Washington's $8 Billion Shadow

[Faux pas]

Mega-contractors such as Halliburton and Bechtel supply the government with brawn. But the biggest, most powerful of the "body shops"—SAIC, which employs 44,000 people and took in $8 billion last year—sells brainpower, including a lot of the "expertise" behind the Iraq war.
by Donald L. Barlett and James B. Steele March 2007

One of the great staples of the modern Washington movie is the dark and ruthless corporation whose power extends into every cranny around the globe, whose technological expertise is without peer, whose secrets are unfathomable, whose riches defy calculation, and whose network of allies, in and out of government, is held together by webs of money, ambition, and fear. You've seen this movie a dozen times. Men in black coats step from limousines on wintry days and refer guardedly to unspeakable things. Surveillance cameras and eavesdropping devices are everywhere. Data scrolls across the movie screen in digital fonts. Computer keyboards clack softly. Seemingly honorable people at the summit of power—Cabinet secretaries, war heroes, presidents—turn out to be pathetic pawns of forces greater than anyone can imagine. And at the pinnacle of this dark and ruthless corporation is a relentless and well-tailored titan—omniscient, ironic, merciless—played by someone like Christopher Walken or Jon Voight.

To be sure, there isn't really such a corporation: the Omnivore Group, as it might be called. But if there were such a company—and, mind you, there isn't—it might look a lot like the largest government contractor you've never heard of: a company known simply by the nondescript initials SAIC (for Science Applications International Corporation), initials that are always spoken letter by letter rather than formed into a pronounceable acronym. SAIC maintains its headquarters in San Diego, but its center of gravity is in Washington, D.C. With a workforce of 44,000, it is the size of a full-fledged government agency—in fact, it is larger than the departments of Labor, Energy, and Housing and Urban Development combined. Its anonymous glass-and-steel Washington office—a gleaming corporate box like any other—lies in northern Virginia, not far from the headquarters of the C.I.A., whose byways it knows quite well. (More than half of SAIC's employees have security clearances.) SAIC has been awarded more individual government contracts than any other private company in America. The contracts number not in the dozens or scores or hundreds but in the thousands: SAIC currently holds some 9,000 active federal contracts in all. More than a hundred of them are worth upwards of $10 million apiece. Two of them are worth more than $1 billion. The company's annual revenues, almost all of which come from the federal government, approached $8 billion in the 2006 fiscal year, and they are continuing to climb. SAIC's goal is to reach as much as $12 billion in revenues by 2008. As for the financial yardstick that really gets Wall Street's attention—profitability—SAIC beats the S&P 500 average. Last year ExxonMobil, the world's largest oil company, posted a return on revenue of 11 percent. For SAIC the figure was 11.9 percent. If "contract backlog" is any measure—that is, contracts negotiated and pending—the future seems assured. The backlog stands at $13.6 billion. That's one and a half times more than the backlog at KBR Inc., a subsidiary of the far better known government contractor once run by Vice President Dick Cheney, the Halliburton Company.
~~~~~
Long read, but a serious eyeopener.

http://www.vanityfair.com/politics/features/2007/03/spyagency200703

[Swede]

1. All that money flowing into a company no one is familiar with,

Amazing.

[Faux pas]

2. I know, it's scary amazing. The part that really got me was:

"It is a simple fact of life these days that, owing to a deliberate decision to downsize government, Washington can operate only by paying private companies to perform a wide range of functions. To get some idea of the scale: contractors absorb the taxes paid by everyone in America with incomes under $100,000. In other words, more than 90 percent of all taxpayers might as well remit everything they owe directly to SAIC or some other contractor rather than to the IRS."

[Faux pas]

3. you all are missing out on on some real news here! n/t

[FourScore]

4. K&R

[Hugin]

5. ...

:kick:

[Hugin]

14. ...

kick

[spanone]

6. Thanks for the article. K&R

[mopinko]

7. .

[cosmicdot]

8. perfect choice to evaluate voting machine security standards, no?

How did SAIC become the company of choice to evaluate security standards of the voting machine industry? better still ... why?

http://www.dissidentvoice.org/Articles7/Landes_SAIC-VoteHere-Diebold.htm

http://www.thirdworldtraveler.com/Election_Reform/Voting_Machines_Wild.html

from the last link:

~snip~

Diebold's CEO, Walden O'Dell is an avid supporter of George W. Bush and has come under attack for penning a fund-raising letter in which he promised to help deliver Ohio's votes to Bush in 2004. Diebold has been retained by the state of Maryland to provide voting software for the 2004 election, but because of ongoing negative publicity, Diebold hired Scientific Applications International Corporation (SAIC) of San Diego, to assess the security of the company's voting software.

But wait, there's more

Many SAIC officers are current or former government and military officials. Retired Army Gen. Wayne Downing, who until last summer served as chief counter-terrorism expert on the National Security Council, is a member of SAIC's board. Also on the board is former CIA Director Bobby Ray Inman, who served as director of the National Security Agency, deputy director of the CIA and vice director of the Defense Intelligence Agency. During the first Bush administration and while on the board of SAIC, Inman was a member of the National Foreign Intelligence Board, an advisory group that reports to the president and to the director of Central Intelligence.

Retired Adm. William Owens, a former vice chairman of the Joint Chiefs of Staff who sits on Defense Secretary Donald Rumsfeld's Defense Policy Board, served as SAIC's president and CEO and until recently was its vice chairman. He now is chairman of the board of VoteHere, which seeks to provide cryptography and computer software security for the electronic election industry. Robert Gates, ex-CIA director, former SAIC board member and a veteran of the Iran-Contra scandal, also is on the board of VoteHere.

SAIC has a history of problems. In a 1995 article in Web Review, investigative journalist Stephen Pizzo notes that in 1990 the Justice Department indicted SAIC on 10 felony counts for fraud, claiming that SAIC mismanaged a Superfund toxic cleanup site. SAIC pleaded guilty. In 1993 the Justice Department again brought charges against the company for "civil fraud on an F-15 fighter contract." In May 1995, the company was charged with Iying "about security system tests it conducted for a Treasury Department currency plant in Fort Worth, Texas."

It is not clear how SAIC became the company of choice to evaluate security standards of the voting machine industry. Under HAVA, Bush is required to establish an "oversight committee, headed by two Democrats and two Republicans, as well as a technical panel to determine standards for new voting machinery. The four commission heads were to be in place by last February, but just one has been appointed. The technical panel also remains unconstituted, even though the new machines it is supposed to vet are already being sold in large quantities," Gumbel says.

~snip~


I think SAIC was the prime contractor for installing most of Saudi Arabia's telecommunication infrastructure (early 80s). It's a small world, after all. Not sure they actually 'make' anything. Likely coordinate and administer 'subcontracted' equipment, hardware, etc. into "a system".

[Faux pas]

12. Oh my bloody hell! I thought I'd already heard the worst, is

it possible for things to be 'worser'? Thanks for the new info, I'll be passing it around also.....Yikes.

[WiseButAngrySara]

9. What do we do with this information? Our eyes are opened

for what? K&R.

[halobeam]

10. What a great question. I was wondering the same thing.

I read every word of this very long read. What DO we do? Okay, so we know. I guess we can forward it, but I think Vanity Fair has greater distribution. Next guess, we can talk about it. Okay... let's do that..

My mind is blown, how about your's? I'm done..

You have anything to add? hmmm.. I'm looking forward to your reply.

I'm glad we had this talk.

Okay, so now what?

Your turn?

I'm all out of guesses

but all full of helplessness.

(my sarcastic tone is not directed at you or any particular person) I'm just not sure what to do with this.. I thought KBR and Halliburton were huge... they are like the ma and pa shop on the corner compared.

we are screwed.

[WiseButAngrySara]

11. It's frightening. And I don't quite understand all of the implications

other than "we are screwed." I had hoped you would have some positive insight, suggestions...

[leftchick]

13. damn! This is government wate on a gargantuan scale!

and don't expect any accountability from the Dems....

Another failed effort involves the F.B.I., which paid SAIC $124 million to bring the bureau, whose computer systems are among the most primitive in American law enforcement, into at least the late 20th century. The lack of information-sharing is one reason why the F.B.I. failed to realize that in the year leading up to 9/11 two of the future hijackers—including one with known "jihadist connections"—were actually living in the San Diego home of an F.B.I. informant. SAIC set to work on a system called the Virtual Case File. V.C.F. was supposed to become a central repository of data (wiretap transcripts, criminal records, financial transactions) from which all F.B.I. agents could draw. Three years and a million lines of garbled computer code later, V.C.F. has been written off by a global publication for technology professionals as "the most highly publicized software failure in history." The failure was due in part to the bureau's ever shifting directives, which points up the perverse nature of government-by-contract. When the government makes unrealistic demands, the contractors go along anyway: they are being paid not to resist but to comply. If it turns out they can't deliver, new contracts will simply be drawn up. Responding to questions about the F.B.I. project, the company conceded that "there were areas in which SAIC made mistakes, particularly where we failed to adequately communicate our concerns about the way the contract was being managed."

These and other SAIC activities would seem to be ripe targets for scrutiny by the new Democratic Congress. But don't be surprised if you hear nothing at all: SAIC's friends in Washington are everywhere, and play on all sides; the connections are tightly interlocked. To cite just one example: Robert M. Gates, the new secretary of defense, whose confirmation hearings lasted all of a day, is a former member of SAIC's board of directors. In recent years the company has obviously made many missteps, and yet SAIC's influence in Washington seems only to grow, impervious to business setbacks or even to a stunning breach of security.

:grr:

[leftchick]

15. more Doug Feith

<snip>

SAIC served as the paymaster for the Iraqi exiles under a $33 million government contract. It brought them all together in the Washington, D.C., suburbs, rented apartments for them, paid their living expenses, provided various support services, and, later, after the invasion and occupation, flew them to their jobs in the new, democratic Iraq. This SAIC operation reported to Douglas Feith, the undersecretary of defense for policy at the Pentagon, a key assistant to Rumsfeld, and one of the architects of the Iraq invasion and occupation. Feith's deputy was Christopher "Ryan" Henry, a former SAIC senior vice president.

[halobeam]

16. k & r!