Top Secret America: Private contractors pose problems of cost, control
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Aug 16, 2010, 5:23:42 PM8/16/10
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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.
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
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.
(2 of 11)
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.”
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
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. And because competition among firms for people with security
clearances is so great, corporations 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.
As companies raid federal agencies of talent, the government has been
left with the youngest intelligence staffs ever while more experienced
employees move into the private sector. This is true at the CIA, where
employees from 114 firms account for roughly a third of the workforce,
or about 10,000 positions. Many of them are temporary hires, often
former military or intelligence agency employees who left government
service usually to work less and earn more while drawing a federal
pension.
(3 of 11)
Across the government, such 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 staff watch centers across the Washington
area. 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.
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
“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, and
others that already existed have expanded greatly. Most are thriving
even as the rest of the United States struggles with bankruptcies,
unemployment and foreclosures.
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.
(4 of 11)
“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.”
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.
Just last week, typing “top secret” into the search engine of a major
jobs website showed 19,759 unfilled positions nationwide.
“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.
“Once they are on board, we treat them as if they're a part of the
total force.”
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
The Post's investigation is based on government documents and
contracts, job descriptions, property records, corporate and social
networking websites, additional records, and hundreds of interviews
with intelligence, military and corporate officials and former
officials. Most requested anonymity either because they are prohibited
from speaking publicly or because, they said, they feared retaliation
at work for describing their concerns.
The investigation focused on top-secret work because the amount
classified at the secret level is too large to accurately track. A
searchable database of government organizations and private companies,
which can be found at topsecretamerica.com, was built entirely on
public records.
The national security industry sells the military and intelligence
agencies more than just airplanes, ships and tanks. It sells
contractors' brain power. They advise, brief and work everywhere,
including 25 feet under the Pentagon in a bunker where they can be
found alongside military personnel in battle fatigues monitoring
potential crises worldwide.
(5 of 11)
Late at night, when the wide corridors of the Pentagon are all but
empty, the National Military Command Center hums with purpose. There's
real-time access to the location of U.S. forces anywhere in the world,
to granular satellite images or to the White House Situation Room.
The purpose of all this is to be able to answer any question the
chairman of the Joint Chiefs of Staff might have. To be ready 24 hours
a day, every day, takes five brigadier generals, a staff of colonels
and senior noncommissioned officers — and a man wearing a pink
contractor badge and a bright purple shirt and tie.
“Knowledge engineer” Erik Saar is the only person in the room who
knows how to bring data from far afield, fast. Saar and four teammates
from a private company, SRA International, teach these top-ranked
staff officers to think in Web 2.0. They are trying to push a
tradition-bound culture to act differently, digitally.
That sometimes means exchanging ideas on shared Web pages outside the
military computer networks dubbed .mil — things much resisted within
the Pentagon's self-sufficient culture. “Our job is to change the
perception of leaders who might drive change,” Saar said.
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
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
in those countries as well as in the Middle East. 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.
(6 of 11)
Misconduct happens, too. A defense contractor formerly called MZM paid
bribes for CIA contracts, sending Randy “Duke” Cunningham, who was a
California congressman on the intelligence committee, to prison.
Guards employed in Afghanistan by ArmorGroup North America, a private
security company, were caught on camera in a lewd-partying scandal.
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. A
dozen firms created the transnational digital highway that carries the
drones' real-time data on terrorist hide-outs from overseas to command
posts throughout the United States.
Private firms have become so thoroughly entwined with the government's
most sensitive activities that without them important military and
intelligence missions would have to cease or would be jeopardized.
Some examples:
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
At the Department of Homeland Security (DHS), the number of
contractors equals the number of federal employees. The department
depends on 318 companies for essential services and personnel,
including 19 staffing firms that help DHS find and hire even more
contractors. At the office that handles intelligence, six out of 10
employees are from private industry.
The NSA, which conducts worldwide electronic surveillance, hires
private firms to come up with most of its technological innovations.
The NSA used to work with a small stable of firms; now, it works with
at least 484 and is actively recruiting more.
The National Reconnaissance Office cannot produce, launch or maintain
its large satellite surveillance systems, which photograph countries
such as China, North Korea and Iran, without the four major
contractors it works with.
(7 of 11)
Every intelligence and military organization depends on contract
linguists to communicate overseas, translate documents and make sense
of electronic voice intercepts. The demand for native speakers is so
great, and the amount of money the government is willing to pay for
them is so huge, that 56 firms compete for this business.
Each of the 16 intelligence agencies depends on corporations to set up
its computer networks, communicate with other agencies' networks, and
fuse and mine disparate bits of information that might indicate a
terrorist plot. More than 400 companies work exclusively in this area,
building classified hardware and software systems.
Hiring contractors was supposed to save the government money. But that
has not turned out to be the case. A 2008 study published by the
Office of the Director of National Intelligence found that contractors
made up 29 percent of the workforce in the intelligence agencies but
cost the equivalent of 49 percent of their personnel budgets. Gates
said that federal workers cost the government 25 percent less than
contractors.
Washington's corridors of power stretch in a nearly straight
geographical line from the Supreme Court to the Capitol to the White
House. Keep going west, across the Potomac River, and the unofficial
seats of power — the private, corporate ones — become visible,
especially at night. There in the Virginia suburbs are the brightly
illuminated company logos of Top Secret America: Northrop Grumman,
SAIC, General Dynamics.
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
Of the 1,931 companies identified by The Post that work on top-secret
contracts, about 110 of them do roughly 90 percent of the work on the
corporate side of the defense-intelligence-corporate world.
To understand how these firms have come to dominate the post-9/11 era,
there's no better place to start than the Herndon, Va., office of
General Dynamics. Ten years ago, General Dynamics' center of gravity
was the industrial port city of Groton, Conn., where workers churned
out submarines. Today, the firm's commercial core is made up of data
tools such as the digital imagery library and the secure BlackBerry-
like device used by President Barack Obama.
(8 of 11)
The evolution of General Dynamics was based on one simple strategy:
Follow the money.
It embraced the emerging intelligence-driven style of warfare. It
developed small-target identification systems and equipment that could
intercept a single insurgent's cellphone and laptop communications. It
found ways to sort the billions of data points collected by
intelligence agencies into piles of information that a single person
could analyze.
It also began gobbling up smaller companies that could help it
dominate the new intelligence landscape, just as its competitors were
doing. Between 2001 and 2010, the company acquired 11 firms
specializing in satellites, signals and geospatial intelligence,
surveillance, reconnaissance, technology integration and imagery.
On Sept. 11, 2001, General Dynamics was working with nine intelligence
organizations. Now it is has contracts with all 16. Its employees fill
the halls of the NSA and DHS. The corporation was paid hundreds of
millions of dollars to set up and manage DHS's new offices in 2003,
including its National Operations Center, Office of Intelligence and
Analysis and Office of Security. Its employees do everything from
deciding which threats to investigate to answering phones.
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
General Dynamics' bottom line reflects its successful transformation.
It also reflects how much the U.S. government — the firm's largest
customer by far — has paid the company beyond what it costs to do the
work. The company reported $31.9 billion in revenue in 2009, up from
$10.4 billion in 2000. Its workforce has more than doubled in that
time, from 43,300 to 91,700 employees, according to the company.
Revenue from General Dynamics' intelligence- and information-related
divisions, where the majority of its top-secret work is done, climbed
to $10 billion in the second quarter of 2009, up from $2.4 billion in
2000, accounting for 34 percent of its overall revenue last year.
The company's profitability is on display in its Falls Church, Va.,
headquarters. There's a soaring, art-filled lobby, bistro meals served
on china enameled with the General Dynamics logo, and an auditorium
with seven rows of white leather-upholstered seats, each with its own
microphone and laptop docking station.
(9 of 11)
General Dynamics now has operations in every corner of the
intelligence world. It helps counterintelligence operators and trains
new analysts. It has a $600 million Air Force contract to intercept
communications. It makes $1 billion a year keeping hackers out of U.S.
computer networks and encrypting military communications. It even
conducts information operations, the murky military art of trying to
persuade foreigners to align their views with U.S. interests.
“The American intelligence community is an important market for our
company,” said General Dynamics spokesman Kendell Pease. “Over time,
we have tailored our organization to deliver affordable, best-of-breed
products and services to meet those agencies' unique requirements.”
This year, General Dynamics' overall revenue was $7.8 billion in the
first quarter, Jay Johnson, the company's chief executive and
president, said at the earnings conference call in April. “We've hit
the deck running in the first quarter,” he said, “and we're on our way
to another successful year.”
In the shadow of giants such as General Dynamics are 1,814 small to
midsize companies that do top-secret work. About a third of them were
established after Sept. 11, 2001, to take advantage of the huge flow
of taxpayer money into the private sector. Many are led by former
intelligence agency officials who know exactly whom to approach for
work.
Abraxas, of Herndon, headed by a former CIA spy, quickly became a
major CIA contractor after 9/11. Its staff even recruited midlevel
managers during work hours from the CIA's cafeteria, former agency
officers recall.
Other small and medium-size firms sell niche technical expertise such
as engineering for low-orbit satellites or long-dwell sensors. But the
vast majority have not invented anything at all. Instead, they
replicate what the government's workforce already does.
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.
(10 of 11)
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 information technology conference this spring in
Phoenix. The agency expected the same IT firms angling for its
business to pay for the entire 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 baseball stadium, reserved exclusively for
the conference attendees. Government buyers and corporate sellers
drank beer and ate hot dogs while the DIA director's morning keynote
speech replayed on the gigantic 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.
Government officials and company executives say these networking
events are critical to building a strong relationship between the
public and private sectors.
“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.
(11 of 11)
At a U.S. Special Operations Command conference in Fayetteville, N.C.,
in April, vendors paid for access to some of the people who decide
what services and gadgets to buy for troops. In mid-May, the national
security industry held a black-tie evening funded by the same
corporations seeking business from the defense, intelligence and
congressional leaders seated at their tables.
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.”
Even some of those gathered in Phoenix criticized the size and
disjointedness of the intelligence community and its contracting base.
“Redundancy is the unacceptable norm,” Lt. Gen. Richard Zahner, Army
deputy chief of staff for intelligence, told the 2,000 attendees. “…
Are we spending our resources effectively? … If we have not gotten our
houses in order, someone will do it for us.”
Another speaker, Kevin Meiners, a deputy undersecretary for
intelligence, gave the audience what he called the key to thriving
even when the Defense Department budget eventually stabilizes and
stops rising so rapidly.
“Overhead,” Meiners told them, is going to get cut first. And that
means IT, the very products and services sold by the businesspeople in
the audience.
“You should describe what you do as a weapons system, not overhead,”
Meiners instructed. “Overhead to them — I'm giving you the secret
sauce here — is IT and people. … You have to foot-stomp hard that this
is a war-fighting system that's helping save people's lives every
day.”
Staff researcher Julie Tate contributed to this report. For full text
of this report, see http://www.topsecretamerica.com"
target="blank">topsecretamerica.com.
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.
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
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.
(2 of 11)
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.”
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
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. And because competition among firms for people with security
clearances is so great, corporations 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.
As companies raid federal agencies of talent, the government has been
left with the youngest intelligence staffs ever while more experienced
employees move into the private sector. This is true at the CIA, where
employees from 114 firms account for roughly a third of the workforce,
or about 10,000 positions. Many of them are temporary hires, often
former military or intelligence agency employees who left government
service usually to work less and earn more while drawing a federal
pension.
(3 of 11)
Across the government, such 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 staff watch centers across the Washington
area. 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.
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
“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, and
others that already existed have expanded greatly. Most are thriving
even as the rest of the United States struggles with bankruptcies,
unemployment and foreclosures.
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.
(4 of 11)
“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.”
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.
Just last week, typing “top secret” into the search engine of a major
jobs website showed 19,759 unfilled positions nationwide.
“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.
“Once they are on board, we treat them as if they're a part of the
total force.”
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
The Post's investigation is based on government documents and
contracts, job descriptions, property records, corporate and social
networking websites, additional records, and hundreds of interviews
with intelligence, military and corporate officials and former
officials. Most requested anonymity either because they are prohibited
from speaking publicly or because, they said, they feared retaliation
at work for describing their concerns.
The investigation focused on top-secret work because the amount
classified at the secret level is too large to accurately track. A
searchable database of government organizations and private companies,
which can be found at topsecretamerica.com, was built entirely on
public records.
The national security industry sells the military and intelligence
agencies more than just airplanes, ships and tanks. It sells
contractors' brain power. They advise, brief and work everywhere,
including 25 feet under the Pentagon in a bunker where they can be
found alongside military personnel in battle fatigues monitoring
potential crises worldwide.
(5 of 11)
Late at night, when the wide corridors of the Pentagon are all but
empty, the National Military Command Center hums with purpose. There's
real-time access to the location of U.S. forces anywhere in the world,
to granular satellite images or to the White House Situation Room.
The purpose of all this is to be able to answer any question the
chairman of the Joint Chiefs of Staff might have. To be ready 24 hours
a day, every day, takes five brigadier generals, a staff of colonels
and senior noncommissioned officers — and a man wearing a pink
contractor badge and a bright purple shirt and tie.
“Knowledge engineer” Erik Saar is the only person in the room who
knows how to bring data from far afield, fast. Saar and four teammates
from a private company, SRA International, teach these top-ranked
staff officers to think in Web 2.0. They are trying to push a
tradition-bound culture to act differently, digitally.
That sometimes means exchanging ideas on shared Web pages outside the
military computer networks dubbed .mil — things much resisted within
the Pentagon's self-sufficient culture. “Our job is to change the
perception of leaders who might drive change,” Saar said.
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
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
in those countries as well as in the Middle East. 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.
(6 of 11)
Misconduct happens, too. A defense contractor formerly called MZM paid
bribes for CIA contracts, sending Randy “Duke” Cunningham, who was a
California congressman on the intelligence committee, to prison.
Guards employed in Afghanistan by ArmorGroup North America, a private
security company, were caught on camera in a lewd-partying scandal.
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. A
dozen firms created the transnational digital highway that carries the
drones' real-time data on terrorist hide-outs from overseas to command
posts throughout the United States.
Private firms have become so thoroughly entwined with the government's
most sensitive activities that without them important military and
intelligence missions would have to cease or would be jeopardized.
Some examples:
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
At the Department of Homeland Security (DHS), the number of
contractors equals the number of federal employees. The department
depends on 318 companies for essential services and personnel,
including 19 staffing firms that help DHS find and hire even more
contractors. At the office that handles intelligence, six out of 10
employees are from private industry.
The NSA, which conducts worldwide electronic surveillance, hires
private firms to come up with most of its technological innovations.
The NSA used to work with a small stable of firms; now, it works with
at least 484 and is actively recruiting more.
The National Reconnaissance Office cannot produce, launch or maintain
its large satellite surveillance systems, which photograph countries
such as China, North Korea and Iran, without the four major
contractors it works with.
(7 of 11)
Every intelligence and military organization depends on contract
linguists to communicate overseas, translate documents and make sense
of electronic voice intercepts. The demand for native speakers is so
great, and the amount of money the government is willing to pay for
them is so huge, that 56 firms compete for this business.
Each of the 16 intelligence agencies depends on corporations to set up
its computer networks, communicate with other agencies' networks, and
fuse and mine disparate bits of information that might indicate a
terrorist plot. More than 400 companies work exclusively in this area,
building classified hardware and software systems.
Hiring contractors was supposed to save the government money. But that
has not turned out to be the case. A 2008 study published by the
Office of the Director of National Intelligence found that contractors
made up 29 percent of the workforce in the intelligence agencies but
cost the equivalent of 49 percent of their personnel budgets. Gates
said that federal workers cost the government 25 percent less than
contractors.
Washington's corridors of power stretch in a nearly straight
geographical line from the Supreme Court to the Capitol to the White
House. Keep going west, across the Potomac River, and the unofficial
seats of power — the private, corporate ones — become visible,
especially at night. There in the Virginia suburbs are the brightly
illuminated company logos of Top Secret America: Northrop Grumman,
SAIC, General Dynamics.
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
Of the 1,931 companies identified by The Post that work on top-secret
contracts, about 110 of them do roughly 90 percent of the work on the
corporate side of the defense-intelligence-corporate world.
To understand how these firms have come to dominate the post-9/11 era,
there's no better place to start than the Herndon, Va., office of
General Dynamics. Ten years ago, General Dynamics' center of gravity
was the industrial port city of Groton, Conn., where workers churned
out submarines. Today, the firm's commercial core is made up of data
tools such as the digital imagery library and the secure BlackBerry-
like device used by President Barack Obama.
(8 of 11)
The evolution of General Dynamics was based on one simple strategy:
Follow the money.
It embraced the emerging intelligence-driven style of warfare. It
developed small-target identification systems and equipment that could
intercept a single insurgent's cellphone and laptop communications. It
found ways to sort the billions of data points collected by
intelligence agencies into piles of information that a single person
could analyze.
It also began gobbling up smaller companies that could help it
dominate the new intelligence landscape, just as its competitors were
doing. Between 2001 and 2010, the company acquired 11 firms
specializing in satellites, signals and geospatial intelligence,
surveillance, reconnaissance, technology integration and imagery.
On Sept. 11, 2001, General Dynamics was working with nine intelligence
organizations. Now it is has contracts with all 16. Its employees fill
the halls of the NSA and DHS. The corporation was paid hundreds of
millions of dollars to set up and manage DHS's new offices in 2003,
including its National Operations Center, Office of Intelligence and
Analysis and Office of Security. Its employees do everything from
deciding which threats to investigate to answering phones.
Related
* Part 3 | Top Secret America: Secrets centers transform many
communities
* Part 1 | Top Secret America: Security bureaucracy too big,
hidden to know effectiveness
General Dynamics' bottom line reflects its successful transformation.
It also reflects how much the U.S. government — the firm's largest
customer by far — has paid the company beyond what it costs to do the
work. The company reported $31.9 billion in revenue in 2009, up from
$10.4 billion in 2000. Its workforce has more than doubled in that
time, from 43,300 to 91,700 employees, according to the company.
Revenue from General Dynamics' intelligence- and information-related
divisions, where the majority of its top-secret work is done, climbed
to $10 billion in the second quarter of 2009, up from $2.4 billion in
2000, accounting for 34 percent of its overall revenue last year.
The company's profitability is on display in its Falls Church, Va.,
headquarters. There's a soaring, art-filled lobby, bistro meals served
on china enameled with the General Dynamics logo, and an auditorium
with seven rows of white leather-upholstered seats, each with its own
microphone and laptop docking station.
(9 of 11)
General Dynamics now has operations in every corner of the
intelligence world. It helps counterintelligence operators and trains
new analysts. It has a $600 million Air Force contract to intercept
communications. It makes $1 billion a year keeping hackers out of U.S.
computer networks and encrypting military communications. It even
conducts information operations, the murky military art of trying to
persuade foreigners to align their views with U.S. interests.
“The American intelligence community is an important market for our
company,” said General Dynamics spokesman Kendell Pease. “Over time,
we have tailored our organization to deliver affordable, best-of-breed
products and services to meet those agencies' unique requirements.”
This year, General Dynamics' overall revenue was $7.8 billion in the
first quarter, Jay Johnson, the company's chief executive and
president, said at the earnings conference call in April. “We've hit
the deck running in the first quarter,” he said, “and we're on our way
to another successful year.”
In the shadow of giants such as General Dynamics are 1,814 small to
midsize companies that do top-secret work. About a third of them were
established after Sept. 11, 2001, to take advantage of the huge flow
of taxpayer money into the private sector. Many are led by former
intelligence agency officials who know exactly whom to approach for
work.
Abraxas, of Herndon, headed by a former CIA spy, quickly became a
major CIA contractor after 9/11. Its staff even recruited midlevel
managers during work hours from the CIA's cafeteria, former agency
officers recall.
Other small and medium-size firms sell niche technical expertise such
as engineering for low-orbit satellites or long-dwell sensors. But the
vast majority have not invented anything at all. Instead, they
replicate what the government's workforce already does.
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.
(10 of 11)
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 information technology conference this spring in
Phoenix. The agency expected the same IT firms angling for its
business to pay for the entire 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 baseball stadium, reserved exclusively for
the conference attendees. Government buyers and corporate sellers
drank beer and ate hot dogs while the DIA director's morning keynote
speech replayed on the gigantic 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.
Government officials and company executives say these networking
events are critical to building a strong relationship between the
public and private sectors.
“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.
(11 of 11)
At a U.S. Special Operations Command conference in Fayetteville, N.C.,
in April, vendors paid for access to some of the people who decide
what services and gadgets to buy for troops. In mid-May, the national
security industry held a black-tie evening funded by the same
corporations seeking business from the defense, intelligence and
congressional leaders seated at their tables.
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.”
Even some of those gathered in Phoenix criticized the size and
disjointedness of the intelligence community and its contracting base.
“Redundancy is the unacceptable norm,” Lt. Gen. Richard Zahner, Army
deputy chief of staff for intelligence, told the 2,000 attendees. “…
Are we spending our resources effectively? … If we have not gotten our
houses in order, someone will do it for us.”
Another speaker, Kevin Meiners, a deputy undersecretary for
intelligence, gave the audience what he called the key to thriving
even when the Defense Department budget eventually stabilizes and
stops rising so rapidly.
“Overhead,” Meiners told them, is going to get cut first. And that
means IT, the very products and services sold by the businesspeople in
the audience.
“You should describe what you do as a weapons system, not overhead,”
Meiners instructed. “Overhead to them — I'm giving you the secret
sauce here — is IT and people. … You have to foot-stomp hard that this
is a war-fighting system that's helping save people's lives every
day.”
Staff researcher Julie Tate contributed to this report. For full text
of this report, see http://www.topsecretamerica.com"
target="blank">topsecretamerica.com.
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