No Comment — July 5, 2007, 2:41 pm

Outsourcing Intelligence

Beginning in 2002, it was apparent that Rumsfeld and Cheney had jointly developed a plan aimed at shifting the center of gravity in the U.S. intelligence community away from the Central Intelligence Agency and towards the Pentagon. In a sense it was always there. The portion of the national intelligence budget claimed by the Defense Department always dwarfed the CIA’s cut. Nevertheless, the CIA had the edge in analytical areas that mattered to Rumsfeld and Cheney. Among other things, these areas were essential to making a case for a war against Iraq. As we now know, the CIA and the National Intelligence Council had been skeptical of claims advanced and pushed by Cheney and Rumsfeld about Iraqi capabilities in the area of weapons of mass destruction.

Within the Pentagon, Rumsfeld’s two principle deputies, Neocon loyalists Doug Feith and Stephen Cambone, were put in charge of developing an intelligence position to counter the official analysis from Langley and push a war with Iraq. Aspects of this effort – such as Feith’s Office of Special Plans – have been exposed and discussed in the past. But much of it has not.

Another key element with respect to which Cambone played a central role was the massive outsourcing of intelligence to private firms. Cambone pushed this approach for three reasons. First, it allowed him to circumvent career military intelligence analysts, who had generally adopted positions much like the CIA’s. Second, because the contractors could be easily manipulated and directed by him and other figures in the Office of the Secretary of Defense (you might think that career military could be pushed through command authority principles, and that would be right, but in the end, they operate to professional standards to which the contractors are not bound). And third, because the contractors could be engaged in ways that put them outside of the normal channels of Congressional oversight. Moreover, Cambone constantly played a game suggesting that these contractors were of a military nature when questions arose with intelligence oversight and that they were intelligence-oriented when armed services oversight raised questions. He found it surprisingly easy to evade oversight through tricks of this sort.

The story of the intelligence contractors remains largely untold, but the first small cracks in the wall around these troubling projects have just appeared.

At a May 14 Defense Intelligence Agency conference, the government revealed that 70% ($34 billion) of its classified intelligence budget is spent on private contracts.

According to The Washington Post’s Steve Fainaru and Alec Klein, the largest private security contract in Iraq, a 3-year, $293 million U.S. Army contract, is for intelligence operations. The contract was won by a British private security firm, Aegis Defense Security Ltd.

Known internally as Project Martix, Aegis’s Army contract has multiple aims. The company, for example, runs more than a dozen Reconstruction Liason Teams in which contractors armed with assault rifles and traveling in armored SUVs visit reconstruction projects to assess their progress and the levels of insurgent activity.

Aegis also provides on-demand “threat assessments for the people that travel the battlespace” throughout Iraq, said Robert Lewis, who directs Project Matrix as the company’s chief of staff in Baghdad. One intelligence assessment, developed recently for the Army Corps of Engineers and provided independently to The Washington Post, included a detailed map of previous attacks and analyzed the intent and capabilities of Shiite militias and criminal gangs operating in Basra province.

Aegis’s hub in Iraq is the Reconstruction Operations Centre. The center was originally envisioned by the Army Corps of Engineers as “a fusion organization for all of the information gathered among the private security companies.” Although the Army Corps of Engineers plays a small role in running the center, it is primarily controlled and run by Aegis. Security companies that register with the center can be tracked by Aegis through dashboard transponders. This system helps to alert the military to armed contractors on the battlefield, and to provide support to contractors in the event they come under attack. In theory, this system would be extremely helpful in the coordination of both contractors and the military facing the same threats. However, in order to be effective, all contractors must register with the Center.

Blackwater USA and DynCorp International, two of the largest security firms in Iraq and both American companies, refuse to participate in Reconstruction Operations Center, essentially making their movements invisible to other private security firms.

Another hindrance to the system’s effectiveness is the classified nature of the information collected. Because Aegis is prevented from disseminating classified information, other contractors are unable to obtain and use the information gathered in a way that is either practical or helpful.

This has deterred the private security contractors from participating, since they don’t benefit from intelligence collected by the center…Aegis’s Lewis acknowledged, “We can’t disseminate classified information, so that is problematic for us.” He said he is not certain how the military uses the information compiled through the center. “All that stuff is shoveled to” the Army Corps of Engineer.

In an industry that is already shielded by a cloak of secrecy and flooded with “classified” information, the use of private contractors to complete sensitive tasks that were once tightly controlled by government employees gives rise to concerns regarding oversight and accountability. U.S. Intelligence budgets are classified, and discussions in Congress regarding intelligence are held in secret. As a result, U.S. officials don’t have access to the information that is necessary for proper oversight. In the recent Intelligence Authorization Act for FY08, the House Permanent Select Committee on Intelligence addressed the issue of accountability in Intelligence Contracting (Section 411) and stated:

The Committee has concluded that Intelligence community leaders do not have an adequate understanding of the scale and composition of the contractor work force, a consistent and well articulated method for assessing contractor performance, or strategies for managing and combined staff-contractor workforce. In addition, the Committee is concerned that the Intelligence Community does not have a clear definition of what functions are “inherently governmental” and, as a result, whether there are contractors performing inherently governmental functions.

The increased use of contractors, coupled with the inability of Congress to provide effective oversight, has resulted in corruption reaching to the highest echelons of the government. A prime example of this is the “Cunningham Scandal.” Two months after Republican Congressman from California Randy “Duke” Cunningham resigned from Congress, he was sentenced to 8 years in prison for accepting over $2.3 million in bribes from Mitchell Wade, owner of MZM, a defense contractor based in San Diego. In exchange for bribes (which included the purchase of a $1.6 million home), Cunningham used his position on the House Intelligence and Appropriations committees to win tens of millions of dollars’ worth of contracts for MZM. Kyle “Dusty” Foggo, the former deputy director of the CIA, is also currently under investigation by the CIA inspector general for involvement in the Cunningham corruption investigation. Foggo has been indicted for conspiring with former MZM CEO Brent Wilkes to win contracts for the company. The lack of transparency associated with the increasing privatization of intelligence operations has created an optimal environment for corruption and manipulation.

Leslie Fields contributed to this post.

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