U.S. Relies on Spies for Hire to Sift Deluge of Intelligence
By SIOBHAN GORMAN and DION NISSENBAUM
The leaks by Edward Snowden reveal a vulnerability in U.S. intelligence since 9/11, triggered by a surge of information collected on people around the world and the proliferation of private government contractors to store, sift and manage it.
Mr. Snowden and other private employees with permission to plug directly into National Security Agency systems have unprecedented access to highly sensitive information-the result of years of pressure to break down the walls dividing U.S. intelligence agencies and share information that might expose the next terror plot.
Thousands of workers employed by government contractors sit side by side with federal workers and hold security clearances that provide access to intelligence databases. The result is a system so enmeshed that government and contract workers are often indistinguishable.
Edward Snowden has said he worked for consulting giant Booz Allen Hamilton as an 'infrastructure analyst.'
In 2012, some 22% of people holding security clearances were contractors, according to the Office of the Director of National Intelligence, down from more than 25% in 2009.
Mr. Snowden's release of documents describing top-secret NSA programs is likely to accelerate a push in Congress to reduce the role of private companies in U.S. spy agencies, officials said.
"There is no guarantee of 100% security," said Ronald Marks, a former Central Intelligence Agency officer who also worked as a contractor. "The problem you have now is that the amount of material that can be gotten out at one time is huge."
Mr. Snowden, an employee of the consulting behemoth Booz Allen Hamilton, has said he leaked highly classified information because he felt Americans should know more about NSA surveillance programs.
Director of National Intelligence James Clapper said a "crimes report" was filed with the Justice Department and government officials are pursuing an investigation.
Mr. Snowden, a former Central Intelligence Agency employee, apparently checked out of a Hong Kong hotel and his whereabouts weren't known Monday.
The size and scale of private contracting for intelligence goes "well beyond the scope of anything the public is aware of or even imagines," said Peter Singer, director of the Center for 21st Century Security and Intelligence at the Brookings Institution.
About 1.2 million Americans hold top-secret clearances, the Director of National Intelligence reported this year. More than a third of those, 38%, are private contractors.
Nearly all of the private-sector growth followed the Sept. 11, 2001 attacks.
Although some of the information on intelligence contractors is secret, NSA officials have said the number of its vendors grew to 6,000 in 2006 from 140 in 2001.
The NSA surveillence flap reveals the many paradoxes of Barack Obama, who, like presidents before him, isn't exactly the man either friends or foes sometimes imagine him to be. Jerry Seib explains on the News Hub.
"It's hard to think of a single thing the intelligence community can do on its own anymore without a contractor being involved in some way," Mr. Singer said, "from the most mundane of data crunching to the pointy end of the black ops side."
Reliance on private contractors sprang from the need to quickly ramp up data collection and analysis after the 9/11 attacks, experts said. U.S.
intelligence had cut employees during the 1990s, following the breakup of the former Soviet Union and the end of the Cold War.
Worried about new attacks on U.S. soil, intelligence agencies sought personnel with security clearances who could get to work immediately.
Such companies as Booz Allen Hamilton had the most ample supply.
Mr. Snowden has said he worked for Booz Allen as an "infrastructure analyst"
at an NSA facility in Hawaii. His security clearance for the job would have been approved by the NSA, which also would have determined the systems he could access from his desktop, said contractors familiar with the process.
Government contracts have been lucrative for Booz Allen. In a government filing last month, Booz Allen said that nearly a quarter of its most recent annual revenue, about $1.3 billion, came from its work with the intelligence community and that another 55%, about $3.2 billion, came from its defense business. More than two-thirds of Booz Allen's 25,000 workers hold government security clearances, and more than a quarter of those hold the highest security clearance.
In 2008, Booz Allen separated its commercial business from its government consulting work and sold the latter to Carlyle Group CG +0.11% -another politically connected firm-for $2.54 billion. The Carlyle-owned government business, Booz Allen Hamilton Holding, sold shares to the public in a November 2010 IPO.
In recent years, Booz Allen has had a number of widely reported security issues. In 2011, the online activist group Anonymous claimed it had hacked Booz Allen computers and stolen 90,000 encrypted passwords for members of the U.S. military. Booz Allen declined to comment at the time.
Last year, Booz Allen's San Antonio office was nearly barred from doing work with the Air Force after one of its new employees, a retired Air Force lieutenant colonel, provided the company with inside information from the Defense Department that could have given Booz Allen a competitive advantage for a coming contract.
Booz Allen agreed to pay a $65,000 fine and said its internal procedures in that instance had failed. At the time, Booz Allen said it had a problem with internal investigations and hired an outside law firm to examine its procedures.
On Sunday, Booz Allen moved quickly to tamp down news of Mr. Snowden's breach. The firm's chairman, Ralph Shrader, sent a memo to Booz Allen employees just hours after the revelation, advising them to keep quiet. The public statement "will be our only external communication on this issue for the time being," he wrote, instructing employees to "refrain from discussion or speculation."
Booz Allen declined to comment Monday.
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Security clearances are high-value commodities in the U.S. intelligence industry. Mr. Snowden told the Guardian newspaper that said he made an income of roughly $200,000. Industry officials said that was probably based on a high-level clearance carried over from his employment at the CIA.
One government contractor described such a high-level security clearance as "the Willy Wonka golden ticket" for a private worker.
On Monday, contractors and defense specialists said they expected Congress to debate how to disentangle private contractors from the U.S. intelligence system. A briefing of the full House is scheduled for Tuesday, and a closed hearing of the Senate Intelligence Committee is set for Thursday.
Facing congressional criticism in 2007, intelligence agencies promised to cut back on private contractors but few have made substantial headway, former officials said.
"Yes, there were initiatives to reduce contractors, but at the end of the day, the budget goes up another billion dollars, and what do you do?" said a former U.S. official.
Almost all intelligence contracts are based on hourly rates, so costs were difficult to contain, the former official said. In addition, U.S.
intelligence agencies have a hard time letting go of contract employees with top-level clearances, because they are difficult to replace quickly, he said.
Mr. Snowden had specialized technical skills that are frequently outsourced because the U.S. government doesn't have enough employees with such training.
Contractors defended the government's reliance on private companies, arguing there often are few distinctions between a federal worker and a contractor.
They cited Pfc. Bradley Manning as a counterargument to the idea that contractors pose more of a security risk than government workers.
The Army private is currently on trial and facing life in prison after admitting to providing WikiLeaks with a trove of classified documents.
"I don't know anybody that can prove that there's more risk to having a contractor," said David Walsh, a former Navy intelligence officer who founded a Virginia-based national security company in 2009 called Prescient Edge Corp.
One outstanding question is how Mr. Snowden was able to access some of the U.S. government's most sensitive secrets.
The answer may lie in the need for system administrators-like Mr. Snowden-to access to the secretive computer systems where the information is stored.
"The most important guy for proprietary protection is the I.T. guy," said Mr. Walsh, whose company currently helps the Defense Intelligence Agency prevent threats to government information and operations.
"They have the keys to the safe," he said, "so they have to be read into everything and you have to have cleared them for that."
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