Spy Chief Nominee Faces Ethical Thicket

Mike McConnell speaks in the Roosevelt Room of the White House in Washington in this Jan. 5, 2007 file photo during his nomination by President Bush to director of National Intelligence. Members of the Senate Intelligence Committee are expected to weigh the credentials of the retired vice Admiral during a confirmation hearing Thursday, Feb. 1, 2007, on Capitol Hill. If confirmed McConnell, who held the highest ranks of the NSA, the Joint Chiefs of Staff and the Defense Intelligence Agency, will become the nation's second national intelligence director (DNI), charged with advising President Bush and unifying 16 independent spy agencies. (AP Photo/Gerald Herbert, File) (Gerald Herbert - AP)

WASHINGTON -- President Bush's choice to be the nation's new spy chief works as a $2 million-a-year private consultant with some of the same senior military and intelligence officials he would supervise as director of national intelligence.

Retired Vice Adm. Mike McConnell could face an unusually daunting challenge avoiding ethical entanglements after a decade working with Booz Allen Hamilton Inc., a large defense and intelligence consulting company with sales of $3.7 billion worldwide, according to an extensive Associated Press review of McConnell's finances and business deals.

McConnell's Senate confirmation hearing is to begin Thursday.

A Senate Intelligence Committee member, Sen. Ron Wyden, D-Ore., said he already has urged McConnell to be prepared to discuss his work as a consultant and its implications on the job of chief over all U.S. intelligence agencies. Those agencies rely heavily on work by outside consultants, who often are hired under contracts kept secret for national security reasons.

"I'm going to bring it up," Wyden said. "I made it clear that I was going to be asking questions about issues relating to his work with contractors."

In May, for example, McConnell and other company executives met privately in San Antonio with Major Gen. Craig Koziol, a top Air Force intelligence officer in charge of cyberwarfare, according to records obtained by the AP under the Freedom of Information Act. The company bid months later on a related contract from the Air Intelligence Agency, part of the U.S. intelligence community that McConnell would oversee as the national director.

More than half Booz Allen Hamilton's sales come from such government contracts. McConnell's closest colleagues at the company anticipate intense scrutiny over its future relationship with him as the overseer of the nation's 16 spy agencies.

"I will never be able to go in and see him in his office," said Richard Wilhelm, a Booz Allen Hamilton senior vice president who has worked with McConnell for more than 30 years. "He's said, 'Unfortunately, I'll not be able to talk to you guys anymore.' We'll have to be very careful."

Efforts to reach McConnell through the White House and through Booz Allen Hamilton were unsuccessful. Presidential nominees routinely do not speak publicly or with reporters before Senate confirmation hearings.

The White House promised that McConnell would divest any financial holdings in Booz Allen Hamilton if he is confirmed as intelligence chief. In addition to his $1,999,840 salary, McConnell owns $1 million to $5 million in company stock, plus up to $1.15 million more in other investment funds owned through the company, according to financial reports he submitted to the White House.

McConnell would earn $186,600 annually as director of national intelligence.

"There has to be the highest level of oversight within the agency and Congress to make sure any appearance of impropriety is totally investigated and erased," said Scott Amey, general counsel for the Project on Government Oversight, a Washington-based whistleblowers group. Amey said public scrutiny over classified intelligence contracts is limited because of secrecy.