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)

Booz Allen Hamilton and the intelligence director's office separately said each will vigorously enforce ethics rules related to McConnell and the company.

In a statement, the agency pledged to refer potential business conflicts to ethics officers inside federal agencies.

A Booz Allen Hamilton spokesman, George Farrar, said the company will establish contracting firewalls to avoid conflicts with McConnell. "That has to be the case," Farrar said. "You have to maintain absolutely by-the-rules contracting."

McConnell's nomination comes in the midst of a broad, government-wide review by the intelligence director's own office about the role of private contractors in U.S. spy agencies. That report, which will examine whether the government hires too many such contractors, is nearly finished but has not yet been sent to Congress.

McConnell, a former director of the National Security Agency until 1996, is described by those who have worked with him as an affable and well-respected intelligence expert. He is credited with recognizing more than a decade ago the risks from electronic attacks by foreigners against important U.S. computer networks _ years ahead of many other government officials.

McConnell is still expecting an unspecified lump-sum retirement payment, an unspecified bonus and an unspecified payment to his retirement account from Booz Allen Hamilton, according to his financial records. The company also will continue to pay for his medical and dental insurance.

Separately, McConnell draws $90,944 annually from his Navy retirement and owns smaller amounts of stock in other companies that also work extensively with the U.S. government, including Halliburton Co., Boeing Co., L-3 Communications Holdings Inc., Cisco Systems Inc., Oracle Corp., Microsoft Corp. and others. He also earns $16,000 as a board member for CompuDyne Corp., which sells security systems to the federal government, and $30,000 as chairman of the Intelligence and National Security Alliance, a trade group that lobbies the government on intelligence matters.

It was unclear how much McConnell's finances have changed since he left U.S. government work in 1996. The National Security Agency, which he led, told the AP it could not locate McConnell's financial records from that period in its files. It suggested the records might have been destroyed because so much time had passed since he worked there.

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Associated Press Writer Sharon Theimer contributed to this report.