By Peter Spiegel, Times Staff Writer 7:34 PM PDT, September 24, 2006
WASHINGTON — The U.S. Army's top officer withheld a required 2008 budget plan from Pentagon leaders last month after protesting to Defense Secretary Donald H. Rumsfeld that the service could not maintain its current level of activity in Iraq plus its other global commitments without billions in additional funding.
The decision by Gen. Peter J. Schoomaker, the Army's chief of staff, is believed to be unprecedented and signals a widespread belief within the Army that in the absence of significant troop withdrawals from Iraq, funding assumptions must be completely reworked, current and former Pentagon officials said.
"This is unusual, but hell, we're in unusual times," said a senior Pentagon official involved in the budget discussions.
Schoomaker failed to submit the budget plan by an Aug. 15 deadline. The protest followed a series of cuts in the service's funding requests by both the White House and Congress over the last four months.
According to a senior Army official involved in budget talks, Schoomaker is now seeking $138.8 billion in 2008, or nearly $25 billion above budget limits originally set by Rumsfeld. The Army's budget this year is $98.2 billion, making Schoomaker's request a 41% increase over current levels.
"It's incredibly huge," said the Army official, who, like others, spoke on condition of anonymity when commenting on internal deliberations. "These are just incredible numbers."
Most funding for the fighting in Iraq is supposed to come from annual emergency spending bills, with the regular defense budget going to normal personnel, procurement and operational expenses, such as salaries and new weapons systems.
About $400 billion has been appropriated for the Iraq and Afghanistan wars through emergency funding measures since Sept. 11, 2001, with the money divided among various military branches and government agencies.
But in recent budget negotiations, Army officials argued that the service's expanding global role in the U.S.-declared war on terrorism — outlined in new strategic plans issued this year — as well as fast-growing personnel and equipment costs tied to the Iraq war, have put intense pressure on its normal budget.
"It's kind of like the old rancher saying: 'I'm going to size the herd to the amount of hay that I have,' " said Lt. Gen. Jerry L. Sinn, the Army's top budget official. "[Schoomaker] can't size the herd to the size of the amount of hay that he has because he's got to maintain the herd to meet the current operating environment."
The Army, with an active-duty force of 504,000, has been stretched by the Iraq and Afghanistan wars. About 400,000 have done at least one tour of combat duty, and more than a third of those have been deployed twice. Commanders have been stepping up their complaints about the strain, saying last week that sustaining current levels will require more help from the National Guard and Reserve or an increase in the active-duty force.
Schoomaker first raised alarms with Marine Corps Gen. Peter Pace, chairman of the Joint Chiefs of Staff, in June after he received new Army budget outlines from Rumsfeld's office. Those outlines called for an Army budget of about $114 billion, a $2-billion cut from previous guidelines. The cuts would grow to $7 billion a year after six years, the senior Army official said.
After Schoomaker confronted Rumsfeld with the Army's own estimates for maintaining the current size and commitments — and the steps that would have to be taken to meet the lower figure, which included cutting four combat brigades and an entire division headquarters unit — Rumsfeld agreed to set up a task force to investigate Army funding.
Although no formal notification is required, Army Secretary Francis J. Harvey, who has backed Schoomaker in his push for additional funding, wrote to Rumsfeld early last month to inform him that the Army would miss the Aug. 15 deadline for its budget plan. Harvey said the delay in submitting the plan, formally called a Program Objective Memorandum, was the result of the extended review by the task force.
The study group — which included three-star officers from the Army and Rumsfeld's office — has since agreed with the Army's initial assessment. Officials said negotiations have moved up to higher levels of the Bush administration, involving top aides to Rumsfeld and Rob Portman, director of the White House Office of Management and Budget.
"Now the discussion is: Where are we going to go? Do we lower our strategy or do we raise our resources?" said the senior Pentagon official. "That's where we're at."
Pressure on the Army budget has been growing since late May, when the House and Senate appropriations committees proposed defense spending cuts for 2007 of $4 billion to $9 billion below the White House's original request.
Funding was further complicated this summer, when the Pentagon was forced to shelve plans to start a gradual reduction of troops in Iraq because of an increase in sectarian violence in Baghdad.
Because of those pressures, the Army in July announced it was freezing civilian hiring and putting a moratorium on new weapons contract awards, among other cost-cutting measures, such as personnel travel restrictions.
Schoomaker has been vocal in recent months about the need to increase funding in war spending bills to pay for the hundreds of tanks and armored fighting vehicles that need to be repaired, or "reset" in military parlance, after heavy use in Iraq.
He has told congressional appropriators that he will need $17.1 billion next year for repairs, or nearly double this year's appropriation — and more than four times what it was costing just two years ago. According to an Army budget document obtained by The Times, Army officials are also planning for repair requests of $13 billion in 2008 and $13.5 billion in 2009.
In recent weeks, however, Schoomaker has become more emphatic in public on overall budget shortfalls, saying that current funding is not enough to pay for Army commitments to the Iraq war and the global strategy drawn out in the Pentagon's mission planning documents.
"There's no sense in us submitting a budget that we can't execute, a broken budget," Schoomaker said at a recent address in Washington.
Steven M. Kosiak, a military budget expert at the Center for Strategic and Budgetary Assessments, an independent Washington think tank, said that despite widespread recognition that the Army should be getting more resources because of war-related costs, its share of the Defense Department budget has been largely unchanged since the 2003 invasion.
Kosiak cautioned, however, that a good portion of the new money the Army needs is not directly tied to the war, but rather to new weapons it wants to buy, particularly the $200-billion Future Combat System, or FCS, a new family of armored vehicles that will eventually replace nearly every tank and transporter in the Army inventory.
"This isn't a problem one can totally pass off on current military operations," Kosiak said. "The FCS program is very ambitious — some would say overly ambitious."
Even with Rumsfeld's backing, any request for an increase could force a conflict with the Office of Management and Budget, which has repeatedly pushed the Pentagon to restrain its annual budget submission.
"Year after year there were attempts to raise the ceiling, but year after year OMB has refused," said a former Pentagon official familiar with the current debate. "The difference this year is the Army has said that if a raise in the ceiling isn't going to be considered, they won't even play the game."
Added the senior Army official: "If you're Rob Portman advising the president of the United States and duking it out with the [Secretary of Defense], it's a pretty sporting little event."
Army officials insisted that Schoomaker's failure to file his 2008 Program Objective Memorandum was not intended as a rebuke to Rumsfeld, saying the defense secretary has backed Schoomaker since the chief of staff raised the issue with him directly.
Still, some Army officials said Schoomaker has expressed concern about recent White House budget moves, such as the decision in May to use $1.9 billion out of the most recent emergency spending bill to fund border security, including deployment of 6,000 National Guard units at the Mexican border.
Army officials said $1.2 billion of that money came out of funds originally intended for Army war expenses.
"The president has got to take care of his border mission, he needs to find a source of funds so he can play a zero-sum game, he takes it out of defense," the senior Army official said. "But when he takes it out of defense, the lion's share is coming out of the outfit that's really in extremis in the current operating environment in the war."
Rumsfeld has not set a new deadline for the Army to officially submit its budget plan. The Army official said staffers believe they can submit a revised plan by November, in time for President Bush to unveil his 2008 budget early next year.
By Greg Miller, Times Staff Writer September 24, 2006
WASHINGTON — For an agency that ordinarily steers clear of major policy debates, the CIA played an unusually prominent role in the showdown between the White House and dissident Republicans over the treatment of detainees.
To many outsiders, the CIA's position was puzzling.
Why would an agency whose own overseas officers are vulnerable to capture — and torture — defend harsh interrogation methods? And how did an organization often criticized for its caution end up pushing the legal envelope, even while the Pentagon was advocating tight new restrictions?
The answers, according to current and former U.S. intelligence officials, reflect a cultural and operational fault line that separates the CIA from the other arms of the U.S. government that operate overseas — mainly the military and the State Department.
The detainee issue has tapped into "a cultural difference," said Mark Lowenthal, former assistant director of the CIA.
"This whole debate has no meaning for a CIA officer as he understands the world and the nature of the deal he made with the government and the nature of the risks he is willing to accept," Lowenthal said.
CIA leaders are typically closely aligned with State Department and Pentagon counterparts in their view of the world and their concern for overseas opinion of the United States. But on the detainee issue, the CIA is less swayed by concerns that other nations might retaliate against U.S. prisoners, and more inclined to consider any cost worth paying for the intelligence it generates.
President Bush wanted to reestablish a secret CIA detention and interrogation program and insulate CIA officers from legal peril in pushing this month for new security legislation. Bush's proposal was opposed by Republican senators, retired military commanders and onetime administration officials such as former Secretary of State Colin L. Powell, who warned the harsh approaches favored by Bush would further soil the U.S. image.
Leading up to a key compromise on Thursday, CIA officials, including the agency director, Gen. Michael V. Hayden, publicly took Bush's side in the fight, voicing concerns evidently felt by many CIA officers worldwide.
"There are smart, sensitive people who work in that agency who are bothered by the same sorts of issues as private citizens are," said Paul Pillar, former deputy director of the CIA counterterrorism center.
But Pillar and others noted that spies, unlike soldiers, are not afforded the protections of the Geneva Convention. Therefore, agency officials are less preoccupied with the concern over reciprocity articulated by Powell and others.
The convention spells out elaborate protections for captured soldiers, and sets minimum standards for others who are captured who are not in uniform.
But spies fall into a separate category. Those engaged in espionage "shall not have the right to the status of prisoner of war," according to the convention, which also says that an occupying government "may impose the death penalty" in cases when a prisoner is guilty of espionage.
The Supreme Court ruled in June that the Geneva Convention applies even to terrorism suspects under U.S. law. But "if a CIA operative is picked up by terrorists, he is unlikely to benefit under any circumstances from Geneva protections," said Robert Grenier, who retired earlier this year as head of the CIA's counterterrorism center.
Indeed, the history of the agency includes gruesome examples. In 1984, William Buckley, the CIA station chief in Beirut, was captured, tortured, and ultimately killed by operatives from the Hezbollah terrorist organization.
Some veterans said the agency's experience fighting terrorists, and the stakes of the interrogations they conduct when suspects are captured, also help explain its more aggressive mindset. While the military has held hundreds of relatively low-level prisoners at Guantanamo Bay and other facilities, the CIA has been responsible for detaining a relative handful of high-ranking Al Qaeda operatives.
"The agency is not recommending that these techniques be applied to everybody," said a former senior CIA official who spoke on condition of anonymity. "We're talking about those very rare cases when you've got somebody who you know was the mastermind behind Sept. 11, who gleefully slit the throat of Danny Pearl."
The former official was referring to Khalid Shaikh Mohammed, the alleged mastermind of the Sept. 11 attacks who is also believed to have executed Wall Street Journal reporter Pearl after he was kidnapped in Pakistan in 2002.
The CIA is said to have used an array of harsh techniques against Mohammed, including "water boarding," in which a prisoner is strapped to a board and made to believe he is going to drown. Water boarding presumably no longer would be allowed under the new rules under consideration in the Senate. But CIA officials said they believe they will still have access to other methods that have proven effective.
"Overall, you have to characterize them as tough and aggressive," said a former senior CIA official involved in the program. "Certainly beyond what one would legitimately expect to encounter in a police precinct."
The CIA view of interrogation policy may also be colored by the fact that it is a principal user of the intelligence it gets from Al Qaeda prisoners — in contrast to other areas of intelligence where the CIA is a more passive conduit of information to policymakers and the Pentagon.
"If they get information on what the Chinese military is doing, that goes to the Pentagon," said another former CIA official. "If they get information on China's likely stance at the United Nations, that goes to the State Department."
But information from interrogations of high-value detainees has fueled dozens of counterterrorism operations mounted by the CIA, netting what officials have described as important captures.
[F6 comment -- yah, the lack of 'values' of the current neo-con 'leadership' of the CIA and their contractor buddies -- as per the posts preceding this one -- . . .]
National Intelligence Director nominee Mike McConnell, right, listens to President George W. Bush speak at the White House on Jan. 5, 2007. REUTERS/Jim Young
Why John Michael McConnell, a top executive at a private defense contractor, should not be allowed to run our nation's intelligence agencies.
By Tim Shorrock
Jan. 08, 2007 | The Bush administration's choice last week of J. Michael McConnell to be director of national intelligence is a major blunder -- and not just because the man who will be overseeing 16 different spy agencies, including the CIA, took the job after a "personal approach [ http://www.msnbc.msn.com/id/16475979/site/newsweek/ ]" from an old friend named Dick Cheney.
The problem is with McConnell's résumé. At present, U.S. intelligence is more dependent on private contractors than it has ever been. About half of the rapidly expanding annual intelligence budget, or more than $20 billion, now goes to outside firms. The work those private contractors perform has been slammed repeatedly for mismanagement, privacy violations and bias -- and yet the would-be head of the nation's intelligence effort is a top executive at one of the worst offenders. McConnell, a retired vice admiral and former director of the National Security Agency, is the current director of defense programs at Booz Allen Hamilton.
With revenues of $3.7 billion in 2005, Booz Allen is one of the nation's biggest defense and intelligence contractors. Under McConnell's watch, Booz Allen has been deeply involved in some of the most controversial counterterrorism programs the Bush administration has run, including the infamous Total Information Awareness [ http://dir.salon.com/story/tech/feature/2003/01/29/tia_privacy/index.html (F6 note - my next post, a reply to this post)] data-mining scheme. As a key contractor and advisor to the NSA, Booz Allen is almost certainly participating in the agency's warrantless surveillance of the telephone calls and e-mails of American citizens.
If the Democrats now running the House and Senate intelligence committees do their job right, they could learn a great deal about these programs and the instrumental role contractors are playing in U.S. intelligence during McConnell's confirmation hearings. McConnell should be compelled to answer some tough questions before the Democrats even consider confirming him.
The intelligence community's reliance on outsourcing dates back to the late 1990s, when commercial advances in computer software and communications began to outpace the considerable lead U.S. intelligence once had in encryption and other technologies. These shortcomings were particularly acute at the NSA, which suffered a system-wide computer blackout in 2000 that shut down the agency's global listening and surveillance system for more than two days, reducing the contents of the president's Daily Briefing by more than 30 percent. In response, during the waning days of the Clinton era, the highly secretive agency had opened its doors to contractors.
The privatization of intelligence within the NSA accelerated as soon as the Bush administration took office. And then came 9-11. The attacks served as a hiring catalyst for other agencies -- like the CIA and the Pentagon, which found themselves short of analysts, linguists and other specialists -- to follow the NSA's lead. Rather than take on new employees, intelligence agencies and counterterrorism centers sought out companies that, like Booz Allen, had hundreds of employees with security clearances on their staff -- clearances nearly always earned during prior and less lucrative employment with the federal government.
Since 2001, intelligence spending has risen about 40 percent a year, and contracting has ballooned by about that much. In some agencies, contractors make up the majority of employees. At the Pentagon's highly classified Counterintelligence Field Activity office, which has been strongly criticized in Congress for spying on U.S. antiwar protesters, 70 percent of the workforce are contractors.
U.S. intelligence budgets are classified, as are nearly all intelligence contracts. But the overall budget is generally understood to be running about $45 billion a year. Based on interviews I've done for an upcoming book, I estimate that about 50 percent of this spending goes directly to private companies. This is big business: The accumulated spending on intelligence since 2002 is much higher than the total of $33 billion the Bush administration paid to Bechtel, Halliburton and other large corporations for reconstruction projects in Iraq.
Booz Allen, along with Science Applications International Corp., General Dynamics, Lockheed Martin, Northrop Grumman, CACI International and a few other corporations, is one of the dominant players in intelligence contracting. Among its largest customers are the NSA, which monitors foreign and domestic communications, and the National Geospatial-Intelligence Agency, an amalgamation of the imagery divisions of the CIA and the Pentagon that was established in 2003.
A few years ago, Information Week reported that Booz Allen had more than 1,000 former intelligence officers on its staff. Asked to confirm that number last month, company spokesman George Farrar told me: "It is certainly possible, but as a privately held corporation we consider that information to be proprietary and do not disclose."
Buried deep on the company's Web site, however, I recently found an explanation of a Booz Allen I.T. contract with the Defense Intelligence Agency, which carries out intelligence for the Joint Chiefs of Staff and the secretary of defense. It states that the Booz Allen team "employs more than 10,000 TS/SCI cleared personnel." TS/SCI stands for top secret-sensitive compartmentalized intelligence, the highest possible security ratings. This would make Booz Allen one of the largest employers of cleared personnel in the United States.
Among the many former spooks on Booz Allen's payroll are R. James Woolsey, the well-known neoconservative and former CIA director; Joan Dempsey, the former chief of staff to CIA Director George Tenet and recently executive director of the President's Foreign Intelligence Advisory Board; and Keith Hall, the former director of the National Reconnaissance Office, the super-secret organization that oversees the nation's spy satellites.
For his part, McConnell was head of the National Security Agency from 1992 to 1996. Prior to that he was the chief intelligence officer for Colin Powell at the Joint Chiefs of Staff during the first Gulf War, where he worked closely with Dick Cheney. On Friday, McConnell told the New York Times that his work at Booz Allen had allowed him to "stay focused on national security and intelligence communities as a strategist and as a consultant. Therefore, in many respects, I never left." That is an understatement. As a senior vice president at Booz Allen, McConnell is in charge of the firm's assignments in military intelligence and information operations for the Department of Defense. In that work, his official biography states, McConnell has provided intelligence support to "the US Unified Combatant Commanders, the Director of National Intelligence Agencies, and the Military Service Intelligence Directors."
And in a relationship that has been completely missed in media coverage of his appointment, McConnell is the chairman of the Intelligence and National Security Alliance, the primary business association of NSA and CIA contractors. As INSA chairman, I've been told, McConnell is presiding over an initiative to enhance ties between the intelligence agencies and their contractors and domestic law enforcement agencies.
McConnell has said little publicly about what he thinks of the administration he will be serving or of that administration's policies. In an off-the-record address to an intelligence conference last year, however, McConnell did say that on the issue of domestic spying, he might be "a little more liberal" than the administration. "Any bureaucracy -- NSA, CIA, FBI, you name it -- can do evil," he concluded. "My view is, you have to have oversight."
McConnell is certainly right on that point. Many intelligence analysts believe that congressional oversight during the Bush administration has been virtually nonexistent. Despite the administration's flagrant abuse of U.S. laws concerning privacy and NSA wiretaps of U.S. citizens, the Republican majority did very little to investigate its abuses.
Now there is a new Congress that actually believes in oversight. One intelligence program that should merit its attention, and that members might want to ask McConnell about during his confirmation hearings, is Total Information Awareness, a data-mining project run by former National Security Advisor John Poindexter that was outlawed by Congress in 2003. Between 1997 and 2002, according to a recent report by the American Civil Liberties Union, Booz Allen was awarded more than $63 million worth of TIA contracts. Last Friday, Newsweek reported that McConnell was a "key figure" in making Booz Allen, along with SAIC, the prime contractors on the project.
Shortly after the 9/11 terrorist attacks, Booz Allen was hired by the CIA to audit the agency's monitoring of trillions of dollars in international financial transactions moving through a European cooperative called SWIFT. The company's impartiality to monitor this program was questioned last year by a European Union panel, which recommended independent supervision and declared that "we don't see such independent supervision under the current situation, and this must be established."
The ACLU and Privacy International, an organization that monitors government intrusion, jointly issued a scathing report [ http://www.aclu.org/pdfs/safefree/boozallen20060914.pdf ] on the issue last September. "Though Booz Allen's role is to verify that the access to the SWIFT data is not abused, its relationship with the US government calls its objectivity significantly into question," the two organizations said.
Booz Allen rejected the charge. "What clients are buying from us is independence and objectivity," spokeswoman Marie Lerch told the New York Times. But the company's close ties to the intelligence community through its employment of former high-ranking officials calls that objectivity into question.
Another key area that Congress should examine is Booz Allen's relationship with the NSA. Largely through McConnell, Booz Allen has very close ties to the NSA, once considered so secret its initials were said to stand for "No Such Agency."
Booz Allen served as the NSA's chief advisor on one of its most significant outsourcing projects. Called Groundbreaker, this huge project was launched shortly before the 9/11 attacks to overhaul the NSA's internal I.T. systems. Booz Allen's work on this project was outlined in a Booz Allen magazine piece on "Government Clients." Working with the NSA, the article states, Booz Allen "helped create a new model of managed competition that outsourced key pieces of the agency's IT infrastructure services." Its work on Groundbreaker "included source selection support and evaluating vendor proposals."
Last year, however, the Baltimore Sun [ http://www.baltimoresun.com/news/custom/attack/bal-te.nsa26feb26,0,6311175.story ] investigated the project and concluded it was a failure. Over the course of the project, Groundbreaker's $2 billion price tag had doubled, and the problems with the system, according to insiders who spoke to the Sun, were legion. "Some analysts and managers have said their productivity is half of what it used to be because the new system requires them to perform many more steps to accomplish what a few keystrokes used to," the paper reported. Another NSA program that Booz Allen was involved in, Trailblazer, which was designed to overhaul the NSA's signals intelligence system, is widely considered [ http://www.tpmmuckraker.com/archives/000592.php ] an even worse failure.
Booz Allen's involvement with both projects would have directly involved the company in the NSA's surveillance of U.S. domestic communications under what President Bush calls the "Terrorist Surveillance Program." Although Bush claims that the NSA program is so narrow that the agency is only listening to calls where an al-Qaida operative is at the other end, longtime analysts of the NSA believe that the program is much bigger than it has been portrayed. "I think they're listening to everybody," says John Pike of GlobalSecurity.org[ http://www.globalsecurity.org/index.html ], a highly respected defense research organization.
When the Groundbreaker and Trailblazer problems came to light, the Senate suspended the NSA's independent acquisition authority. In July 2006, the oversight subcommittee of the House intelligence committee issued a blistering critique of the Pentagon's management of the NSA and other intelligence programs. "Many of the major acquisition programs at the National Reconnaissance Office, the National Security Agency and the National Geospatial-Intelligence Agency have cost taxpayers billions of dollars in cost overruns and schedule delays," the bipartisan report concluded. Booz Allen was deeply involved in all three, and as head of the firm's defense intelligence programs, McConnell would have had direct participation.
Contracting has now become so ubiquitous in intelligence that the DNI itself is complaining. "Increasingly, the IC [intelligence community] finds itself in competition with its contractors [ http://www.dni.gov/publications/DNIHumanCapitalStrategicPlan18October2006.pdf ] for our own employees," the DNI wrote in an unclassified report on personnel policies released last June. "[T]hose same contractors recruit our own employees, already cleared and trained at government expense, and then 'lease' them back to us at considerably greater expense."
Concomitant with this report, the DNI launched its first study of intelligence contracting. The results, however, won't be in until the end of this fiscal year. By then, McConnell will probably be firmly ensconced as the director of DNI. Getting a grip on these problems is too much to ask of a contractor who was himself deeply involved in them.
About the writer
Tim Shorrock writes about national security, intelligence and other topics for The Nation, Mother Jones and other publications. He is working on a book about the privatization of intelligence, to be published in 2008.
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