Spies for Hire: The Secret World of Intelligence Outsourcing (Hardcover)

~ (Author)
Key Phrases: intelligence community, counterintelligence field activity, national surveillance state, Booz Allen, United States, Lockheed Martin (more...)

Editorial Reviews

From Publishers Weekly

Even James Bond is temping these days. According to investigative journalist Shorrock, the CIA and other intelligence agencies now have more contractors working for them than they do spies of their own. Often former staff hired back at double or triple their former government salaries, these private contractors do everything from fighting in Afghanistan to interrogating prisoners, aiming spy satellites and supervising secret agents. Shorrock gives a comprehensive—at times eye-glazing—rundown of the players in the industry, and his book is valuable for its detailed panorama of 21st-century intelligence work. He uncovers serious abuses—contractor CACI International figured prominently in the Abu Ghraib outrages—and nagging concerns about corrupt ties between intelligence officials and private corporations, industry lobbying for a national surveillance state, the withering of the intelligence agencies' in-house capacities and the displacement of an ethos of public service by a profit motive. However, the bulk of the outsourcing Shorrock unearths is rather pedestrian, involving the management of mundane IT systems and various administrative services, and this exposé insinuates more skullduggery than it demonstrates. (May)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

From The Washington Post

Reviewed by Jeff Stein

Not long ago I had lunch with a recently retired senior CIA officer who worked himself into an expletive-laced rage over private contractors who had taken up seats in the agency's sanctum sanctorum, the clandestine services where the spies roam.

Many of them, he said, had spent only a few years working for the agency. Then they performed Washington's version of alchemy, turning their top-secret security clearances into gold-plated jobs with the new breed of Beltway bandits, the intelligence contractors, at twice their old pay.

Unlike in decades past, when firms such as Boeing and Lockheed provided spy planes and satellites and other hardware that the CIA could not possibly build itself, the new breed of contractor offers the CIA guys in trench coats and black ops gear, ready to do the work the agency traditionally has done.

My CIA acquaintance, who retired as chief of a large European station, groused that making money had replaced duty, honor, country in the spy ranks -- and along with it, accountability. "If they make a mistake," he asked, "do you think their company is going to admit it, if it threatens their contract?"

Late last year, CIA Director Michael V. Hayden finally jammed a crowbar into the revolving doors, barring ex-employees from returning to work on their old projects for 18 months.

As investigative reporter Tim Shorrock notes in this valuable (and angry) book, contractors have long had the run of the Pentagon and CIA, working hand in hand on projects ranging from reconnaissance satellites to Predator drones. But Shorrock persuasively shows that the business has changed dramatically in recent years, beginning even before the Sept. 11 attacks set off a homeland security gold rush.

Today, intelligence contracting is a $45 billion-a-year industry, he says, chewing up three quarters of the estimated $60 billion intelligence budget. It is no longer limited mainly to providing hardware; its reach now extends from top to bottom, from data-mining contractors who sift the Internet for terrorist activity to spy handlers, regional intelligence analysts and ex-special operations troops who run paramilitary operations.

Cold War-era hardware, such as the U-2 spy plane, unquestionably made us safer. Has outsourcing made us safer in an age of non-state terrorism? Shorrock does not think so. As the U.S. occupation of Iraq was tanking in 2006, he writes, intelligence contractors gathered "over sushi and Chinese hors d'oeuvres . . . sipping cognac" at a conference at the Mandarin Oriental Hotel in Washington, where they gloated over their business fortunes. "The industry's on a roll," one investment adviser told him, even if the war on terror isn't.

The new buzz phrase, according to Shorrock, is "net centric warfare," a contractor-supplied technology that pushes information out "to the soldier at the tip of the spear," allowing him "to download data, imagery, and intelligence from computer bases located in nearby command posts or from spy planes flying overhead." Net centric warfare "is right in the sweet spot we provide for our customers," Shorrock quotes Robert Coleman, president of ManTech International, a top intelligence contractor, telling investors at the Mandarin Oriental. The event's keynote speaker was former CIA Director George Tenet, who within three months of his speech "would join, either as a director or an adviser, four companies that were directly involved with the high-tech military strategies he was endorsing," Shorrock writes.

This is a movie version of Washington, of course, with black-hat war profiteers right out of Catch-22's M & M Enterprises. Beyond the caricatures is a world in which contractors necessarily fill gaps in U.S. intelligence capabilities and provide valuable new technology. Yes, they're turning a profit along the way, but is that inherently evil, as Shorrock suggests? His book would have benefited mightily from interviews with some of the officials he lampoons. But one-sided though it is, it contains some important, timely truths about the influx of private entrepreneurs into America's spy agencies.

Shorrock -- a frequent contributor to such liberal muckraking magazines as Mother Jones, the Nation and the Progressive -- dates the beginning of the intelligence "outsourcing boom" to the Carter and Reagan years, when cutting the federal payroll became a Washington mantra. But it was during the Clinton administration that the privatization of intelligence went on steroids, abetted by industry-dominated study commissions championed by Vice President Al Gore and Defense Secretary William Cohen. Oh, the savings, purred the representatives of Boeing, Lockheed Martin, L-3 Communications and other contracting giants on the board of the National Defense Panel, which recommended a vast privatization of national security activities. More than 30,000 government jobs, it estimated, could be cut.

"A revolution in business affairs," Gore and Cohen said in a joint statement.

"A corporate vision for the Defense Department," said Cohen, more precisely.

The revolution was accompanied by the collapse of the Soviet Union, which was to provide a "peace dividend" through reductions in national security spending. The soft part of the budget, as always, was personnel. R. James Woolsey, faced with cuts as Bill Clinton's CIA director in 1993, slashed the number of large CIA stations by more than 60 percent and of case officers working overseas by more than 30 percent, Shorrock reports.

The spies were out in the cold. Yet Woolsey was "ferocious" in defending the intelligence community's technical budget, according to Spies for Hire: "He fought vigorously to increase spending on expensive high-technology programs -- precisely the vehicles that were funding the great leaps being made at the time by Titan, Martin Marietta, and other companies he advised before going to the CIA."

That's a nasty swipe. Is Shorrock suggesting that Woolsey fired spies to make a buck for his pals? Alas, Woolsey doesn't get space to defend himself. In any event, as has been fully reported elsewhere, the CIA was sadly lacking HUMINT -- spy handlers collecting human intelligence -- when al-Qaeda's storm hit landfall in New York and Washington.

So the old boys who had been cut from the rolls, or had retired, saw an opportunity. One of them was Richard "Hollis" Helms, a 30-year CIA veteran who retired in 1999. "In the months after the 9/11 attacks, he began taking notice of the many retired intelligence officers who were being hired by defense contractors," Shorrock writes. He "seized the moment" and created Abraxas, which quickly grew into a company with $65 million in revenues and more than 200 former intelligence officers on its payroll, "the largest aggregate of analytical counter-terrorism capabilities outside of the U.S. government."

Would the United States be better off if those operatives were working as CIA employees, reporting directly to agency supervisors rather than to private bosses whose loyalty to the company's bottom line may trump the nation's national security? After reading Shorrock's strenuous indictment, you will wonder.

Copyright 2008, The Washington Post. All Rights Reserved.

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Product Details

• Hardcover: 448 pages
• Publisher: Simon & Schuster; 1 edition (May 6, 2008)
• Language: English
• ISBN-10: 0743282248
• ISBN-13: 978-0743282246
• Product Dimensions: 9.6 x 6.7 x 1.3 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 3.6 out of 5 stars  See all reviews (8 customer reviews)
• Amazon.com Sales Rank: #70,160 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

32 of 35 people found the following review helpful:

4.0 out of 5 stars Useful Contribution, Neglects Outputs & Constituencies, May 28, 2008

By	Robert D. Steele (Oakton, VA United States) - See all my reviews (TOP 50 REVIEWER)

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Edit of 4 Jun 08 to strongly recommend Retired Reader's review as a companion to my own observations.

I sat down with this book today and found it absorbing. It is perhaps the best overview for anyone of names and numbers associated with the $60 billion (or more, perhaps as much as $75 billion) a year we waste on the 4% we can steal, and next to nothing on Open Source Intelligence (OSINT). The book loses one star for failing to integrate over 300 relevant books (see the annotated bibliographies to my first two books), and for failing to apply any visualization at all. This book is a mass of facts and figures, names and places. With or without visualization, it is a seminal reference point and recommended for all university and public libraries.

The book focuses mostly on technical waste--the inputs--and does not cover outputs nor constituencies. The reality is as General Zinni has put it so well: the IC produces 4% of what is needed, at a cost so horrendously wasteful as to warrant severe outrage among all taxpayers.

Having read the book, I can state that the author's agenda, if he has one, is to expose the risk to our civil liberties of creating a national surveillance state in which the bulk of the expertise is outside the government and subject to corruption and cronyism as well as lack of oversight.

Here are three tid-bits that strongly support the author's general intent, and some links.

1) Secret intelligence scam #1 is that there is no penalty for failure. Lockheed can build a satellite system that does not work (for NASA as well as the secret world--two different failures--or get the metrics wrong so priceless outer space research does not deploy a parachute--}and get another contract. Similarly SAIC with Trailblazer, CACI in Iraq, Blackwater murdering civilians and ramming old men in old cars out of the way, this is all a total disgrace to America.

2) "Butts in seats" means that most of our money goes to US citizens with clearances who know nothing of the real world, *and* the contractor gets 150% of their salary as "overhead." That is scam #2.

3) Scam #3 is that the so-called policy world, when it exists, does not really care what the secret world has to say, unless it justifies elective wars, secret prisons in the US (Halliburton) and so on. Dick Cheney ended the policy process in this administration. But even without Cheney and his gang of proven liars, the dirty little secret of the secret world is that a) there is no one place where all information comes together to be made sense of; and b) less than 1% of what we collect gets looked at by a human; and c) most of the policy world could care less what Top Secret Codeword information is placed before them--as Colin Powell says so memorably in his autobiography, he preferred the Early Bird compilation of news clippings.

I have been saying since 1988 that the secret emperor is not just naked, but institutionalized lunacy. Books like this are helpful, eventually the public will hear our voice.

Here are specific tid-bits that caught my attention as I went through the book.

+ Two errors in reference to me: I was neither a committee chair nor a program director. The author does quote me accurately.

+ Early on I am impressed to note documented facts:

- 50% of the clandestine case officers at CIA are contractors

- 35% of the Defense Intelligence Agency workforce is contracted

- Virtually 100% of the National Reconnaissance Office (NRO) is contracted

- 70% of all US Intelligence Community funds are spent on external contracts rather than internal capabilities.

- Booz Allen Hamilton has 10,000 employees with Top Secret Codeword clearances

- Revolving door is gutting the agencies (and most retirements will take place between 2007 to 2012--we have no middle management, no bench).

- Total Information Awareness (TIA) program never died, it went underground

- Pentagon under Cheney, then Cheney-Rumsfeld, now Cheney-Gates appears committed to outsourcing everything except the shooting--this is very very bad for all of us

- SIGINT data stream is wagging the dog--three V's of unstructured data are volume, velocity, and variety (183 languages we don't speak) but the author cited General Tony Zinni, USMC (Ret) telling a conference that all the high-tech in the world cannot give him plans and intentions on the battlefield.

- History of outsourcing goes back to the Odeen (CEO BDM) report sponsored by the Defense Science Board, this was the beginning of trying to privatize everything possible. Combined with the Pentagon's inherent disrespect for the CIA, it made privatizing intelligence even more attractive.

- McConnell comes out of this book looking respectable, Woolsey and Tenet less so. Dempsey was not a Navy officer by career--they sent her to knife and fork school when she managed the Navy intelligence budget within GDIP, much as the USMC took care of Arnold Punaro who ultimately made one-star while being Staff Director of the SASC. Although the author excels at naming names, and he discusses failures where they are known, there is very little substantive understanding of how the US IC has collapsed on all fronts--personnel, budget, finance, facilities, global presence, global coverage, relevance to the customer, etcetera.

- CACI and SAIC come out of this book looking truly terrible, while ManTech and Booz Allen Hamilton come out as moderately competent. I have to remind myself that contractors are not evil--they do what we incentivize them to do, and right now it is OUT OF CONTROL.

- He names LtGen Ken Minihan, USAF, as the de facto ideologist for the intelligence-industrial complex, and provides a good review of how venture capital funds were created to focus specifically on secret contracts.

- John Brennan emerges from this book as the man behind the curtain, levering the International and National Security Alliance (INSA) to further the complex. I disagree with the author's characterization of the DNI and INSA alliance as unethical. I do however agree that it is unprofessional in that INSA is executing myopic orders and not contributing at all to the needed cross-fertilization and understanding of where the real innovation is happening, in Collective, Peace, and Commercial Intelligence (the latter the complete opposite of Contractor Intelligence, or butts in seats).

See also:
Legacy of Ashes: The History of the CIA
Blond Ghost
The Very Best Men Four Who Dared:The Early Years of the CIA
Blank Check: The Pentagon's Black Budget
Body of Secrets: Anatomy of the Ultra-Secret National Security Agency
None So Blind: A Personal Account of the Intelligence Failure in Vietnam

There are success stories. Here are two books on one such case, where the White House and the Pentagon chose not to act over four days:
First In: An Insider's Account of How the CIA Spearheaded the War on Terror in Afghanistan
Jawbreaker: The Attack on bin Laden and al-Qaeda: A Personal Account by the CIA's Key Field Commander

Bottom line books:
On Intelligence: Spies and Secrecy in an Open World
Collective Intelligence: Creating a Prosperous World at Peace

I put this book down wishing that the field of cognitive science would evolve more quickly. Our profession is in disarray, in confusion, seeking to substitute butts in seats and dollars for cultural, linguistic, historical, and other forms of context. We need several multinational life boats of change catalysts--such as a Multinational Decision Support Center in Tampa, taking over the rapidly vacating Coalition Coordinating Center, in order to create the world's first unclassified intelligence center dedicated to providing open decision support to all parties active in stabilization & reconstruction, humanitarian assistance, and disaster relief (both at home and abroad). The IC is, as I said in Forbes ASAP, Inside Out and Upside Down. This is not the contractor's fault. It is our fault. We are a Dumb Nation instead of a Smart Nation. Bad. Very bad.

8 of 8 people found the following review helpful:

4.0 out of 5 stars Excellent Subject, Many Facts, But Not Impartial, October 8, 2008

By	David M. Dougherty (Arkansas) - See all my reviews (TOP 500 REVIEWER)

Amazon Verified Purchase

Author Shorrock does the nation a great service in providing a basis for discussion of the out-sourcing of intelligence and IT support functions to private industry by federal agencies. For this I would have given him five stars, but it is evident his theme is that such out-sourcing is generally a subversion of the proper function of government and its control by representatives of the people. To this end, he seems to select those incidents that favor his viewpoint, rather than presenting the situation in an impartial manner for the reader to draw his own conclusions. By this I do not mean that the author should not present his own analysis and conclusions -- only that the facts should not be presented with perjorative adjectives and snide comments concerning personal and corporate motives. As an ex-intelligence officer, I certainly would have moved into a private corporation where my skills could have been used to help fulfill the security mission of the Federal Government had personal circumstances not intervened, and I like to think my motives would have been more aligned with satisfaction in accomplishing the mission than for personal profit.

At any rate, this is an important work, and my views of Shorrock's book are almost isomorphic with those contained in the reviews by Steele and "Retired Reader."

With respect to the issue of private corporations being restricted to not breaking the law (either international, US, or any any other country's), one must realise that the gathering of covert HUMINT essentially ALWAYS involves breaking someone's laws. If a contractor is expressly forbidden to do this or is to be held accountable for such trangressions, then contractors cannot perform positive intelligence gathering functions. Unfortunately, at the present time the CIA and all other agencies involved in covert intelligence gathering are clearly incapable of fulfilling their missions in this regard without using private contractors. Regardless of the reasons for this lack of in-agency capability, to eliminate private contractors as the author seems to desire, would be to put America's security at grave risk.

There are solutions to this problem, but the author seems more intent on promoting his leftist agenda than in addressing the issues with the clear goal of improving America's intelligence. Yes, the use of private contractors has gone too far, but what level of private contracting and for what functions would be appropriate? And how do we get to that appropriate level? Alas, these questions were missing in this book, and unfortunately I have not found them yet in any other.

Lastly, allow me to register my disappointment with the reaction to this book. To date, there have been only six reviews and judging from the ratings pro and con on the reviews, I would estimate that the number of readers of the reviews are not more than forty. That's pretty insignificant when one considers the importance of the book's topic, and shows the lack of public interest in this subject. Something is terribly wrong with the US reading public when banal books like those by Friedman and Zakaria promoting the U.S.'s submission to international organizations and globalism receive thousands of reviews and ratings and books on the condition of the CIA and intelligence out-sourcing draw almost no interest.

20 of 25 people found the following review helpful:

5.0 out of 5 stars Required Reading for An Alert and Knowledgeable Citizenry, May 12, 2008

By	Ishmael "cleverlemming" (Montana) - See all my reviews

Rather than reinvent the wheel, I'm going to quote liberally from an excellent full-length review of this book from blogger Meteor Blades at Daily Kos:

"Spies for Hire is one of those books so brimful of detail, including mergers and acquisitions by intelligence companies, that one wishes for coded links and two or three charts illustrating the career trajectories and corporate genealogy of a couple dozen of the key players."

Another reviewer told an unsourced anecdote about an intelligence contractor who was downsized into driving a limo. Well, consider the story of neocon visionary Stephen Cambone. A charter member of PNAC, Cambone was appointed as the undersecretary of defense for intelligence at the Pentagon, a position of immense power and influence, which was forged from the conflict between Rumsfeld and the CIA.

"Among his other duties was overseeing "Copper Green," the interrogations, much of them by private contractors, of Iraqi prisoners at Abu Ghraib. Cambone was so widely despised and feared at the Pentagon that an Army general had jokingly said that "if he had one round left in his revolver, he would take out Steve Cambone," according to the Washington Post's Thomas Ricks."

When Rumsfeld was forced out of his job, his loyal retainer, Cambone was shown the exit a few months later, in January of 2007. However, Cambone did not end up driving a limousine:

"In January 2008, the Pentagon's Counter-Intelligence Field Agency granted a $30 million contract to the Missions Solutions Group of QinetiQ North America...Just two months before that contract was awarded, QinetiQ hired a new vice president for strategy. His name is Stephen Cambone."

So, why is this book a must-read? I'll leave you with one more quote from a different source:

"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together."
--Dwight D. Eisenhower