by Dana Priest and William M. Arkin
by Dana Priest and William M. Arkin
(To go to the Washington Post web page with these three articles, and
related slide shows, videos, and articles
click here -- or if that comes up small print go to :
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Top Secret America.)
(To go to the Washington Post web page with these three articles, and related slide shows, videos, and articles click here -- or if that comes up small print go to : http://projects.washingtonpost.com/top-secret-america/ or Google Wash Post, Top Secret America.)
|ClearanceJobs.com offers patriotic mints in its booth advertising the company's services placing defense workers. About 265,000 U.S. contractors have top-level clearance. (Photo by Michael S. Williamson / The Washington Post)|
CTGi plays off the conference's setting in Phoenix with its cactus squeeze toys. (Photo by Michael S. Williamson / The Washington Post)
General Dynamics sponsors a night at Chase Field ballpark. (Photo by Michael S. Williamson / The Washington Post)
Chase Field provides an informal setting for DIA conference attendees to further their networking. (Photo by Michael S. Williamson / The Washington Post)
The DIA convention hall posed a challenge for cellphone reception, prompting some people to step away from the action. (Photo by Michael S. Williamson / The Washington Post)
Hany Girgis founded SGIS, a small company that has grown in the post-9/11 world. (Photo by SGIS)
Guy Filippelli founded Berico Technologies, which provides technical collection and data processing services to the intelligence community. (Photo by Michael S. Williamson / The Washington Post)
Stars engraved on the wall of the CIA represent people who died in the line of duty. Eight stars represent private contractors killed since 9/11. (Courtesy of CIA)
Capt. Scott Wolverton of the Air Force Intelligence Surveillance and Reconnaissance Agency visits the DIA conference's Wild West Town Center for a pretend shootout. (Photo by Michael S. Williamson / The Washington Post)
In June, a stone carver from
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 M. Gates and CIA Director Leon Panetta said they agreed with such concerns.
The Post investigation uncovered what amounts to an alternative geography of
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
Private contractors working for the CIA have recruited spies in
Through the federal budget process, the George W. Bush administration andmade 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 M. 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 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
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.
As Top Secret America has grown, the government has become more dependent on contractors with matching security clearances.
The Post's 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
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-Qaeda leadership for the. "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 1,951 unfilled positions in the Washington area, and 19,759
nationwide: "Target analyst," Reston. "Critical infrastructure specialist,"
"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."
The Post's investigation is based on government documents and contracts, job descriptions, property records, corporate and social networking Web sites, additional records, and hundreds of interviews with intelligence, military and corporate officials and former officials. Most requested anonymity either because they are prohibited from speaking publicly or because, they said, they feared retaliation at work for describing their concerns.
The investigation focused on top-secret work because the amount classified at the secret level is too large to accurately track. Aof government organizations and private companies was built entirely on public records. [For an explanation of the newspaper's decision making behind this project, please see the .]
The national security industry sells the military and intelligence agencies more than just airplanes, ships and tanks. It sells contractors' brain power. They advise, brief and work everywhere, including 25 feet under the Pentagon in a bunker where they can be found alongside military personnel in battle fatigues monitoring potential crises worldwide.
Late at night, when the wide corridors of the Pentagon are all but empty, the
The purpose of all this is to be able to answer any question the chairman of themight have. To be ready 24 hours a day, every day, takes five brigadier generals, a staff of colonels and senior noncommissioned officers - and a man wearing a pink contractor badge and a bright purple shirt and tie.
Erik Saar's job title is "knowledge engineer." In one of the most sensitive
Recruiters for companies that hold government contracts
meet with job seekers who have security clearances at a Targeted Job Fairs event
That sometimes means asking for help in a public online chat room or
exchanging ideas on shared Web pages outside the military computer networks
dubbed .mil - things much resisted within the Pentagon's self-sufficient
culture. "Our job is to change the perception of leaders who might drive
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
Contractor misdeeds in
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
But contractors have also advanced the way the military fights. During the
bloodiest months in
Contractors have produced blueprints and equipment for the unmanned aerial
war fought by drones, which have killed the largest number of senior al-Qaeda
leaders and produced a flood of surveillance videos. A dozen firms created the
transnational digital highway that carries the drones' real-time data on
terrorist hide-outs from overseas to command posts throughout the
Private firms have become so thoroughly entwined with the government's most sensitive activities that without them important military and intelligence missions would have to cease or would be jeopardized. Some examples:
*At the, the number of contractors equals the number of federal employees. The department depends on 318 companies for essential services and personnel, including 19 staffing firms that help DHS find and hire even more contractors. At the office that handles intelligence, six out of 10 employees are from private industry.
surveillance, hires private firms to come up with most of its technological innovations. The NSA used to work with a small stable of firms; now it works with at least 484 and is actively recruiting more.
*Every intelligence and military organization depends on contract linguists to communicate overseas, translate documents and make sense of electronic voice intercepts. The demand for native speakers is so great, and the amount of money the government is willing to pay for them is so huge, that 56 firms compete for this business.
*Each of the 16 intelligence agencies depends on corporations to set up its computer networks, communicate with other agencies' networks, and fuse and mine disparate bits of information that might indicate a terrorist plot. More than 400 companies work exclusively in this area, building classified hardware and software systems.
Hiring contractors was supposed to save the government money. But that has not turned out to be the case. A 2008 study published by thefound that contractors made up 29 percent of the workforce in the intelligence agencies but cost the equivalent of 49 percent of their personnel budgets. Gates said that federal workers cost the government 25 percent less than contractors.
The process of reducing the number of contractors has been slow, if the giant
They store, process and analyze communications and intelligence transmitted
to and from the entire
Vice Adm. David J. "Jack" Dorsett, director of naval intelligence, said he
could save millions each year by converting 20 percent of the contractor jobs at
Defense Secretary Robert M. Gates says he would like to
reduce the number of defense contractors to pre-9/11 levels. (Photo by: Melina
Mara | The
Of the 1,931 companies identified by The Post that work on top-secret contracts, about 110 of them do roughly 90 percent of the work on the corporate side of the defense-intelligence-corporate world.
To understand how these firms have come to dominate the post-9/11 era, there's no better place to start than the Herndon office of General Dynamics. One recent afternoon there, Ken Pohill was watching a series of unclassified images, the first of which showed a white truck moving across his computer monitor.
The truck was in
To do this, he clicked his computer mouse. Up popped a picture of the truck driver's house, with notes about visitors. Another click. Up popped infrared video of the vehicle. Click: Analysis of an object thrown from the driver's side. Click: U-2 imagery. Click: A history of the truck's movement. Click. A Google Earth map of friendly forces. Click: A chat box with everyone else following the truck, too.
Ten years ago, if Pohill had worked for General Dynamics, he probably would
have had a job bending steel. Then, the company's center of gravity was the
industrial port city of
The evolution of General Dynamics was based on one simple strategy: Follow the money.
The company embraced the emerging intelligence-driven style of warfare. It developed small-target identification systems and equipment that could intercept an insurgent's cellphone and laptop communications. It found ways to sort the billions of data points collected by intelligence agencies into piles of information that a single person could analyze.
It also began gobbling up smaller companies that could help it dominate the new intelligence landscape, just as its competitors were doing. Between 2001 and 2010, the company acquired 11 firms specializing in satellites, signals and geospatial intelligence, surveillance, reconnaissance, technology integration and imagery.
General Dynamics' bottom line reflects its successful transformation. It also reflects how much the U.S. government - the firm's largest customer by far - has paid the company beyond what it costs to do the work, which is, after all, the goal of every profit-making corporation.
The company reported $31.9 billion in revenue in 2009, up from $10.4 billion in 2000. Its workforce has more than doubled in that time, from 43,300 to 91,700 employees, according to the company.
Revenue from General Dynamics' intelligence- and information-related divisions, where the majority of its top-secret work is done, climbed to $10 billion in the second quarter of 2009, up from $2.4 billion in 2000, accounting for 34 percent of its overall revenue last year.
The company's profitability is on display in its
General Dynamics now has operations in every corner of the intelligence
world. It helps counterintelligence operators and trains new analysts. It has a
"The American intelligence community is an important market for our company," said General Dynamics spokesman Kendell Pease. "Over time, we have tailored our organization to deliver affordable, best-of-breed products and services to meet those agencies' unique requirements."
In September 2009, General Dynamics won a $10 million contract from the
What all of these contracts add up to: This year, General Dynamics' overall revenue was $7.8 billion in the first quarter, Jay L. Johnson, the company's chief executive and president, said at an earnings conference call in April. "We've hit the deck running in the first quarter," he said, "and we're on our way to another successful year."
In the shadow of giants such as General Dynamics are 1,814 small to midsize
companies that do top-secret work. About a third of them were established after
of Herndon, headed by a former CIA spy, quickly became a major CIA contractor after 9/11. Its staff even recruited midlevel managers during work hours from the CIA's cafeteria, former agency officers recall.
Other small and medium-size firms sell niche technical expertise such as engineering for low-orbit satellites or long-dwell sensors. But the vast majority have not invented anything at all. Instead, they replicate what the government's workforce already does.
A company called, founded soon after the 2001 attacks, was one of these.
In June 2002, from the spare bedroom of his
SGIS sold the government the services of people with specialized skills; expanding the types of teams it could put together was one key to its growth. Eventually it offered engineers, analysts and cyber-security specialists for military, space and intelligence agencies. By 2003, the company's revenue was $3.7 million. By then, SGIS had become a subcontractor for General Dynamics, working at the secret level. Satisfied with the partnership, General Dynamics helped SGIS receive a top-secret facility clearance, which opened the doors to more work.
By 2006, its revenue had multiplied tenfold, to $30.6 million, and the company had hired employees who specialized in government contracting just to help it win more contracts.
"We knew that's where we wanted to play," Girgis said in a phone interview. "There's always going to be a need to protect the homeland."
Eight years after it began, SGIS was up to revenue of $101 million, 14 offices and 675 employees. Those with top-secret clearances worked for 11 government agencies, according to The Post's database.
The company's marketing efforts had grown, too, both in size and sophistication. Its Web site, for example, showed an image of Navy sailors lined up on a battleship over the words "Proud to serve" and another image of a Navy helicopter flying near the Statue of Liberty over the words "Preserving freedom." And if it seemed hard to distinguish SGIS's work from the government's, it's because they were doing so many of the same things. SGIS employees replaced military personnel at the Pentagon's 24/7 telecommunications center. SGIS employees conducted terrorist threat analysis. SGIS employees provided help-desk support for federal computer systems.
Still, as alike as they seemed, there were crucial differences.
For one, unlike in government, if an SGIS employee did a good job, he might walk into the parking lot one day and be surprised by co-workers clapping at his latest bonus: a leased, dark-blue Mercedes convertible. And he might say, as a video camera recorded him sliding into the soft leather driver's seat, "Ahhhh . . . this is spectacular."
And then there was what happened to SGIS last month, when it did the one thing the federal government can never do.
It sold itself.
The new owner is a Fairfax-based company called Salient Federal Solutions,
created just last year. It is a management company and a private-equity firm
with lots of
"We have an objective," says chief executive and President Brad Antle, "to make $500 million in five years."
Of all the different companies in Top Secret America, the most numerous by far are the information technology, or IT, firms. About 800 firms do nothing but IT.
Some IT companies integrate the mishmash of computer systems within one agency; others build digital links between agencies; still others have created software and hardware that can mine and analyze vast quantities of data.
The government is nearly totally dependent on these firms. Their close
relationship was on display recently at the
And they did.
General Dynamics spent $30,000 on the event. On a perfect spring night, it hosted a party at Chase Field, a 48,569-seat baseball stadium, reserved exclusively for the conference attendees. Government buyers and corporate sellers drank beer and ate hot dogs while the DIA director's morning keynote speech replayed on the gigantic scoreboard, digital baseballs bouncing along the bottom of the screen.
, a DIA contractor, invited guests to a casino night where intelligence officials and vendors ate, drank and bet phony money at craps tables run by professional dealers.
Thenetwork security company, a Defense Department contractor, welcomed guests to a Margaritaville-themed social on the garden terrace of the hotel across the street from the convention site, where 250 firms paid thousands of dollars each to advertise their services and make their pitches to intelligence officials walking the exhibition hall.
Government officials and company executives say these networking events are critical to building a strong relationship between the public and private sectors.
"If I make one contact each day, it's worth it," said Tom Conway, director of federal business development for McAfee.
As for what a government agency gets out of it: "Our goal is to be open and
learn stuff," said Grant M. Schneider, the DIA's chief information officer and
one of the conference's main draws. By going outside
These types of gatherings happen every week. Many of them are closed to anyone without a top-secret clearance.
At a U.S. Special Operations Command conference in
Such coziness worries other officials who believe the post-9/11 defense-intelligence-corporate relationship has become, as one senior military intelligence officer described it, a "self-licking ice cream cone."
Another official, a longtime conservative staffer on the Senate Armed Services Committee, described it as "a living, breathing organism" impossible to control or curtail. "How much money has been involved is just mind-boggling," he said. "We've built such a vast instrument. What are you going to do with this thing? . . . It's turned into a jobs program."
Even some of those gathered in
On a day that also featured free back rubs, shoeshines, ice cream and fruit smoothies, another speaker, Kevin P. Meiners, a deputy undersecretary for intelligence, gave the audience what he called "the secret sauce," the key to thriving even when the Defense Department budget eventually stabilizes and stops rising so rapidly.
"Overhead," Meiners told them - that's what's going to get cut first. Overhead used to mean paper clips and toner. Now it's information technology, IT, the very products and services sold by the businesspeople in the audience.
"You should describe what you do as a weapons system, not overhead," Meiners instructed. "Overhead to them - I'm giving you the secret sauce here - is IT and people. . . . You have to foot-stomp hard that this is a war-fighting system that's helping save people's lives every day."
After he finished, many of the government officials listening headed to the exhibit hall, where company salespeople waited in display booths. Peter Coddington, chief executive of, a small firm whose software teaches computers to "read" documents, was ready for them.
"You have to differentiate yourself," he said as they fanned out into the aisles. Coddington had glass beer mugs and pens twirling atop paperweight pyramids to help persuade officials of the nation's largest military intelligence agency that he had something they needed.
But first he needed them to stop walking so fast, to slow down long enough for him to start his pitch. His twirling pens seemed to do the job. "It's like moths to fire," Coddington whispered.
A DIA official with a tote bag approached. She spotted the pens, and her pace slowed. "Want a pen?" Coddington called.
She hesitated. "Ah . . . I have three children," she said.
"Want three pens?"
She stopped. In Top Secret America, every moment is an opportunity.
"We're a text extraction company. . . ," Coddington began, handing her the pens.
Staff researcher Julie Tate contributed to this report.