U.S. security turns corporate

  • Article by: DANA PRIEST and WILLIAM M. ARKIN , Washington Post
  • Updated: July 20, 2010 - 7:13 AM

Some of the nation's most sensitive duties have been doled out to private contractors, with exploding budgets and little oversight.

In June, a stone carver from Manassas, Va., chiseled another perfect star into a marble wall at CIA headquarters, one of 22 for agency workers killed in the global war initiated by the 2001 terrorist attacks.

The intent of the memorial is to publicly honor the courage of those who died in the line of duty, but it also conceals a deeper story about government in the post-9/11 era: Eight of the 22 were not CIA officers at all. They were private contractors.

To ensure that the country's most sensitive duties are carried out only by people loyal above all to the nation's interest, federal rules say contractors may not perform what are called "inherently government functions." But they do, all the time and in every intelligence and counterterrorism agency, according to a two-year investigation by the Washington Post.

What started as a temporary fix in response to the terrorist attacks has turned into a dependency that calls into question whether the federal workforce includes too many people obligated to shareholders rather than the public interest and whether the government is still in control of its most sensitive activities. In interviews last week, both Defense Secretary Robert Gates and CIA Director Leon Panetta said they agreed with such concerns.

The Post investigation uncovered what amounts to an alternative geography of the United States, a Top Secret America created since 9/11 that is hidden from public view, lacking in thorough oversight and so unwieldy that its effectiveness is impossible to determine.

It is also a system in which contractors are playing an ever more important role. The Post estimates that out of 854,000 people with top-secret clearances, 265,000 are contractors. There is no better example of the government's dependency on them than at the CIA, the one place in government that exists to do things overseas that no other U.S. agency is allowed to do.

Private contractors working for the CIA have recruited spies in Iraq, paid bribes for information in Afghanistan and protected CIA directors visiting world capitals. Contractors have helped snatch a suspected extremist off the streets of Italy, interrogated detainees once held at secret prisons abroad and watched over defectors holed up in the Washington suburbs. At Langley, Va., headquarters, they analyze terrorist networks. At the agency's training facility in Virginia, they are helping mold a new generation of American spies.

Through the federal budget process, the George W. Bush administration and Congress made it much easier for the CIA and other agencies involved in counterterrorism to hire more contractors than civil servants. They did this to limit the size of the permanent workforce, to hire employees more quickly than the sluggish federal process allows and because they thought -- wrongly, it turned out -- that contractors would be less expensive.

Nine years later, well into the Obama administration, the idea that contractors cost less has been repudiated, and the administration has made some progress toward its goal of reducing the number of hired hands by 7 percent over two years. Still, close to 30 percent of the workforce in the intelligence agencies is contractors.

"For too long, we've depended on contractors to do the operational work that ought to be done" by CIA employees, Panetta said. But replacing them "doesn't happen overnight. When you've been dependent on contractors for so long, you have to build that expertise over time."

A second concern of Panetta's: contracting with corporations, whose responsibility "is to their shareholders, and that does present an inherent conflict."

Or as Gates, who has been in and out of government his entire life, puts it: "You want somebody who's really in it for a career because they're passionate about it and because they care about the country and not just because of the money."

Contractors can offer more money -- often twice as much -- to experienced federal employees than the government is allowed to pay them. Some offer such perks as BMWs and $15,000 signing bonuses, as Raytheon did in June for software developers with top-level clearances.

The idea that the government would save money on a contract workforce "is a false economy," said Mark Lowenthal, a former senior CIA official and now president of his own intelligence training academy.

From IT to killing the enemy

Across the government, contract workers are used in every conceivable way.

Contractors kill enemy fighters. They spy on foreign governments and eavesdrop on terrorist networks. They help craft war plans. They gather information on local factions in war zones. They are the historians, the architects, the recruiters in the nation's most secretive agencies. They are among the most trusted advisers to the four-star generals leading the nation's wars.

So great is the government's appetite for private contractors with top-secret clearances that there are now more than 300 companies, often nicknamed "body shops," that specialize in finding candidates, often for a fee that approaches $50,000 a person, according to those in the business.

Making it more difficult to replace contractors with federal employees: The government doesn't know how many are on the federal payroll. Gates said he wants to reduce the number of defense contractors by about 13 percent, to pre-9/11 levels, but he's having a hard time even getting a basic head count.

"This is a terrible confession," he said. "I can't get a number on how many contractors work for the Office of the Secretary of Defense," referring to the department's civilian leadership.

The Post estimate of 265,000 contractors doing top-secret work was vetted by several high-ranking intelligence officials who approved of the Post's methodology. The newspaper's Top Secret America database includes 1,931 companies that perform work at the top-secret level. More than a quarter of them -- 533 -- came into being after 2001.

The privatization of national security work has been made possible by a nine-year "gusher" of money, as Gates recently described national security spending since the 9/11 attacks.

With so much money to spend, managers do not always worry about whether they are spending it effectively.

"Someone says, 'Let's do another study,' and because no one shares information, everyone does their own study," said Elena Mastors, who headed a team studying the Al-Qaida leadership for the Defense Department. "It's about how many studies you can orchestrate, how many people you can fly all over the place. Everybody's just on a spending spree. We don't need all these people doing all this stuff."

Mission and misdeeds

Most of these contractors do work that is fundamental to an agency's core mission. As a result, the government has become dependent on them in a way few could have foreseen: wartime temps who have become a permanent cadre.

"We could not perform our mission without them. They serve as our 'reserves,' providing flexibility and expertise we can't acquire," said Ronald Sanders, who was chief of human capital for the Office of the Director of National Intelligence before retiring in February.

Since 9/11, contractors have made extraordinary contributions -- and extraordinary blunders -- that have changed history and clouded the public's view of the distinction between the actions of officers sworn on behalf of the United States and corporate employees with little more than a security badge and a gun.

Contractor misdeeds in Iraq and Afghanistan have hurt U.S. credibility. Abuse of prisoners at Abu Ghraib, some of it done by contractors, helped ignite a call for vengeance against the United States that continues today. Security guards working for Blackwater added fuel to the five-year violent chaos in Iraq and became the symbol of an America run amok.

Contractors in war zones, especially those who can fire weapons, blur "the line between the legitimate and illegitimate use of force, which is just what our enemies want," Allison Stanger, a professor of international politics and economics at Middlebury College and the author of "One Nation Under Contract," told the independent Commission on Wartime Contracting at a hearing in June.

But contractors have also advanced the way the military fights. During the bloodiest months in Iraq, the founder of Berico Technologies, a former Army officer named Guy Filippelli, working with the National Security Agency (NSA), invented a technology that made finding roadside-bomb makers easier and helped stanch the number of casualties from improvised explosives, according to NSA officials.

Contractors have produced blueprints and equipment for the unmanned aerial war fought by drones, which have killed the largest number of senior Al-Qaida leaders and produced a flood of surveillance videos.

Hot dogs and cozy ties

Of all the different companies in Top Secret America, the most numerous by far are the information technology, or IT, firms. About 800 companies do nothing but IT.

Some IT companies integrate the mishmash of computer systems within one agency; others build digital links between agencies; still others have created software and hardware that can mine and analyze vast quantities of data.

The government is nearly totally dependent on these firms. Their close relationship was on display recently at the Defense Intelligence Agency's annual IT conference this spring in Phoenix. The agency expected the same IT firms angling for its business to pay for the five-day get-together, a DIA spokesman confirmed. And they did.

General Dynamics spent $30,000 on the event. It hosted a party at Chase Field, a 48,569-seat stadium, reserved exclusively for the conference attendees. Government buyers and corporate sellers drank beer and ate hot dogs while the DIA director's keynote speech replayed on the scoreboard.

Carahsoft Technology, a DIA contractor, invited guests to a casino night where intelligence officials and vendors ate, drank and bet phony money at craps tables run by professional dealers. The McAfee network security company, a Defense Department contractor, welcomed guests to a Margaritaville-themed social where 250 firms paid thousands of dollars each to advertise their services and make their pitches to intelligence officials walking the exhibition hall.

"If I make one contact each day, it's worth it," said Tom Conway, director of federal business development for McAfee.

As for what a government agency gets out of it: "Our goal is to be open and learn stuff," said Grant Schneider, the DIA's chief information officer and one of the conference's main draws. By going outside Washington, where many of the firms are headquartered, "we get more synergy. ... It's an interchange with industry."

These types of gatherings happen every week. Many of them are closed to anyone without a top-secret clearance.

Such coziness worries other officials who believe the post-9/11 defense-intelligence-corporate relationship has become, as one senior military intelligence officer described it, a "self-licking ice cream cone."

Another official, a lifelong conservative staffer on the Senate Armed Services Committee, described it as "a living, breathing organism" impossible to control or curtail. "How much money has been involved is just mind-boggling," he said. "We've built such a vast instrument. What are you going to do with this thing? ... It's turned into a jobs program."

  • related content

  • Top Secret America grows out of control

    Monday July 19, 2010

    Since the 9/11 attacks, U.S. intelligence operations have spiraled in size, scope, price, with little oversight.

  • More online

    Tuesday July 20, 2010

    The complete version of this story, the second in a three-part series, can be found at www.washingtonpost.com. An extensive, searchable database built by the Washington Post about Top Secret America...

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

 
Close