Negroponte to Review Intelligence Changes

By Walter Pincus
Washington Post Staff Writer
Saturday, July 2, 2005

Director of National Intelligence John D. Negroponte will review changes made at the Army's National Ground Intelligence Center (NGIC) to address criticism by a presidential commission in March that found there was "gross failure" in the center's analysis of Iraqi arms in 2002, said Gen. Michael V. Hayden, Negroponte's deputy.

Two NGIC analysts, who since 2002 have received annual performance awards, judged in September 2002 that the aluminum tubes that Iraq was purchasing were "highly unlikely" to be used for rocket motor cases because of their "material and tolerances," according to the report of the president's commission on intelligence. The NGIC finding, which the commission termed "completely wrong," bolstered a CIA contention that the tubes were meant for nuclear centrifuges and were evidence that Saddam Hussein was reconstituting a nuclear weapons program.

The NGIC said it discovered its errors before the president's intelligence commission started its review, and as a result "instituted changes to training and procedures to improve analytic products," according to an Army statement delivered in answer to written questions from The Washington Post.

The two civilian analysts responsible for the tube analysis "were instrumental in developing that training and procedure improvement," the Army statement said.

Hayden told reporters Wednesday that the NGIC and two other intelligence agencies cited by the presidential commission -- the Defense Intelligence Agency Humint Service, which handles human intelligence, and the intelligence community's Center for Weapons Intelligence, Nonproliferation and Arms Control (WINPAC) -- would be held accountable for mistakes on prewar intelligence.

"They are doing their own look, and we will do our own," said Hayden, who added that the NGIC's activities fall under the DNI's purview. The House and Senate intelligence committees have also opened inquiries into the NGIC, according to congressional sources.

The NGIC has a staff of 900 full-time scientists, engineers, intelligence analysts and soldiers, with most of them at a relatively new facility near Charlottesville. It provides analyses of foreign armies, including scientific and technical work on their weapons.

Meanwhile, the NGIC has also been in the spotlight as a result of a controversy involving MZM Inc. MZM is a research company whose government contracting business has come under scrutiny after it was disclosed that its president, Mitchell J. Wade, purchased the California home of Rep. Randy "Duke" Cunningham (R-Calif.) for $1.6 million, but shortly thereafter sold it, taking a $700,000 loss.

Cunningham, a subcommittee chairman of the Permanent Select Committee on Intelligence and a member of the Defense subcommittee of the House Appropriations Committee, lived on a yacht owned by Wade docked in the Capital Yacht Club on the Potomac River.

A federal investigation is underway covering the Wade-Cunningham house sale, which the congressman last week acknowledged showed "poor judgment."

On Oct. 18, 2002, MZM got the first of what would grow to be a series of orders for NGIC work. This initial one was for a seven-week, $194,000 study analyzing a computer program concept called "FIRES," according to material provided by the Pentagon. FIRES was a program first suggested by an NGIC employee who believed that if U.S. operatives around the world collected blueprints of important buildings worldwide, an important intelligence database could be developed.

At the time, the NGIC's senior civilian employee and executive director was William S. Rich Jr. Rich had been the top civilian official at the NGIC since its inception in 1994. In September 2003, Rich retired from the NGIC and thereafter went to work as senior executive vice president for strategic intelligence for MZM, according to former NGIC colleagues and Pentagon documents. Rich has not returned telephone calls, and MZM has refused to comment on its NGIC work.

Other NGIC employees have been hired by MZM. The former sergeant major at the NGIC, George A. Peeterse, is an MZM vice president. Contacted by telephone at home last week, Peeterse declined to discuss MZM or the NGIC. "We have been told to refer all questions to MZM headquarters in Washington," he said.

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