National

War on terror is a business

Contractors and government officials mingled in May at the Defense Intelligence Agency's information technology conference in Phoenix. Private IT firms paid for the entire event.
Contractors and government officials mingled in May at the Defense Intelligence Agency's information technology conference in Phoenix. Private IT firms paid for the entire event. The Washington Post

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.

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.

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."

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.

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.

"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.

"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 Web site 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."

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