Kremlinology & the Censored DNI Outsourcing Study

The timing of the news cycle was brilliant.  The media was in the final stages of gearing up for the year's biggest spy non-event:  the publication of Tenet's CYA memoir, a tome destined to soon become doorstops throughout the nation.  At that juncture the office of the Director of National Intelligence chose to announce that the year-long study on the use of industrial contractors by the intelligence community was not going to be released.  The number and use of industrial contractors was suddenly a matter of national security. 

I've been closely following the press and blogosphere's reaction.  It's truly been a Maytag repairman's job.  The Spy Who BIlled Me is the only blog that covered it and the only decent mainstream media coverage was by The New York Time's Scott Shane, who then went trench coat chasing after Tenet, though probably not by his own choice.  USA Today lapped up what they were told and The Washington Post was strangely silent.  (And given some of the Post's recent government-friendly reporting, the novelist in me wonder's if they've jumped on the contracting bandwagon and taken on an Agency PsyOps contract...)

So I've watched.  I've waited.  No leak.  No media coverage.  No legs to the most important spy story of the year.  (I'm sure this at least made for a relaxing weekend for the DNI.)

Tired of playing the Maytag repairman, I decided to dust off those old Kremlinology skills, analyze what I know from open sources about industrial outsourcing and offer up a few speculations. After all, reading the tea leaves of the Kremlin isn't all that different from reading the coffee grounds at Langley.  And at the moment, both seem to share a similar commitment to open government.

***

One background point needs to be made before we start.  The study was commissioned by John Negroponte, the first Director of National Intelligence, a career diplomat and a rare leader in the intelligence community without ties to the industry.  Judging from the time line when Negroponte commissioned it and from when McConnell became DNI, the study was probably nearing completion--too late to change its fundamentals--when McConnell took over the job.

First, let's look at the obvious who are the most powerful players and could they have any embarrassing past related to outsourcing in the intel community?

The two most powerful players in the non-industrial intel community are Michael Hayden, Director of the CIA, and John McConnell, Director of National Intelligence (DNI), the nation's (official) top spy and the guy who controlled the release of the study. 

McConnell was the chairman of the Intelligence and National Security Alliance, the lobbying group of the private intelligence industry, until he stepped down to become DNI.  Concurrently, McConnell also a Senior VP for Booz, Allen, Hamilton, one of the biggest contractors to the intelligence community overall and the NSA in particular.  McConnell also served as the head of the NSA from 1992-1996 before leaving to work at its largest contractor, Booz Allen. 

Hayden was head of the NSA from 1999-2005 and we probably don't need to go much further down memory lane to figure this one out.

The key is tenure at the NSA for both of them.  McConnell got the outsourcing trend seriously started there and Hayden took it full throttle.  The old joke that an airplane is a bunch of spare parts flying in close formation best characterizes the NSA:  the NSA is a bunch of contractors working in close formation. 

It's an open secret the NSA's infrastructure is run by contractors and the NSA would collapse without them.  I can't imagine how any serious study of outsourcing by the intelligence community could avoid examination of the extent that contractors control the support and operating structure of the NSA.  Given that both the DNI and DCI--McConnell and Hayden--were both key to the outsourcing of the meat and bones of the NSA, I would suspect that it would be impossible to sanitize the study enough to keep them out of it.

Secondly, we can assume that the study was going to tell us what regular readers of this blog already know:  a tectonic shift has occurred in the intel community toward wide-scale outsourcing to industrial firms, vs. the long established practice of outsourcing certain jobs to subject matter experts who were independently contracted directly to the government.  So we should then ask the question, what are the outsourcing trends that they want to keep secret and what Agencies are they affecting?

We already know from open sources that the Pentagon's new spy shop, the Counterintelligence Field Activity (CIFA) is made up of over 70% of contractors.  At one point, one of its main contractors was MZM, of the Duke Cunningham scandal fame.  CIFA has also been implicated in domestic spying, so this raises a very thorny question: have contractors been used as a workaround to legal restrictions on US government agencies, restrictions intended to protect civil liberties?

Smart money says that CIFA got a serious mention.

But really smart money knows that at the heart of the controversy is the outsourcing of the CIA.  I've been writing about it here for over six months and for a couple of years now in my soon-to-be released novel, OUTSOURCED.  Whatever statistical games the Agency's HRM and Public Affairs Officers want to play aside, the heart, brains and soul of the Agency have been outsourced. The directorate at the CIA that matters most is the National Clandestine Service (the former Directorate of Operations, the DO.)  Somewhere over 50% of it has been outsourced to industrial contractors. 

To put the CIA outsourcing story into human terms, the really smart, powerful guys left and headhunted all the other smart guys, leaving the kids and the mediocre behind.  Then they offered back their services at market price--which was significantly higher than they were being paid for the same services as US government employees.  Even the dullards left behind at the Agency got it that they could contract back to their former bosses who knew how to do the job and do it right and how to make the lesser lights look good when it came time for promotion. 

To make this a clearer, look around to the people you're working with--down the hall, into the next cubicle, whatever.  How many of them would you want to take with you to run a new company in the exact same line of business?  My guess is that there are probably 40-50% who you would be very happy to leave behind.  What's left at the CIA is far from its best and brightest.  The Agency has been dumbed down.

Judging from the numbers alone, it's very clear that the workforces of entire branches of the CIA are contracted out.   I can't imagine any other organizational structure that would work other than giving effective day-to-day control of entire branches to contractors, contractors with their own supervisory structures and whose project manager reports to the branch chief.  My best guess is that an outsourcing study would show an Agency barely in control of itself, with the de facto power to control its day-to-day activities in the hands of private corporations.   

Thirdly, other than the extent of outsourcing and the question of control, what could be so controversial?  The answer: whatever it is they're contracting out for.  We know some of these things from open sources.  Greg Miller's article last fall in the LA Times told us that Abraxas, a company founded by retired DO Senior Intelligence Service officers, creates the Agency's nonofficial cover alias identities.  Bob Baer's essay last week in Time tells us that an unnamed company in Baghdad, "decides where CIA officers can go and whom they can see."  We know from other sources that contractors recruit and run spies, serve as watch officers, etc.

Along this line of inquiry, I'd love to know the answers to a few questions, most of which probably never made it into the outsourcing study:

• Did industrial contractors work on the outsourcing study? 
  

• Who has effective control of the de facto CIA workforce? Have the negative effects on performance of CIA staff morale issues that began with the appointment of John Deutsch as DCI during the Clinton administration been neutralized, perhaps brilliantly, by outsourcing a large part of the key workforce in a way that the brightest operators and analysts are rewarded with compensation and continued challenging assignments without being subjected to the politically correct policies of CIA’s HRM commissars?

• Has the function of a true name nonofficial cover officer been handed over to one or more industrial contractors?  (A true NOC in Agency parlance, a deep cover spy to the rest of us.)  From the perspective of senior DO professionals, would that not perhaps be a better solution than to make NOCs subject to some of the intelligence community-wide HR policies outlined in last October's Human Capital Report that would seem to give NOCs the choice of either “coming inside” or knocking them out of the running for career advancement into senior service?

• What's up with the SAD?  Didn't the Clinton years severely downsize those guys?  Seems like contractors could offer a very reasonable solution here.

• Has anyone considered farming out the Farm?  It seems like a natural for a facilities management contract and some training contracts.  Blackwater is well positioned to take over some aspects of training.  And a Starbuck's franchise in the SRB could boost sagging morale.

• And, most importantly, who at the Agency is tasked with monitoring The Spy Who Billed Me--a government employee--or green badger?  Bonus question:  does he report his findings directly to his branch chief boss, or are they funneled and filtered up through his company’s own branch project manager, perhaps with a discreet drop copy to his company’s head office?   And just how much does The Spy Who Monitors Me bill for this function?

Call me.  I'm willing to subcontract.

Comments

[Tony Foresta]

First, one thousand thanks for all your diligent work on the "Spy Who Billed Me" issues.

Please correct me, if I am mistaken, - but it would seem based on years of my own research along these lines (more accurately the Private Military Company apparatus) that one of the most alarming aspects of this trajectory, and these unknown unknown trends is the interpenetration with, and inconnectivity of what Indira Singh terms "The Bush Crime Family Cabals", and the extreme right (what I term the fascist) element of the GOP.

The CIA, NSA, DIA, DNS et al, and all the other government agencies charged with managing, and monitoriing the intelligence products, and the intelligence apparatus are naturally subjected to at least some level of bi-partisanship, in that all these organizations report to both parties representatives in congress and the executive office over time. The ebbs and flows of American politics left and right would seemingly insure that the intelligence apparatus would be forced to people its' organizations and particularly its management with a "balanced" representation of the American political spectrum both left and right. Private companies are under no such pressure.

Since all the Government organizations are forced to compete for funding, it would seem under the oldAmerica standard (wherein the intelligence product, and the intelligence apparatus is at least somewhere accountable to the US Government) that all these government organizations would seek to win and maintain benefactors and support from all sides of the American political landscape.

The critical issue with the outsourcing of the "Intelligence Industrial Complex", The Military Industrial Complex", and the "Media Industrial Complex" is that all these secretive and unmonitored, unaccoutable private contractors are disturbingly and alarmingly aligned almost EXCLUSIVELY and SINGULARLY with the far right, extreme right, fundmantalist right, or (what I term fascist) element of the GOP, the "Bush Crime Family Cabals", select corporate oligarchs, and the fanaticus wingnutsia truebelievers supporting, defending, apologizing for, and cloaking the far right, the extreme right, the fundmantalist right, or (what I term the fascist) elements of America.

Do you share my concern that the current gaggle of "Spy's Who Billed Me" are far too close to the extreme right, and particularly the "Bush Crime Family Cabals", - and more disturbingly excluding all other elements, entities, ideologies, and individuals?

[R J Hillhouse]

No, not at all.

The issues are far too complex and the roots far too deep to reduce it to a partisan caricature. The outsourcing trend at the CIA has extremely little to do with partisan politics and a lot more to do with very poor management in the most senior positions at the Agency, starting with the Clinton administration's appointment of Deutsch as DCI.

I would not make the argument that all outsourcing at the Agency is bad. Quite the contrary, some things that fall far outside core competencies make a lot of sense to outsource. The problems are control, accountability, health of the organization and the future when these corporations are no longer run by loyal patriots, who have spent years in the yoke of government service. That's when things will get very interesting.

[Bold Enigma]

Tony Foresta makes an interesting point, and Dr. Hillhouse's response shows a good depth of understanding of the intelligence contracting out environment. At least at CIA, one must bear in mind that morale and effectiveness-destroying human resources practices occured, and are still occuring, under both the Clinton and Bush administrations. Contracting out and "relocating" the best and the brightest to corporate environments where the politically correct twinks can't touch them appears to be a necessity under both Republican and Democratic administrations.

The career senior intelligence officers that created most of the private intelligence firms that the CIA uses were "raised" professionally to be non-partisan. They were also raised to creatively circumvent considerable obstacles and get the job done. The fact that the obstacles that they are now being forced to circumvent result from disfunctional leadership on the part of both Democrats and Republicans only makes the current intelligence outsourcing evolution more historic.

[David McGiffert]

I hope this article and others like them
are followed up on. This is an area
of great danger to all of us and, up
to now, has been hidden from public
scrutiny. It must not be allowed to
go on unchecked. VERY DANGEROUS.

Thanks for the work! Very valuable.

David

[Stus]

A fascinating post, Dr. Hillhouse. These are issues that have been bothering me for some time, the growth of the corporate mercenary companies and the question of what percentage of the war cost is that of the contracts for outsourced intelligence specialists and the "guys with guns" on the ground. Will we ever find out?

[R J Hillhouse]

The short answer is no. We will never know the size of the industry. I also doubt the US Government will ever know it as well.

I don't think the US Government knows the actual numbers of how much money has been spent on outsourced services in the War on Terror i.e. for private military and private intel. The DoD has done various surveys to try to get a head count of contractors in Iraq, but in the end, usually ends up with crude estimates. Their budget is so byzantine, it's nearly impossible to figure out where all the money is going, especially since they often route contracts through other government agencies for a small management fee. (e.g. the interrogation contract in the Abu Ghraib scandal was routed through some branch of the National Park Service in Arizona. Took them a week to figure this out after the torture scandal hit the headlines.)

The censored DNI study was the first to get a grip on the number of contractor in the intelligence community. We have no way of knowing how thorough it was (e.g. did it include all SAPs that contractors are involved in.) In numbers, it's a little over $22 billion that is outsourced. Most of this is through the NSA because of its total dependence upon contractors and its equipment needs.

The overall private military industry--or private security industry, as they prefer to call it--has been estimated at over $100 billion globally. I've never seen this number broken down or how they arrived at it, but I've seen nothing that makes me doubt it. Some have claimed that over the past decade, it has been the fastest growing industry globally.

[Stus]

Thanks -- that gives me more of a handle on the subject (and allows me to pretend to understand it!).

[Tony Foresta]

Thanks for your response. Perhaps I am looking through the glass darkly. While I accept your point that "The issues are far too complex and the roots far too deep to reduce it to a partisan caricature", my dread concerns are only partially allayed given the kind of contamination of the intelligence product bruted by the fascist OSP/OSI/WHIG cabals that intentionally cherry picked, "dodgey, unvetted, single sourced hype and fictions to cook the justifications for attacking Iraq on one hand, and ruthlessly slimed or dismissed any challenge or opposition to the partyline on the other. Realizing these were pentagon klans and not under any contract, I trust that your are correct that "The problems are control, accountability, health of the organization and the future when these corporations are no longer run by loyal patriots, who have spent years in the yoke of government service' - again based on well documented evidence relating to Iraq and socalled neverendingwaronterror, and my own (pedestrian) research into PMC's, - I fear the potential for grievous abuse in the awarding of contracts to select coteries, klans, cabals, cronies and oligarchs whose ultimate purposes and singular objectives are profits.

Let us hope that the emerging intelligence apparatus and all the concomittant unknown unknowns therein is somehow led by individuals "..."raised" professionally to be non-partisan.

The intelligence product feeds policy. If policy contamination undermines, cooks, doctors, on in other ways corrupts the intelligence product to conform to preconcieved policies and designs, - then in effect - there is no intelligence. There is the sound of one hand clapping, and clapping to a specific partyline. Worse, real intelligence is silenced or dismissed and never given ear.

Forgive me for holding absolutely ZERO trust in the Bush government ever allowing contractors or anyone else to reveal, or give voice to intelligence that counters the Bush governments fascist designs and machinations.

My dread concern is that my daughter will inherit an America whose intelligence apparatus is exceedingly partisan and exclusively concerned with profits and NOT the security and prosperity of America, or the rest of the American population.

[R J Hillhouse]

Tony, I share the concern that the new privatization of intelligence leads to increased opportunities for manipulation of intel. There are multiple potential conflicts of interest because most of these corporations serve multiple clients, both foreign and domestic.

The issue of where corporate loyalties will lie after the current generation of executive leadership retires is also a very serious issue. (And here I'm addressing only the private intel firms founded and run by retired Agency case officers. The large corporations that also provide intelligence services are another issue.)

____________

On a separate note, I understand that there is a journalist at The New York Times who is ready to receive the DNI outsourcing study and who is fully aware of the recent threats made by senior intel officials to discourage this.

[Tony Foresta]

The truth will set us free.

I hope the "NYT Journalist" is able to find the courage and support to release at least of portion this report.

It would seem obvious that its finding (whatever they may be, are of critical interest to the American people.

I cannot see how national security interests would be comprimized through release of some kind of acounting of contracting in Iraq and in the socalled neverendingwaronterror.

Quite obviously certain profiteers might be embarrassed, or potentially open to some form of legal jeopardy, - but that is exacty the point of government accountability. All of these people, from the government agencies or officials awarding these contracts, and including the PMC's, and PIC's and the myriad contractors themselves, - effectively work for us. The people deserves and should demand accountability.

We are talking about billions of the peoples dollars expended with wanton abandon and questionable results. The people have the right "...to petition the government for redress of grievances" and to DEMAND some kind of accounting, and a accountability.

Granted, these are exceedingly ticklish issues, and retraint and good judgement on both sides of the fence are imperatives.

That said, war profiteers ruthlessly pillaging the public treasure, decietfully cloaking their activites and accounts is conduct unbecoming, a grotesque breach of our own laws, and a betrayal and perversion of the core principles upon which this nation was founded.

War profiteering is a grievous abuse the American people cannot, and must not countenance or tolerate for any reason, under any circumstances, - regardless what "evildoers" may say, or whatever insane threats they may proffer.

I am one of those Americans who does not care what al Quaida thinks, or says, or what insanity, or freakish malignancy they teach, or what massmurder and mayhem they may threaten. I believe Americans and America abiding by, and honoring our core principles, the rule of law, and the Constitution are more than capable of eliminating these freaks, shaitans, and whatever threats they pose without compromizing our principles or betraying our unique experiment in democracy.

Americans will defeat these freaks by honoring our core values, not stooping to the depraved to kind of depraved malignancy they practice and proselytize.

If for example, the DNI report were released to the appropriate committee's in closed door sessions, - I still hold the hope that the majority of demorats, (thankfully a majority) and a few republicans would put aside partisan issues and bickering, - and any potentially embarrasing, or perhaps criminal wrongdoings involving the Bush government pursue and serve the peoples best interersts.

If not, - then America is truly dead. Acquire a gun, get locked, oocked, and ready to rock, - because if our government is not accountable then there is no government, - or worse there is only a fascist totalitarian dictatorship and the future our children will inherit is in dire peril of falling or being dragged into chaos.

"Deliver us from evil!"

[Texas Slim]

Confound those disclosures required of public companies!

"I did not like the bureaucratic and other constraints of a public company, nor was I comfortable with some of the disclosures that have to be made, especially concerning our discreet clients and cases.”

http://harpers.org/archive/2007/05/hbc-90000048

[anon]

I want to clarify...

The Best and the Brightest, the Cream of the Crop intelligence leaving the CIA,

To be part of a Profit Based Corporation that has entitlements to our National Security issues and to ensure our protection,

Doesn't make me feel warm and fuzzy inside...