May 31, 2008

Former High-Ranking Bush Officials Enjoy War Profits


By Tim Shorrock
salon.com

Now working inside America's "shadow" spy industry, George Tenet, Richard Armitage, Cofer Black and others are cashing in big on Iraq and the war on terror.

Editor's note: This article is adapted from Tim Shorrock's book, "Spies for Hire: The Secret World of Intelligence Outsourcing," published this month by Simon & Schuster and reprinted with permission.

May 29, 2008 | Richard L. Armitage, who served from 2001 to 2005 as Deputy Secretary of State, was a rarity in the Bush administration: an official who delighted in talking to the press. Reporters loved him for his withering criticism of the neoconservative zealots around President George W. Bush and in part because he fed them tidbits about the White House they could obtain nowhere else. His accidental disclosure to conservative columnist Robert Novak that Valerie Plame, the wife of Iraq war critic Joseph Wilson, was working undercover for the Central Intelligence Agency remains one of the most notorious leaks of the Bush era.

But perhaps because of his cozy ties to the Washington press corps and the media's obsession with Plamegate, very little has been written about Armitage's extensive business dealings. In fact, Armitage is one of the most successful capitalists in Washington. He has successfully parlayed his experience in covert operations and secret diplomacy into a thriving career as a consultant and adviser to some of the biggest players in America's Intelligence Industrial Complex -- corporations that are working at the heart of U.S. national security and profiting handsomely from it.

Armitage, currently an adviser to presidential candidate John McCain, had once been Colin Powell's closest ally during the bitter disputes inside the Bush administration over the invasion and occupation of Iraq. According to the Washington Post's Bob Woodward, Armitage advised Powell on more than one occasion to tell the neocons to "go fuck themselves," and, at one point, even refused to deliver a speech about Iraq drafted for him by Vice President Dick Cheney's office.

Yet, three years after those epic battles, Armitage is enjoying life as a stakeholder in a dozen private companies that are making money directly from the war started by his former nemeses.

Over the past decade, contracting for America's spy agencies has grown into a $50 billion industry that eats up seven of every 10 dollars spent by the U.S. government on its intelligence services. Today, unbeknownst to most Americans, agencies once renowned for their prowess in analysis, covert operations, electronic surveillance and overhead reconnaissance outsource many of their core tasks to the private sector. The bulk of this market is serviced by about 100 companies, ranging in size from multibillion dollar defense behemoths to small technology shops funded by venture capitalists.

Nearly every one of them has sought out former high-ranking intelligence and national security officials as both managers and directors. Like Armitage, these are people who have served for decades in the upper echelons of national power. Their lives have been defined by secret briefings, classified documents, covert wars and sensitive intelligence missions. Many of them have kept their security clearances and maintain a hand in government by serving as advisers to high-level advisory bodies at the Pentagon, the Central Intelligence Agency, the National Security Agency and the White House. Now, with their government careers behind them, they make their living by rendering strategic advice to the dozens of information technology vendors and intelligence contractors headquartered along the banks of the Potomac River and the byways of Washington's Beltway.

Ever since the 1950s, with the rise of America's modern military-industrial complex, high-level U.S. officials and military men have moved between the government and private sectors. But what we have today with the intelligence business is something far more systemic: senior officials leaving their national security and counterterrorism jobs for positions where they are basically doing the same jobs they once held at the CIA, the NSA and other agencies -- but for double or triple the salary, and for profit. It's a privatization of the highest order, in which our collective memory and experience in intelligence -- our crown jewels of spying, so to speak -- are owned by corporate America. Yet, there is essentially no government oversight of this private sector at the heart of our intelligence empire. And the lines between public and private have become so blurred as to be nonexistent.

Shortly after leaving government in 2005, Armitage was recruited to the board of directors of ManTech International, a $1.7 billion corporation that does extensive work for the National Security Agency and other intelligence collection agencies. He's also since advised two private equity funds with significant holdings in intelligence enterprises. Veritas Capital, where Armitage served as a senior adviser from 2005 to 2007, owns intelligence consultant McNeil Technologies Inc. and DynCorp International, an important security contractor in Iraq. For a time, Veritas also owned MZM, Inc., the CIA and defense intelligence contractor that was caught -- before the Veritas acquisition -- bribing former Republican Congressman Randy "Duke" Cunningham.

In 2007, Armitage, along with several Veritas executives, moved over to DC Capital Partners, an intelligence-oriented buyout firm with some $200 million in assets. One of its first acquisitions after Armitage came on board was Omen Inc., a Maryland company that provides information technology and consulting services to the NSA. The fund has since combined Omen with two other intelligence contractors to form a new company called National Interests Security Company LLC, which has 850 employees, more than half of them holding top secret or higher security clearances.

Through his own eponymous consulting firm, Armitage has lobbied on behalf of L-3 Communications Inc., one of the nation's largest intelligence contractors, to help it sell anti-submarine surveillance systems to Taiwan. L-3, like ManTech, is also heavily involved in Iraq. (Further topping off Armitage's investment interests in the war: He sits on the board of directors of ConocoPhillips, which is aiming to become a major player in Iraq's energy industry through a joint venture with Russia's Lukoil.)

In these jobs, former high-level officials like Armitage continue to fight terrorist threats and protect the "homeland," as they once did while working in government. But by fusing their political careers with business, these former officials have brought money-making into the highest reaches of national security. They have created a new class of capitalist policy-makers that is bridging the gap between public policy and private business in ways that are unprecedented in American history.

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