Wednesday, September 20, 2006

Meet the Counterterrorism-Industrial Complex

Posted on Tuesday, September 19, 2006

By Ken Silverstein

Last week I wrote about the steady flow of CIA employees to Blackwater USA, the private security contractor with major operations in Iraq. Yesterday's Los Angeles Times took a broader look at the revolving door between intelligence agencies and the private sector, and found that “because of the demands of the war on terrorism and the drawn–out conflict in Iraq, U.S. spy agencies have turned to unprecedented numbers of outside contractors to perform jobs once the domain of government-employed analysts and secret agents.”

For private contractors to hire intelligence officials is not a new phenomenon. Take a look at the board of directors of any major defense or homeland security contractor and you're likely to come across some familiar names. The board at San Diego-based Science Applications International Corporation, which receives billions annually in federal contracts, has included two former CIA directors (John Deutch and Robert Gates), a former head of the National Security Agency (Bobby Ray Inman), and two former defense secretaries (William Perry and Melvin Laird).

But the pace of the movement to private firms has recently reached alarming proportions. “At the CIA,” said the Los Angeles Times story, “poaching became such a problem that former Director Porter J. Goss had to warn several firms to stop recruiting employees in the agency cafeteria . . . . One recently retired case officer said he had been approached twice while in line for coffee.” (As I noted in my recent post about Blackwater, that firm's CEO, Erik Prince, has a “green badge” that allows him access to CIA installations, and he regularly meets with senior officials at the agency's headquarters.)

Among the Times' other interesting findings:

More than half of all employees at the National Counterterrorism Center (NCC) are outside contractors, and the former head of the NCC, John Brennan, is now the CEO of Analysis Corp, which supplies contract analysts to the center. The use of contractors is especially heavy at the CIA. Abraxas Corp, a firm conveniently located near the agency in McLean, Virginia, and home to many former CIA veterans, creates false identities for an elite group of overseas case officers.

Contractors have at times outnumbered CIA employees at key stations like Baghdad and Islamabad. In Baghdad, contractors aren't simply performing bureaucratic functions; they recruit informants, manage relationships with the military, and “handle agents in support of frontline combat units.”

Senior U.S. intelligence officials told the Times that agencies have become so dependent on contractors that they could no longer function without them. “If you took away the contractor support, they'd have to put yellow tape around the building and close it down,” a former CIA official told the newspaper.

One former senior CIA official told me that the implications of the “enhanced revolving door” are being felt in a broad variety of ways. “There are many people inside who aspire to work for a private contractor because—overnight—they can at least double their earnings,” he said. “It undermines morale and doesn't build a competent system. But the bigger story is that this is symptomatic of a new ‘counterterrorism-industrial complex’ that's popping up and that is starting to look a lot like Eisenhower's military-industrial complex.

It's a multibillion dollar industry and it's beginning to drive policy.”

Revolving Door to Blackwater Causes Alarm at CIA

Posted on Tuesday, September 12, 2006
By Ken Silverstein.

Blackwater USA, the private security contractor that has operated in places such as Iraq, Afghanistan, Azerbaijan, and New Orleans, has been booming the past few years. Founded in December of 1996, the company spent its early years “paying staff with an executive's credit card and begging for customers,” according to the Virginian-Pilot. But today, Blackwater reportedly has revenues of about $100 million annually, almost all of it from government contracts, and maintains “a compound half the size of Manhattan and 450 permanent employees,” according to the newspaper.

How did Blackwater rise so high, so fast? The “war on terrorism” got the ball rolling for the firm, but one suspects that political connections played a big part as well. Erik Prince, Blackwater's founder, is a former SEAL who is deeply involved in Republican Party politics. Since 1998, he has funneled roughly $200,000 to GOP committees and candidates, including President Bush. In 2004, Blackwater retained the Alexander Strategy Group, the PR and lobbying firm that closed down earlier this year due to its embarrassing ties to Jack Abramoff and Tom DeLay. (Paul Behrends, a former national security adviser to Congressman Dana Rohrabacher, handled the account for Alexander. After the firm shut down, Behrends moved on to a firm called C&M Capitolink, and took the Blackwater account with him.)

A number of senior CIA and Pentagon officials have taken top jobs at Blackwater, including firm vice chairman Cofer Black, who was the Bush Administration's top counterterrorism official at the time of the 9/11 attacks (and who famously said in 2002, “There was before 9/11 and after 9/11. After 9/11, the gloves came off.”) Robert Young Pelton, author of the new book, Licensed to Kill, says that an early Blackwater contract—a secret no-bid $5.4 million deal with the CIA—came in 2002 after Prince placed a call to Buzzy Krongard, who was then the CIA's executive director.

A CIA source with whom I spoke said that Prince is very tight with top agency officials and has a “green badge,” the security pass for contractors who have access to CIA installations. “He's over there [at CIA headquarters] regularly, probably once a month or so,” this person told me. “He meets with senior people, especially in the D.O.” (The D.O., or Directorate of Operations, runs covert operations; last year, it was absorbed by the newly created National Clandestine Service.)

Prince's visits are probably one reason that the revolving door to Blackwater keeps turning. Last fall, Rob Richer resigned from the post of Associate Deputy Director of Operations; he immediately took a job as Blackwater's Vice President of Intelligence. Richer is a former head of the CIA's Near East Division and long served in Amman, where, for a period beginning in 1999, he held the post of station chief. For years he was the agency's point man with Jordan's King Abdullah, with whom he developed an extraordinarily close relationship. “There have been some ups and downs in our relationship with Jordan, but the king has always been on good terms with the CIA,” said a person familiar with the situation. “The king's primary relationship is always with the CIA, not the American ambassador.”

The CIA has lavishly subsidized Jordan's intelligence service, and has sent millions of dollars in recent years for intelligence training. After Richer retired, sources say, he helped Blackwater land a lucrative deal with the Jordanian government to provide the same sort of training offered by the CIA. Millions of dollars that the CIA “invested” in Jordan walked out the door with Richer—if this were a movie, it would be a cross between Jerry Maguire and Syriana.

“People [at the agency] are pissed off,” said one source. “Abdullah still speaks with Richer regularly and he thinks that's the same thing as talking to us. He thinks Richer is still the man.” Except in this case it's Richer, not his client, yelling “show me the money.” (Richer did not return a phone call seeking comment.)

Meanwhile, there's talk at the agency that Blackwater is also aggressively recruiting Jose Rodriguez, the CIA's current top spy as director of the National Clandestine Service. Rodriguez has a number of former agency friends at Blackwater, most notably Rick Prado, with whom he served in Latin America and who is now Blackwater's Vice President of Special Programs.

One of my sources told me that agency employees have voiced concerns to CIA director Michael Hayden about the Blackwater revolving door. “In a situation like this, there are too many opportunities for people to scratch each others' backs,” he said.

Note: Another internal concern at the CIA is that employees involved in the agency's secret detention program might be hit with subpoenas or indictments if the Democrats win control of the House in November. I noted this back in April; on Monday, the Washington Post had a front-page story saying that CIA counterterrorism officers have “signed up in growing numbers for a government-reimbursed, private insurance plan that would pay their civil judgments and legal expenses if they are sued or charged with criminal wrongdoing . . . The new enrollments reflect heightened anxiety at the CIA that officers may be vulnerable to accusations they were involved in abuse, torture, human rights violations and other misconduct, including wrongdoing related to the Sept. 11, 2001, attacks.”

I'm told that a number of CIA employees have been complaining to Inspector General John Helgerson about the detainee program. “They have told him that they don't like the program and they want to be on the record about it now, in case the subpoenas start flying,” a source reports.

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