George Tenet cashes in on Iraq

The former CIA chief is earning big money from corporations profiting off the war -- a fact not mentioned in his combative new book or heard on his publicity blitz.

Published May 7, 2007 12:34PM (EDT)

If you go by the book jacket of his new memoir, "At the Center of the Storm," George Tenet is enjoying the life of a retired government servant teaching at Georgetown University, where he was appointed to the faculty in 2004. The former CIA director played up the academic image when he kicked off the recent media blitz for his new book by doing an interview for CBS's "60 Minutes" from his spacious, book-lined office at the university. His academic salary, and the reported $4 million advance he received from publisher HarperCollins, should provide the former CIA director with more than enough money to live comfortably for the rest of his days and leave a substantial fortune to his children.

But those monies are hardly Tenet's entire income. While the swirl of publicity around his book has focused on his long debated role in allowing flawed intelligence to launch the war in Iraq, nobody is talking about his lucrative connection to that conflict ever since he resigned from the CIA in June 2004. In fact, Tenet has been earning substantial income by working for corporations that provide the U.S. government with technology, equipment and personnel used for the war in Iraq as well as the broader war on terror.

When Tenet hit the talk-show circuit last week to defend his stewardship of the CIA and his role in the run-up to the war, he did not mention that he is a director and advisor to four corporations that earn millions of dollars in revenue from contracts with U.S. intelligence agencies and the Department of Defense. Nor is it ever mentioned in his book. But according to public records, Tenet has received at least $2.3 million from those corporations in stock and other compensation. Meanwhile, one of the CIA's largest contractors gave Tenet access to a highly secured room where he could work on classified material for his book.

Tenet sits on the board of directors of L-1 Identity Solutions, a major supplier of biometric identification software used by the U.S. to monitor terrorists and insurgents in Iraq and Afghanistan. The company recently acquired two of the CIA's hottest contractors for its growing intelligence outsourcing business. At the Analysis Corp. (TAC), a government contractor run by one of Tenet's closest former advisors at the CIA, Tenet is a member of an advisory board that is helping TAC expand its thriving business designing the problematic terrorist watch lists used by the National Counterterrorism Center and the State Department.

Tenet is also a director of Guidance Software, which makes forensic software used by U.S. law enforcement and intelligence to search computer hard drives and laptops for evidence used in the prosecution and tracking of suspected terrorists. And Tenet is the only American director on the board of QinetiQ, the British defense research firm that was privatized in 2003 and was, until recently, controlled by the Carlyle Group, the powerful Washington-based private equity fund. Fueled with Carlyle money, QinetiQ acquired four U.S. companies in recent years, including an intelligence contractor, Analex Inc.

By joining these companies, Tenet is following in the footsteps of thousands of other former intelligence officers who have left the CIA and other agencies and returned as contractors, often making two or three times what they made in their former jobs. Based on reporting I've done for an upcoming book, contractors are responsible for at least half of the estimated $48 billion a year the government now spends on intelligence. But exactly how much money will remain unknown: Four days before Tenet's book was published, the Office of the Director of National Intelligence decided not to release the results of a yearlong study of intelligence contracting, because disclosure of the figure, a DNI official told the New York Times, could damage national security.

That may be a real break for Tenet. Under his watch, according to former CIA officials and contractors I've interviewed, up to 60 percent of the CIA workforce has been outsourced. A spokesman for the CIA told me last week that that figure "is way off the mark," but wouldn't provide the actual figure, which he said is classified. But publication of that number could prove embarrassing to Tenet, particularly in light of his own deep involvement in the privatization of U.S. intelligence.

Despite making himself available for plenty of airtime of late, Tenet was not available for an interview with Salon, said Tina Andreadis, his publicist at HarperCollins. She referred me to Bill Harlow, Tenet's co-author and his former director of public affairs at the CIA, who said Tenet's work on corporate boards "is all a matter of public record."

Tenet's ties with contractors were underscored last week in a dispute between two groups of former CIA officials over Tenet's legacy. On April 28, six former intelligence officers wrote to Tenet, saying he shared culpability with President Bush and Vice President Cheney for "the debacle in Iraq," and suggesting he donate half the royalties from his book to Iraq war veterans and their families. All of the signatories had severed their ties to U.S. intelligence, although three of them, Phil Giraldi, Larry Johnson and Vince Cannistraro, work as consultants for news organizations, corporations and government agencies outside of intelligence.

A few days later, six recently retired officers responded. They called the first letter a "bitter, inaccurate and misleading attack" on Tenet and pointed out that it was drafted by officers who "had not served in the Agency for years." Tenet, his supporters said, "literally led the nation's counterterrorism fight." And three of its six signatories were directly involved in that fight -- as contractors. They included John Brennan of the Analysis Corp.; Cofer Black, Tenet's former counterterrorism director and vice chairman of Blackwater, the private military contractor; and Robert Richer, the former deputy director of the CIA's clandestine services. Richer recently left Blackwater to become the CEO of Total Intelligence, a new company formed with Black and other ex-CIA officials to provide intelligence services to corporations and government agencies.

The company with the closest ties to the CIA -- and the biggest potential financial payoff for Tenet -- is L-1 Identity Solutions, the nation's biggest player in biometric identification. L-1's software, which can store millions of ID records based on fingerprints and eye and facial characteristics, helps the Pentagon and U.S. intelligence "in the fight against terrorism by providing technology for insurgent registration [and] combatant identification," the company says. L-1 technology is also employed by the State Department and the Department of Homeland Security for U.S. passports, visas, drivers' licenses and transportation worker ID cards. L-1 clearly hired Tenet for the business he could secure at the CIA. "We want the board to contribute in a meaningful way to the success of the company," CEO Bob LaPenta told analysts during an earnings conference call last year. "You know, we're interested in the CIA, and we have George Tenet."

Last fall, as part of its push into intelligence outsourcing, L-1 acquired SpecTal, a Reston, Va., intelligence contractor with at least 300 employees with security clearances, gaining instant access to several agencies where SpecTal had contracts, including the CIA, the NSA and the Defense Intelligence Agency. Just recently, L-1 picked up another intelligence contractor, Advanced Concepts Inc., where 80 percent of the 300 employees have top-secret clearances. Tenet, according to company filings with the Securities and Exchange Commission, was provided with 80,000 shares of L-1 stock when the company acquired Viisage, where Tenet was also a director. At the company's recent price of $19.79, those shares are worth more than $1.5 million. According to an SEC filing on April 6, in 2006 Tenet received director's compensation of $129,337, and $332,030 worth of stock. "George has amazing experience," said Doni Fordyce, L-1's executive vice president for communications. "We're in the security business, right? So he's a tremendous asset." In 2006, L-1 earned $164.4 million, up from $66.2 million in 2005.

Last October, Tenet continued to profit from the defense industry by joining the board of directors of QinetiQ Group PLC. QinetiQ, whose name draws from the fictional British spook who made the gadgets in the James Bond movies, moved aggressively into the U.S. market in 2003 after a majority of its voting stock was acquired by the Carlyle Group. (Carlyle sold off its remaining shares in February, making a $470 million profit on its original investment.)

Here, too, Tenet is profiting from involvement in Iraq and the broader war on terror. QinetiQ's recent acquisitions in the U.S. market include defense contractor Foster Miller Inc., which makes the so-called TALON robots used by U.S. forces in Iraq to neutralize IEDs. QinetiQ also controls Analex Corp., an information technology and engineering company that earns 70 percent of its revenue from the Pentagon. Among the clients listed on Analex's Web site are the National Reconnaissance Office, which manages the nation's spy satellites, and the Pentagon's Counter-Intelligence Field Activity office -- a secretive agency that has been criticized by members of Congress for collecting intelligence on American antiwar activists. According to QinetiQ's Annual Report and Accounts for 2006, non-executive directors like Tenet are paid a minimum of $70,000, with some paid up to more than a quarter-million dollars.

At QinetiQ, Tenet is working with Duane P. Andrews, a former assistant secretary of defense who is QinetiQ's CEO for North America. Prior to coming to QinetiQ, Andrews served for 13 years as a senior executive with Science Applications International Corp. SAIC is one of the largest U.S. intelligence contractors and a major provider of private sector analysts to both the CIA and the National Security Agency. Vanity Fair recently referred to it as a "shadow government."

There is an intriguing detail about SAIC buried in Tenet's acknowledgements in his new book: "Arnold Punaro of SAIC," he writes, "graciously provided me with a secure workspace to review and work with classified material." Punaro is identified on the SAIC Web site as the company's executive vice president for government affairs, communications and support operations, as well as general manager of its Washington operations.

Getting use of such a secure room is no small feat. In the intelligence business, such rooms are known as sensitive, compartmented information facilities, or SCIFs. To prevent eavesdroppers from picking up top-secret conversations, a typical SCIF has film on the windows, walls fitted with soundproof steel plates and white-noise makers embedded in the ceiling. Punaro must have had approval from SAIC and the CIA to allow Tenet such access. Harlow, Tenet's co-author, explained to Salon that Tenet could have used office space at the CIA to work on the book, but that he "believed it would be better not to be producing his memoirs at a government facility." It was "a matter of convenience" to use the room at SAIC, Harlow said.

In 2006, shortly after he joined TAC's advisory board, Tenet joined the board of directors of Guidance Software. One of Guidance's products, EnCase, has been used extensively by U.S. law enforcement, intelligence and military agencies to collect evidence in criminal and counterterrorism cases, including the prosecution of Enron executives and the British "shoe bomber," Richard Reid. Tenet's "years of experience fighting terrorism and extensive knowledge of potential and existing threats will expand Guidance's unparalleled expertise in computer forensics and network investigations," the company noted in a press release. According to SEC records, Tenet earned $58,112 in 2006 as a director and holds 9,700 shares of company stock. At its recent price of $12.85 per share, that would make Tenet's stock worth more than $124,000.

In his work at the Analysis Corp., Tenet has been reunited with John O. Brennan, his former chief of staff and, according to the book, one of his "closest advisers." Brennan spent 25 years in the CIA, and was deputy executive director at the time of the 9/11 attacks. In 2003, he was dispatched by Tenet to run the CIA's Terrorist Threat Integration Center. It eventually morphed into the U.S. government's National Counterterrorism Center, which Brennan ran from December 2004 to August 2005, when he retired from government. (The center, which integrates intelligence from various agencies, the Pentagon and the Department of Homeland Security, is staffed primarily by contractors.) In November 2005, Brennan joined TAC, which has contracts with the State Department, Homeland Security and the Office of the Director of National Intelligence. Brennan, the company's CEO, also declined a request from Salon for comment for this report.

In a statement TAC released when Tenet was appointed to that company's board last year, Tenet said he would help the company "address critical needs as government and industry work together to fight terrorism." Serving with Tenet on the advisory board there are Alan Wade, Tenet's former chief information officer, and John P. Young, a former CIA senior analyst. TAC is a privately held company and no public information is available regarding compensation for its board members. But between the terrorist attacks of Sept. 11, 2001, and 2006, the company's income quintupled, from less than $5 million in 2001 to $24 million in 2006.

By Tim Shorrock

Tim Shorrock is the author of Spies for Hire: The Secret World of Intelligence Outsourcing. You can follow his frequent postings on Twitter at @TimothyS

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