Spies for Hire

by Tim Shorrock

  * Waechter is now a director of NSA contractor NCI Information Systems.

  * MTC’s status as a pure play is about to end. In December 2007, BAE Systems agreed to acquire the company for $450 million. When the sale is completed in the first half of 2008, MTC and its 2, 900 employees will be folded into BAE’s Customer Solutions Operating Group, which is based in Rosslyn, Virginia. According to the BAE Web site, the group “provides the full-spectrum of support and service solutions for current and future defense, intelligence, and civilian systems, driven by its customers’ needs to ensure their front end operational requirements are supported and maintained.” See David Hubler, “BAE Acquires MTC Technologies,” Washington Technology, December 26, 2007.

  * There’s a flip side to this: because contracting is dependent on government budgets, predicting future revenues can be tricky. Waechter discovered this the hard way. Confident that CACI would continue its winning ways, he predicted in 2006 that company earnings would likely surpass $2 billion in 2007. When that didn’t happen, CACI had to downgrade its earnings predictions, leading many investors to sell and dropping the price of CACI’s stock. As a result, Waechter soon found himself out of a job.

  * In searching through corporate statements on file with the Securities and Exchange Commission, for example, I found an intriguing notice from Viper Networks Inc., a California firm that allows subscribers to use its Internet service for what is called voice-over-Internet-protocol, or VOIP: “As a provider of telephone services, our company may be asked to provide information regarding our customer telephone records to the National Security Agency (NSA) and governmental agencies in connection with efforts taken by these agencies to fight the war against terror. In the event that we assist the NSA and other agencies in providing such information, we may be exposed to potential liability in violating the privacy rights of our customers. We may also face the loss of revenues and customer good will.” See Section 10, Matter of National Security Agency and Potential Liability, FORM 10-KSB/A, Amendment No. 1, Viper Networks Inc. Annual Report for the fiscal year ending December 31, 2005, Commission File Number 0032939.

  * That’s because most of the world’s cable operators are controlled by foreign corporations. Apollo, for example, is owned by Britain’s Cable & Wireless, while Flag Atlantic is owned by the Reliance Group of India. Much of the international “transit traffic” carried by the cable companies flows through the United States (this is particularly true of communications emanating from South America and moving between Asia and Europe). In the old days of copper wires, the NSA could get access to this traffic by sending a submarine team to splice the cables in international waters, as it once did to the Soviet Union’s undersea military cables. But that is an extremely expensive and difficult proposition with fiber optics, and politically dicey to boot—which is where the U.S. telecoms come in. “Cooperation with the telcos doesn’t make NSA surveillance possible, but it does make it cheaper,” Bruce Schneier, the founder and chief technology officer of Counterpane Internet Security, a California consulting firm, told me in a 2006 interview.

  * Seymour Hersh added more detail to the USA Today story in an article for The New Yorker. He was told by a security consultant that one carrier set up a “top-secret high-speed circuit between its main computer complex and Quantico, Virginia, the site of a government-intelligence computer center.” The telecom companies, the consultant told Hersh, are “providing total access to all the data,” allowing the NSA to get “real-time actionable intelligence.” See Seymour M. Hersh, “The Talk of the Town: Listening In,” The New Yorker, May 29, 2006. A 2006 lawsuit filed by public interest lawyers in New Jersey claims that the Quantico circuit was set up by Verizon. See Eric Lichtblau, James Risen, and Scott Shane, “Wider Spying Fuels Aid Plan for Telecom Industry,” New York Times, December 16, 2007.

  * Narus has close intelligence connections: one of its top executives is William Crowell, the former deputy director of the NSA under Mike McConnell. Ori Cohen, the Israeli technology entrepreneur who founded Narus, volunteered Narus’s services to U.S. intelligence shortly after 9/11. According to Fortune, Cohen had several conversations with intelligence officials interested in using his products in the first month after the attacks. See Melanie Warner, “Web Warriors,” Fortune, October 15, 2001.

  * Details about the dispute emerged in 2007 when Congress began to investigate the role of the Justice Department in the NSA surveillance program. One of the most dramatic confrontations was described to the Senate Judiciary Committee by John Ashcroft’s former deputy James B. Comey. One night, as Ashcroft lay ill in an intensive care unit in George Washington University Hospital in Washington, D.C., Comey received word that Alberto Gonzales and Andrew Card, President Bush’s chief of staff, were on their way to the hospital to get Ashcroft’s signature on a paper reauthorizing the NSA surveillance program. Comey was alarmed because he and Ashcroft had rejected the reauthorization; so he rushed over to the hospital, where he asked FBI director Robert Mueller to meet him. The four men all arrived at Ashcroft’s bed at the same time. But when Gonzales asked Ashcroft to sign the document, he refused. According to Comey, Ashcroft “lifted his head off the pillow and in very strong terms expressed his view of the matter, rich in both substance and fact, which stunned me.” The paper wasn’t signed, and the program continued for several weeks without Department of Justice approval. President Bush finally intervened, and agreed to some changes suggested by Comey. Later, Ashcroft himself confirmed to the House Intelligence Committee that he had objected to certain aspects of the eavesdropping program. “It is very apparent to us that there was robust and enormous debate within the administration about the legal basis for the president’s surveillance program,” Silvestre Reyes, D-Texas, the committee’s chairman, told reporters after the closed-door meeting with the former attorney general.

  * CEO COM LINK was first activated in 2002. It was part of a larger homeland security initiative involving the Business Roundtable and Booz Allen Hamilton that called for “public-private partnerships to play a major role in the overall defense against, and in response to, terrorism,” according to documents I obtained from the Department of Homeland Security under the Freedom of Information Act. In 2003, the hotline was tested during a classified war game in Washington attended by about seventy people from the top levels of government and business. The war game simulated a simultaneous terrorist attack on New York City and Chicago involving biological weapons. James Woolsey played a key role in the exercise as a “subject-matter expert” on terrorism, according to Booz Allen spokesman George Farrar. Afterward, Michael Armstrong of AT&T and the Business Roundtable crowed that the war game had established the “critical importance of rapidly linking the public and private sectors during a national crisis” and underscored CEO COM LINK’s “value in enabling collaboration.” If the exercise had been real, he said, it would have “saved hundreds of thousands of lives.” No such system was ever built for first-responders or civilian aid organizations.

  * Comcast, one of the nation’s largest Internet service providers, provided further clues about how telecommunications companies comply with FISA in a company handbook published in September 2007. Comcast charges the government $1, 000 for an “initial start-up fee” and the first month of intercept service for any FISA surveillance “requiring deployment of an intercept device,” the handbook states. After the first month, the fee drops to $750 per month “for each subsequent month in which the original [FISA] order or any extensions of the original order are active.” The handbook also says that Comcast complies with disclosure demands presented in the form of National Security Letters. The handbook was obtained by Secrecy News and posted on its Web site at www.fas.org/blog/secrecy/docs/handbook.pdf.

  * I attempted to interview Nacchio in January 2008. My request was turned down by his appeals attorney, Maureen Mahoney.

  * Minihan, who is a partner with the Paladin Capital Group, did not respond to several requests to be interviewed for thi
s book.

  * The New York Times added a few new details to the Qwest story in December 2007. According to reporters Eric Lichtblau, James Risen, and Scott Shane, the NSA informed Qwest in early 2001 that it wanted to install monitoring equipment on Qwest’s “most localized communications switches,” which carried primarily domestic calls but also offered access to “limited international traffic.” The NSA, the Times said, “intended to single out only foreigners on Qwest’s network.” But Nacchio, believing that the arrangement “could have permitted neighborhood-by-neighborhood surveillance of phone traffic without a court order,” rejected the request. The NSA concluded that Nacchio and other company officials misunderstood its proposals. See Eric Lichtblau, James Risen, and Scott Shane, “Wider Spying Fuels Aid Plan for Telecom Industry,” New York Times, December 16, 2007.

  * One of the more spectacular transitions from intelligence to business has taken place at Blackwater, which operates one of the world’s largest private security firms. One of its first contracts was a secret no-bid $5.4 million deal with the CIA. Within two years of signing, Blackwater hired as its vice chairman Cofer Black, the CIA’s former top counterterrorism official. Days after 9/11, Black was dispatched to the White House to brief President Bush and his advisers on the CIA’s plans for overthrowing the Taliban in Afghanistan; his orders to the CIA paramilitaries sent to Afghanistan were to “bring him Osama bin Laden’s head on a stick.” Rob Richer, the CIA’s former associate deputy director of operations and, before that, head of its Near East division, became Blackwater’s vice president of intelligence, and later went to work for a private intelligence company. Erik Prince, the millionaire former Navy SEAL who founded Blackwater, is reportedly on “very tight” terms with top CIA officials and meets frequently with the CIA’s covert operations division. See Ken Silverstein, “Revolving Door to Blackwater Causes Alarm at CIA,” Harper’s On-Line, September 12, 2006.

  * The extent of the information provided to the Groundbreaker bidders was revealed in 2005 by Wayne Madsen, a Washington-based investigative journalist who once worked for the NSA. That May, Madsen reported in his newsletter, he obtained a copy of an NSA contract document from 2002 that showed how Groundbreaker “allowed the Eagle Alliance and other contractors to gain access to and even virtual control over some of the most sensitive systems within the U.S. intelligence community.” According to Madsen, the document showed that some ten thousand Windows NT and Unix workstations and servers that handled the NSA’s highly classified SIGINT and electronic intelligence applications, including databases that contained communications intercepts, were “firmly in the grasp of the Eagle Alliance.” The document, Madsen said, called for the consortium to establish a SIGINT Applications Office to “provide and maintain Information Technology services, tools, and capabilities for all SIGINT mission applications at the NSA.” Those details, he concluded, were “a far cry from the non-operational administrative support functions originally specified in the Groundbreaker contract.” See Wayne Madsen, “The Neocon Power Grab at NSA and an Attempt to Stifle the Press,” OnLineJournal.com, May 24, 2005, at http://cryptome.org/nsa-stifle.htm.

  * The key provision, Section 105A, reads as follows: “Notwithstanding any other provision of this Act, a court order is not required for the acquisition of the contents of any communication between persons that are not located within the United States for the purpose of collecting foreign intelligence information, without respect to whether the communications passes through the United States or the surveillance device is located within the United States.”

  † As the bill was being debated, Jim Dempsey of the Center for Democracy and Technology told me that most civil libertarians, including himself, supported legislation to allow the NSA to intercept foreign-to-foreign communications traveling through the United States without a warrant. “In my reading of FISA, I don’t see how that is covered by FISA,” he said. “That issue is off the table.” But the problem came when the administration insisted on language that excluded warrants for calls that were foreign to domestic. “They want to eliminate the warrant requirement for listening to the communications of U.S. citizens with parties overseas,” said Dempsey. “That fact that they aren’t targeting me is small consolation when they’re listening to my communications and falsely believe I’m a terrorist. So they claim to be targeting a foreigner and they are genuinely targeting the foreigner, but they will use the information against an American. So an American’s rights are in jeopardy.” I interviewed Dempsey in August 2007.

  * Telecom companies also began directing campaign money to key lawmakers, such as Senator Rockefeller of the Intelligence Committee. Starting in the spring of 2007, executives at AT&T and Verizon contributed more than $42, 000 in political donations to the West Virginia Democrat, according to a report that first appeared in Wired magazine. Most of the money was raised at a Verizon fund-raiser in New York and an AT&T fund-raiser in San Antonio. Although it represented a fraction of the $3.1 million the senator raised in total during the year, it marked a significant break from the past for the telecom providers: prior to 2007, Wired pointed out, “contributions to Rockefeller from company executives at AT&T and Verizon were mostly non-existent.” By the end of October, after reading the administration’s secret legal documents about the NSA program, Rockefeller decided to back the White House and the industry, and agreed to the immunity provision (his aides scoffed at the idea that the senator from one of the wealthiest families in America “would make policy decisions based on campaign contributions”). See Ryan Singel, “Democratic Lawmaker Pushing Immunity Is Newly Flush with Telco Cash,” Wired, October 18, 2007, http://blog.wired.com/27bstroke6/2007/10/dem-pushing-spy.html; and Eric Lichtblau and Scott Shane, “Companies Seeking Immunity Donate to Senator,” New York Times, October 23, 2007.

  * McConnell knew as well as anyone that the NSA surveillance had roped in quite a few innocent Americans. In a stunning 2008 revelation in The New Yorker, journalist Lawrence Wright confronted the DNI with evidence that his phones had been tapped in the course of writing his popular history of Al Qaeda, The Looming Tower. The FBI, he told McConnell, had come to his house in Austin, Texas, to ask about some of his calls. And he knew he’d been monitored because a source in the Intelligence Community had read him “a summary of a telephone conversation that I had from my home with a source in Egypt.” When McConnell countered that Wright may have been bugged because he got a call from a number “associated with some known outfit,” Wright shot back: “Actually I had made that call.” A similar experience happened to Wendell Belew, a Washington, D.C., attorney for the Al-Haramain Islamic Foundation, an Islamic charity based in Saudi Arabia. In 2003, Belew learned from an NSA document obtained by his lawyers as part of a lawsuit that he had been subject to NSA surveillance sometime after 2001. The document, according to the lawsuit Belew and others filed against the NSA, “represented an account of a conversation between myself and other attorneys and clients in Saudi Arabia,” he told me. Al-Haramain was apparently targeted in connection with the Treasury Department’s designation of the charity as an Al Qaeda sympathizer (which the charity denies); but Belew, the former Democratic counsel to the House Budget Committee, hardly fits McConnell’s definition of a national security threat. Al-Haramain’s lawsuit against the NSA is the one case that may lead the courts to declare the warrantless program illegal; as of this writing, the case was still very much alive. For Wright’s disclosure, see his article, “The Spymaster,” The New Yorker, January 21, 2008. I interviewed Belew in 2007.

  * When Ashcroft formed his lobbying firm in 2006, he told the Washington Post it was “a continuation of the aspiration I have that our nation have access to the best possible resources to fight terror, whether domestic or international.” During his tenure at the Justice Department, the Post pointed out, Ashcroft championed expanded federal powers to conduct surveillance; now, he “wants intelligence and law enforcement agencies to be aided by the tech world’s ‘best of breed.’” In
2007, as an AT&T lobbyist, Ashcroft signed a letter to the Senate Judiciary Committee supporting legislation to provide immunity to telecom providers that cooperated with the NSA. Immunity, he said, “provides a just and fair protection for companies that allegedly responded to a call for assistance from the president in a time of national crisis.” Other companies represented by Ashcroft include Nanodetex Corp., which detects airborne pathogens such as anthrax; Innova Holdings Inc., which makes software to control drones and UAVs; and Dulles Research LLC, which claims to detect “illicit networks” by analyzing the actions of people. See Ellen Nakashima, “Ashcroft Finds Private-Sector Niche,” Washington Post, August 13, 2006; and Eric Lichtblau, “Key Senators Raise Doubts on Eavesdropping Immunity,” New York Times, November 1, 2007.