Spies for Hire

by Tim Shorrock

  Professionally and politically, I’m indebted to the many editors I’ve worked with as I researched and wrote this book. At Salon, Mark Follman thoughtfully edited some of my most important articles about intelligence and the phenomenon of outsourcing, and pressed me to write more for that excellent online publication. Monika Bauerlein, the coeditor of Mother Jones, published my first article on intelligence and outsourcing, “The Spy Who Billed Me,” in 2005, and encouraged me to write about intelligence, national security, and other topics. At The Nation, editor and publisher Katrina vanden Heuvel commissioned my 2002 piece on the Carlyle Group, which I started on long before the events of 9/11 thrust that bank into the public eye; I also salute The Nation’s managing editor, Karen Rothmyer, and its copy editor, Roane Carey. Though I sometimes disagree with The Nation’s editorial judgments, the magazine remains sharp and vital 150 years after its founding, and I’m proud to have been associated with it since 1983.

  I seriously doubt that I would have started writing about intelligence contracting if I hadn’t met Bill Golden, the founder of Intelligence Careers.com. I first encountered Bill while researching a story on outsourcing for Mother Jones. On a whim, I decided to check into one of Golden’s job fairs I’d seen advertised on the Internet. When I entered the recruitment building near Dulles Airport in Northern Virginia, everyone had badges draped around their necks indicating the value of their security clearances. A security guard stopped me and, when I told him I was a reporter, directed me to the man in charge: Bill Golden. He was sitting all by himself in a large cafeteria, accompanied only by his laptop. After asking for some identification, Bill loaded my name into Google to check my bona fides, and out popped dozens of articles from The Nation, Antiwar.com, and other lefty sites. I thought “uh-oh, there goes my interview”; but Bill just wanted to make sure I was who I said I was. For the next two and a half hours, he explained to me what the outsourcing business was about and gave a concise history of how it began. Bill was my entry into the industry, and made me realize that the people I was writing about weren’t so mysterious after all. Since that meeting, Bill has always taken my calls and patiently answered my questions about the industry and the Intelligence Community. Much appreciation, Bill.

  As I was writing this book, I was delighted to become acquainted with Raelynn Hillhouse, who blogs from Hawaii on intelligence and outsourcing at The Spy Who Billed Me. Raelynn, who writes as R. J. Hillhouse, has been an excellent (if distant) colleague over the past year, offering insight and expertise, particularly in areas where I was in the dark. She and I share a common interest with the business of outsourcing and have, at times, supported and bounced off each other’s work. In 2007, for example, we teased out the intelligence budget numbers imbedded in a set of PowerPoint slides I obtained from the Office of the Director of National Intelligence. Raelynn’s report on those numbers led the ODNI to issue a formal response—“the only time that office has ever publicly responded to the writings of a private citizen,” as she put it. Raelynn took her blog’s title from my 2005 article for Mother Jones, and thanked me on her site with a link to my own Web site. That one link has driven more traffic to my site than any other. Raelynn’s coverage of Blackwater, the private military contractor that provides security for the CIA in Iraq, is the best you’ll find. Moreover, her novel Outsourced is a gem. If you read that book along with mine, you will have covered most of what you need to know about the phenomenon of intelligence outsourcing.

  Thanks also go to the United States Geospatial Intelligence Foundation. In 2006, Steven Jacques of USGIF invited me to attend GEOINT, the foundation’s annual conference and exhibition—by far the most interesting unclassified event in the Intelligence Community—despite the group’s rule that book writers should not be registered as press. Attending GEOINT in 2006 and 2007 provided insight and information I couldn’t have gathered anywhere else. Jordan Fuhr, the USGIF’s director of communications, went out of his way to help me understand the imagery part of the intelligence industry. At the National Geospatial-Intelligence Agency, I thank David Burpee, the director of public affairs, for his help. If the rest of the Intelligence Community had press people as accessible and open as Dave is, the public would be much more informed about intelligence, and the nation would be better off.

  Inside the industry itself, I thank Leonard Moodispaw, the CEO of Essex Corporation, and John Gannon, a vice president of BAE Systems. They granted me lengthy telephone interviews that helped me better understand the intelligence business and the issues they face as private sector executives working for the Intelligence Community. Jason Kello of the Intelligence and National Security Alliance patiently answered many questions about his organization. Donald W. Tighe, vice president, external affairs, of In-Q-Tel, and Donald L. Black, the chief of public affairs for the Defense Intelligence Agency, provided information that helped me write accurate portrayals of their organizations. Unfortunately, I can’t say the same about the ODNI itself, or the NSA and the CIA. Their press people refused to say much of anything for this book and flatly rejected my many requests to interview officials about outsourcing. It’s amazing to me that organizations that spend billions of dollars a year in taxpayer money can get away with being so opaque. What the nation spends on intelligence, and how much of that goes to contractors, should not be a state secret.

  That’s why I thank Steven Aftergood, who edits Secrecy News for the Federation of American Scientists. Steven is a national treasure: for years he has been making the case for public disclosure of the intelligence budget. Just as I was closing on this book, his transparency campaign bore fruit when the ODNI (reluctantly and grudgingly) obeyed the will of Congress and declassified the 2007 budget for the National Intelligence Program, which funds the NSA, the CIA, and the other big collection agencies: the total is $43.5 billion. Through his excellent newsletter, Aftergood also makes available scores of reports about the Intelligence Community that would never see the light of day without his perseverance; indeed, several studies that I cite in this book were first mentioned and posted in Secrecy News. For his efforts on behalf of the national interest and reporters like myself, Steven deserves a public service medal.

  As a journalist and reporter, I owe a great deal to my former colleagues at the Journal of Commerce, where I worked for most of the 1990s. Before our staff was scattered to the winds, the JOC was a great paper; but in 1998 its British owners decided to downsize, and cut the Washington bureau from thirteen to one in the course of about eighteen months. In particular I want to thank Scott Bosley, who was the paper’s editor when it was owned by Knight Ridder, and two reporters I worked closely with in Washington, Bill Roberts, now of Bloomberg, and John Maggs, now of National Journal. Though we often disagreed about the politics of trade and other issues, we knew we were good at what we did, and relished the idea of breaking stories that no one else had. The Journal of Commerce also holds poignant memories for me. For years, the paper’s main office was on the twenty-sixth floor of Two World Trade Center in New York City. In my last several years at the paper, I spent weeks at a time in those offices working on stories, negotiating with management in my capacity as the president of the JOC staff union, and staring out the windows at the amazing views of the Hudson River and beyond. Luckily the paper moved out of New York before 9/11; but when I watched the Twin Towers collapse that horrible day, I felt a deep loss that still hurts.

  I have many people to thank in Washington, where I lived for nearly twenty-five years and did much of the initial research for this book. Ed Feigen of the AFL-CIO has been a steady friend and comrade for most of my journalism career, as has John Kelly, my oldest friend in Washington, who generously shared his deep expertise on the CIA with me. John Feffer and Karin Lee have worked closely with me on many issues related to U.S. foreign policy and Northeast Asia; they also put me up during many of my visits back to D.C. and have been supportive of my work since I first met them on their way to Korea in 1998. David Isenberg, a colleague from ou
r days together at the University of Oregon, was gracious with his time and editorial advice. David Corn, the longtime Washington bureau chief for The Nation who now holds the same position with Mother Jones, was helpful with contacts and suggestions, as was Ken Silverstein, the Washington editor of Harper’s. David Kaplan, one of the nation’s top intelligence reporters, helped me understand arcane issues involving the Intelligence Community. On Capitol Hill, special thanks are due to Paul Cox, the press secretary for Representative David Price of North Carolina, and to Representative Price himself, who agreed to several interviews with me about his contractor legislation. In D.C., I also thank Abid Aslam, Alec Dubro, Jason Vest, Nick Schwellenbach, Chris Townsend, John Cavanagh, Sarah Anderson, Bruce Vail, Andy Banks, Bob Guldin, Mary Price, Martha Allen, and my many friends and colleagues at the National Writers Union and in the labor and peace movements.

  In Memphis, where I lived while writing this book, I thank Jim Kovarik for reading early drafts of my manuscript. Robert Gordon, the author of It Came from Memphis and other fine books on music and culture, gave me excellent advice at a crucial time. Other friends who were supportive in immeasurable ways were Paula Kovarik, Steve Lockwood, Mary Durham, Judy Card, Sandy Furrh, Andy Cohen, Mark Allen, and Rev. Cheryl Cornish. I also want to thank all the great Memphis musicians who make life in the Mid-South a delight, particularly Jim Dickinson and his sons Luther and Cody Dickinson of the North Mississippi All-Stars (“World Boogie Is Coming!”). In the San Francisco Bay Area, where I have deep roots, I thank Pratap Chaterjee and Tonya Hennessee of CorpWatch for their support and suggestions (and Tonya for one favor in particular). Thanks also to my longtime San Francisco comrades Tom Edminster and Ed Kinchley, who’ve been there for me through thick and thin, and the beatific people at City Lights Books, the greatest bookstore on earth.

  Last but not least, there’s my family. Roxanne, my precious daughter, is now a student at the University of Maryland. She’s been a great support and inspiration to me and is already an excellent writer; I hope that’s one thing she’s learned from her dad. I dedicate this book to her. My father, Hallam C. Shorrock Jr., a World War II vet who learned Japanese during the war while serving in Naval Intelligence, has inspired and helped me in every way imaginable. In 1947, he and my mother went to Japan as missionaries, raised a family, and stayed in Asia until 1969. My father was one of the few American residents in Japan to speak out against the Vietnam War, and together we joined the antiwar movement in Japan and, later, back home in the United States. Those experiences altered my life in significant ways and made me who I am today. Yasuko Fukada, my father’s wife and companion, has been a big fan of my writing, which she says helped her and my dad get together. Helen Savage Shorrock, my late mother, who died just before 9/11, would have been pleased and proud to see this book in her hands; to her, I owe my love of learning, my fascination with public affairs, and, thankfully, my ability to cook. My siblings, Karen, Terry, Michael, and Judy, and their families, have been steadfast in their love and support. My stepdaughter, Sarah, and her husband, Todd Gill, have been great as well.

  It’s impossible to summon the right words to thank my wife of seven years, Kathy McGregor, who’s an RN, a hospice nurse extraordinaire, a union organizer, and a great storyteller to boot. Kathy supported me in this book project, from my first proposals in 2002 to my last drafts in the autumn of 2007, with jobs that sometimes wore her out. She had to endure a lot during that time—long absences, lost weekends, the stress of deadlines, my jumbled mind after hours of writing. But she never once let me down and bore the pressures with grace, love, and understanding. I hope I can repay her in kind, because she deserves it.

  Tim Shorrock

  Tahoma, California

  February 2008

  Notes

  PROLOGUE

  1. John Humphrey spoke at a session entitled “Supporting the Intelligence Community” at the Intelcon Conference in Bethesda, Maryland, on May 9, 2006.

  2. Dave Dragics made this comment at a March 2006 conference for defense investors sponsored by the investment bank Friedman, Billings, Ramsey.

  3. “Rumsfeld’s Office Streamlines Its IT,” UPI, November 10, 2005.

  1. THE INTELLIGENCE-INDUSTRIAL COMPLEX

  1. For descriptions of the NCTC, see David Martin, “Tour of the National Counterterrorism Center,” transcript, CBS News, September 7, 2006; and Kevin Whitelaw, “The Eye of the Storm,” U.S. News & World Report, November 6, 2006.

  2. Mike McConnell, “Overhauling Intelligence,” Foreign Affairs, Vol. 86, No. 4, July/August 2007.

  3. David Hubler, “CACI Pipes Aboard Calland as New VP,” Washington Technology, August 16, 2007.

  4. I was the first journalist to report on this number. I wrote about the ODNI slides in Salon. See Tim Shorrock, “The Corporate Takeover of US Intelligence,” Salon, June 1, 2007, http://www.salon.com/news/feature/2007/06/01/intel_contractors/.

  5. Herbert Browne, interview with author, December 18, 2006.

  6. Eugene Fidell, interview with author, July 2006.

  7. Robert Baer, interview with author, May 2007.

  8. Deborah Walker, NSA presentation to Defense Intelligence Agency acquisition conference, May 2007.

  9. R. J. Hillhouse, “Corporate Content and the President’s Daily Brief,” The Spy Who Billed Me (blog), July 23, 2007.

  10. Jane Mayer, “The Black Sites: The CIA’s Interrogation Techniques,” The New Yorker, August 13, 2007.

  11. NRO director Donald M. Kerr, remarks at the United States Geospatial Intelligence Foundation’s GEOINT 2006 symposium, November 15, 2006.

  12. Tim Shorrock, “The Spy Who Billed Me,” Mother Jones, January/February 2005.

  13. “The US Intelligence Community’s Five Year Strategic Human Capital Plan,” an annex to the U.S. National Intelligence Strategy, June 22, 2006, http://www.odni.gov/publications/DNIHumanCapitalStrategicPlan18October2006.pdf.

  14. Greg Miller, “Spy Agencies Outsourcing to Fill Key Jobs,” Los Angeles Times, September 17, 2006.

  15. Scott Shane, “Government Keeps a Secret After Studying Spy Agencies,” New York Times, April 26, 2007.

  16. Statement by Ellen Cioccio, acting director of Public Affairs, ODNI press release, June 19, 2007.

  17. Terri Everett, “Procuring the Future: 21st Century IC Acquisition,” Office of the Director of National Intelligence, May 2007, http://www.fas.org/irp/dni/everett.ppt.

  18. Reports of our findings quickly made their way into the mainstream press and the blogosphere and, according to industry sources, caused a great deal of angst within the top ranks of national intelligence. “I didn’t expect that conversation to dominate the next two weeks of the ODNI public affairs office,” an executive who has daily conversations with that office told me. A few days after he made those comments, the ODNI issued a formal statement about our findings, saying that the bar graphs and their underlying data in the Everett slides were based on a “small, anecdotal sample” of a portion of the IC’s contracting activities and therefore could not “be used to derive either the overall [IC] budget or a breakdown of any portion of the budget.” But that hardly seemed plausible. For one thing, the slides, and their background numbers, had been prepared for more than a year, and imbedded data in Everett’s presentation showed that it had been saved 541 times and worked on for over a hundred hours since its original creation (“After 541 saves, you would think the ODNI had it exactly like they wanted it—save for that embedded spreadsheet,” Hillhouse commented on her blog). More to the point, the budget numbers in the ODNI’s slides matched the estimates of several well-informed intelligence observers. Robert David Steele, a former CIA officer who once directed the intelligence program for the Marine Corps, told me in 2006 that he believed the IC’s budget exceeded $60 billion. And a prominent member of the Intelligence and National Security Alliance who didn’t want his name used informed me that the contractor and budget numbers in Everett’s PowerPoint presentation paralleled his understan
ding of the Intelligence Community’s historical spending, which has typically been equivalent to 10 percent of the defense budget. In 1995, he noted, the IC’s budget was $25 billion, or 10 percent of that year’s defense budget of $250 billion. Extending that logic, the Bush administration spent, in total, more than $600 billion on defense in 2006 ($669.8 billion, to be exact, according to Winslow Wheeler, a former Pentagon procurement official who directs the Straus Military Reform Project at the Center for Defense Information). Ten percent of that is $66 billion—$6 billion more than the $60 billion estimated by Hillhouse. Considering all that, I think $60 billion is a safe number to use for an estimate of the intelligence budget. See Winslow Wheeler, “Defense Budget Tutorial #1: What Is the Actual Size of the 2006 Defense Budget?,” http://www.d-n-i.net/fcs/defense_budget_tutorial.htm.

  19. Scott Amey, interview with author, February 2007.

  20. Steven Aftergood, interview with author, June 2007.

  21. Leonard Moodispaw, interview with author, January 2007.

  22. “ManTech Awarded $130 Million in Previously Unannounced Contracts in April for Support of National Security Programs,” ManTech press release, May 15, 2006; and “CACI Awarded $230 Million in Previously Unannounced Contracts to Support National Security and Intelligence,” CACI press release, October 31, 2006.