MIDDLE EAST: US turns to private sector for spies Financial Times; May 17, 2004 By Joshua Chaffin in Washington
For Dave Tittle, who has run an executive placement company in northern Virginia for the last 30 years, business has never been so good. That is because Mr Tittle's speciality is supplying talent for the growing number of private companies that do the US government's spying.
"An awful lot of activity has been outsourced," says Mr Tittle, who himself once worked at the National Security Agency. "Anything that has to do with collection or analysis of intelligence data is being done by the private sector."
If the build-up to the Iraq war highlighted the extent to which the army relies on private contractors like Halliburton for logistical tasks like delivering fuel, then the recent prisoner abuse scandal has revealed similar trends under way in the nation's intelligence apparatus.
Two private companies - CACI International and Titan Corp - employed interrogators and interpreters who worked at the Abu Ghraib prison near Baghdad, where Iraqi prisoners faced humiliating abuse.
The fact that US intelligence services turned to private companies to handle such sensitive tasks has surprised even former CIA officers. Yet it represents only the leading edge of a much larger trend, according to former intelligence officials.
Information technology companies scattered near the Pentagon in northern Virginia have taken on billions of dollars worth of contracts in recent years to do everything from gathering intelligence from satellites and sophisticated sensors to analysing the results and then distributing them to the appropriate government customers.
Meanwhile, smaller companies have cropped up to supply former agents as actual "bodies on the ground" in hazardous locations. Some former intelligence officials claim that these "spooks" are currently operating in the tribal lands of Pakistan, where US soldiers have been forbidden in their hunt for Osama Bin Laden, al-Qaeda leader.
"The agency's being run by contractors in a certain sense," said Robert Baer, a former CIA agent who operated in northern Iraq.
While proponents claim that outsourcing is more cost-efficient, the trend has alarmed critics who question whether the public can exercise proper oversight over such secretive activities.
Even people who work in the field say the scale of intelligence outsourcing remains a mystery because the budgets themselves are classified, even from members of Congress.
"It's even tougher to keep tabs on a contractor in the intelligence world than it is in the military world," says Peter Singer, a fellow at the Brookings Institute and author of Corporate Warriors: The Rise of the Privatised Military Industry.
The phenomenon appears to have been born by the same factors that motivated the broader military outsourcing - chiefly, a movement throughout the federal government in the 1990s to send tasks to the private sector if they could be performed more efficiently.
In the case of intelligence, this trend has been hastened by both deep budget cuts following the end of the cold war, and increased emphasis on high technology in espionage.
Mr Tittle says outsourcing allowed the CIA quickly to bring experienced agents out of retirement to help fight the war on terror.
"Many would be on a beach now in Miami if it weren't for 9-11," he explains. "Chances are, they're going to be more expensive. But the reality is, you need them right away."
Whether or not outsourcing actually saves the government any money is difficult to assess, as the contracts are far from transparent. Even financial analysts who follow the sector find it hard to gather information. For example, none of the analysts that covered CACI - a publicly traded company - were even aware that it was engaged in the politically-sensitive activity of interrogation.
But of greater concern is whether intelligence contractors are employed to deliberately shield government activities from the public eye, as some critics contend. "That's the whole rationale for using these firms," Mr Singer said "A lot of people focus on the financial cost [benefit], but it's really the political cost [benefit]. It allows you to shift roles that might be controversial to . . private companies."