed.

  But confusion certainly does matter in Datta Khel, a small village in North Waziristan along Pakistan’s northwest frontier, where the Predators and the newer Reapers built by Neal Blue’s company do their work. Confusion in the skies above Datta Khel means death.

  On March 17, 2011, American drones fired at least two missiles into a gathering in Datta Khel that killed more than forty people. The U.S. government insisted that the drone strike killed a Taliban commander, but villagers later told investigators that the drones had attacked a meeting of local elders gathered to negotiate a dispute over a chromite mine. Many of those killed were men who were both local elders and heads of large families. Their deaths triggered yet another round of anti-American protests in Pakistan. Confusion and angry finger-pointing over the strike reverberated in the United States and Pakistan for a few days, but eventually quieted down. Meanwhile, the drone strikes continued unabated, killing suspected terrorists and civilians alike. The Pentagon and the CIA kept buying more drones, General Atomics kept building them, and Neal Blue kept making money.

  After Datta Khel, in fact, the U.S. drone campaign intensified throughout 2012 and into 2013, and a new term entered the language of the American way of war—“signature strikes.” These were drone strikes that targeted groups of people that appeared to be military-age males who happened to be in suspicious locations, even when they hadn’t been specifically identified as threats. Those strikes reportedly included attacks on rescuers following an earlier drone attack, as well as the targeting of funerals of the dead from previous attacks.

  The global war on terror has been very, very good to Neal Blue. He and his younger brother, Linden Blue, the vice chairman of the firm, are the owners of privately held General Atomics. Almost no one outside of the insular world of the defense industry has ever heard of the Blue brothers, but they are the men who ultimately profit the most from America’s drone war, from the use of Predators and Reapers, the soulless hunter-killers that circle the skies of Pakistan, Yemen, and other chaotic lands. In fact, the Blue brothers have benefited from the nation’s decade-long homeland security binge more than almost any other Americans. In 2012, General Atomics Aeronautical Systems received $1.8 billion in government contracts, up from just $110 million in 2001.

  The Blue brothers are among the oligarchs of 9/11, the people who have earned vast wealth from businesses involved in the nation’s most controversial counterterror policies and programs. There is an entire class of wealthy company owners, corporate executives, and investors who have gotten rich by enabling the American government to turn to the dark side. But they have done so quietly. They have largely avoided the scrutiny and infamy that dragged down the post-9/11 operators who garnered too much attention, like Erik Prince, the founder of Blackwater. The new quiet oligarchs just keep making money.

  They are the beneficiaries of one of the largest transfers of wealth from public to private hands in American history. America’s richest discovered that the hottest way to make money was to get inside Washington’s national security apparatus. With new regulations, Wall Street is no longer quite as attractive as it was before the banking crisis, so the nation’s most clever men have targeted the steady flow of billions into counterterrorism programs. Washington’s partisan budget battles have left counterterrorism spending largely unscathed.

  One study found that government spending on homeland security has been so excessive that the only way it could be considered cost-effective would be if it funded programs that prevented 1,667 terrorist attacks—each year—like the 2010 Times Square attempted car bombing. That would mean stopping four terrorist attacks in the United States every day.

  Neal and Linden Blue have been inseparable their entire lives. After growing up in Colorado, where their mother served as the Colorado state treasurer, both went to Yale and both learned to love to fly airplanes. While still in college in the 1950s, the brothers spent months crisscrossing Latin America in a small plane, garnering publicity and landing themselves on the cover of Life magazine in 1957.

  They served in the air force, started a plantation in Nicaragua to grow bananas and cacao beans, and got into real estate, construction, and oil and gas in Colorado. Years later, Linden Blue became a top executive at Lear Jet and Beech Aircraft. By 1986, the brothers were in position to acquire General Atomics, which had started as a nuclear technology subsidiary of General Dynamics, the giant defense contractor, but had subsequently become an orphan. General Atomics had been sold and resold and passed around from one oil company to another until Chevron agreed to unload it to the Blue brothers for $50 million. That turned out to be quite a bargain.

  Along the way, the Blue brothers became major players in uranium mining and real estate. Their penchant for playing hardball was on display in both. In the 1980s, Neal Blue bought the valley floor area just outside Telluride, the Colorado ski resort. He was determined to develop it, despite the overwhelming opposition of the town of Telluride and many of its wealthy and famous residents. He spent years locked in a costly legal battle with the town, which ended up at the Colorado Supreme Court. Blue lost but still forced his opponents to raise $50 million to buy him out.

  Meanwhile, Blue’s firm faced investigations because of radioactive pollution spilling from a uranium plant on an Indian reservation in Oklahoma. He also faced complaints about uranium leaks from a closed mine in Golden, Colorado. Another Colorado uranium facility became a Superfund site. In Australia, the Blue uranium empire was accused of trying to mislead customers in order to get out of unfavorable contracts. Even with General Atomics, Blue ran into problems just before 9/11, when it was reported that the firm had been accused of rigging contracts to benefit a company owned by Neal Blue’s sons, according to a 2001 story in the San Diego Reader as well as court documents filed in the case.

  But 9/11 changed everything for the Blue brothers, turning a diverse business portfolio into an empire—thanks to the federal government. The controversies surrounding their business practices were overlooked as the nation’s top defense and intelligence officials scrambled to throw money at the brothers as fast as possible.

  Neal Blue has said that he first began to think about drones because of Nicaragua. He knew the country from his plantation days. In the 1980s, he became fixated on dreaming up ways to drive out the leftist Sandinistas who had come to power in 1979. (The Blue brothers had a long history of animosity toward Communism in Latin America, dating back at least to 1961, when Linden Blue’s plane was forced down in Cuba, where he was jailed for twelve days.) Neal Blue later told a reporter that he came up with the idea of launching explosive-laden, unmanned aircraft to destroy fuel dumps and other targets in Nicaragua. The notion of combat drones stuck with him.

  In 1990, General Atomics acquired Leading Systems, a small drone maker. Washington had minimal interest in drones then, and Leading Systems had been struggling financially because it was ahead of its time. Things began to pick up by the end of the 1990s, when drones played a surveillance role in the Balkans—the United States was reluctant to put more American soldiers and spies on the ground than was absolutely necessary, and drones proved a useful substitute.

  After the turn of the century, the air force and CIA began to get serious about pushing for drones armed with missiles so that they could shoot whatever they could see. The 9/11 attacks jump-started their development. It wasn’t long before a Predator drone carrying Hellfire missiles made its first appearance in the skies over Afghanistan.

  The General Atomics Predator was followed by the larger and more powerful General Atomics Reaper, and the air force, a pilot-centric service that had long been dismissive of unmanned aeri
al vehicles (UAVs), read the writing on the wall and began to convert squadrons of piloted fighters into squadrons of drones. Today, the air force is training more personnel to operate drones than to actually fly manned aircraft. The service has also waged a prolonged turf battle with the CIA for control over the government’s fleet of armed drones. In effect, this battle has been over who could give the most money to the Blue brothers. In 2013, President Obama appeared to side with the Pentagon when it was reported that he had decided to shift most drone operations away from the CIA to the air force, but the CIA fought back and refused to relinquish its central role in drone strikes. Meanwhile, the Department of Homeland Security has been getting its own Predators for border surveillance, and General Atomics has been allowed to begin selling unarmed Predators to other nations, even in the Middle East.

  Of course, the Blue brothers and General Atomics have also been doing their best to curry favor in Washington. In 2006, for example, the Center for Public Integrity found that General Atomics had spent more than any other company to pay for the travel of congressional staffers.

  Yet the Blue brothers do not see themselves as being on the federal dole. In 2011, Linden Blue coauthored a blistering critique of Barack Obama’s free-spending ways—even as government contracts to General Atomics were soaring to new heights. In a column published by the conservative Hudson Institute, Blue complained that “many people, far too many people, believe the role of government is to care for them.”