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Former Top CIA Spy on How US Intelligence Became Big Business

Grenier estimated that "many more than half" of the personnel who worked under him at the CIA's counterterrorism center were private contractors. Contractors "were coming in and they were all over the place," Grenier said of his time at CTC. "Often I would go down and talk to people in my work force and I would say, 'Hey, that was a great job and I saw what you did last night, I saw that cable that you turned up, thank you very much.' And I'd be startled when they would give me a business card."

It is difficult to access detailed information about the extent to which US intelligence activities are privatized, primarily because the budgets of the eighteen intelligence agencies operated by the United States are mostly classified. In 2007, journalist Tim Shorrock, who wrote the definitive book on the privatization of intelligence, Spies for Hire, obtained and published an unclassified document from the Office of the Director of National Intelligence showing that 70 percent of the US intelligence budget was spent on private contractors. No documents on these classified budgets have been made public since.

Grenier largely defended the use of contractors, primarily because he said he believes that the government, in a time of war, needs to be able to hire skilled, specialized personnel capable of securing the necessary security clearances. "It's far easier to go through the process to get a contractor if time is an issue than it would be to bring somebody on as a regular employee," Grenier said. He said that when he was running CIA operations in Afghanistan immediately after 9/11, he was working with several of his predecessors who had left the CIA, but returned, with their experience and clearances, as independent contractors. Grenier cited another "very prosaic" reason for the reliance on contractors: the federal budgeting process.

In 2003, just 237 interrogators graduated from the United States Army Intelligence Center, headquartered at the fort. Today, plans call for quadrupling the number of qualified interrogators to 1,000 a year by 2006 and the number of soldiers trained in basic intelligence skills to 7,000. This is an astronomical increase, far beyond the current capabilities of the center.

While military contracting for construction or weapons manufacturing is nothing new, the privatization of intelligence instruction is a new and rapidly expanding sector that came about less than four years ago. One estimate in Mother Jones magazine, compiled from interviews with military experts, suggests that as much 50 percent of the $40 billion given annually to the 15 intelligence agencies in the United States is now spent on private contractors.

James Bamford, the author of The Puzzle Palace (an expose of the National Security Agency which is now used as a textbook at the Defense Intelligence College), is worried about this new trend. "While there is nothing inherently wrong with the intelligence community working closely with private industry," he wrote in The New York Times, "there is the potential for trouble unless the union is closely monitored. Because the issue is hidden under heavy layers of secrecy, it is impossible for even Congress to get accurate figures on just how much money and how many people are involved."

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.