by Tim Shorrock
Even though green-badgers are generally hired through companies such as Booz Allen Hamilton or SAIC, some negotiate their own contracts with the agency, former officers said. The CIA wouldn’t discuss how its contracts are structured. But in the spring of 2007, the agency released a few intriguing details about its personnel regulations as part of its legal defense against charges from a former covert employee, identified only as “Peter B.,” who claims he was wrongfully terminated by the CIA. The court document, which was heavily redacted, described three categories of contract employees at the CIA: career associates who perform duties—“usually clandestine and operational”—on a career basis; internal contract employees, who are hired for a specific term “and normally work inside Agency installations”; and external employees hired for a specific term who normally work “outside Agency installations.”12 That seemed to cover contractors in all four of the CIA’s areas of operations.
The most prominent of these is the National Clandestine Service, which was previously known as the Directorate of Operations and employs some 1, 200 case officers around the world—more than half of whom are green-badgers, as mentioned earlier. The Directorate of Intelligence, the analytic branch of the CIA, employs the largest group of analysts in the federal government, according to director Hayden.13 The other two directorates are Science and Technology, which directs the CIA’s investments in innovative technology, and Support, which provides security, cover stories, financing, and other services to CIA missions. Contractors are hired in all four directorates, according to the agency. “We have no figures on the distribution of our contractors,” the CIA spokesperson told me. “But it’s safe to assume that our contractors perform a wide variety of missions across the agency.” Some analysts believe that the number of contractors in these divisions exceeds 70 percent of the workforce—about par for the Intelligence Community, as we know now from the ODNI’s own figures.14
The CIA’s big contracting push during the Bush administration was triggered by the events of September 11. The next morning, the Special Activities division of the CIA’s operations directorate began recruiting contractors to be sent into Afghanistan to start chasing Al Qaeda. The man making the calls was Cofer Black, the director of the CIA’s counterintelligence unit, who organized the CIA’s first effort at leading U.S. troops into battle. Black “got his orders from an all-night meeting at Camp David,” Billy Waugh, a veteran CIA contractor who first worked for the CIA in Vietnam, told the journalist Robert Young Pelton. After meeting with Bush’s war cabinet, Black came back with the understanding that “things were different,” he added. “They wanted people killed. They weren’t going to fire off some missile and hit some friggin’ dust pile. They wanted some dead bodies on the ground.”15
Over the next few weeks, the CIA fielded a force of about one hundred fighters, including about sixty contractors, who joined up with a few U.S. Special Forces personnel and fragmented units from the pro–United States Northern Alliance and other Afghan groups opposed to the Taliban, the Afghan ruling party and an ally of Al Qaeda. In doing so, said Pelton, the CIA began “a new era of joint operations where military, intelligence, paramilitary, indigenous, mercenary, and even civilian contractors were working in unison with full lethal capabilities.”16
Six months later, the CIA-led force had defeated the Taliban and driven Al Qaeda into hiding. Its resources strained, the CIA’s security division, known as the Global Response Staff, signed a six-month, $5.4-million contract with Blackwater, then an unknown private military contractor based in North Carolina, to provide security to the CIA’s newly established station in Kabul. Within three years, bolstered by contracts with the U.S. occupation forces in Iraq and the State Department, Blackwater had become one of the world’s largest private military companies. Since 2004, its president has been Cofer Black, who left the counterterrorism division to join Blackwater. Dozens of other former CIA officials and lower-level officers followed him into the company.
The surge in CIA contracting in the other divisions occurred in the eighteen months after the attacks, when Congress and the administration created several new institutions to deal with the new terrorist threat and thwart the next attack. In 2002, in the largest reorganization of government since 1947, the Department of Homeland Security was formed by combining twenty-two disparate federal agencies. From the beginning, it included its own intelligence and analysis division. It was headed by a longtime CIA veteran, Charles Allen, who was recruited to the position from his job as assistant director of central intelligence for collection. In January 2003, the Bush administration created the Terrorist Threat Integration Center (TTIC). It combined elements of the DHS, the Department of Defense, and the counterterrorism divisions of the FBI and the CIA, with a mission to “fuse” and analyze all information related to terrorism in one place. John Brennan, its first director, was a twenty-five-year veteran of the CIA whose last job was as chief of staff to CIA director George Tenet. Under Brennan, the TTIC was spun out of the CIA and renamed the National Counterterrorism Center.
These organizations placed tremendous strains on the CIA, which sent many of its top analysts to staff them. At the same time, the Department of Homeland Security and the NCTC needed an immediate infusion of analysts with security clearances and experience in the intelligence business. With most of the agencies already stretched and many cleared intelligence veterans working in the private sector, the only place to go for recruits was the big companies. By 2004, about 70 percent of the analysts and subject matter experts working at the NCTC were contractors, according to former CIA officials.
The use of contractors, particularly in the analytic branch of the agency, was a major shift from the past. Until recently, contracting “was very, very limited,” Larry Johnson, a former CIA officer, told me. Johnson worked in the CIA’s Directorate of Operations in the late 1980s and read hundreds of classified CIA reports while serving as deputy director of the State Department’s Office of Counterterrorism in the early 1990s. “On the analysis side, [a contractor] would be asked to come to make a presentation or review a particular publication,” he said. “It was used very sparingly. And it really wasn’t used very much on the DO [Directorate of Operations] side, either.”17 Ray McGovern, an outspoken critic of the Iraq War who served in the CIA’s analytic division from 1963 to 1990, had a similar experience. “Very little was outsourced,” he told me. Technical data on weapons or economic models were occasionally proofed by outsiders, and CIA analysts often communicated with academic and think tank specialists. “But no contractor was involved in actually analyzing this data and presenting it to our consumers, first and foremost the president,” he said. “It was always in the hands of analysts, who massaged it and compared it to what else we knew from covert sources.”18
That was true until the early 1990s. As we saw in the previous chapter, the outsourcing of intelligence analysis grew rapidly in the decade that followed the end of the Cold War. Intelligence budgets were cut and the entire government came under pressure from the Clinton administration to streamline operations and save money by transferring jobs that were not “inherently governmental” to the private sector.19 The Directorate of Operations was particularly hard hit by the cuts. “The Clandestine Service felt the impact of the post–Cold War peace dividend, with cuts beginning in 1992,” the 9/11 Commission wrote in its 2002 report on the intelligence failures that led up to the 9/11 terrorist attacks. “As the number of officers declined and overseas facilities were closed, the DCI and his managers responded to developing crises in the Balkans or in Africa by ‘surging,’ or taking officers from across the service to use on the immediate problem.” The Directorate of Operations’ “nadir,” the commission said, was in 1995, “when only 25 trainees became new officers.”20
One factor in the CIA’s increasing use of outside analysts was the congressional demands for information and analysis on new, emerging threats following the collapse of the Soviet Union. According to John Gannon, a v
ice president at BAE Systems who held the CIA’s senior-most analytical position for most of the 1990s, Congress had very different priorities in intelligence during the Clinton administration than it does today. Specifically, after the Republicans swept the midterm elections in 1994, congressional leaders began pressing the Intelligence Community to focus on national missile defense and China’s militarization; terrorism was more of a “tertiary kind of priority.” That translated into big spending increases for technology to collect and analyze missile data, as opposed to human intelligence. At the same time, as the confrontation with the Soviet Union faded and other issues took its place, the CIA itself was turning outside for expertise. “For the half-century of the Soviet threat, a lot of the IC’s expertise of the Soviet Union was inside the community,” said Gannon. “But if you look at the cyber-threat, the threat of bioterrorism, or even Russia today, the center of gravity of experience is outside of the IC.” In many cases, that turned out to be industry. “When I was chairman of the National Intelligence Council, even on issues like the ballistic missile threat, if we really wanted to do quality analysis, we discovered the best analysis was being done by the aerospace industry,” according to Gannon. “So we worked with them.”21
But missing in all of this is the greed factor. Many CIA officials and officers, knowing they could earn up to three times as much as a private sector contractor, left the agency in droves after 9/11 to either start their own companies or join established ones. “On the analytic side, everybody ran for the terrorism dollars,” says Johnson, the former CIA officer. “That rush for the private sector will be the legacy of the Bush administration.” One recent migrant from the CIA to the private sector provides a good illustration of the pattern: John Brennan, the first director of the National Counterterrorism Center. Brennan, who spent nearly thirty-five years at the CIA, retired from the government in November 2005 and immediately joined The Analysis Corporation, a Fairfax, Virginia, government contractor, as president and chief executive officer. TAC, which is owned by a defense contractor, SFA Inc., employs over 140 people, who, according to company literature, support the work of intelligence, law enforcement, and homeland security agencies “with heavy emphasis on counterterrorism.” Much of TAC’s business is with the NCTC itself, where Brennan worked for three years. In fact, the NCTC is one of the company’s largest customers, and TAC provides counterterrorism support to “most of the agencies within the Intelligence Community,” according to a company press release.
During the 1990s, before Brennan came aboard, TAC developed the U.S. government’s first terrorist database, called Tipoff, on behalf of the State Department. The database was initially conceived as a tool to help U.S. consular officials and customs inspectors determine if foreigners wanting to enter the United States were known or suspected terrorists. In 2003, management of the database, which received information collected by a large number of agencies, including the CIA, the NSA, and the FBI, was transferred to Brennan’s TTIC and, later, to the National Counterterrorism Center.22 In 2005, Tipoff was expanded and renamed the Terrorist Identities Datamart Environment, or TIDE, and fingerprint and facial recognition software was added to make it easier to identify suspects as they crossed U.S. borders.
TAC remains an important NCTC contractor: in 2005, it won a $2.3 million contract in a partnership with CACI International to integrate information from the Defense Intelligence Agency into the TIDE database.23 TIDE is now “the wellspring for watch lists distributed to airlines, law enforcement, border posts and US consulates,” with nearly half a million names in the database, and it is also the first intelligence database to include both foreigners and U.S. citizens, according to the Washington Post.24* TAC has become a critical private sector player in the nation’s counterterrorism efforts; in the five years after 9/11, its income quintupled, from less than $5 million in 2001 to $24 million in 2006.25
In 2006, TAC increased its visibility in the Intelligence Community by creating a “senior advisory board” that included three heavy hitters from the CIA: former director George Tenet, former chief information officer Alan Wade, and former senior analyst John P. Young. “We will want to tap into their expertise, they are part of the brain trust here,” Brennan told the Washington Post 26 (Tenet, in a statement released by TAC, said he would help the company “address critical needs as government and industry work together to fight terrorism”27). According to a former contractor familiar with TAC, Brennan is one of Tenet’s closest friends and confidants, and hired Tenet primarily as a rainmaker to bring new business and contracts to the firm. A former CIA officer who served in the Middle East said Brennan’s close ties with Tenet go back to the early 1990s, when Brennan was the chief of station in Riyadh, Saudi Arabia, a country that Tenet visited frequently as director of central intelligence. TAC did not return phone calls or reply to e-mails. Brennan’s prominence in the intelligence industry was underscored in 2007 when he was elected chairman of the Intelligence and National Security Alliance, the contractor organization formerly headed by Director of National Intelligence Mike McConnell.
Tenet has cashed in on his CIA experience in other ways, and has become a wealthy man as a result. In 2006, he earned more than $2 million in director’s fees, stock, and other compensation from his work for three corporations that provide the U.S. government with technology, equipment, and personnel used for the war in Iraq as well as the broader war on terror.
In 2006, Tenet was elected to the board of directors of L-1 Identity Solutions, a major supplier of biometric identification software used by the U.S. military and intelligence agencies to monitor terrorists, insurgents, and the general populace in Iraq and Afghanistan. Longtime defense executive Robert LaPenta, one of the three “L’s” who founded L-3 Communications, is the chairman of the board and CEO of L-1, which was formed by the merger of the five top companies in the biometric industry. L-1’s software, which can store millions of ID records based on fingerprints and eye and facial characteristics, helps the Pentagon and U.S. intelligence “in the fight against terrorism by providing technology for insurgent registration [and] combatant identification,” the company says on its Web site. L-1 technology is employed by the State Department and the Department of Homeland Security for U.S. passports, visas, driver’s licenses, and transportation worker ID cards; key customers also include intelligence contractors Booz Allen Hamilton, Northrop Grumman, Lockheed Martin, and SAIC.
L-1 clearly hired Tenet for the business he could secure at the CIA.
“We want the board to contribute in a meaningful way to the success of the company,” LaPenta told financial analysts during a 2006 earnings conference call. “You know, we’re interested in the CIA, and we have George Tenet.” The former CIA director has been particularly useful to L-1 as the company has expanded its markets in the Middle East.
“George Tenet: a phone call gets us in to see whoever we want,” LaPenta said in a 2007 analyst’s briefing. In the months after Tenet joined L-1, the company moved heavily into intelligence outsourcing by acquiring two of the CIA’s hottest contractors, SpecTal and Advanced Concepts Inc.
SpecTal, which has three hundred employees with top secret security clearances, was an interesting choice for L-1. Its Web site reads like something out of a spy novel. “From the situation rooms of Washington, D.C., to the back alleys of the Third World, SpecTal employees have devoted their lives to handling America’s most daunting security and intelligence challenges.” Prior to its acquisition by L-1, SpecTal was working closely with the CIA in Afghanistan on a number of classified missions that Tenet, as CIA director, was apparently quite familiar with. In November 2006, several L-1 executives met with Tenet to discuss potential business in Afghanistan. During the course of that conversation, LaPenta told investors, Tenet urged L-1 to “call the SpecTal guys” because “they know everybody in every one of these ministries that you need to go talk to.” 28 In May 2007, L-1 picked up another intelligence contractor, Advanced Concepts Inc. (ACI), whe
re 80 percent of its three hundred employees have top secret clearances. ACI, according to LaPenta, is a systems engineering firm that, among other things, protects computer systems for the National Security Agency, making it “a great complement for SpecTal.”29 By combining the two companies, LaPenta told analysts, he hoped that SpecTal might get some of its “training and analysis and ops people” hired at the NSA, and get work for ACI’s IT and systems people at the CIA.
Tenet has been amply rewarded for opening doors for L-1. According to company filings with the Securities and Exchange Commission, he was provided with eighty thousand shares of L-1 stock in 2006 when the company acquired Viisage, where Tenet was also a director. Valued at the company’s price in the spring of 2007 ($20), those shares were worth more than $1.5 million. According to another SEC filing, Tenet received director’s compensation of $129, 337, and $332, 030 worth of stock in 2006. “George has amazing experience,” Doni Fordyce, L-1’s executive vice president for communications, told me. “We’re in the security business, right? So he’s a tremendous asset.” In 2006, L-1 earned $164.4 million, up from $66.2 million in 2005.
Tenet is also the only American director on the board of QinetiQ Group PLC, the British defense and intelligence research firm that was controlled from 2003 to 2007 by the Carlyle Group, the well-known (and well-connected) private equity fund headquartered in Washington, D.C. QinetiQ is the privatized unit of Britain’s Defense Evaluation Research Agency. It was once one of the most secretive parts of Britain’s Ministry of Defence, and got its inspiration from Q, the legendary British intelligence technician immortalized on film in James Bond movies (“Think about Q in the Bond movies,” Carlyle executive Douglas Franz once explained to a group of investors. “These guys do that stuff.”30). The company employs more than ten thousand people, about the same number as CACI International; seven thousand of them are scientists and engineers.31