Thursday, January 7, 2010

Not Systemic Failure, But Failed System

"Systemic failure” is how President Obama on Dec. 30 described the homeland security and intelligence lapses that led to the unsuccessful terrorist attack by a Nigerian Islamist on Dec. 25. The accuracy of this assessment was underscored by another intelligence failure that resulted in the death of seven CIA agents in Afghanistan on Dec. 30.

What is to be done?

Michael Chertoff, the head of the national security consulting agency Chertoff Group and former secretary of the Department of Homeland Security, says buy and install more full-body scanners.

Indeed, that may be part of the answer. But his private-public status – and the fact under his tenure as DHS chief the department began buying scanners (at an estimated $160, 000 each) from Rapiscan (a company Chertoff Group now represents) – is cause for skepticism. Rapiscan received $26.5 million through DHS contracts in 2008, and$41.4 million from all government departments.

It’s unlikely, however, that attempts to fix our homeland security and intelligence system with new communications and screening systems can do much to improve a system that is increasingly driven more by private than public interests.

As Kate Hanni, founder of, told the Washington Post: "Mr. Chertoff should not be allowed to abuse the trust the public has placed in him as a former public servant to privately gain from the sale of full-body scanners under the pretense that the scanners would have detected this particular type of explosive."

Chertoff is one of a stream of mid- and high-level national security officials who have left homeland security, intelligence, and defense positions to join national security corporations. Tom Ridge, Chertoff’s predecessor at DHS, formed a national security consulting agency called Ridge Global.

One of the most recent national security start-ups is RiceHadley Group, founded by former Secretary of State Condoleezza Rice and former National Security Advisor Stephen Hadley.

Other new security companies formed by top Republican Party figures: Ashcroft Group founded by former Attorney General John Ashcroft; and Guiliani Group, formed by former New York City mayor and presidential candidate Rudolf Guiliani.

Chertoff is quickly becoming the most high-powered and deeply-pocketed national security consulting firms.

Other principals at Chertoff Group are also former government heavies, including:

* Former CIA director (2005-2009) Michael Hayden, who also directed the National Security Agency (NSA, 1999-2005);

* DHS deputy Paul Schneider (who prior to his position at DHS was head of acquisitions for NSA and the U.S. Navy);

* Ret. Admiral Jay Cohen, who was DHS director of science and technology and previously the Navy's technology chief; and

* Charlie Allen, who was the intelligence chief at DHS and, according to Michael Chertoff, "pretty much head of everything you could be for the CIA and head of national collections."

Financial recognition of the influential position held by Chertoff Group in homeland security policy and contracting came on Jan. 6 when Blue Star Capital a London investment company specializing in mergers and acquisitions within the homeland security sector, announced that it had entered into a “strategic relationship” with the Chertoff Group.

This new relationship also pointed to the increasing merger of the homeland security, defense, and intelligence sectors. As Blue Star explained:

"The Chertoff Group will work with Blue Star on due diligence for certain revenue generating opportunities in the homeland security, defense and intelligence markets, de-risking investments in this high-growth sector.

“The combined team brings together international experience including the U.S. Department of Homeland Security, U.S. Department of Defense, U.S. Central Intelligence Agency, and National Security Agency, plus UN security expertise, UK police, Scotland Yard counterterrorism expertise, Special Forces, security services, commercial defense companies, and global mergers and acquisitions investment banking experience."

The system that so spectacularly failed in two recent incidents is all about mergers and synergy, and little about real national security.

Chertoff applauded the value of the merger: "I believe there are many areas of opportunity within the Homeland Security, Intelligence and Defense sectors in the UK and mainland Europe where the synergies between Blue Star and the Chertoff Group will provide real value.”

The increasing merger of the homeland security, defense, and intelligence sectors is creating a new national security complex, where the leading defense contractors are now also the leading intelligence and homeland security contractors.

It is becoming quite clear that this merger of sectors and the purported synergy between public and private interests have been good for business.

But it is also becoming increasingly clear that this corporate-driven system of sector mergers and synergy of homeland security, intelligence, and defense is distorting national security priorities and putting us at risk.

It’s time to clean house and create a new system of national security – one in which our homeland security, defense, and intelligence is not overridden by the likes of Lockheed Martin, Blackwater, Halliburton, and the Chertoff Group.

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