AMY GOODMAN: The Carlyle Group is one of the world’s largest
and most secretive investment funds. Nicknamed the Ex-President’s Club,
Carlyle’s employees have included both President Bush, H.W. and George
W. Bush, former British Prime Minister John Major, former Secretary of
State James Baker, and former Defense Secretary Frank Carlucci. Amidst
growing public scrutiny over its dealings, the company has recently
scaled back its holdings in military contractors and its links to
controversial political figures.
But that appears to be
changing. On Friday, the intelligence firm Booz Allen Hamilton said it
would sell its government-oriented unit to Carlyle Group for $2.5
billion. Booz Allen has been a major figure in the privatization of
government intelligence. Current National Intelligence Director Mike
McConnell was Booz Allen’s director of defense programs before his
appointment last year. Booz Allen has been deeply involved in some of
the Bush administration’s most controversial counterterror programs,
including the infamous Total Information Awareness data-mining scheme.
The Carlyle-Booz Allen deal awaits shareholder and regulator approval.
Tim Shorrock is the author of Spies for Hire: The Secret World of Intelligence Outsourcing.
In a new article for CorpWatch, Shorrock says Carlyle’s purchase of
Booz Allen would lead to its “re-[emergence] as the owner of one of
America’s largest private intelligence armies.” Tim Shorrock joins us
now from Washington, D.C. Welcome to Democracy Now!, Tim.
TIM SHORROCK: Thank you, Amy.
AMY GOODMAN: It’s good to have you with us. Well, start
off by talking about the significance of Carlyle buying, if it’s
approved, Booz Allen’s government unit.
TIM SHORROCK: Well, as you said before, as you said
earlier, Carlyle has kind of scaled down its defense investments in
recent years, but this is a major plunge back into it. Booz Allen
Hamilton is one of the largest intelligence contractors in America and
also plays a very strategic role, I would say, in US intelligence as an
adviser to agencies such as the National Security Agency. And it also
advises all the key combat commands of the United States military and
other key agencies such as the Central Intelligence Agency and the
National Geospatial-Intelligence Agency. And they don’t just provide
technology. They provide, you know, all kinds of expertise and all
kinds of management, consulting to these agencies, you know, help them
decide how to spend their money down the road. And they have many, many
people on staff who have played very senior roles in intelligence.
AMY GOODMAN: Can you talk about Michael McConnell and his journey from Booz Allen to National Intelligence?
TIM SHORROCK: Well, McConnell began as an intelligence
officer in the US Navy. He became well known to Americans when he was
the intelligence adviser to Colin Powell during the first Gulf War. And
then after that, he was appointed to be director of the National
Security Agency at the very tail end of the first Bush administration.
He ran the National Security Agency, which of course does eavesdropping
and surveillance on telephone calls and emails all over the world,
including in the United States. He ran the NSA for a few years, and
then he went directly to Booz Allen, where he became the director—he
was a vice president of Booz Allen, he was a director of their military
intelligence programs.
The important thing for readers—for listeners to know about the
military intelligence is that the Pentagon controls about 85 percent of
the entire intelligence budget. And so, when we’re talking about
military intelligence, we’re talking about a huge swathe of
intelligence. And so, in that position, he advised the NSA, he advised
many of the other agencies. And so, he played a very important role in
intelligence. And I would say that people like McConnell, when they’re
in the private sector playing this kind of consulting role to the
agencies, they might as well be called an intelligence official with a
proviso that they are working for the private sector. So then, as you
also mentioned, during his time at Booz Allen, they played an important
advisory role in many important Bush’s administration programs, such as
Admiral Poindexter’s program, which was designed to, you know, collect
all kinds of information on American citizens to root out—to allegedly
root out terrorism here.
AMY GOODMAN: Tim Shorrock, can you lay out what you call the intelligence-industrial complex?
TIM SHORROCK: Well, in my book Spies for Hire, I
describe this intelligence-industrial complex as a $50 billion
industry, and I base that on what our intelligence budget is now and
figures I’ve gotten on the percentage of money that’s actually spent on
contracts. It’s about 70 percent of our entire intelligence budget goes
to private contracts.
So this complex is about—I would say about a hundred companies.
There’s many more, but, you know, a hundred companies that really play
important roles have major contracts. And they range in size from
Lockheed Martin and companies like Northrop Grumman, big defense
contractors that we usually associate with, you know, building planes
or big ships are very involved in intelligence at all levels, to small
companies like Spectel, which is a little company in Virginia that
employs about 200 or 300 people with high-level security clearances who
go and work for the CIA and other agencies and missions in places like
Iraq and Afghanistan.
You also have companies like Booz Allen, which are more like
consulting companies that have millions of dollars, hundreds of
millions of dollars in contracts with the agencies. Booz Allen, I might
add, also not only has contracts with the various agencies, but as well
as with the Office of the Director of National Intelligence. So they’re
advising our intelligence leaders on, you know, what kind of technology
to buy, all aspects of intelligence.
AMY GOODMAN: As you say, Mike McConnell, the Director of
National Intelligence, is the first contractor in US history to take
the leading role in the US intelligence community.
TIM SHORROCK: That’s right. And that’s a pretty important
fact for people to know. I mean, in the past, leaders of the
intelligence—there’s only been, you know, two directors of National
Intelligence under the intelligence, so-called, reform bill that passed
in 2004. The first one was an ambassador, Negroponte, and then
McConnell took over. But never in the past has there been someone gone
straight from the private sector to running US intelligence. They
always come out of the—in the past, it was always the Director of
Central Intelligence was the director of all intelligence, was the
President’s primary adviser on intelligence. So here, you have somebody
who spent, you know, over a decade as a very high-level private
consultant running intelligence operations for profit being the
President’s primary adviser on intelligence.
AMY GOODMAN: Tim Shorrock, start naming names. Talk about
the US corporations, the multinational companies that are involved in
the intelligence-industrial complex.
TIM SHORROCK: Well, like I said, there’s a lot of
companies that people recognize, because they’re big defense
contractors, and they’ve grown—like Lockheed Martin, Northrop Grumman,
Raytheon, BEA Systems of Britain, for example—they’ve grown in
intelligence by—often by buying smaller companies and putting together
intelligence units of their own.
There’s also companies like—at sort of the middle level, I call
them, companies like CACI International (CACI), which as listeners know
is—was one of the contractors involved in the prisoner abuse scandal at
Abu Ghraib. They’re a very, very important intelligence contractor, and
they operate at all levels of all the agencies, from the CIA to the NSA
to many military intelligence agencies.
There’s other companies here in Washington. There’s one called
Mantec International, for example, that does a lot of work for the
National Security Agency, particularly in places like Iraq and
Afghanistan, where they’re out actually on the frontlines, you know,
tracking enemy weapons systems and listening in on conversations
between insurgent groups and helping the US military track people down.
So, it covers a very wide range of companies. And probably most of these companies, very few people know about them.
We talked at the top of the hour about Carlyle buying Booz
Allen. Carlyle, in 2003, bought a company called QinetiQ, which is
spelled with a Q. It’s a British company. And QinetiQ used to be the
defense intelligence research group or research unit of the British
military, and it was privatized in the early part of the Bush
administration. The Carlysle Group bought it, pumped hundreds of
millions of dollars of investment capital into it, and it was—already
had contracts—QinetiQ already had contracts with the Pentagon, various
defense agencies here. But with Carlyle’s money, they really advanced
into the intelligence market. And with that capital, QinetiQ bought
five or six medium- sized intelligence companies and really expanded
into the intelligence-industrial complex.
And that’s sort of typical of the way companies expand. They buy
companies primarily for the contracts they hold with intelligence
agencies. So Carlyle did it with QinetiQ. Then they sold their
holdings, made about a half-a-billion-dollar profit off of it. And
then, they’ve obviously been looking around and decided Booz Allen
would make a very profitable investment. And I’m sure over the next few
years we will see a fair amount of expansion from Booz Allen, as
Carlyle pumps in more capital and they buy other companies and grow
even larger.
AMY GOODMAN: We’re talking to Tim Shorrock, investigative journalist. His new book is out; it’s called Spies for Hire: The Secret World of Intelligence Outsourcing. We’ll come back to this conversation in a minute.
[break]
AMY GOODMAN: We continue our conversation with Tim Shorrock. Spies for Hire is his book, The Secret World of Intelligence Outsourcing.
Tim, finishing up on Carlyle taking over Booz Allen, if approved, of
course Carlyle gained great notoriety after the September 11th attacks.
They were having their big meeting in Washington at the Hay-Adams, and
their big investors—some of their big investors—were the bin Laden
family, not Osama bin Laden, but bin Laden—other bin Laden brothers.
And in the end, you know, there were the Bushes, there were James
Baker, and there were the bin Ladens. They were forced to sell out, is
that right?
TIM SHORROCK: Yeah, they—after that news appeared—I think it was first reported in the Wall Street Journal—they
quickly asked the bin Laden family to withdraw their investment, which
they did. But they have a lot of investment from—I mean, you know,
Carlyle is a private equity fund, and what they do is they get
investments from very large investment funds, many of them overseas.
Many American pension funds controlled by US unions, such as the
Service Employees International Union, have very large investments in
Carlyle. The California Public Employees’ Retirement System, for
example, actually owns five percent of the Carlyle Group. So they’re
well connected to various facets of American capital. And, yes, the bin
Ladens pulled out. Lately, they’ve had investment from a large
government investment fund in Abu Dhabi. But a lot of these people, as
you mentioned earlier, like George Bush, Sr. and James Baker, have
withdrawn, but they still employ many, many people who have come from
high-level positions within government and clearly have analyzed what
the markets are and what potential profit there is in a company like
Booz Allen.
AMY GOODMAN: So, can you talk about—what does it mean
when private companies are working with the CIA, in terms of the
top-secret information that they have? You begin your prologue with a
man named John Humphrey, a former CIA officer. Talk about what he said.
TIM SHORROCK: Well, I was at an intelligence conference,
and this man from—he was from CACI International—was speaking about
sort of the general experience of contractors, and he was saying how
difficult it was to be in a position like in Abu Ghraib, when you’re a
contractor and you have the government asking you to do things and the
rules are unclear. And he was expressing some real discomfort about a
contractor being in that role.
And I was rather stunned, because I had never heard anyone from
CACI express any remorse or any second thoughts about what had happened
at Abu Ghraib. Their CEO—his name is Jack London—went on a huge media
offensive, which they’re still on. They just published a little
pamphlet about their—you know, how badly they were treated during the
Abu Ghraib scandal. But the fact is, you know, you have contractors
like this that create a profit center out of interrogating enemy
prisoners. They create a profit center out of interrogating prisoners
in Guantanamo.
When did this begin to be part of American capitalism, when you
have very sensitive operations like this—in some cases, operations we
shouldn’t even be doing—become profit centers? I think this is an
extremely dangerous trend. And lately, there’s been some attempts in
Congress—right now, there’s an attempt in Congress to have some
legislation that would keep contractors out of this area of
interrogation, keep them out of the area of renditions, where they’re
flying people, capturing people in places like Syria or, you know, in
Italy and flying them to places where they can be tortured by other
governments. There’s been private corporations involved in that, as
well.
AMY GOODMAN: And you point out chain of command issues, where you will have one of these private contractors telling soldiers what to do.
TIM SHORROCK: Well, that’s exactly, apparently, what
happened in Abu Ghraib. And the problem is, you know—there’s been a lot
of testimony, and there’s been a really good film, was made about—that
included shots from Abu Ghraib and interviews with prisoners, and
there’s now a lawsuit that’s been filed by the Center for
Constitutional Rights against CACI International for its role there.
But from what we do know from testimony at some of the trials of
the lower-level people that were at Abu Ghraib that were eventually
convicted for their role in the abuse is that, in fact, some of the
worst practices there were endorsed and pushed by some of these
contractors, they claim in the trials and some of the other testimony,
from people from CACI International. For example, introducing the use
of attack dogs to frighten and terrorize prisoners there, that was
actually in part introduced by individuals from this company.
And, you know, we know the people at the top, Donald Rumsfeld,
Stephen Cambone and others who wanted to step up the practices there at
Abu Ghraib, they’ve never—they’ve always escaped responsibility, and so
did the companies. And this problem of like, where is the legal
responsibility when they break the law, is still yet to be clarified.
AMY GOODMAN: Tim Shorrock, you write about a report that
was suppressed last year, official information about the scope of
intelligence outsourcing. Can you talk about what happened?
TIM SHORROCK: Well, when I started writing this book and
researching this book, I was sort of drawing on figures I had done. I
did an article for Mother Jones a few years ago where I had
estimated, based on interviews with quite a few people here in
Washington, that the total outsourcing in intelligence was about 50
percent; about half the budget at that time, I thought, I estimated,
was being spent on contracts. And by 2006 or so, I was looking for some
firm figures, 2007.
And finally, the Office of Director of National Intelligence
actually commissioned an internal study. They ordered all the agencies,
all the sixteen agencies of the intelligence community, to provide them
with figures about how much contracting went on in their specific
agencies, what the major companies were, the percentage, the breakdown
of the work force between contractors and government employees. And
they put this report together. There was a lot of press reports in the New York Times, LA Times,
other places that were following this, where people were expecting, and
it seemed like they were going to actually release sort of the
basic—you know, the top figures of this, so the American people and
Congress would get a good idea of the extent of contacting.
But when the time came to release this report, Admiral
McConnell, who of course had come from one of the major contractors and
had knowledge of and contacts with all the companies that were
involved, they decided not to put it out. And so, I think the report
was released to certain members of Congress who have access to highly
classified material, but it was not released in general in Congress and
certainly not to the American people.
But the figure that I got about a year ago—I got a leaked
document that was an unclassified document that was a pie chart that
showed 70 percent—that’s seven-o percent—of our intelligence budget
money going into the hands of private contractors. So the fact is that,
you know, the American people aren’t told this by the American
government, and many people in Congress have no idea of the extent of
contracting, and it’s supposed to be their job to provide oversight to
our intelligence community. And when you have—they don’t even have
knowledge of what’s going on with 70 percent of the budget. That makes
oversight a little bit of a joke.
AMY GOODMAN: The Office of the Director of National
Intelligence, ordering a study of contracting with the sixteen agencies
that make up the community, when it came time to release, the office
said no? They refused to make it public?
TIM SHORROCK: That’s right. They said this information
would help America’s enemies. It would—you know, it would
basically—would help—you know, I guess they were talking about
al-Qaeda. If al-Qaeda or somebody like that knew that, you know, 50
percent of the CIA was outsourced, that would help them in some way.
But that’s all—you know, you can figure a lot of this stuff out from
public information. I talked to a lot of people and got some pretty
firm estimates.
Some of the agencies, to their credit, do provide a breakdown.
For example, the Defense Intelligence Agency, which provides
intelligence for the Joint Chiefs of Staff and the Secretary of
Defense, told me that 35 percent of their workforce is private-sector
contractors. The National Geospatial-Intelligence Agency, which
provides imagery, satellite—secret satellite imagery and mapping to
military units and also to national intelligence agencies, their
workforce is 50 percent contractors. The National Reconnaissance
Office, which is one of our most secret agencies and controls all
military spy satellites, their contracted workforce is 95 percent, so
it’s a huge proportion of their workforce.
AMY GOODMAN: And you have some other astounding figures.
At least half to 75 percent of people at NSA headquarters—the NSA,
National Security Agency, many times larger than the CIA—are
contractors, 50 to 75 percent contractors working in the private
sector.
TIM SHORROCK: Right. The NSA was one of the agencies that
basically refused to talk on any level to me about this, but that’s
what I’ve been able to gather from talking to people who actually work
for—people employed by companies that are contracted to the NSA.
But what your listeners need to understand is that a lot of
these contractors actually work in these buildings. So the National
Security Agency is up—just up the road from here in Fort Meade,
Maryland. They have a huge black building where they all work. And so,
many of the people actually working inside that building are
contractors working for Booz Allen Hamilton or Lockheed Martin or
General Dynamics Information Systems. All the companies we’ve talked
about, they’re actually sitting there doing this classified work.
And the NSA has been a real sort of pioneer in the use of
outsourced intelligence. They went into it really heavily in the late
1990s and started expanding their contractor base from a few hundred
companies, now where it’s, you know, literally in the thousands. And
so, that means that, you know, we know the NSA tracks and listens to
our conversations, listens to literally millions and millions of
conversations, cell phones, email communications overseas, as well. And
so, that analysis, a lot of that analysis, is being carried out by
private-sector companies with people with high-level security
clearances.
AMY GOODMAN: Before we end, Tim, I wanted to go to a piece you’ve just broken in Salon.com called “Blacklisted by the Bush Government.” Explain.
TIM SHORROCK: Well, this is a story about how NSA
surveillance can have a domestic impact. I write about an Islamic
charity that was based in Saudi Arabia that was under investigation,
that has been under investigation by the US government for ties to
terrorism. They had a fairly large chapter that they invested in in
Oregon, in Ashland, Oregon. This was in the late 1990s, where they
became affiliated. And so, my story is about the effects of this
investigation on this Oregon chapter, which, based on the reporting I
did, there are no—there are no—there’s no evidence of connections to
terrorism. Yet, by declaring them specially designated global
terrorists, they were able to shut the organization down and basically
drive it out of business with no evidentiary hearing, no ability by
these people to challenge the evidence, which is all classified. All
the important evidence is classified. I find it a severe distortion of
our justice system and very alarming.
AMY GOODMAN: Can you talk about the players involved? Talk about the Saudi sports star.
TIM SHORROCK: Oh, Soliman Al-Buthe is one of the key
figures in this story, and he was—the charity was called the
Al-Haramain Islamic Foundation. And the man I talk—I went to Saudi
Arabia to interview him, he was an adviser to them, and he helped set
up Al-Haramain in Oregon. He’s now an environmental figure. He’s a
government official in the city of Riyadh, where basically his job is
inspecting all restaurants, you know, for health problems. And so, he’s
called a specially designated global terrorist, as well, and he’s
called that by the UN because the US designated him as such. He also
has not been able to see any classified evidence. The US says he’s a
terrorist. But I think—you know, last year, the US embassy in Riyadh
invited him to a function, and which they rescinded after it was
reported in the Portland Oregonian.
But a lot of people like that that I met in Saudi Arabia,
they’re called—they’ve been accused of being terrorist supporters in
some way by the United States, but they operate there freely and they
seem to have a lot of love for the United States. So when I met this
man Soliman, he loves to watch the Lakers. He has his TV all the time
to Chris Matthews of MSNBC. And it was kind of humorous to think of him
as a terrorist. But I think the problem is, the organization itself in
some of the countries that it operated in, according to US
intelligence, did provide money and supplies to some Jihad groups
overseas. But the issue is, the actual evidence can never be seen, and
so we have to trust—we’re supposed to trust the US government’s
judgment on this. And I think in the—
AMY GOODMAN: And you begin your piece with this
conversation that he, in Saudi Arabia, is having with his lawyers in
the United States, and he’s trying to figure out how to pay them. And,
well, then you tell the story of what happens and who’s listening.
TIM SHORROCK: Right. Well, the significance of the
Al-Haramain case is that this man, Soliman Al-Buthe, that I interviewed
was on the phone with two of his lawyers here in the United States in
March 2004, at a period when the NSA surveillance program was being
questioned by the Justice Department. His conversation was monitored by
the National Security Agency without a warrant. The only reason the
Al-Haramain lawyers found out about it was they were given a document
by accident by the Treasury Department, which does these investigations
of global terrorists and puts the financial screws on them. They
accidentally gave them an NSA document, highly classified document,
that showed they were under surveillance.
On the basis of that document, they have sued the National
Security Agency for warrantless—for violating FISA, violating the 1978
law that regulates foreign intelligence by the NSA. And that lawsuit is
the only lawsuit still in play in which the NSA warrantless program of
the Bush administration might be found illegal by a federal judge in a
federal court.
AMY GOODMAN: Tim Shorrock, I want to thank you very much for being with us, investigative journalist, author of the new book Spies for Hire: The Secret World of Intelligence Outsourcing.
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