WAR CRIMES DOSSIER: Salon article on WAR PROFITEERS (Hey! Follow the money!)

Former high-ranking Bush officials enjoy war profits

Now working inside America's "shadow" spy industry, George Tenet, Richard Armitage, Cofer Black and others are cashing in big on Iraq and the war on terror.

Editor's note: This article is adapted from Tim Shorrock's book, "Spies for Hire: The Secret World of Intelligence Outsourcing," published this month by Simon & Schuster and reprinted with permission.

terrorism, News, Iraq, CIA, Spies, Salon News, National Security Agency, Homeland Security, Outsourcing, Tim Shorrock

Salon composite

From bottom: Former Bush officials George Tenet, Richard Armitage and Cofer Black

May 29, 2008 | Richard L. Armitage, who served from 2001 to 2005 as Deputy Secretary of State, was a rarity in the Bush administration: an official who delighted in talking to the press. Reporters loved him for his withering criticism of the neoconservative zealots around President George W. Bush and in part because he fed them tidbits about the White House they could obtain nowhere else. His accidental disclosure to conservative columnist Robert Novak that Valerie Plame, the wife of Iraq war critic Joseph Wilson, was working undercover for the Central Intelligence Agency remains one of the most notorious leaks of the Bush era.

But perhaps because of his cozy ties to the Washington press corps and the media's obsession with Plamegate, very little has been written about Armitage's extensive business dealings. In fact, Armitage is one of the most successful capitalists in Washington. He has successfully parlayed his experience in covert operations and secret diplomacy into a thriving career as a consultant and adviser to some of the biggest players in America's Intelligence Industrial Complex -- corporations that are working at the heart of U.S. national security and profiting handsomely from it.

Armitage, currently an adviser to presidential candidate John McCain, had once been Colin Powell's closest ally during the bitter disputes inside the Bush administration over the invasion and occupation of Iraq. According to the Washington Post's Bob Woodward, Armitage advised Powell on more than one occasion to tell the neocons to "go fuck themselves," and, at one point, even refused to deliver a speech about Iraq drafted for him by Vice President Dick Cheney's office.

Yet, three years after those epic battles, Armitage is enjoying life as a stakeholder in a dozen private companies that are making money directly from the war started by his former nemeses.

Over the past decade, contracting for America's spy agencies has grown into a $50 billion industry that eats up seven of every 10 dollars spent by the U.S. government on its intelligence services. Today, unbeknownst to most Americans, agencies once renowned for their prowess in analysis, covert operations, electronic surveillance and overhead reconnaissance outsource many of their core tasks to the private sector. The bulk of this market is serviced by about 100 companies, ranging in size from multibillion dollar defense behemoths to small technology shops funded by venture capitalists.

Nearly every one of them has sought out former high-ranking intelligence and national security officials as both managers and directors. Like Armitage, these are people who have served for decades in the upper echelons of national power. Their lives have been defined by secret briefings, classified documents, covert wars and sensitive intelligence missions. Many of them have kept their security clearances and maintain a hand in government by serving as advisers to high-level advisory bodies at the Pentagon, the Central Intelligence Agency, the National Security Agency and the White House. Now, with their government careers behind them, they make their living by rendering strategic advice to the dozens of information technology vendors and intelligence contractors headquartered along the banks of the Potomac River and the byways of Washington's Beltway.

Ever since the 1950s, with the rise of America's modern military-industrial complex, high-level U.S. officials and military men have moved between the government and private sectors. But what we have today with the intelligence business is something far more systemic: senior officials leaving their national security and counterterrorism jobs for positions where they are basically doing the same jobs they once held at the CIA, the NSA and other agencies -- but for double or triple the salary, and for profit. It's a privatization of the highest order, in which our collective memory and experience in intelligence -- our crown jewels of spying, so to speak -- are owned by corporate America. Yet, there is essentially no government oversight of this private sector at the heart of our intelligence empire. And the lines between public and private have become so blurred as to be nonexistent.

Shortly after leaving government in 2005, Armitage was recruited to the board of directors of ManTech International, a $1.7 billion corporation that does extensive work for the National Security Agency and other intelligence collection agencies. He's also since advised two private equity funds with significant holdings in intelligence enterprises. Veritas Capital (V's note: here) where Armitage served as a senior adviser from 2005 to 2007, owns intelligence consultant McNeil Technologies Inc. and DynCorp International, an important security contractor in Iraq. For a time, Veritas also owned MZM, Inc., the CIA and defense intelligence contractor that was caught -- before the Veritas acquisition -- bribing former Republican Congressman Randy "Duke" Cunningham.

In 2007, Armitage, along with several Veritas executives, moved over to DC Capital Partners, an intelligence-oriented buyout firm with some $200 million in assets. One of its first acquisitions after Armitage came on board was Omen Inc., a Maryland company that provides information technology and consulting services to the NSA. The fund has since combined Omen with two other intelligence contractors to form a new company called National Interests Security Company LLC, which has 850 employees, more than half of them holding top secret or higher security clearances.

Through his own eponymous consulting firm, Armitage has lobbied on behalf of L-3 Communications Inc., one of the nation's largest intelligence contractors, to help it sell anti-submarine surveillance systems to Taiwan. L-3, like ManTech, is also heavily involved in Iraq. (Further topping off Armitage's investment interests in the war: He sits on the board of directors of ConocoPhillips, which is aiming to become a major player in Iraq's energy industry through a joint venture with Russia's Lukoil.)

In these jobs, former high-level officials like Armitage continue to fight terrorist threats and protect the "homeland," as they once did while working in government. But by fusing their political careers with business, these former officials have brought money-making into the highest reaches of national security. They have created a new class of capitalist policy-makers that is bridging the gap between public policy and private business in ways that are unprecedented in American history.

Next page: With former CIA director George Tenet on the team, said one CEO, "a phone call gets us in to see whoever we want"

Take the case of George Tenet, who retired in 2004 from his service as President Bush's CIA director. As he was writing his memoirs and preparing for a new career as a professor at Georgetown University, Tenet quietly began cutting deals with companies that earn much of their revenues from contracts with the intelligence community. And, as I was the first to report a year ago in Salon, Tenet began to make big money off of the Iraq war. By the end of 2007, he had made nearly $3 million in directors' fees and other compensation from his service as a director and adviser to four companies that provide the U.S. government with technology, equipment and personnel used for the war in Iraq, as well as in the broader war on terror.

Those companies include L-1 Identity Solutions Inc., an intelligence and biometric conglomerate that holds a near-monopoly on software that identifies people by their fingerprints and facial characteristics; Guidance Software, a Pasadena, Calif., supplier of investigation and forensic software to the FBI and the Intelligence Community; and the Analysis Corp., a Fairfax, Va., intelligence contractor founded by Tenet's former chief of staff, John Brennan. Brennan himself went into the spy business after serving as chairman of the National Counterterrorism Center -- which is one of the Analysis Corp.'s biggest clients.

In Tenet's most prestigious position, he was the only American director of QinetiQ, the British defense research company that was privatized in 2003 and acquired by the well-connected Carlyle Group. Earlier this year, Tenet left QinetiQ's UK parent to join the board of QinetiQ North America, the company's U.S. subsidiary and one of the fastest-growing contractors in the U.S. intelligence market. There, Tenet is working with CEO Duane P. Andrews, a former assistant secretary of defense who was the chief intelligence adviser to Dick Cheney when he was Secretary of Defense in the early 1990s. (Prior to joining QinetiQ, Andrews would have had plenty of contact with Tenet, as Andrews was a senior executive with Science Applications International Corp., a major CIA and NSA contractor.

In January, QinetiQ North America expanded its intelligence network by hiring Stephen Cambone, who was the assistant secretary of defense for intelligence under Donald Rumsfeld, as its vice president for strategy. That appointment came just days after the company won a $30 million, five-year contract to provide unspecified "security services" to the Pentagon's Counter-Intelligence Field Activity office, a controversial domestic security agency that was created by Rumsfeld and Cambone in 2002 and later took heat from Congress for illegally spying on antiwar and religious activists.

One of the most spectacular transitions from intelligence to business took place at Blackwater USA, the security contractor infamous for its trigger-happy soldiers in Iraq. One of Blackwater's first major contracts, negotiated by founder Erik Prince, was a secret no-bid $5.4 million deal with the CIA signed shortly after the September 11 terrorist attacks. Shortly thereafter, Blackwater hired as its vice chairman Cofer Black, the CIA's former top counterterrorism official who was dispatched by Tenet in the days after 9/11 to brief President Bush and his advisers on the CIA's plans for overthrowing the Taliban in Afghanistan. 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.

Appointments like this, observes intelligence expert Steven Aftergood, reflect the "incestuous" relationships that exist between former officials and private intelligence contractors. "It's unseemly, and what's worse is that it has become normal," he told me after the news broke about Stephen Cambone's move to QinetiQ. "The problem is not so much a conflict of interest as it is a coincidence of interests -- the Intelligence Community and the contractors are so tightly intertwined at the leadership level that their interests, practically speaking, are identical."

Former high-ranking officials bring tremendous value to a government contractor seeking new work or a private equity fund looking for companies to buy. "You understand the decision-making process inside the Beltway, and that is liquid gold," says Roger Cressey, who worked in President Clinton's National Security Council as deputy director of counterterrorism and is now a partner in Good Harbor Consulting, a company he founded with his former boss at the NSC, Richard Clarke. Cressey, who is a terrorism consultant for NBC News, adds that the influence of a retired official lasts only a limited period of time after he or she leaves office. "You have 18 to 24 months to translate your rolodex into real services," he says

But the value of a CIA director or national security official goes much further than a rolodex. Because high-ranking officials have been privy to classified and top-secret information for years -- and sometimes, in the cases of people like Armitage and Tenet, decades -- they have details about intelligence programs, classified operations and the internal affairs of other countries that few others can claim.

Armitage, who was a senior Pentagon official during the Reagan administration, was deeply involved in covert operations in Vietnam as a Navy officer and, shortly after September 11, flew to Pakistan on behalf of the Bush administration to deliver a stark message to its military president, Pervez Musharraf, that drastic measures would follow if Musharraf did not support the war on terror. He also led an influential group of U.S. officials who quietly pushed the Japanese government to adopt a more militaristic role in global affairs over the last seven years.

In all of these tasks, Armitage would have had access to the most classified intelligence available to U.S. officials, including telephone intercepts provided by the NSA. That kind of experience is extremely valuable to a company like ManTech, which sells and operates signals intelligence systems to the NSA and provides "cyber and physical security" for U.S. embassies and consulates around the world. According to ManTech CEO George J. Pedersen, who also employed Armitage as an adviser during the 1990s, Armitage was brought on as a director for his "enormous insight into our corporation's capabilities and operations." (Armitage did not respond to a written request for an interview.)

Tenet is even more connected: With the former CIA director on board, L-1's CEO Robert LaPenta told analysts last year, "a phone call gets us in to see whoever we want." Tenet, of course, has extensive knowledge about intelligence services in Saudi Arabia, the UK and Pakistan as well as secret operations in Iraq, Afghanistan and Somalia. His insights have already helped L-1 in its acquisition strategies. Shortly after Tenet joined L-1's board, the company acquired one of the CIA's hottest contractors, SpecTal, which has 300 employees with top-secret security clearances who work extensively in Afghanistan. Months before, during a 2006 meeting with L-1 executives about SpecTal's potential business in that country, Tenet urged company executives to "call the SpecTal guys" because "they know everybody in every one of these ministries that you need to go talk to," according to LaPenta. L-1 not only called them; it bought them out, and has since combined SpecTal with its latest acquisition, Advanced Concepts Inc., a systems engineering firm holding contracts at the NSA. Tenet, through a spokesman, declined to comment.

Next page: As one former top spook put it, America's "shadow" intelligence community has "more former secretaries of this and directors of that" than the entire government

Power also flows out of a former high-ranking official's presence as a policy-maker. During the 1990s, when Armitage was building his reputation as a private consultant and defense industry adviser, he was a member of President Clinton's Defense Policy Board. Although Armitage, like any board member, was prohibited from divulging contents of meetings with his clients, the internal discussions and access to classified documents helped shape the advice he gave his clients. That's certainly the impression one gets from officials at CACI International, a key intelligence contractor where Armitage served on the board of directors during that time. During his tenure as a director in the 1990s, CACI officials wrote in 2001, Armitage provided "valuable guidance on CACI's strategic growth plans and the federal government and Defense Department markets."

The same can be said of many of Armitage's contemporaries in the defense and intelligence industries who advise their clients while holding positions in government advisory boards at the Pentagon, the CIA and the NSA. One of Armitage's fellow directors at ManTech, for example, is Retired Admiral David E. Jeremiah. He is a member of President Bush's Foreign Intelligence Advisory Board and a paid adviser to the National Reconnaissance Office, the super-secret agency that manages the nation's spy satellites. A third ManTech director, Richard J. Kerr, a 32-year veteran of the CIA, led a 2005 study for the CIA into the agency's prewar assessments of Iraq and its weapons of mass destructionne of the most representative figures in America's new private intelligence elite is Joan A. Dempsey. She is currently a vice president of Booz Allen Hamilton, where for the last three years she has worked alongside former CIA director Jim Woolsey and more than 1,000 other former intelligence officers. Dempsey, a steely-looking blonde, began her career as a naval technician listening to Soviet bomber and submarine traffic at Misawa Air Base in Japan, a key NSA listening post. Over the years, she slowly worked her way up the intelligence chain of command at the Pentagon, from Naval Intelligence to the Defense Intelligence Agency. In 1997, she was appointed deputy assistant secretary of defense for intelligence and security in the Clinton administration, the highest civilian intelligence position in the Department of Defense at the time. There, she had responsibility over the NSA, the NGA and the NRO, the three national collection agencies controlled by the Pentagon, as well as the DoD's tactical command, control, communications and intelligence (C3I) efforts.

By 1999, Dempsey had become George Tenet's representative to the rest of the Intelligence Community as the CIA's director of community management. In that position in 1999 she won the everlasting support of the Intelligence Community -- and its growing army of contractors -- when she led negotiations with the Republican-led Congress that added $1.2 billion to the intelligence budget. That figure still remains one of the largest single-year increases in the history of the National Foreign Intelligence Program. Five years later, partly in recognition of this feat, Dempsey was given the William O. Baker award for meritorious intelligence service by the Security Affairs Support Association (SASA), which from 1979 to 2005 represented the largest prime contractors at the NSA and the CIA. Her remarks at that ceremony serve as a kind of leitmotif for the outsourcing phenomenon in intelligence.

In her acceptance speech, Dempsey paid effusive praise to the corporations she had known over the years, many of whom had purchased tables for the event: General Dynamics, Essex Corporation, Oracle Corporation, Computer Sciences Corporation, AT&T Government Solutions, ManTech and Lockheed Martin. She thanked her "Pentagon friends" from L-3 Communications, with whom she had worked "on my favorite program of all time, the U-2" spy plane. She spoke of her pride in working with the Boeing Company on the Future Imagery Architecture, a $4 billion project by the NRO and the NGA to build and operate the next generation of imagery satellites (the project was cancelled in 2005). At the CIA, Dempsey said, she had "benefited enormously" from her work with Booz Allen Hamilton and SAIC.

Then she went slightly off-script: "I like to call Booz Allen the shadow IC," she said, using the common acronym for the intelligence community, because it has "more former secretaries of this and directors of that" than the entire government. That must have caused some chuckles at the lead table, where Woolsey was sitting. But Dempsey, of course, got the last laugh. Fifteen months later, she joined the "shadow IC" herself as a vice president. In her job at Booz Allen, she "provides strategy consulting services to the US government, including the national security and civil sectors, as well as commercial industry," according to company spokesperson George Farrar. Then, in January 2007, Dempsey's joke came full circle when Mike McConnell, her boss at Booz Allen, was appointed Director of National Intelligence. In the space of a few years, Booz Allen had been transformed from a "shadow" intelligence community player into the real thing.

It was most intriguing, then, to hear what Dempsey is actually doing in her new job at Booz Allen. In the spring of 2006, Dempsey was invited to speak to a seminar on intelligence reform at Harvard University. In a remarkably candid speech, Dempsey disclosed that her office at Booz Allen was evaluating the entire decision-making process within the intelligence community. Under her supervision, she said, Booz Allen was "studying the implications of the many decisions that are being made on a daily basis right now all over the intelligence community," including by the staff of the Office of the Director of National Intelligence. "No one has thought through the implications of those decisions in a strategic or aggregate sense for the future," she added. So Booz Allen is helping out by "trying to forecast" what these decisions "mean for the intelligence community of the future -- what it's going to look like, how it's going to operate -- along a trend line."

It was a remarkable circumstance: Booz Allen was conducting a study for the DNI, a position that was about to be filled by one of the company's own -- Mike McConnell. The shadow IC was now helping the real IC prepare for an immediate future when the real IC would be led by the shadow IC. This was more than a revolving door: The private and the public sides of intelligence were now sharing the same room.

Get ready! Here comes the domestic surveillance big time!

Domestic Spying, Inc.

by Tim Shorrock , Special to CorpWatch
November 27th, 2007

A new intelligence institution to be inaugurated soon by the Bush administration will allow government spying agencies to conduct broad surveillance and reconnaissance inside the United States for the first time.

Under a proposal being reviewed by Congress, a National Applications Office (NAO) will be established to coordinate how the Department of Homeland Security (DHS) and domestic law enforcement and rescue agencies use imagery and communications intelligence picked up by U.S. spy satellites. If the plan goes forward, the NAO will create the legal mechanism for an
unprecedented degree of domestic intelligence gathering that would make the U.S. one of the world's most closely monitored nations. Until now, domestic use of electronic intelligence from spy satellites was limited to scientific agencies with no responsibility for national security or law enforcement.

The intelligence-sharing system to be managed by the NAO will rely heavily on private contractors including Boeing, BAE Systems, L-3 Communications and Science Applications International Corporation (SAIC). These companies already provide technology and personnel to U.S. agencies involved in foreign intelligence, and the NAO greatly expands their markets. Indeed, at an intelligence conference in San Antonio, Texas, last month, the titans of the industry were actively lobbying intelligence officials to buy products specifically designed for domestic surveillance.

The NAO was created under a plan tentatively approved in May 2007 by Director of National Intelligence Michael McConnell. Specifically, the NAO will oversee how classified information collected by the National Security Agency (NSA), the National Geospatial-Intelligence Agency (NGA) and other key agencies is used within the U.S. during natural disasters, terrorist attacks and other events affecting national security. The most critical intelligence will be supplied by the NSA and the NGA, which are often referred to by U.S. officials as the "eyes" and "ears" of the intelligence community.

The NSA, through a global network of listening posts, surveillance planes, and satellites, captures signals from phone calls, e-mail and Internet traffic, and translates and analyzes them for U.S. military and national intelligence officials.

The National Geospatial-Intelligence Agency (NGA), which was formally inaugurated in 2003, provides overhead imagery and mapping tools that allow intelligence and military analysts to monitor events from the skies and space. The NSA and the NGA have a close relationship with the super-secret National Reconnaissance Office (NRO), which builds and maintains the U.S.
fleet of spy satellites and operates the ground stations where the NSA's signals and the NGA's imagery are processed and analyzed. By law, their collection efforts are supposed to be confined to foreign countries and battlefields.

The National Applications Office was conceived in 2005 by the Office of the Director of National Intelligence (ODNI), which Congress created in 2004 to oversee the 16 agencies that make up the U.S. intelligence community. The ODNI, concerned that the legal framework for U.S. intelligence operations had not been updated for the global "war on terror," turned to Booz Allen
Hamilton of McLean, Virginia -- one of the largest contractors in the spy business. The company was tasked with studying how intelligence from spy satellites and photoreconnaissance planes could be better used domestically to track potential threats to security within the U.S.. The Booz Allen study was completed in May of that year, and has since become the basis for the NAO oversight plan. In May 2007, McConnell, the former executive vice president of Booz Allen, signed off on the creation of the NAO as the principal body to oversee the merging of foreign and domestic intelligence collection operations.

The NAO is "an idea whose time has arrived," Charles Allen, a top U.S. intelligence official, told the Wall Street Journal in August 2007 after it broke the news of the creation of the NAO. Allen, the DHS's chief intelligence officer, will head the new program. The announcement came just
days after President George W. Bush signed a new law approved by Congress to expand the ability of the NSA to eavesdrop, without warrants, on telephone calls, e-mail and faxes passing through telecommunications hubs in the U.S . when the government suspects agents of a foreign power may be involved.

"These [intelligence] systems are already used to help us respond to
crises," Allen later told the Washington Post. "We anticipate that we can
also use them to protect Americans by preventing the entry of dangerous
people and goods into the country, and by helping us examine critical
infrastructure for vulnerabilities."

Donald Kerr, a former NRO director who is now the number two at ODNI, recently explained to reporters that the intelligence community was no longer discussing whether or not to spy on U.S. citizens:

"Our job now is to engage in a productive debate, which focuses on privacy as a component of appropriate levels of security and public safety,'' Kerr said. ''I think all of us have to really take stock of what we already are willing to give up, in terms of anonymity, but [also] what safeguards we want in place to be sure that giving that doesn't empty our bank account or do something equally bad elsewhere.''

What Will The NAO Do?

The plan for the NAO builds on a domestic security infrastructure that has been in place for at least seven years. After the terrorist attacks of September 11, 2001, the NSA was granted new powers to monitor domestic communications without obtaining warrants from a secret foreign intelligence court established by Congress in 1978 (that warrant-less program ended in
January 2007 but was allowed to continue, with some changes, under legislation passed by Congress in August 2007).

Moreover, intelligence and reconnaissance agencies that were historically confined to spying on foreign countries have been used extensively on the home front since 2001. In the hours after the September 11th, 2001 attacks in New York, for example, the Bush administration called on the NGA to capture imagery from lower Manhattan and the Pentagon to help in the rescue and recovery efforts. In 2002, when two deranged snipers terrified the citizens of Washington and its Maryland and Virginia suburbs with a string of fatal shootings, the Federal Bureau of Investigation (FBI) asked the NGA to provide detailed images of freeway interchanges and other locations to help spot the pair.

The NGA was also used extensively during Hurricane Katrina < http://www.corpwatch.org/article.php?id=14023> , when the agency provided overhead imagery -- some of it supplied by U-2 photoreconnaissance aircraft -- to federal and state rescue operations. The data, which included mapping of flooded areas in Louisiana and Mississippi, allowed residents of the stricken areas to see the extent of damage to their homes and helped first-responders locate contaminated areas as well as schools, churches and hospitals that might be used in the rescue. More recently, during the October 2007 California wildfires, the Federal Emergency Management Agency (FEMA) asked the NGA to analyze overhead imagery of the fire zones and
determine the areas of maximum intensity and damage. In every situation that the NGA is used domestically, it must receive a formal request from a lead domestic agency, according to agency spokesperson David Burpee. That agency is usually FEMA, which is a unit of DHS.

At first blush, the idea of a U.S. intelligence agency serving the public by providing imagery to aid in disaster recovery sounds like a positive development, especially when compared to the Bush administration's misuse of the NSA and the Pentagon's Counter-Intelligence Field Activity (CIFA) to spy on American citizens. But the notion of using spy satellites and aircraft
for domestic purposes becomes problematic from a civil liberties standpoint when the full capabilities of agencies like the NGA and the NSA are considered.

Imagine, for example, that U.S. intelligence officials have determined, through NSA telephone intercepts, that a group of worshippers at a mosque in Oakland, California, has communicated with an Islamic charity in Saudi Arabia. This is the same group that the FBI and the U.S. Department of the Treasury believe is linked to an organization unfriendly to the United
States.

Imagine further that the FBI, as a lead agency, asks and receives permission to monitor that mosque and the people inside using high-resolution imagery obtained from the NGA. Using other technologies, such as overhead traffic cameras in place in many cities, that mosque could be placed under surveillance for months, and -- through cell phone intercepts and overhead
imagery -- its suspected worshipers carefully tracked in real-time as they moved almost anywhere in the country.

The NAO, under the plan approved by ODNI's McConnell, would determine the rules that will guide the DHS and other lead federal agencies when they want to use imagery and signals intelligence in situations like this, as well as during natural disasters. If the organization is established as planned, U.S. domestic agencies will have a vast array of technology at their disposal. In addition to the powerful mapping and signals tools provided by the NGA and the NSA, domestic agencies will also have access to measures and signatures intelligence (MASINT) managed by the Defense Intelligence Agency (DIA), the principal spying agency used by the secretary of defense and the Joint Chiefs of Staff.

(MASINT is a highly classified form of intelligence that uses infrared sensors and other technologies to "sniff" the atmosphere for certain chemicals and electro-magnetic activity and "see" beneath bridges and forest canopies. Using its tools, analysts can detect signs that a nuclear power plant is producing plutonium, determine from truck exhaust what types of
vehicles are in a convoy, and detect people and weapons hidden from the view of satellites or photoreconnaissance aircraft.)

Created By Contractors

The study group that established policies for the NAO was jointly funded by the ODNI and the U.S. Geological Survey (USGS), one of only two domestic U.S. agencies that is currently allowed, under rules set in the 1970s, to use classified intelligence from spy satellites. (The other is NASA, the National Aeronautics and Space Administration.) The group was chaired by
Keith Hall, a Booz Allen vice president who manages his firm's extensive contracts with the NGA and previously served as the director of the NRO.

Other members of the group included seven other former intelligence officers working for Booz Allen, as well as retired Army Lieutenant General Patrick M. Hughes, the former director of the DIA and vice president of homeland security for L-3 Communications, a key NSA contractor; and Thomas W. Conroy, the vice president of national security programs for Northrop Grumman, which has extensive contracts with the NSA and the NGA and throughout the
intelligence community.

From the start, the study group was heavily weighted toward companies with a stake in both foreign and domestic intelligence. Not surprisingly, its contractor-advisers called for a major expansion in the domestic use of the spy satellites that they sell to the government. Since the end of the Cold War and particularly since the September 11, 2001 attacks, they said, the

"threats to the nation have changed and there is a growing interest in making available the special capabilities of the intelligence community to all parts of the government, to include homeland security and law enforcement entities and on a higher priority basis."

Contractors are not new to the U.S. spy world. Since the creation of the Central Intelligence Agency (CIA) and the modern intelligence system in 1947, the private sector has been tapped to design and build the technology that facilitates electronic surveillance. Lockheed, for example, built the U-2, the famous surveillance plane that flew scores of spy missions over the Soviet Union and Cuba. During the 1960s, Lockheed was a prime contractor for the Corona system of spy satellites that greatly expanded the CIA's abilities to photograph secret military installations from space. IBM, Cray Computers and other companies built the super-computers that allowed the NSA to sift through data from millions of telephone calls, and analyze them for intelligence that was passed on to national leaders.

Spending on contracts has increased exponentially in recent years along with intelligence budgets, and the NSA, the NGA and other agencies have turned to the private sector for the latest computer and communications technologies and for intelligence analysts. For example, today about half of staff at the NSA and NGA are private contractors. At the DIA, 35 percent of the workers are contractors. But the most privatized agency of all is the NRO, where a
whopping 90 percent of the workforce receive paychecks from corporations.

All told the U.S. intelligence agencies spend some 70 percent of their estimated $60 billion annual budget on contracts with private companies, according to documents this reporter obtained < http://www.salon.com/news/feature/2007/06/01/intel_contractors/> in June
2007 from the ODNI.

The plans to increase domestic spying are estimated to be worth billions of dollars in new business for the intelligence contractors. The market potential was on display in October at GEOINT 2007, the annual conference sponsored by the U.S. Geospatial Intelligence Foundation (USGIF), a non-profit organization funded by the largest contractors for the NGA.

During the conference, which took place in October at the spacious Henry B. Gonzalez Convention Center in downtown San Antonio, many companies were displaying spying and surveillance tools that had been used in Afghanistan and Iraq and were now being re-branded for potential domestic use.

BAE Systems Inc.

On the first day of the conference, three employees of BAE Systems Inc. who had just returned from a three-week tour of Iraq and Afghanistan with the NGA demonstrated a new software package called SOCET GXP. (BAE Systems Inc. is the U.S. subsidiary of the UK-based BAE, the third-largest military contractor in the world.)

GXP uses Google Earth software as a basis for creating three-dimensional maps that U.S. commanders and soldiers use to conduct intelligence and reconnaissance missions. Eric Bruce, one of the BAE employees back from the Middle East, said his team trained U.S. forces to use the GXP software "to study routes for known terrorist sites" as well as to locate opium fields.
"Terrorists use opium to fund their war," he said. Bruce also said his team received help from Iraqi citizens in locating targets. "Many of the locals can't read maps, so they tell the analysts, 'there is a mosque next to a hill,'" he explained.

Bruce said BAE's new package is designed for defense forces and intelligence agencies, but can also be used for homeland security and by highway departments and airports. Earlier versions of the software were sold to the U.S. Army's Topographic Engineering Center, where it has been used to collect data on more than 12,000 square kilometers of Iraq, primarily in urban centers and over supply routes.

Another new BAE tool displayed in San Antonio was a program called GOSHAWK, which stands for "Geospatial Operations for a Secure Homeland - Awareness, Workflow, Knowledge." It was pitched by BAE as a tool to help law enforcement and state and local emergency agencies prepare for, and respond to, "natural disasters and terrorist and criminal incidents." Under the GOSHAWK program, BAE supplies "agencies and corporations" with data providers and information technology specialists "capable of turning geospatial information into the knowledge needed for quick decisions." A typical operation might involve acquiring data from satellites, aircraft and sensors in ground vehicles, and integrating those data to support an emergency or security operations center. One of the program's special attributes, the company says, is its ability to "differentiate levels of classification," meaning that it can deduce when data are classified and meant only for use by analysts with security clearances.

These two products were just a sampling of what BAE, a major player in the U.S. intelligence market, had to offer. BAE's services to U.S. intelligence -- including the CIA and the National Counter-Terrorism Center -- are provided through a special unit called the Global Analysis Business Unit. It is located in McLean, Virginia, a stone's throw from the CIA. The unit is headed by John Gannon, a 25-year veteran of the CIA who reached the agency's highest analytical ranks as deputy director of intelligence and chairman of the National Intelligence Council. Today, as a private sector contractor for the intelligence community, Gannon manages a staff of more than 800 analysts with security clearances.

A brochure for the Global Analysis unit distributed at GEOINT 2007 explains BAE's role and, in the process, underscores the degree of outsourcing in U.S. intelligence.

"The demand for experienced, skilled, and cleared analysts - and for the best systems to manage them - has never been greater across the Intelligence and Defense Communities, in the field and among federal, state, and local agencies responsible for national and homeland security,"

BAE says. The mission of the Global Analysis unit, it says,

"is to provide policymakers, warfighters, and law enforcement officials with analysts to help them understand the complex intelligence threats they face, and work force management programs to improve the skills and expertise of analysts."

At the bottom of the brochure is a series of photographs illustrating BAE's broad reach: a group of analysts monitoring a bank of computers; three employees studying a map of Europe, the Middle East and the Horn of Africa; the outlines of two related social networks that have been mapped out to show how their members are linked; a bearded man, apparently from the Middle
East and presumably a terrorist; the fiery image of a car bomb after it exploded in Iraq; and four white radar domes (known as radomes) of the type used by the NSA to monitor global communications from dozens of bases and facilities around the world.

The brochure may look and sound like typical corporate public relations. But amid BAE's spy talk were two phrases strategically placed by the company to alert intelligence officials that BAE has an active presence inside the U.S.. The tip-off words were "federal, state and local agencies," "law enforcement officials" and "homeland security." By including them, BAE was broadcasting that it is not simply a contractor for agencies involved in foreign intelligence, but has an active presence as a supplier to domestic security agencies, a category that includes the Department of Homeland Security (DHS), the FBI as well as local and state police forces stretching from Maine to Hawaii.

ManTech, Boeing, Harris and L-3

ManTech International, an important NSA contractor based in Fairfax, Virginia, has perfected the art of creating multi-agency software programs for both foreign and domestic intelligence. After the September 11th, 2001 attacks, it developed a classified program for the Defense Intelligence Agency called the Joint Regional Information Exchange System. DIA used it to combine classified and unclassified intelligence on terrorist threats on a single desktop. ManTech then tweaked that software for the Department of Homeland Security and sold it to DHS for its Homeland Security Information Network. According to literature ManTech distributed at GEOINT, that software will "significantly strengthen the exchange of real-time threat information used to combat terrorism." ManTech, the brochure added, "also provides extensive, advanced information technology support to the National Security Agency" and other agencies.

In a nearby booth, Chicago, Illinois-based Boeing, the world's second largest defense contractor, was displaying its "information sharing environment" software, which is designed to meet the Office of the Director of National Intelligence's new requirements on agencies to stop buying "stovepiped" systems that can't talk to each other. The ODNI wants to focus on products that will allow the NGA and other agencies to easily share their classified imagery with the CIA and other sectors of the community.

"To ensure freedom in the world, the United States continues to address the challenges introduced by terrorism,"

a Boeing handout said. Its new software, the company said, will allow information to be

"shared efficiently and uninterrupted across intelligence agencies, first responders, military and world allies."

Boeing has a reason for publishing boastful material like this: In 2005, it lost a major contract with the NRO to build a new generation of imaging satellites after ringing up billions of dollars in cost-overruns. The New York Times recently called the Boeing project "the most spectacular and expensive failure in the 50-year history of American spy satellite projects."

Boeing's geospatial intelligence offerings are provided through its Space and Intelligence Systems unit, which also holds contracts with the NSA. It allows agencies and military units to map global shorelines and create detailed maps of cities and battlefields, complete with digital elevation data that allow users to construct three-dimensional maps. (In an intriguing aside, one Boeing intelligence brochure lists among its "specialized organizations" Jeppesen Government and Military Services. According to a 2006 account by New Yorker reporter Jane Mayer, Jeppesen provided logistical and navigational assistance, including flight plans and clearance to fly over other countries, to the CIA for its "extraordinary rendition" program.)

Although less known as an intelligence contractor than BAE and Boeing, the Harris Corporation has become a major force in providing contracted electronic, satellite and information technology services to the intelligence community, including the NSA and the NRO. In 2007, according to its most recent annual report, the $4.2 billion company, based in Melbourne, Florida, won several new classified contracts. NSA awarded one of them for software to be used by NSA analysts in the agency's "Rapidly Deployable Integrated Command and Control System," which is used by the NSA to transmit "actionable intelligence" to soldiers and commanders in the field. Harris also supplies geospatial and imagery products to the NGA. At GEOINT, Harris displayed a new product that allows agencies to analyze live video and audio data imported from UAVs. It was developed, said Fred Poole, a Harris market development manager, "with input from intelligence analysts who were looking for a video and audio analysis tool that would allow them to perform 'intelligence fusion'" -- combining information from several agencies into a single picture of an ongoing operation.

For many of the contractors at GEOINT, the highlight of the symposium was an"interoperability demonstration" that allowed vendors to show how their products would work in a domestic crisis.

One scenario involved Cuba as a rogue nation supplying spent nuclear fuel to terrorists bent on creating havoc in the U.S.. Implausible as it was, the plot, which involved maritime transportation and ports, allowed the companies to display software that was likely already in use by the Department of Homeland Security and Naval Intelligence. The "plot" involved the discovery by U.S. intelligence of a Cuban ship carrying spent nuclear fuel heading for the U.S. Gulf Coast; an analysis of the social networks of Cuban officials involved with the illicit cargo; and the tracking and interception of the cargo as it departed from Cuba and moved across the Caribbean to Corpus Christi, Texas, a major port on the Gulf Coast. The agencies involved included the NGA, the NSA, Naval Intelligence and the Marines, and some of the key contractors working for those agencies. It illustrated how sophisticated the U.S. domestic surveillance system has become in the six years since the 9/11 attacks.

L-3 Communications, which is based in New York city, was a natural for the exercise: As mentioned earlier, retired Army Lt. General Patrick M. Hughes, its vice president of homeland security, was a member of the Booz Allen Hamilton study group that advised the Bush administration to expand the domestic use of military spy satellites. At GEOINT, L-3 displayed a new program called "multi-INT visualization environment" that combines imagery and signals intelligence data that can be laid over photographs and maps.

One example shown during the interoperability demonstration showed how such data would be incorporated into a map of Florida and the waters surrounding Cuba. With L-3 a major player at the NSA, this demonstration software is likely seeing much use as the NSA and the NGA expand their information-sharing relationship.

Over the past two years, for example, the NGA has deployed dozens of employees and contractors to Iraq to support the "surge" of U.S. troops. The NGA teams provide imagery and full-motion video -- much of it beamed to the ground from Unmanned Aerial Vehicles (UAV) -- that help U.S. commanders and soldiers track and destroy insurgents fighting the U.S . occupation. And since 2004, under a memorandum of understanding with the NSA, the NGA has begun to incorporate signals intelligence into its imagery products. The blending technique allows U.S. military units to track and find targets by picking up signals from their cell phones, follow the suspects in real-time using overhead video, and direct fighter planes and artillery units to the exact location of the targets -- and blow them to smithereens.

That's exactly how U.S. Special Forces tracked and killed Abu Musab al-Zarqawi, the alleged leader of Al Qaeda in Iraq, the NGA's director, Navy Vice Admiral Robert Murrett, said in 2006. Later, Murrett told reporters during GEOINT 2007, the NSA and the NGA have cooperated in similar fashion in several other fronts of the "war on terror," including in the Horn of Africa, where the U.S. military has attacked Al Qaeda units in Somalia, and in the Philippines, where U.S. forces are helping the government put down the Muslim insurgent group Abu Sayyaf. "When the NGA and the NSA work together, one plus one equals five," said Murrett.

Civil Liberty Worries

For U.S. citizens, however, the combination of NGA imagery and NSA signals intelligence in a domestic situation could threaten important constitutional safeguards against unwarranted searches and seizures. Kate Martin, the director of the Center for National Security Studies, a nonprofit advocacy organization, has likened the NAO plan to "Big Brother in the Sky." The Bush administration, she told the Washington Post, is

"laying the bricks one at a time for a police state."

Some Congress members, too, are concerned.

"The enormity of the NAO's capabilities and the intended use of the imagery received through these satellites for domestic homeland security purposes, and the unintended consequences that may arise, have heightened concerns among the general public, including reputable civil rights and civil liberties organizations,"

Bennie G. Thompson, a Democratic member of Congress from Mississippi and the chairman of the House Homeland Security Committee, wrote in a September letter to Secretary of Homeland Security Michael Chertoff. Thompson and other lawmakers reacted with anger after reports of the NAO and the domestic spying plan were first revealed by the Wall Street Journal in August.

"There was no briefing, no hearing, and no phone call from anyone on your staff to
any member of this committee of why, how, or when satellite imagery would be shared with police and sheriffs' officers nationwide,"

Thompson complained to Chertoff.

At a hastily organized hearing in September, Thompson and others demanded that the opening of the NAO be delayed until further studies were conducted on its legal basis and questions about civil liberties were answered. They also demanded biweekly updates from Chertoff on the activities and progress of the new organization. Others pointed out the potential danger of allowing U.S. military satellites to be used domestically.

"It will terrify you if you really understand the capabilities of satellites,"

warned Jane Harman, a Democratic member of Congress from California, who represents a coastal area of Los Angeles where many of the nation's satellites are built. As Harman well knows, military spy satellites are far more flexible, offer greater resolution, and have considerably more power to observe human activity than commercial satellites.

"Even if this program is well-designed and executed, someone somewhere else could hijack it,"

Harman said during the hearing.

The NAO was supposed to open for business on October 1, 2007. But the Congressional complaints have led the ODNI and DHS to delay their plans. The NAO "has no intention to begin operations until we address your questions," Charles Allen of DHS explained in a letter to Thompson. In an address at the GEOINT conference in San Antonio, Allen said that the ODNI is working with DHS and the Departments of Justice and Interior to draft the charter for the
new organization, which he said will face "layers of review" once it is established.

Yet, given the Bush administration's record of using U.S. intelligence agencies to spy on U.S. citizens, it is difficult to take such promises at face value. Moreover, the extensive corporate role in foreign and domestic intelligence means that the private sector has a great deal to gain in the
new plan for intelligence-sharing. Because most private contracts with intelligence agencies are classified, however, the public will have little knowledge of this role. Before Congress signs off on the NAO, it should create a better oversight system that would allow the House of Representatives and the Senate to monitor the new organization and to examine how BAE, Boeing, Harris and its fellow corporations stand to profit from this unprecedented expansion of America's domestic intelligence system.

Tim Shorrock <http://www.timshorrock.com> has been writing about U.S.
foreign policy and national security for nearly 30 years. His book, Spies
for Hire: The Secret World of Outsourced Intelligence, will be published in
May 2008 by Simon & Schuster. He can be reached at timshorrock@gmail.com.