Reports Revive Debate on Contractor Use
Lawmakers, Critics Warn That Military, CIA May Rely Too Much on Private Firms

By Walter Pincus
Washington Post Staff Writer
Saturday, August 22, 2009

The disclosure that the CIA once hired Blackwater USA for elements of an assassination program has brought back into focus the wide range of intelligence and military activities that are being contracted out to private firms.

Some lawmakers have balked at the shift of intelligence operations away from government employees. This week, Diane Feinstein (D-Calif.), chairman of the Senate Select Committee on Intelligence, said she has "believed for a long time that the intelligence community is overreliant on contractors to carry out its work." She called it a particular problem "when contractors are used to carry out activities that are inherently governmental."

That phrase, though, is subject to interpretation, and the Office of Management and Budget stipulates that agencies in the executive branch have a good deal of discretion. Moreover, there is no legal prohibition to contracting out what may appear to be a government function.

On Wednesday, after news reports surfaced about the CIA's hiring of Blackwater, former agency director Michael V. Hayden noted that the definition of an "inherently government activity" is quite narrow.

"Actual intelligence analysis, actual intelligence collection are permissible activities for contractors under current OMB guidance," Hayden said.

Hayden did not comment directly on the reports about Blackwater and the assassination program targeting suspected top members of al-Qaeda, but he and current CIA personnel have defended the use of contractors.

"The CIA views contractors as essential to the accomplishment of its mission, bringing unique skills that the agency may need only for limited periods of time," spokesman Paul Gimigliano said in a statement.

He added that contractors provide additional capabilities to staff officers and provide "within the laws and regulations . . . the flexibility required by the changing priorities of intelligence."

In the case of assassination operations, which officials say never passed the planning stage, the involvement of Blackwater has exacerbated the frustration of Democratic lawmakers and others critical of the use of contractors in intelligence work.

Of the scores of private security contractors that have worked for U.S. military and government agencies, Blackwater gained the most notoriety because of accusations its personnel used excessive force against civilians in Iraq. The Justice Department investigated the North Carolina company, now known as Xe Services LLC, for the alleged role of its employees in the slayings of 17 Iraqis in Baghdad in 2007. Five Blackwater guards were indicted last year in connection with those deaths.

The founder of the privately held firm, Erik Prince, is a major financial backer of Republican political candidates and causes. After the March 2003 invasion of Iraq, his company won numerous lucrative contracts to provide protection for U.S. personnel, including a $21 million no-bid contract to protect L. Paul Bremer, head of the U.S.-led Coalition Provisional Authority.

The next year, Blackwater secured a $1 billion, five-year State Department contract to guard U.S. diplomats and other dignitaries worldwide.

The precise dollar amount of Xe's business with other government agencies is difficult to determine. But "Master of War," an investigative book on Blackwater by journalist Suzanne Simons published this year, put the sum at $2 billion since 1997 -- not including the company's classified contracts with the CIA and other intelligence agencies.

Robert Baer, a former CIA case officer who has written several books on intelligence, on Friday criticized the choice of Blackwater in assassination operations.

"It's one thing, albeit often misguided, for the agency to outsource certain tasks to contractors," he wrote on Time magazine's Web site. "It's quite another to involve a company like Blackwater in even just the planning and training of targeted killings, akin to the CIA going to the Mafia to draw up a plan to kill Castro."

Hayden said that about 30 percent of CIA employees are contractors, down from a much higher percentage several years ago. But contracting in the intelligence community remains widespread.

L-3, the giant military contractor, says on its Web site that its Intelligence Solutions Division has 2,300 employees at more than 28 sites worldwide. It is advertising this month to hire personnel for eight military intelligence jobs in Afghanistan, including a senior intelligence analyst with 10 years of Defense Department or other government agency experience and a Top Secret clearance.

Meanwhile, Raytheon, the corporation that supplies many technical elements of the Predator drones, is advertising for a technician to help "troubleshoot" the surveillance camera used on the unmanned vehicles.

A senior Senate staff aide familiar with defense matters said yesterday that such technicians are needed "because the equipment is so advanced" that the best workers are those from the companies that helped build the drones and not from the military.

Staff writer Joby Warrick contributed to this report.

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