Thursday, October 19, 2006

CONSTANTINE REPORT: Rumsfeld & N. Korea Intrigue, Blackwater, Duke Cunninham & the Pentagon, CIA Contractor Money Laundering, etc.

Meet the Counterterrorism-Industrial Complex

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.”
Musharraf: Ohar Sheikh is a British Military Intelligence Agent

Pakistan foils coup plot 14 Oct 3006 A plot to stage a coup against Pakistan's President General Pervez Musharraf soon after his recent return from the US has been uncovered, resulting in the arrest of more than 40 people. [This is why the Bush dictatorship wants Musharraf gone: Omar Sheikh is MI6 agent: Musharraf 14 Oct 2006 General Pervez Musharraf has disclosed that Omar Sheikh, who kidnapped and murdered American journalist Daniel Pearl and is now facing death penalty, was actually the British secret Agency MI6's agent and had executed certain missions on their behest before coming to Pakistan and visiting Afghanistan to meet Osama and Mullah Omar.]
Rumsfeld Link to N. Korean Reactors

Rumsfeld link to sale of reactors to North Korea 10 May 2003 The US Defence Secretary, Donald Rumsfeld, sat on the board of a company that three years ago sold two light water nuclear reactors to North Korea - a country he now regards as part of the "axis of evil" and which has been targeted for regime change by Washington because of its efforts of build nuclear weapons. Mr Rumsfeld was a non-executive director of ABB, a European engineering giant based in Zurich, when it won a $US200 million contract to provide the design and key components for the reactors. He sat on the board from 1990 to 2001, earning $US190,000 a year.
Rocky Mountain Spies

By Shane Harris
October 16, 2006

The next boomtown for spend-happy spies is . . . Aurora, Colo.? The growing Denver suburb will play home to a major operations center for the National Security Agency, amid a broader move by the intelligence community to align its operations with the military.

The Denver Post first reported NSA's move in January, and the buzz spread that its electronic eavesdroppers were building a new "warning hub" at Buckley Air Force Base. National security historian William M. Arkin has reported that the base is a major downlink for intelligence satellites, including NSA's. Buckley also is home to the 460th Space Wing, which runs the Defense Support Program satellites, the "eyes in the sky" that detect missile launches and warn the military.... Some of the biggest names in the intelligence business, including SAIC and Lockheed Martin Corp., have satellite offices nearby. Only Las Vegas and Colorado Springs - go figure - have better tax rates than Aurora, according to The Kiplinger Letter.
Cunningham probe could lead to officials in Defense, intelligence

By Jenny Mandel

An investigation into the dealings of former Rep. Randy "Duke" Cunningham, R-Calif., may implicate Defense Department and other agency officials who awarded contracts or were otherwise involved with funds channeled to corrupt contractors, according to a House inquiry.

The executive summary of an investigation by the House Permanent Select Committee on Intelligence was released Tuesday by ranking member Jane Harman, D-Calif. The summary offers insight into the findings of independent investigator, Special Counsel Michael Stern.

Stern was hired by Harman and committee Chairman Peter Hoekstra, R-Mich., to examine the activities of Cunningham, who pleaded guilty last November to accepting at least $2.4 million in bribes from contractors. Mitchell Wade, the former president of government contractor MZM Inc., pleaded guilty in February to bribing Cunningham and corrupting Defense Department officials

The investigation summary said that, to facilitate their illicit activities, the men needed to "secure the cooperation, or at least the noninterference, of many people," including the various Defense officials "responsible for execution of the money, awarding the contracts and preparing the statements of work; and officials of the agencies for which the contracts were to be performed."

"This was a lot of people to persuade, cajole, deceive, pressure, intimidate, bribe or otherwise influence to do what they wanted," Stern wrote in the report.

Despite the bipartisan origins of Stern's investigation, Hoekstra and Harman have battled over the release of the full report, which was completed in May and presented to the full committee shortly thereafter, according to a statement by Harman. In July, a 23-page unclassified version of Stern's original 59-page report was prepared, as well as the executive report that Harman released this week.

Hoekstra condemned that release as "disturbing and beyond the pale," stating that the inquiry hasn't been finalized pending review of an offer by Cunningham to give the committee information. But he also noted that Cunningham had indicated an intention to invoke his Fifth Amendment right to silence if forced to testify under oath.

According to the investigation summary, Cunningham used Intelligence Committee authorizations to channel contracts toward Wade and Brent Wilkes, an alleged co-conspirator and founder of defense contractor ADCS Inc., in exchange for bribes. The investigation found that committee staff "either actively cooperated with or did not resist" Cunningham's actions, and noted that he used his clout as a member of the Defense appropriations subcommittee with jurisdiction over several of the Intelligence Committee's key priorities to push his own agenda.

The report cited "red flags" associated with Cunningham's pet earmarks, and said committee staff were unable to conduct appropriate oversight over a Cunningham-backed counterintelligence project at an unspecified agency because project staff were reluctant to share negative information with the committee and committee staff were unwilling or unable to follow up on negative agency feedback when it was provided.

The summary indicated that former committee staffer Brant Bassett had relationships with Wilkes, CIA official Kyle "Dusty" Foggo, who is under a separate investigation in the matter, and, to a lesser extent, Cunningham.

It also alluded to dealings between Cunningham and "certain foreign nationals," and a congressional official told the Associated Press that Stern had looked into two trips that Cunningham took to Saudi Arabia in 2004.

The main focus of the investigation, however, was not federal officials' roles, but the possibility of committee staff involvement. Spokesman Jamal Ware could not say how much detail the full report provides on the level of executive branch involvement. "It was not meant to be a federal review," Ware said.

He said Cunningham "made contact with the committee and made an offer to provide input" as long as he was not subpoenaed, and that the matter was under review by committee lawyers. He said he did not know when that matter would be resolved, or when the full investigation report might be released.

According to the summary, investigators requested information from Defense, CIA and the Director of National Intelligence and received listings of contracts linked to Wilkes and Wade, but Defense "has been unwilling to share information to date, due to the pending criminal investigations."

According to, a federal spending database hosted by watchdog group OMB Watch, alleged co-conspirator Wilkes' company received $89.4 million in Defense and General Services Administration contracts between fiscal years 2000 and 2005, the entire time span available. Virtually all of those contracts were awarded in open competitions in which only one bid was received, or without competition, according to the database.

The contract database did not include information for Wade's company, MZM. FedSpending doesn't capture certain classified contracts, and the data is not guaranteed to be up-to-date or to accurately reflect agency contracting actions.

Also see:

Many in Government Helped Cunningham Or Yielded, Panel Finds Report Indicates Widening Investigation
By Walter Pincus
Washington Post
October 18, 2006, Page A19

Former congressman Randy "Duke" Cunningham (R-Calif.) channeled more than $70 million in Pentagon and intelligence agency contracts to two companies that paid him bribes, and required the "cooperation or at least the non-interference of many people" to pull that off, a congressional investigation has found...

Report Spells Out Abuses by Former Congressman
Published: October 18, 2006

The investigation found that Mr. Cunningham, a California Republican who is serving an eight-year prison sentence for bribery, repeatedly abused his position on the committee to authorize money for military projects, often over the objections of staff members who criticized some of the spending as wasteful....
Wife of banned U.S. contractor held on suspicion of laundering
September 19, 2006

BERLIN (AP) -- The wife of an American military contractor accused of cheating U.S. taxpayers has been arrested on suspicion of laundering her husband's purportedly ill-gotten gains after investigators seized about $1 million from her accounts, a prosecutor said yesterday.

Jacqueline Battles, a German citizen, was detained after a German bank informed authorities about "suspicious transactions" on her accounts two months ago, prosecutor David Kirkpatrick said. ... In March, a U.S. jury ordered Mrs. Battles' husband, contractor Mike Battles, and business partner Scott Custer to pay $10 million for swindling the U.S. government in connection with Iraq rebuilding projects involving their Middletown, R.I.-based company, Custer Battles LLC. The firm also had a primary office in McLean, Va. ...

According to the Providence Journal, Mr. Battles ran unsuccessfully in the 2002 Republican primary for the right to challenge Rep. Patrick J. Kennedy, Rhode Island Democrat, for his seat. Mr. Battles reportedly is a U.S. Military Academy graduate who once worked for the CIA. Mr. Custer is a former Army Ranger.

The firm reportedly won $100 million in Iraq contracts before being banned in 2004. There also are accusations that Custer Battles then set up sham companies to continue receiving Iraq contracts.
CIA contractor found guilty in local assault case
9/22/2006 3:00 PM
By: Ilin Chen

LILLINGTON, N.C. -- Former CIA contractor David Passaro was found guilty of beating his ex-girlfriend, Bonnie Heart, in Harnett County. District Court Judge Andy Corbett sentenced him to 55 days in prison, which could be served along with his federal sentence. But, Friday’s decision was not the end of this case.

David Passaro strolled into court wearing just jeans and a T-shirt. He faced misdemeanor charges of assault, larceny, and damage to property. Passaro had been in court before on assault charges. In August, he was found guilty in federal court of beating an afghan detainee, and faces up to 11 years in prison.
Raytheon hires CIA veteran
Boston Business Journal - 10:31 AM EDT Wednesday

Raytheon Co. said Wednesday it has hired a former CIA member.

The Waltham, Mass. defense contractor (NYSE: RTN) said Michael P. Morgan, a 26-year CIA veteran, will lead the company's multi-int strategy for its Intelligence and Information Systems (IIS) business, a $2.5 billion unit specializing in intelligence, information systems and technology.

In this role, Morgan will develop business development initiatives to strengthen and expand IIS' expertise in the intelligence sector.

Morgan's most recent assignment was with the CIA's Office of the Director of National Intelligence. Prior to this post, he held a variety of senior level intelligence positions with the CIA.
O'Reilly Equates 9/11 Scholars With Terrorists

O'Reilly threatens Truth Professors With FBI Investigation By Paul Joseph Watson & Alex Jones 14 Oct 2006 During Professor Jim Fetzer's appearance on The O'Reilly Factor Thursday night, O'Reilly equated the 9/11 Scholars with terrorists and threw his weight behind a move to have them being investigated by the FBI, in a similar vein to a previous case in which his false charges led to the arrest of another professor and charges of supporting terrorism which were later dismissed. "I'd put the FBI on you and that nutty Barrett and find out what the hell you guys are up to," salivates O'Reilly, making reference to Sammy Al-Arian, a former professor at USF who was charged and later acquitted...