The Contractors Causing Chaos but Not Out and Out Corruption

I’m beginning to agree with Rayne’s comment of the other day that the only explanation for the length of the WaPo series on contractors is to please the Pulitzer committee. The other most (perhaps more) likely explanation for the style of the piece is that editors have tried so hard not to piss off the security establishment–and to stop short of voicing the conclusions that Dana Priest and William Arkin’s work support–that they’ve turned Priest and Arkin’s work into a bunch of disembodied fluff.

Take a look at the logic of this passage–which points out the drawbacks of using contractors–to see what I mean:

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.

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.

It starts with a classic “on the one side, on the other” piece of cowpie: a sentence that even linguistically refuses to take sides. Contractors, you see, are extraordinary in all ways!!!

Then watch the shift into an almost agent-less soft-pedaling of the problems contractors have caused. Abuse of prisoners happened. But apparently, only at Abu Ghraib, not at Bagram, not at Gitmo, not at firebases where detainees died. And the names of those contractors? Their role in the abuse? The WaPo stops short of telling you, for example, that a CACI interrogator was the one instructing the grunts at Abu Ghraib to abuse detainees. The WaPo also doesn’t tell you the CACI contractors never paid any price for doing so. The WaPo doesn’t mention that DOD believed they had no way of holding  contractors accountable for such things (though the case of David Passaro, in which a detainee died, of course proved that contractors could be prosecuted).

Then there’s Blackwater. What’d they do? Why they, “added fuel to the five-year violent chaos in Iraq and became the symbol of an America run amok.” No mention of Nisour Square. No mention of the Iraqi Vice President’s murdered security guard.  No mention of the contractors killed in Fallujah–who were left exposed by Blackwater. No mention of the illegal gun smuggling. And definitely no mention of the most recent allegations that Blackwater has been involved with assassination squads. Instead, we get Allison Stanger’s quote–alluding to contractors doing the actual killing, but never actually spelling that out for those who don’t read Jeremy Scahill (or, frankly, Erik Prince).

And then, after alluding to the CACI interrogators who avoided the legal consequences the Abu Ghraib guards paid, after alluding to Blackwater’s fueling of chaos but not mentioning its many legal problems, only then does this story say,

Misconduct happens, too.

Which, grammatically and logically, suggests the CACI and Blackwater crimes were not actually misconduct.

And even here there’s some real fudging. According to the WaPo, there was only one contractor involved in the Duke Cunningham story: MZM. (And even there, WaPo makes no mention of MZM’s involvement in CIFA’s spying on American citizens.) No mention of the other contracting scandal exposed in the Duke Cunningham case, wherein the third most senior guy at CIA, Dusty Foggo, went to jail for sending contracts to his childhood buddy Brent Wilkes in exchange for prostitutes and–possibly–a plush job after he left the CIA. That kind of revolving door corruption is one of the real and repeated problems with reliance on contractors. The such a senior person at CIA sold out security for an expensive whore ought to serve as a cornerstone for this morality tale. But according to the WaPo, it didn’t happen.

And that’s how the miracle of modern MSM editing presents the downsides of contractors as largely disembodied chaos rather than security contracts getting doled out for reasons that have nothing to do with security, rather than contractors abusing their quasi-immune status to engage in really counterproductive crimes.

Marcy has been blogging full time since 2007. She’s known for her live-blogging of the Scooter Libby trial, her discovery of the number of times Khalid Sheikh Mohammed was waterboarded, and generally for her weedy analysis of document dumps.

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including the Guardian, Salon, and the Progressive, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse and dog in Grand Rapids, MI.

  1. klynn says:

    Man Marcy, I am so glad you are here. Thank you.

    The other underlying story, which is only hinted at and is a bit on the soft news side, is the vast number of firms which are also tied to or owned by private equity firms.

    There are bits which bring out the concern IRT shareholders. But the focus on equity firms is quite understated.

    • fatster says:

      Do you know of anyone who is working on drawing up a chart showing the linkages between all the corporations and firms involved? It would be a doozy.

      • klynn says:

        Yeah, to think we used tax dollars to feed their too big to fail coffers and now our tax dollars are creating a police state. And tax dollars to float their health care sector to bleed citizens dry.

        We are looking at 362.72 citizens per intel worker and 1168.99 citizens per contract intel worker.

        That is staggering.

        • Leen says:


          But this seems like the deeper issue.

          “And I think we have to wonder—we have to take the intelligence that they gather and the advice that they give to our government agencies with a huge grain of salt, because when you get a contract, the important thing about that contract is you want to get the next contract. You want to get that contract renewed. You might get a five-year contract with one-year renewals. You want to get it renewed every year. So, do you think you’re going to downplay the threat? Do you think you’re going to say, “Oh, there’s no more, you know, problem over here in this area of the world, so we can just—you know, you can just pull our contract”? They’re not going to do that. And I think we really have to wonder about the quality of the intelligence you get from these private-sector companies.”

          If your bills or profits are dependent upon ginning or sexing up the threats from other nations, Al Queda etc how can you trust their assessments?

          Does anyone know how long anyone who has served in congress or in an administrations has to wait before they can lobby for a defense contractor? Seems like there should be at least 10 years between. But if you were really trying to serve the American public the revolving door would be eliminated totally.

  2. MadDog says:

    After reading Part 2 earlier this morning, all I could do was y-a-w-n. This was news, how?

    And that’s when this refrain kept repeating itself over and over again in my brain:

    Where’s the news?

    I know it’s obligatory to mention that one admires Dana Priest’s previous stellar work, but:

    Where’s the news?

    And to EW’s comment of:

    …a bunch of disembodied fluff…

    It’s like the WaPo (and Dana Priest) decided to count the grains of rice in a soupbowl of gumbo, and with precious fanfare have announced to the entire world, that gumbo they’ve learned, contains rice!

    And not only that, but a soupbowl of gumbo contains 279 grains of rice!

    And with that, I find myself asking once again:

    Where’s the news?

  3. Leen says:

    Shorrock sure focused on the “what took them so long” piece
    Tim Shorrock Asks Why It Took the Washington Post So Long to Investigate the US Intelligence System

    “AMY GOODMAN: For more, we’re joined by Tim Shorrock, an investigative journalist and the author of Spies for Hire: The Secret World of [Intelligence Outsourcing].

    Tim, as you go through the first of the series of pieces in the Washington Post—you’ve been looking at these issues for a long time—what are you—what do you think is most important?

    TIM SHORROCK: Well, first of all, let me say that, with all due respect to the Washington Post—and Dana Priest and Bill Arkin are very good reporters—we have to ask, why did it take them seven years to do this story? Anyone who’s been covering intelligence or national security in Washington knows that intelligence has been privatized to an incredible extent and national security has been privatized to an incredible extent.

    I broke the first stories on the intelligence-industrial complex. The first one appeared in Mother Jones in 2005. In 2007 I wrote a major story for Salon and a whole series in Salon. I disclosed that 70 percent of the US intelligence budget is spent on private-sector contractors. And then, of course, I wrote this book, which has a lot of this information that’s in the Post series. So, I find it rather amazing that it took them this long to actually do this kind of piece, because the information has been there.

    And the American people have been ill-served by the Washington Post, whose coverage of these companies has been basically rah-rah journalism—rah-rah Lockheed Martin, rah-rah Booz Allen, look at the profits they’re making. There has not been this kind of careful look at what’s actually happening. So, that’s the first point I’d like to make. And I think, you know, people should look at the work of myself, Jeremy Scahill, other journalists that have covered this sector and put out the word of how much intelligence is controlled and gathered by private-sector corporations.”

      • Leen says:

        Hope he focuses on what he said during his interview with Amy
        “And I think we have to wonder—we have to take the intelligence that they gather and the advice that they give to our government agencies with a huge grain of salt, because when you get a contract, the important thing about that contract is you want to get the next contract. You want to get that contract renewed. You might get a five-year contract with one-year renewals. You want to get it renewed every year. So, do you think you’re going to downplay the threat? Do you think you’re going to say, “Oh, there’s no more, you know, problem over here in this area of the world, so we can just—you know, you can just pull our contract”? They’re not going to do that. And I think we really have to wonder about the quality of the intelligence you get from these private-sector companies.”

          • harpie says:

            and Jason [email protected]

            From emptywheel @36 in previous thread:

            Btw, I’ll put up an announcement of this later. But I just asked Tim Shorrock to do a livechat with us about the IIC on Wednesday at 10AM ET.

            So if you’ve got questions for him you can ask then.

              • harpie says:

                and [email protected]

                Glad to be of help. :-)

      • readerOfTeaLeaves says:

        Budget accountability?
        In a nation where Elizabeth Warren has not been able to find out where the TARP billions went? In a DC rife with off-books black budgets? In a nation where we get a FinReg fig leaf?

        Apart from Bush’s tax cuts, apart from Social Security being one of the few big Moneypots left for the elites to pillage, this is rife for no end of fraud, extortion, and criminal conduct.
        Oh, and drug lords laundering billions.

        Budget accountability?
        You’re kidding, right? (/s)

        EW @4: hope everyone has a great conversation on Wed.

  4. TheOrA says:


    Thanks for the breakdown and addition of missing info on this. GG is flogging it for a different reason, but your perspective, wow, facts are facts are facts, how do you remember it all? And may you get a vote come Pulitzer time!

    Slightly OT, however I thought it was worth a mention since I hadn’t seen in linked in any of the other recent posts.

    Here is one documentariest that didn’t miss out on the fact that torture wasn’t limited to Abu Ghraib.

    None of Us Were Like This Before: Six Questions for Joshua Phillips
    By Scott Horton

    Earlier this year, Joshua Phillips received the Alfred I. duPont-Columbia University Award for his 2008 American Radio Works documentary What Killed Sergeant Gray. Now he’s developed that story in a book that offers a compelling account of how the use of torture and abusive techniques on prisoners affected the lives of American soldiers caught up in it. I put six questions to Joshua Phillips

  5. Citizen92 says:

    Were the Heritage Foundation twenty-something MBA’s sent over to Iraq to restructure the Ministry of Finance and other parastatals considered contractors?

    And what of MZM’s “office furniture” contract for OVP?

    I do hope Ms. Priest’s research will delve into the possibility that some of these firms are delivering zero value for money. Particularly the 25 person or less shops.

  6. klynn says:

    The worst comment I have read so far referenced how the growth in the IIC is the largest jobs program.

    “Contractor misdeeds…”


    The words I am thinking of are NOT disembodied fluff.

  7. Leen says:

    Blackwater’s youngest victim. That is the youngest victim that we know about
    EXCLUSIVE…Blackwater’s Youngest Victim: Father of 9-Year-Old Killed in Nisoor Square Gives Most Detailed Account of Massacre to Date


    So thankful for Jeff Kaye’s alerts and well written post. As long as our MSM goes along with “Erasing Iraq: The Human Costs of Carnage” The “turn the page, next chapter, don’t be about vengeance” but investigate lies about blowjobs folks keep driving over the dead and tortured in Iraq and elsewhere.
    ” Mike isn’t dropping off the radar. Along with Richard Hil and Paul Wilson, he just published another amazing work of political journalism. In his new book, Erasing Iraq: the Human Costs of Carnage, Otterman again traces the history of U.S. intervention in Iraq, from the early support for Saddam Hussein, through the Iran-Iraq War, the 1990 Gulf War, the Clinton-era period of murderous sanctions, and the recent devastation wreaked by the 2003 U.S. invasion and occupation. The destruction of Iraqi society, with its millions of displaced, its looting of historical treasures, its chaos and war upon a previously largely secular culture, is shown to be a kind of sociocide.

    From Mike’s brand-new website:

    For nearly two decades, the US and its allies have prosecuted war and aggression in Iraq. Erasing Iraq shows in unparalleled detail the devastating human cost.

    Western governments and the mainstream media continue to ignore or play down the human costs of the war on Iraqi citizens This has allowed them to present their role as the benign guardians of Iraqi interests. The authors deconstruct this narrative by presenting a portrait of the total carnage in Iraq today as told by Iraqis and other witnesses who experienced it firsthand.”

  8. Peterr says:

    No mention of the other contracting scandal exposed in the Duke Cunningham case, wherein the third most senior guy at CIA, Dusty Foggo, went to jail for sending contracts to his childhood buddy Brent Wilkes in exchange for prostitutes and–possibly–a plush job after he left the CIA.


    Shorter editors: Nothing to see here. Move along, move along . . .

  9. Frank33 says:

    Way to go Emptywheel. But we can make some conclusions. This report was shown to our National Security Masters so they could approve its publication. This is just more censorship and coverup. WaPo is doing its usual pimping for warmongers. No Pullitzer here.

    But the WaPo stenographers trip on their own contradictions. The Kangaroo Courts are trying to call it “War crimes” if the Jihadists fail to wear the proper “uniform” when they battle an American Military Occupation.

    Wiki says

    An unlawful combatant or unprivileged combatant/belligerent is a civilian who directly engages in armed conflict in violation of International Humanitarian Law (IHL) and may be detained or prosecuted under the domestic law of the detaining state for such action.

    Then the Contractors and Blackwater mercenaries are also “unprivileged belligerents”. Perhaps the operators of the “Drones” may not be properly dressed for war. Of course, under a military occupation, no insurgents are likely to wear a military uniform as they fight their occupiers.

    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,”

  10. Gitcheegumee says:

    What about the correlation between fusion centers and private contractors?

    More About Fusion Centers | American Civil Liberties UnionJul 9, 2010 … Some fusion centers incorporate private-sector corporations into the intelligence process, potentially undermining privacy laws designed to … – Cached

    • Gitcheegumee says:

      We found that while fusion centers vary widely in what they do, five overarching problems with these domestic intelligence operations put Americans’ privacy and civil liberties at risk:

      1.Ambiguous Lines of Authority. In a multi-jurisdictional environment it is unclear what rules apply, and which agency is ultimately responsible for the activities of the fusion center participants.
      2.Private Sector Participation. Some fusion centers incorporate private-sector corporations into the intelligence process, potentially undermining privacy laws designed to protect the privacy of innocent Americans, and increasing the risk of a data breach.
      3.Military Participation.Some fusion centers include military personnel in law enforcement activities in troubling ways.
      4.Data Mining. Federal fusion center guidelines encourage wholesale data collection and data manipulation processes that threaten privacy.

      5.Excessive Secrecy. Fusion centers are characterized by excessive secrecy, which limits public oversight, impairs their ability to acquire essential information and impedes their ability to fulfill their stated mission, bringing their ultimate value into doubt.

      There were 40 fusion centers when the report was published. Six months later there 58 fusion centers and a growing number of news reports illustrating the problems we identified, so in July 2008 we published a follow-up report. Today there are at least 72 fusion centers across the country


      • earlofhuntingdon says:

        You highlight a considerable threat to our constitutional rights: the unfettered growth of so-called fusion centers. These federalize, militarize and privatize local law enforcement all at the same time. Who is responsible for their oversight, management and compliance with the law. My guess is no one, it’s assumed they will do things properly – including spending vast amounts of money and invade constitutionally protected areas of daily life – or that that doesn’t matter.

        ps: If they are nominally established under the auspices of the Heimat Sicherheitsients, then two things happen: Joe Lieberman is in charge of their oversight, hahahaha, and no one but the military has the balls to take charge of such an inter-agency hydra.

        The other thing about inter-agency hydras like this is that their budgets are an amalgam of many contributions, making it excruciatingly hard to calculate exactly what’s spent on this activity. I assume that’s a feature, not a bug.

        • Gitcheegumee says:

          klynn, I am soooo unclever at the mechanics of teh tubes…

          Here is an excellent primer on fusion centers from Political Research Associates:

          Intelligence Fusion Centers – – The Website of …Fusion centers constitute a new piece in a vastly more powerful police apparatus. They give the executive branch an incredible physical reach into state and …
…/intelligence-fusion-centers.html – Cached – Similar

          NOTE: FWIW, back when the TeaBuggers were brewing up a brouhaha at Mary Landrieu’s NOLA office, I posted a coupla things about the fusion center there getting an infusion of federal money .

          BTW, did anyone happen to read recently that BP was getting into the intel biz?

      • Hugh says:

        I seem to be blogwhoring a lot in this thread, but I covered fusion centers and the two ACLU reports:

        in item 372 of my Bush scandals list. I also have item 78 in my Obama scandals list on DHS turning over classified material from DOD databases to them.

        Fusion centers are a great threat to our Constitutional rights and they fly under the radar. The ACLU reports pointed out that virtually all of the country’s 800,000 law enforcement personnel have access to them and can add to them. The potential for abuse is exponential.

        • Gitcheegumee says:

          PDF] Statement for the Record of Gregory Schaffer Assistant Secretary …File Format: PDF/Adobe Acrobat – View as HTML
          Jun 16, 2010 … inform the official FISMA report to Congress. …. their local fusion centers, allowing classified information sharing outside of Washington …

          NOTE: Page 8 delineates the NEW programs that enhance the cooperation between the private sector and governmental, classified entitioes.


  11. Jeff Kaye says:

    “Misdeeds”… not murder.

    No mention of the most famous (infamous) contracting agency of them all (after Blackwater-Xe) — Mitchell-Jessen and Asscociates.

    I’d note that in June 2009 I covered the issue of contractors in relation to JPRA and the torture scandal: “Targets of Opportunity”: Corruption, Contractors, and the Origins of the SERE Torture Program. None of this, I’d avow, will make it into the WP series.

    Without a doubt, there’s a lot of cash available for the business-minded, and some ex-JPRA personnel have been critical of the blurring of the boundaries between the military organization and civilian contractors. JPRA/SERE military officers would resign to become civilian employees of the Air Force, where they could now make between $75,000 and $150,000 per year, plus benefits. One former JPRA employee described the agency as “a closed community of hiring among old SERE/Pararescue community cronies, such that a military member of JPRA can retire on a Friday and come back to work on the Monday as a Tate contractor and a substantially higher salary.” Certain officers have been accused of building “empires” of loyal flunkies, as the officer has the power to hire the old military employee at higher civil service wages, or even slide some contracting business their way some day.

    No wonder there seems to be a plethora of small-time contracting agencies, like Spivey’s RS Consulting, or Sere Solutions, Inc., or James Mitchell’s first foray into the field, Knowledge Works, which he ran with an Army Special Operations Psychologist, Lt. Colonel John C. Chin.

    • Leen says:

      Lies about WMD’s in Iraq “fabrications, overestimates ”
      waterboarding “Enhanced interrogation methods”
      prisoners of war “enemy combatants”

      Demands for accountability for serious crimes “witch hunts, retribution, vengeance”

  12. Leen says:

    Ew hope you ask Shorrock Klynn’s question from the other day

    ” klynn July 19th, 2010 at 8:44 am

    Here’s a stat I would like to see. How many individuals employed by the contractors are dual citizens? How many dual citizens has the government decided to employ in national security positions?”

  13. bobschacht says:

    Thanks for another dynamite diary! Everyone should “spotlight” this to journalists around the country (see “spotlight” link at end of the top post, above). This diary is very timely, too: because of its heft, this WaPo series *has* to be covered by the secondary press, and they’ll be wondering how to report on it. Let’s give them a clue.

    Bob in AZ

  14. Leen says:

    Aafia Siddiqui, a Pakistani neuroscientist and mother of three is to stand trial in New York for attempted murder. But shadowy questions about her life remain, including her links to al-Qaida and her five ‘lost’ years.

    As reported on National Terror Alert last year, The capture of Aafia Siddiqui, most likely saved many innocent lives however; the information she may be able to provide authorities may prove even more valuable in the long run.

    Earlier reports stated that handwritten notes about a “mass casualty attack” that listed New York City landmarks like the Empire State Building and the Statue of Liberty were found on Siddiqui. It has also been reported that Siddiqui carried lists of other locations like Wall Street, the Brooklyn Bridge and Plum Island and notes about “dirty bombs,” chemical and biological weapons and other explosives.

    Has Aafia Siddiqui’s Daughter Surfaced?

  15. earlofhuntingdon says:

    Failure to connect the dots has migrated from the intel boyz to their editorial colleaguez. That ought to put paid to Ms. Priest’s hopes for another Pulitzer. Republishing unclassified material and quotes released for publication, supported by a few additional facts, isn’t enough to win one. What’s required is drawing out the import of those facts, and their forceful use as supporting evidence in a manner that doesn’t require the reader to replicate all her thoughts and evidence.

    Ms. Priest ought to consider working for FDL; her work might well shine more brilliantly without the editorial dust layered onto it to keep it hidden. The WaPoop either sells coal as gems or turns glistening diamonds into rough cuts in order not to offend the sensibilities of its neighbors. Placating behavior in a gated community does not journalism make.

  16. Leen says:

    Spencer has a great one up
    Credit where due


    Yep: RT @johnmcquaid “WaPo’s failure to acknowledge earlier journalism on the privatization of intelligence is all about winning prizes” about 2 hours ago via web

    Glenn Greenwald

    WaPo’s failure to acknowledge earlier journalism on the privatization of intelligence is all about winning prizes cc @TimothyS

  17. Leen says:

    Has Shorrok ever been on Ed’s, Dylan Ratigans, Matthews, Rachel, Keiths? Have they all ignored him, his book. I know Scahill has been on a few of these outlets

  18. earlofhuntingdon says:

    And this from Glennzilla (emphasis and links omitted; emphasis added):

    Our military, our CIA, our spying agencies (such as NSA) are every bit corporate as they are governmental: in some cases more so. So complete is the merger that it’s the same people who switch seamlessly back and forth between governmental agencies and their private “partners,” which means we have not only a vast Secret Government, but one that operates with virtually no democratic accountability and is driven not by National Security concerns but by its own always-expanding private profits. Just read the years of work from Tim Shorrock — which disgracefully was not even cited by the Post — documenting how dangerous all of this.

    Others, such as Marcy, who publicly ask the questions the Post refuses to ask, or make the connections the Post refuses to make, also deserve recognition.

    Failing to cite Tim Shorrock’s work cannot be just about competition for a Prize; it must also be about not giving the public greater access to public information the Post and its Beltway patrons want to keep under wraps.

    Money aside, it is hard to see why Ms. Priest remains with her colleagues. Her stature and talent give her access; her work would make another publication rather than be downplayed by it.

  19. Frank33 says:

    Breaking Spencer Ackerman News: Drug addled, hearing impaired, right wing blimp Rush Limbaugh has just promoted Spencer to the Big Time. In one of his typically incoherent rages against lefty media coordinating mainstream reporting, Spencer is highlighted as one of the leaders.

    To paraphrase: The “obscure blogger” for “indoctrinated liberals” was part of a campaign to protect Obama during the campaign. “Ackerman urged colleagues to deflect attention from Jeremiah Wright by changing the subject.”

    Congratulations Spencer!

  20. Gitcheegumee says:

    I know this is redundant,as I have posted it several times over the past months, but if I may, in light of the topic:

    President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye.

    Unbeknownst to almost all of Washington and the financial world, Bush and every other President since Jimmy Carter have had the authority to exempt companies working on certain top-secret defense projects from portions of the 1934 Securities Exchange Act. Administration officials told BusinessWeek that they believe this is the first time a President has ever delegated the authority to someone outside the Oval Office. It couldn’t be immediately determined whether any company has received a waiver under this provision.

    The timing of Bush’s move is intriguing. On the same day the President signed the memo, Porter Goss resigned as director of the Central Intelligence Agency amid criticism of ineffectiveness and poor morale at the agency. Only six days later, on May 11, USA Today reported that the National Security Agency had obtained millions of calling records of ordinary citizens provided by three major U.S. phone companies. Negroponte oversees both the CIA and NSA in his role as the administration’s top intelligence official.

    William McLucas, the Securities & Exchange Commission’s former enforcement chief, suggested that the ability to conceal financial information in the name of national security could lead some companies “to play fast and loose with their numbers.” McLucas, a partner at the law firm Wilmer Cutler Pickering Hale & Dorr in Washington, added: “It could be that you have a bunch of books and records out there that no one knows about.”

    NOTE: I would be curious as to how many of these contractors and contracts are considered,”Top Secret”,ergo,SEC reporting exemptions.

    • earlofhuntingdon says:

      NOTE: I would be curious as to how many of these contractors and contracts are considered,”Top Secret”,ergo,SEC reporting exemptions.

      The majority of them.

  21. earlofhuntingdon says:

    Glennzilla also disputes the assertion in the Priest and Arkin series that what she and her co-author describe is not the firebreathing dragon that Dwight Eisenhower warned about in his 1961 farewell speech. He concludes that it looks exactly like the corporate-governmental monolith he warned his fellow citizens against (emphasis added):

    Everyone should decide for themselves if we have the “alert and knowledgeable citizenry” which Eisenhower said was necessary to “compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.” If we empower a massive private industry this way — with core governmental authorities — to gorge on unchecked power and huge private profits at the public expense, all derived from Endless War and civil liberties abridgments, why would one expect anything other than Endless War and civil liberties abridgments to be the inevitable outcome?

    • Gitcheegumee says:

      In the penultimate draft of the address, Eisenhower initially used the term military-industrial-congressional complex, and thus indicated the essential role that the United States Congress plays in the propagation of the military industry. But, it is said, that the president chose to strike the word congressional in order to placate members of the legislative branch of the federal government. The actual authors of the term were Eisenhower’s speech-writers Ralph E. Williams and Malcolm Moos.[3]Attempts to conceptualize something similar to a modern “military-industrial complex” existed before Eisenhower’s address. In 1956, sociologist C. Wright Mills had claimed in his book The Power Elite that a class of military, business, and political leaders, driven by mutual interests, were the real leaders of the state, and were effectively beyond democratic control.

      Also F. A. Hayek mentions in his 1944 book The Road to Serfdom the danger of a support of monopolistic organisation of industry from WWII political remnants:Another element which after this war is likely to strengthen the tendencies in this direction will be some of the men who during the war have tasted the powers of coercive control and will find it difficult to reconcile themselves with the humbler roles they will then have to play [in peaceful times].”[5]


  22. Hugh says:

    I wrote an entry on this for my Obama scandals list. I included the points at the beginning of the first part article, and I made sure to link to Tim Shorrock. I have to agree that the WaPo piece is surprisingly light otherwise.

    The bit about the underwear bomber at the end of the article seemed almost tacked on to me. In the spirit of this post, it begins by saying that it showed the best and worst of the intelligence enterprise.

    About Dana Priest and the WaPo, I wanted to say that the long time it took them to come up with even this broadbrush, watered-down version is valid but not unexpected. I began my Bush scandals list precisely because I thought that events like the neglect of wounded soldiers at Walter Reed would soon be forgotten, and I didn’t want to see that happen. And that got me started trying to collect all the other stories of the Bush Presidency that were likely also to be forgotten. So when I began writing my entry about Walter Reed what struck me was that this story had been around for a couple of years before Priest picked it up. What made the non-coverage of it by the MSM during that interim all the more egregious is that Walter Reed is right in Washington only a few minutes from Congress, the White House, and the WaPo. As I wrote at the time, “Washington didn’t know about Walter Reed because it didn’t want to know.” I think the same could be said about the privatization of American intelligence, and let’s face it a zillion other scandals and failures the powers that be would rather not be discussed.

    • Frank33 says:

      The bit about the underwear bomber at the end of the article seemed almost tacked on to me. In the spirit of this post, it begins by saying that it showed the best and worst of the intelligence enterprise.

      Very interesting. I have done some blog horing about Underwear. Priest and Arkin are not being truthful. Abdulmutallab was not stopped from detonating the explosive device. It was detonated and caused a fire that crew and passengers extinguished. And once again, Abdul was escorted through security by another Al Qaeda spy, and Abdul had no passport. This spy story is still behind “The Wall”.

      And so Abdulmutallab was able to step aboard Northwest Airlines Flight 253. As it descended toward Detroit, he allegedly tried to ignite explosives hidden in his underwear. It wasn’t the very expensive, very large 9/11 enterprise that prevented disaster. It was a passenger who saw what he was doing and tackled him.

  23. JasonLeopold says:

    I agree w/Rayne and others too. Visually the entire package/presentation is quite appealing but what is in the article today that took two years to write? I didn’t see anything revelatory in today’s installment. They scored an interview with Gates and Gates said some things and they broke down some numbers. To me it appears as if they researched earlier work by other reporters, read their books, and used some of that to help form their narrative.

    • billyc says:

      Mr. Leopold, I agree with your statement.
      Since you’re already familiar with Shorrock’s work, let me suggest two others to add to your must-read list:
      The Complex by Nick Turse and The Shadow Factory by James Bamford.
      Turse, who has a doctorate from Columbia, expands the concept of the military-industrial complex from the Eisenhower era to “military-industrial-technological-entertainment-academic-scientific-media-intelligence-homeland security-surveillance-national security-corporate complex.” Since that is so unwieldy, he simply refers to it as The Complex.
      An article that appeared in May, 2008, in Rolling Stone, as a run-up to the Beijing Olympics, showcases an IC contractor who was(is?) helping create China Police State 2.0:

      • earlofhuntingdon says:

        You forgot “religious” in your Complex. The Republicans want a state religion whose job is to promote Republicans.

  24. Leen says:

    Law Says Treasury Secretary Can Name Elizabeth Warren To Lead Consumer Protection Agency WITHOUT Senate Confirmation… Opposition From GOP Neutralized

    SEIU, Labor Directly Lobby Geithner On Elizabeth Warren’s Behalf

  25. bobschacht says:

    I spotlighted this diary to the following:
    Keith Olbermann : Host : MSNBC
    Jamie McIntyre : Senior Pentagon Correspondent : CNN News Group
    Christiane Amanpour : Contributing Correspondent : CBS News
    Fareed Zakaria : Analyst : ABC News
    Eric Schmitt : Military Correspondent : New York Times
    Thomas Shanker : Defense Correspondent : New York Times
    Paul Richter : National Security Correspondent : Los Angeles Times
    Bob Drogin : Intelligence, Asia Correspondent : Los Angeles Times
    Robert Burns : Military Writer : Associated Press
    Anthony Capaccio : Defense Correspondent : Bloomberg News

    In the process, I found it interesting how few journalists are devoted to studying “intelligence,” as an explicit part of their beat! One good thing to come of the WaPo series would be if more reporters took on that subject as part of their regular beat. Bob Drogin was the only one I could find who was explicitly devoted to “intelligence.”

    What would be the other labels? “National security”? Ain’t many journos covering that beat, either. “Defense”? Too big a tent.

    Bob in AZ

    • Leen says:

      Would really like to see Tim Shorrock, Jeremy Scahill, Dana Priest, Arkin all on one program. If any of the talking heads are interested in helping us understand what is going on in the intelligence community have all of them on at once.

  26. pdaly says:

    I won’t be able to make it to the special book salon, but a question I’d like to know if Shorrock can answer,

    This boom industry of the intelligence corporations is it continuously dependent on the public tax dollar spigot, the majority of companies disappearing once the flow of cash is stopped, like mushrooms that thrive on an overwatered lawn only to disappear during a drought, or are the intelligence corporations growing deep roots like a well-watered lawn, the burrowed roots drinking from sources deep below the surface and fully capable to survive a dry spell?

  27. Hmmm says:

    Leave it to me to ask the obvious, as ever, but what % of this black budget would it take to cover the costs of repaying the Social Security bonds? What % to cover the unemployment insurance extensions costs? Is the sum of those two percentages approximately equal to or less than the % currently being devoured by inefficiency and fraud? (And that’s before we even get to whatever’s being spent on Constitutionally proscribed activities.)

    Come to think of it, this can reasonably be seen as double-dipping: If you’re an owner of any of the businesses participating in these programs then you get to apply the benefits of the Bush tax cuts (dip #1) to the profits (dip #2) that would not exist in the first place if it weren’t for the USG money funding the programs.

      • Hmmm says:

        De nada. FWIW, I was thinking more in terms of national budget priorities. You can’t discuss the relative priority of this black budget program if you can’t discuss the existence, nature, and content of the program in the first place. But if you can get a rough fix on the size of its budget, then you can at least compare and contrast with the funding of other, threatened, programs.

        • readerOfTeaLeaves says:

          You can’t discuss the relative priority of this black budget program if you can’t discuss the existence, nature, and content of the program in the first place.

          Well, if you actually had to justify your economic existence and explain how all your efforts still failed to prevent a shoe-bomber at Christmas or a Times Square attempted bombing, then you’d probably opt for “Option 2: The Do Not Disclose” method of off-books contracting.

          Because if the accounting were thorough, we might discover that humans are critters that are extremely social. That early childhood nurturing builds better, stronger, smarter brains. And that if you want to prevent violence 20 years from now, you focus today on developing a talented, well-paid group of people who teach parents how to be better parents, who work with children under the age of 5.
          Everything else is pretty much putting out fires, which become extremely expensive (socially, economically, culturally).

  28. gmoke says:

    It’s impossible for any Republican to be a war profiteer or a traitor. All Republicans, by definition, are patriots. All Democrats, by definition, are not. Liberals are almost certainly Communist Fascist Socialist agitators. DFHs should be shot on sight.

    I thought all good Americans knew these truths to be self-evident.

  29. rmwarnick says:

    If torture and murder aren’t misconduct, then I’m curious about what the WaPo knows about “MISCONDUCT.”

  30. onitgoes says:

    Thanks for an excellent post and great commentary.

    I would laugh if I didn’t feel like crying.

    Someone on another post today was self-righteously chiding us all because we have the temerity to want to draw the Soc Sec that we paid into. Somehow wanting our rightful Soc Sec makes us dirty bludging slackers and we should all be prepared to work until we drop, even it that’s 105.

    And yet this goes on unabated (as it has for decades), and many citizens are either blissfully unaware… or if they’re somehow given the facts and evidence, they choose to turn a blind eye. A lot of similar discussions went on during Viet Nam, and we were all excoriated for calling out the CIA for the drug pushing war lords that they were. Nothing has changed, except for the amount of pillaging, which has increased to monumental levels… and somehow it’s never enough for the elites.

  31. Cynthia says:

    Notice that investigative journalists like Tim Shorrock, the author of “Spies for Hire: The Secret World of Intelligence Outsourcing,” and Jeremy Scahill, the very sexy author (at least to me he is) of “Blackwater: The Rise of the World’s Most Powerful Mercenary Army,” have been laboring long and tirelessly digging up all kinds of dirt on the intelligence community, but none of their work has managed to spill over into the mainstream press and take root there. I don’t know if this is because the public in general believes that journalists employed through left-of-center publications like Mother Jones and The Nation are less credible than the ones employed through right-of-center publications like The Washington Post and The New York Times or what. But regardless of what the reason may be, Tim Shorrock lets us know that he’s pretty miffed for being marginalized by the mainstream press, making me pretty miffed, too!

    • earlofhuntingdon says:

      Good for him; it’s unlikely Ms. Priest’s work would have been as persuasive or taken only two years to publish if not for Mr. Shorrock’s prior work. As Glenzilla pointed out this morning, it is shocking that the WaPoop’s series failed to recognize that. I wonder whether that was Ms. Priest’s decision or her editor’s.

    • bobschacht says:

      I wonder if that’s because no one in the press covers the Intelligence beat. At least, not overtly. I hope that maybe the WaPo series will at least result in more journalists being assigned to cover that beat.

      Bob in AZ

  32. Cynthia says:

    The primary reason why the intelligence community, whether it’s employed to track down “enemies of the state” on either the domestic or foreign front, has become a breeding ground for waste, fraud and abuse is because intelligence agencies, unlike most other governmental agencies, are exempt from regulatory oversight on the ground that doing so would compromise national security. But the problem with this argument is that most of the time what the intelligence community does has little, if anything, to do with national security. This is why many times when whistle-blowers or journalists try to report any type of waste, fraud and abuse taking place in the intelligence community, they are accused of being “enemies of the state” and hauled off to jail without due process of law, which is a direct violation of our First as well as our Fifth Amendment Rights. We must find some way to put a stop to this practice of allowing the intelligence community to hide behind a iron veil of state secrecy. And we must do this before our country devolves into a full-blown police state. This, I believe, gets to the heart of what the “Sovietization” of America is all about.

  33. spanishinquisition says:

    How about the Afghan warlords on the payroll? I doubt those show up on any public list of contractors.

    • earlofhuntingdon says:

      Scahill makes the important observation that the WaPoop series has come out years after Congress ought to have been debating the extent of this outsourcing, its costs and risks, its impact, and its complete lack of oversight, whether through traditional intel and defense oversight committees or Lieberman’s worthless DHS “oversightless” committee.

    • Leen says:

      thanks for that link

      Scahill “It was also hilarious to read CIA director Leon Panetta—who just gave Blackwater a brand new $100 million global CIA contract—act like he is anything other than a contractor addict. “For too long, we’ve depended on contractors to do the operational work that ought to be done” by CIA employees, Panetta told the Post. 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.” Panetta told the Post he was concerned about contracting with corporations, whose responsibility “is to their shareholders, and that does present an inherent conflict.” I wonder if the Blackwater guys working for Panetta can contain their laughter reading those statements. I imagine them taping a post-it note that says “Kick me” on Panetta’s back and then chuckling about it with the Lockheed contractors.”

      What Blackwater “expertise” would Panetta be referring to? Gunning down innocent Iraqi people and children in the middle of an intersection in Iraq? This is “expertise”

      Blackwater Indictments Are Like Al Capone Going Down for Tax Evasion

      by Jeremy Scahill

      Talk to this family about Blackwater’s “expertise”

    • bobschacht says:

      Here’s Ignatius:

      How about a leaner and meaner intelligence system?

      Well, Ix-nay on the meaner part. We’ve already got that.
      Leaner? Yes, please.

      Connecting the dots does not require “more,” as much as “better”.

      Bob in AZ

  34. fatster says:

    I have my doubts.

    US Intel Chief Nominee Pledges Toughness in Spies’ Oversight

    “In an answer to one senator’s question, Clapper, who is Undersecretary of Defense for Intelligence, asserted the DNI has the authority to overrrule the CIA director – a stance, analysts say, that will likely draw criticism at the Central Intelligence Agency.”


  35. timbo says:

    Excellent analysis of what is wrong with the Washington Post’s piece. They’re trying to make it seem digestible to readers by not mentioning any of the gory details that a presumably informed readership might already know about?! And thus they miss the impact and potential flaws in the use of contractors with concrete evidence that was known in its parts but the big mosaic is not explicitly presented and only alluded in a nebulous fashion instead. Very insightful…