CACI, Boeing, and Others Running Homeland Security’s Information Systems

CACI International, a company that says it specializes in the “new defense era” and “asymmetric warfare,” is the top private contractor at NOC, and is joined by Boeing and Unisys, along with such consulting firms as Engineering Consultants Service, Electronic Consulting Services, and Security Assistance Corporation.

CACI, which relies on the federal government for 96% of its revenues and does 40% of its federal work for the intelligence community, has won three contracts for communications operations support for NOC. CACI, which was implicated by the U.S. Army for the involvement of its contracted interrogators in the Abu Ghraib prison abuses in Iraq, is facing a lawsuit by the Center for Constitutional Rights for torturing Iraqis.

Illustrative of the central role that private contractors play in the most fundamental information-gathering, intelligence assessment, and management operations of DOC is the following job announcement by DHS contractor Engineering Systems Consultants.

The consulting firm advertised that it was “seeking an Incident Management Officer (IMO) Desk Support. The IMO will supports (sic) the Senior Watch Officer (SWO) within the Department of Homeland Security (DHS) National Operations Center (NOC) by providing senior leadership and other elements of DHS with situational awareness of incidents, events or concerns impacting the United States or its interests.”

Among the specific duties of this contract employee:

• “Provides baseline analysis, assessments and threat monitoring, while sharing information to help deter, detect, and prevent terrorist acts and to manage domestic incidents.
• “Cultivate cooperative relationships with officials of different agencies (state, territory, district, and tribal Directors of Homeland Security, Emergency Operation Centers, and Law Enforcement).
• “Produce and publish the National Operations Center Initial Incident and Update Reports for all National and International Situation Summary’s and ensuring that the developed products are posted to the National Common Operating Picture (COP).
• “Write and publish the DHS Situation Reports and Executive Summary’s (sic).”

A November report by DHS’s own Office of Inspector General on the department’s National Operations Center noted that a review to determine what should be considered “inherently governmental functions” at DHS was “outside the scope of this review.” It added, though, that “we believe the issue warrants further attention by our office.”

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The Homeland Security Team

What does “security” mean?

For Team Chertoff it means “securing the future of your organization” through outsourcing and government contracts.

It’s the job of the revived Team Chertoff -- in the form of the national security consulting agency the Chertoff Group – to bring the government to its clients and its client to the government.

The government is not just the Department of Homeland Security – where Michael Chertoff served as secretary for Bush’s second term – but as the Chertoff Group explains: ‘Our principals have worked closely together for years, as leaders of the Department of Defense, the Department of Homeland Security, the Department of Justice, the National Security Agency and the CIA.”

It’s the team that brought us the immigrant crackdown, the border fence, surge in immigrant imprisonment, the Iraq war, the outsourcing boom at DHS and in intelligence, Guantanamo Bay prison, and the Hurricane Katrina disaster response.

Yet Team Chertoff – “New Team, Long-Term Colleagues” – boasts of their government record. It’s no wonder. At DHS alone, outsourcing means $15 billion annually to private firms, while during the Bush administration intelligence outsourcing grew to 70% of the estimated $66 billion annual intelligence budget.

“We came through it together,” says the Chertoff Group, “And the United States came out stronger. We reorganized the country’s disaster response system, so we’ll never again see anything like the aftermath of Hurricane Katrina. We vastly improved interagency communications, so federal and local agencies won’t be in the dark about who’s doing what. We developed a whole new approach to border security and counterterrorism, and since 9/11 not a single person has died from a terrorist attack within our borders.

“We came to know each other under the most trying circumstances. We came to trust each other with our lives. We work incredibly well – together – under pressure.

“And once you get to know us, you’ll understand how valuable we can be to securing the future of your organization.”

Here are Chertoff Group-airbrushed bios of its team:

• The Honorable Charles E. Allen
• Larry Castro
• The Honorable Michael Chertoff
• The Honorable Jay M. Cohen
• Nathaniel T. G. Fogg
• General Michael V. Hayden
• The Honorable Jeffrey W. Runge, MD, FACEP
• The Honorable Paul A. Schneider
• Dr. Gary M. Shiffman
• Chad C. Sweet
• Dr. J. Bennet Waters

Security means big business. Security means a reconstituted military-industrial complex comprising intelligence, homeland security, and defense – a national security complex.

See related:

Tom Barry, “Former Bush Security Chiefs Find Terrorism Obsession Can Be Profitable,” CIP’s Americas Program.

Tom Barry, “Not Systemic Failure, But Failed System,” Border Lines Blog.

Information and Intel Outsourcing at Homeland Security

The Department of Homeland Security has outsourced intelligence, detention, communications, even oversight functions. Its National Operations Center (DOC), designed as the government’s information clearinghouse on homeland threats, is one of the department’s chief outsourcers.

In large part the over-reliance on private contractors has led to system failures in such DHS projects as SBInet (the chronically mismanaged, over-budget, and unproven virtual fence), the Coast Guard’s Deepwater project, and its dysfunctional information system about homeland threats.

DHS officials since the department’s creation in March 2003 have promised congressional oversight committees year after year that the department would reduce its dependence on private contractors as it consolidated. But little has improved and outsourcing is rising.

In a recent interview with Federal Times.com, David Mauer, a homeland security director at the Government Accountability Office, said that GAO has had DHS “on our high-risk list since Day One.” While DHS is promising more procurement oversight officers – as it has been over the past several years – the department has delegated many of its central responsibilities to private contractors and has not established any clear guidelines on what is a departmental function that should be kept in-house.

The Department of Homeland Security has outsourced intelligence, detention, communications, even oversight functions. Its National Operations Center, designed as the government’s new clearinghouse on homeland threats, is one of the department’s chief outsourcers.

A scathing report by the DHS’s own Office of Inspector General on the department’s National Operations Center criticizes the department for the DOC’s basic inability to function effectively because of a lack of an overall plan, deep divisions, and its changing focus. While the study didn’t target the outsourcing problem, it did over a revealing, shocking glimpse at the degree that outsourcing pervades an operation that operates within the department and is central to homeland protection.

The NOC, according to the GAO, “relies heavily on contractor staff to perform its mission functions.” Since FY 2006 the DHS’s information-sharing center’s use of contractors has increased 195%.

Last year 62% of NOC’s budget was designated for contract support.

Sixty-two percent – about $11.2 million -- of the NOC’s FY 2009 budget is designated for contract support. That compares to the $3.8 million spent by the DHS for contract support in 2003 for similar functions. NOC management plans to spend $11.2 million for contract support in FY 2009.

One Senior Watch Officer at NOC told the OIG that contractors were needed in the department’s first three years as it was organizing. But that these positions should have been subsequently replaced with full-time federal employees. According to this SWO, the contractors’ technical expertise is not as important as stated by management, and some contractors’ jobs could be performed by lower paid government employees. Another desk officer said that only a few NOC employees are federal employees and that most are contractors -- which, according to the OIG, “may indicate that some contractors are performing inherently governmental functions.”

The NOC contracts for the Communications Watch Officer, Knowledge Management Officer, Fusion Desk Officer, Tracker, HSIN Desk Officer, Incident Management Desk Officer, and media monitoring desk officer positions, and for a NOC senior advisor.

With respect to the OIG’s concern that private contractors are performing “inherently governmental functions” such as oversight and management, the new study revealed that

Within NOC “one contractor has program manager responsibilities and oversees seven NOC functions: the fusion desk, the Tracker, the Knowledge Management Officer, the representative, the Secretary’s Briefing Staff, the chemical/biological/radiological/nuclear desk, the explosive incidents desk, and the state and local law enforcement desks.”

The OIG report noted that a review to determine the inherently governmental functions at DHS was “outside the scope of this review.” It added, though, that “we believe the issue warrants further attention by our office.”

It is also an issue that merits further attention by the Obama administration.

Unless it acts to substantially reduce the DHS dependence on private contractors and to review the wisdom of creating such an unwieldy, unfocused, and money drain of a department, the continuing failures of the Bush-created DHS in intelligence, detention policy, information systems, and domestic counterterrorism will be part of its own legacy.

Illustration: CACI is a major Homeland Security, DOD, and intelligence contractor.

Dysfunctional Information Operations at Homeland Security Department

Since its creation in March 2003, DHS has created immense immigration database that is now integrated with the FBI’s criminal database, all of which it is now sharing with local law enforcement officials. The resulting information system is the main instrument of the immigrant crackdown that is detaining and deporting record numbers of both illegal immigrants and legal immigrants who have criminal records.

But with respecting to protecting the homeland, DHS has created an information and intelligence-sharing system that simply doesn’t work. Even within the special DHS division to fuse federal, local, and private information fails to share information and intelligence.

It didn’t take the failure of DHS to prevent an attempted act of terrorism on Dec. 25 by a Nigerian man linked to Al Qaeda to conclude that the information clearinghouse system created by DHS systemically flawed. A November report by DHS’s own Office of Inspector General (OIG) on the department’s National Operations Center (NOC), the DHS information-sharing center, came to that conclusion just talking to the NOC staff.

The study’s two central conclusions represented a blistering criticism of the blundering department. According to the OIG:

• “NOC is negatively affected by organizational issues such as not having requisite authority, ambiguities in its mission, and an unclear chain of command.”
• “The overall focus of the NOC shifts between emergency management, terrorism prevention, and law enforcement.”

Over the past seven years DHS has come under repeated criticism from its own inspector general, the Government Accountability Office, and an array of congressional oversight committees for its system failures.

Most of the criticism of DHS has centered on its particularly apparent constitutional inability to exercise effective oversight and management of its multiple agencies and on its deep-seated reliance on private contractors, even for oversight functions. In addition, the media, human rights organizations, and immigrant support organizations have leveled harsh criticism against DHS for its abuse-ridden immigrant detention system.

The DHS has had a ready excuse for its failures, namely that it is a new department that has had the mammoth task of cobbling together the operations of 22 agencies into one integrated department.

Year after year DHS officials have told congressional oversight committees that its oversight failures and contractor reliance are products of the rush to get a new department up and running. This oft-repeated excuse routinely comes with the oft-repeated promise that it will do better.

But it hasn’t done better, as the OIG report on the National Operations Center makes startling clear.

National Operations Center Isn’t Operational

The National Operations Center (NOC) is the department’s second attempt to create a homeland security information center.

NOC was established in May 2006 as the successor to DHS’ much-criticized Homeland Security Operations Center and in the wake of the DHS’s failed responses to Hurricane Katrina. It is a division of DHS’ Office of Operations Coordination and Planning (OPS), which, according to DHS, “is responsible for monitoring the daily security of the United States.”

NOC’s mission is to “facilitate information sharing and operational coordination” with federal, state, and local agencies with the objective of providing “domestic situation awareness” to senior DHS officials and to the White House.

As part of that mission, the National Operations Center is mandated to provide DHS and White House leadership with “a Common Operating Picture, information fusion, information sharing, communications, and coordination pertaining to domestic-incident management and prevention of terrorism.”

The OIG report on NOC highlights the bureaucratic dysfunction that pervades the unwieldy DHS bureaucracy. By doing so, the study raises nagging questions about the wisdom of having a government department that combines such diverse functions as emergency response, immigration enforcement, transportation security, the Coast Guard, and domestic counterterrorism.

The study also underscores DHS’ structural dependence on private contractors.

Although heavily redacted, the report is studded with alarming observations and conclusions, including the following:

• “Some contractors may be performing inherently governmental functions,” such as overseeing other contractors.
• Although combining law enforcement, emergency management, and intelligence expertise, it doesn’t possess “operational capabilities.” One NOC official told the OIG that “the center is operational only in name, and does not have the capabilities or authority to direct DHS component resources or personnel.”
• Other DHS agencies routinely ignore NOC and are “charting their own course,” according one DOC official.
• Another NOC official said that government officials rely more heavily on entities external to DHS, such as the Office of the Director of National Intelligence’s National Counterterrorism Center and the FBI’s National Joint Terrorism Task Force, for information and intelligence.
• “Some NOC personnel said that after Hurricane Katrina the center has ‘become an arm of the Federal Emergency Management Agency,’ and they contend that the change has diminished the ability of all NOC personnel to respond to terrorist threats.
• Despite the renaming and revamping of the Homeland Security Operations Center and the creation of the new intelligence center in 2006, “no formal plans or training programs were in place to facilitate the NOC reorganization.”
• NOC’s two divisions – intelligence and operations – are badly split, paralyzing the agency. “Another desk officer said the Intelligence and Operations sides play in different worlds, and 90% of what I&A [Intelligence and Analysis] knows, the SWOs [Senior Watch Officers] do not know.”
• Senior Watch Officers, who are responsible for briefing DHS leadership on potential domestic and international incidents that may affect national security, “are not receiving the necessary information to brief DHS senior leadership.”

DHS has accepted a series of seventeen OIG recommendations to remedy the array of problems examined the report.

But remaining unquestioned is advisability of the very existence of the DHS. The last seven years of DHS failures and its lack of focus raise persistent questions about having one department that under the mission of homeland security includes such a diversity of functions.

Nor does the study question the advisability of involving the new department in local law enforcement through its network of fusion centers.

Given the diverse array of its responsibilities – including border security, disaster response, counterterrorism intelligence, immigration enforcement, infrastructure protection, aviation security, etc. – it is little wonder that its National Operations Center is confused, divided, and dysfunctional.

The Revolving Door Between Homeland Security and Chertoff Group

The Chertoff Group, headed by former Department of Homeland Secretary Michael Chertoff, is quickly become the chief private interface between DHS and homeland security contractors.

Chertoff founded the national security consulting agency in March 2007, and immediately established its high-profile presence in the private homeland security sector by bringing into the agency General Michael V. Hayden, former Director of the Central Intelligence Agency and the National Security Agency, as well as one former DHS deputy secretary, two former DHS undersecretaries, and a former DHS chief of staff.

The revolving door joining DHS and the Chertoff Group had by the end of 2009 brought into consulting group four additional former high DHS officials and one former official with the National Security Agency. The presence of General Hayden and Larry Castro, the NSA’s former coordinator for Homeland Security Support, underscores the increasing links between the homeland security and intelligence sectors, both in government and in business.

Commenting in November 2009 on the most recent collection of former government officials that now are part of his team, Chertoff said: “By expanding the depth and breadth of the intellect and resources available to our clients, we will be uniquely positioned to assist them at a time when they need it most…,” pointing to “the myriad modern hazards, ranging from cyber threats and terrorism to natural disasters and pandemics” that threaten government and business.

Bringing their government experience and connections to the Chertoff Group are:

• Dr. Jeffrey Runge, former DHS Assistant Secretary for Health Affairs and Chief Medical Officer.
• Larry Castro, former NSA epresentative to DHS and the agency’s Coordinator for Homeland Security Support
• Dr. Gary M. Shiffman, Professor former Chief of Staff at U.S. Customs and Border Protection (CBP)
• Dr. J. Bennet Waters, former Deputy Assistant Administrator at the Transportation Security Administration (TSA) and Chief of Staff at DHS’ Office of Health Affairs.
• Nathaniel T. G. Fogg, former Deputy Chief Operating Officer and Counselor to the Administrator at the Federal Emergency Management Agency (FEMA).

The revolving door in the emerging national security complex swings both ways. Before joining the DHS Nathaniel Fogg was a management consultant with Booz Allen, a major defense, intelligence, and homeland security contractor.

Private contractors pervade DHS, where about one-third ($15 billion) of the annual budget goes to private firms providing goods and services..

See related:

Tom Barry, “Former Bush Security Chiefs Find Terrorism Obsession Can Be Profitable,” CIP’s Americas Program.

Tom Barry, “Not Systemic Failure, But Failed System,” Border Lines Blog.

Native American Firms Profit from Detaining Immigrants

Immigrant detention means business. Native Americans are profiting from the immigrant crackdown against hopeful New Americans.

Not only are the major private prison corporations seeing their profits soar from the surge in immigrant inmates. Native American corporations, as the favored recipients of Department of Homeland Security contracts, are also cashing in on the growing opportunities to make money by detaining and imprisoning immigrants.

Last summer the Department of Homeland Security announced its decision to overhaul the widely criticized immigrant detention system run by the DHS’s Immigration and Customs Enforcement (ICE). Among the promised reforms were the centralization of immigrant detention and increased oversight of its patchwork system of more than 350 immigrant detention centers owned and operated by private prison firms and local governments.

Although DHS, through Immigration and Customs Enforcement (ICE), outsources most of its arrested immigrants to private firms and governments in the business of imprisonment, the department has seven of its own detention centers (“Service Processing Centers”).

These centers, five of which are found on the southern border, have historically formed the foundation of the federal government’s immigrant detention system. But over the past two decades, the Justice Department and since 2003 have preferred outsourcing immigrants than in-house detention.

Among immigrant advocacy and human rights organizations, the DHS promise to overhaul the immigrant detention has sparked hope that ICE will stop its outsourcing practices and reestablish the government as the direct custodian of the more than 350,000 immigrants it has held for detention in recent years.

But the type of outsourcing and subcontracting practices that have led to major oversight and accountability problems that pervade ICE’s contracted facilities are deeply ingrained even within ICE’s detention centers.

An immigrant detained at the 800-bed El Paso Service Processing Center is, in effect, in private not government hands. ICE has contracted the operations, transportation, and food services to a private holding group Doyon Ltd.

Doyon is one of several Native American corporations that are sealing major contracts with the Department of Homeland Security. Most are Alaska Native Corporations (ANCs), a collection of regional and village corporations created as part of the Alaska Claims Settlement Act of 1971. A few of these Native American corporations are contracting for various parts of ICE’s immigrant detention operations.

While more Native American corporations are securing DHS contracts, most of the government contracts held by ANCs and other Native American corporations are with the Department of Defense.

Contract awards to ANCs increased by 916% from 2000-2008, rising from $508.4 million in 2000 to $5.2 billion in 2008. The first volume of a two-part report recently prepared for the Senate Committee on Homeland Security and Governmental Affairs for Senator Claire McCaskill found that ANC federal contracts have been increasing at a 33.6% annual rate since 2000 – six times greater than the overall increase in federal contract spending.

In 1986 Congress passed legislation that allowed ANCs to participate in the Small Business Administration's (SBA) 8(a) program. Since then, Congress has extended special procurement advantages to 8(a) ANC firms, such as the ability to win sole-source contracts for any dollar amount. A Governmental Accounting Office study in 2006 lambasted the lack of oversight and accountability by government agencies in issuing sole-source contracts to the ANCs.

The GAO said that “acquisition officials at the agencies reviewed told GAO that the option of using ANC firms under the 8(a) program allows them to quickly, easily, and legally award contracts for any value. They also noted that these contracts help them meet small business goals.”

Doyon’s Family

Doyon says it “operates a diverse array of subsidiary businesses and joint ventures.”

Its main subsidiaries include Doyon Government Group, Doyon Associated, Doyon Universal Services, Cherokee General Corporation, and Doyon Drilling. These subsidiaries has other subsidiary companies and joint ventures, allowing Doyon to compete through preferential contracting in an array of business sectors propped up by government contracts – and where, as in detention services, it has little or no experience of its own.

The member of the Doyon family that contracts for immigrant detention is Doyon Security Services, part of the company’s Doyon Government Group. In addition to the El Paso contract, Doyon has a $144.8 million contract to provide security and most other services at ICE’s Krome detention in Miami, Florida.

Doyon Security Services, which it says “has grown into a powerhouse in the security field during the past six years. Within the past twelve months this subsidiary has won over $266 million in new competitive contracts that employ 960 personnel in the homeland security-immigration and customs enforcement fields.”

On its website, Doyon points to its Board of Advisors for Doyon Government Group. But that board has only one member: Ret. Brig. Gen. Joe Stringham, who is hailed for his service in Vietnam and El Salvador.

In South Vietnam, Stringham is reported to have formed “a unique mercenary battalion” that became the subject of the John Wayne movie, “The Green Berets.” In the 1980s, Stringham became the commander of the U.S. Military Group in El Salvador and “trained and developed the Salvadoran Armed Forces,”, and in recognition for his “bravery and meritorious service” he received El Salvador’s highest military decoration, “The Medal of Gold.”

While General Stringham’s experience in the U.S. interventions in Vietnam and El Salvador may not prove especially relevant in immigrant detention, Doyon underlines its in-house military experience in securing security services contract with the U.S. Army and Coast Guard.

Founded in 2003, Doyon Security Services has attempted to take advantage of new federal efforts to protect government infrastructure. In addition to DHS, the company has secured federal contracts with the Army Corps of Engineers, U.S. Army, Alaska pipeline, and U.S. Navy.

Joint Ventures and Outsourcing

Immigrants arrested by ICE are often confused, understandably, about just who are their jailors – even within an ICE owned and operated detention center. The same is true for visitors who are met not by ICE personnel but by an outsourced workforce of clerical workers and security guards.

Being an immigrant in ICE custody gives one an inside look the business of detention in America and also how prevalent and labyrinthine is government outsourcing.

In the case of El Paso center, DHS let out a request for contracts for the operations of its detention center (including cell extractions, armed guards, in/out processing, armed escorts, vehicle fleet ownership, and feed services).

DHS awarded the $152 million contract to Doyon Ltd, a corporation that has no in-house experience in detention services. But Doyon has something better than experience. It has preference rights.

Preference gives a couple of dozen regional and village Alaska Native Corporation a priority shot at getting federal contracts. Native status gets a corporation into the door, but a company like Doyon also needs a partner that can actually do the work.

An article in Alaska Business Monthly (Oct. 2004), titled “Native corporations form prosperous joint ventures: these corporate marriages can be made in heaven if carefully thought out,” called the ANCs’ search for business partners “a corporate matchmaker’s dream.”

ANCs and other Native American Corporations have perfected the capitalist art of joint ventures and subcontracting. For its part, Doyon established a joint venture with Akal Security, the country’s fifth largest private security services firm.

Named after the Punjabi word for “deathless” (the traditional battle cry of Indian Sikhs), Akal Security was founded and is run by turbaned Sikhs.

Akal has a “Homeland Security” division, and observes that the “the U.S. government has turned to Akal to provide specialized security services for many of America’s most critical national security facilities and agencies, including the Departments of Justice and Homeland Security.”

In 2008 Akal, apart from its joint ventures with Doyon and other preferential contractors, received $132 million in DHS contracts. Among other DHS security work, Akal serves as an ICE surrogate at four ICE detention centers: El Paso, Krome, Florence, Az., and El Centro, Calif. As Akal notes, “DHS has turned to Akal to ensure the quality of critical contract detention services.”

The new ICE contracts at the El Paso and Krome processing centers build on previous AKAL contracts with ICE. Prior to its joint venture with Doyon, AKAL had paired up with another Native American corporation, DECO Security Services, to operate the El Paso immigrant detention center.

These ICE contracts are set aside for 8(a) companies, and through joint venturing with such native companies like Doyon, Deco, or Ahtna, larger companies with real capacity can secure contracts that would otherwise be out or reach, since they don’t otherwise qualify as small businesses, minority businesses, or native corporations. With respect to the Krome contract, the security company says that “Akal and Doyon operate under an approved mentor-protégé agreement, so with Akal as the incumbent, the effort was ideally positioned.

Describing the joint venture’s structure, Akal says that Doyon owns 51%, and “Doyon will be the principal operator on the site and Akal will provide professional and

back-end support.” In other words, like almost all of the Native American or Native Alaskan contracts with DHS, DOD, and the State Department, the non-native business will do the actual work of the contract while the native business provides the preference qualifications.

Immigrant Inmates Protest Native American Jailors

Another ANC that has taken advantage of preferential government contracts is Ahtna Development Corporation, which describes itself as “A Full-Service Operations and Maintenance Company.”

DHS contracted with the ANC’s subsidiary, Ahtna Technical Services Inc (ATSI), which had no experience in correctional services, to provide operational, maintenance, and other support services at four ICE facilities: Buffalo Federal Detention Facility, Krome Service Processing Center, Port Isabel Service Processing Center, and the Varick Street Detention Facility in New York City.

In addition, ICE has contracted the Alaskan corporation to manage food services at six other ICE processing centers.

A New York Times article (Nov. 1, 2009) highlighted the history of abuses at the Varick facility, which is an adjunct to the ICE field office in New York City. Operated by ATSI under a DHS contract, the security staff at the Varick detention center are employees of a Texas security subcontractor.

In April last year 200 immigrant detainees at ICE’s Port Isabel detention center organized a passive resistance campaign and hunger strike to protest alleged physical and verbal mistreatment by the staff of Ahtna Technical Services. According to immigrant-support groups, detainees also suffered due process violations and were not receiving adequate medical care.

The immigrant inmates involved in the protest complained that despite repeated complaints to ICE the abuses and deplorable conditions at the detention center had gone unresolved.

According to Maria Muentes, an organizer with Families for Freedom, “Many of the detainees are legal permanent residents from northeastern cities [and] they've been shipped to this desolate prison away from any kind of family and community support. ATSI [Ahtna] staff is being very brazen in their lawlessness. I think there's a perception that no one will speak up in defense of immigrants. It all seems designed to break down the will of the detainees so that they will agree to being deported.”

DHS says that that it owns and operates the Port Isabel detention center. However, by contracting out the operation of the center to a company with dubious professional credentials and experience and which then outsources its responsibilities to yet another company, DHS gives the impression that it is not taking direct and full responsibility for his homeland security and immigration regulation mission.

This is a problem that extends well beyond the operations of ICE to the very heart of the department’s homeland security operations, including intelligence, transportation security, and information systems – all of which are largely outsourced.

The recent intelligence and communications failures surrounding the Dec. 25 attempted terrorism incident point to the need, the urgent need, for DHS to rein in its rampant outsourcing.

Rise of the Native National Security Corporation

Native American corporations, led by dozens from Alaska, are coming under fire in Congress for their preferential access to billions of dollars in defense, intelligence, and homeland security contracts – and because of the often shoddy, largely unaccountable work on national security and homeland security contracts.

Another related concern is that these preferential contracts – granted without the normal open bidding process – are actually performed by other corporations who receive subcontracts from the Native American corporation, which functions largely as a vehicle to secure contracts, not implement them.

Two of the main critics of the Alaska Native Corporations (ANCs) that have captured major national security contracts are Sen. Claire McCaskill (D-Mo.) and former senator and current Secretary of State Hillary Clinton. ANCs were created in the wake of the Alaska Claims Settlement Act of 1971.

Since 2000 ANCs have captured large military and homeland security contracts even though these corporations have only minimal in-house experience in the much of their contracted jobs. The Chenega Corporation, which partners with the infamous Blackwater (recently renamed Xe Services), lists the “strengths and services” of its “Intel and Military Operations” on its corporate website:

• Transformation and future force development

• Support to Intel and special operations

• Operational readiness, asymmetric warfare and C4ISR support

• Weapons system engineering and logistics

• Operational analysis, concept of operations development

• Linguistics, debriefers, and translation services

Two federal initiatives – one by the Small Business Administration and the other by the contracting oversight committee of the Senate Homeland Security Committee – are investigating the pillaging of federal defense and homeland security contracts by ANCs and their subcontractors. But neither the efforts of the SBA to reform its own contracting regulations nor the work of Senator McCaskill’s subcommittee have gained much media attention or public support – in part because of the esoteric nature of these preferential contracts and in part because of the power of the national security industry that has benefited by partnering with ANCs.


Overview of the Alaska Native National Security Bonanza 

Contract awards to ANCs increased by 916% from 2000-2008, rising from $508.4 million in 2000 to $5.2 billion in 2008. A sharply declining percentage of ANC contracts are performed in Alaska. In 2008 approximately 80% of the contract dollars went for work outside Alaska – with Virginia being the leading state for ANC operations

The first volume of a two-part report recently prepared for the Senate Committee on Homeland Security and Governmental Affairs for Senator McCaskill found that ANC federal contracts have been increasing at a 33.6% annual rate since 2000 – six times greater than the overall increase in federal contract spending.

The value of federal contracts did rose rapidly during the Bush administration – up $149% in eight years – but the dollar amount of ANC contracts jumped more than 900%.

Despite their being multimillion corporations, the ANCs still depend on their officially designated status as small businesses to rake in billions of dollars in preferential federal contracts. ANCs receive a disproportionate share of 8(a) or federal small business contracts. Between 2000 and 2008, ANCs received $12.1 billion in federal contracts through the 8(a) program. In 2008, awards to ANCs constituted 18% of all federal contract dollars awarded through 8(a) prime contracts. Also in 2008 nearly three-quarters of all federal contracts were awarded to ANCS under the government’s small business procurement practices.

There are federal regulations that limit the amount awarded in small business contracts. As a rule, sole-source 8(a) contracts must be valued under $5.5 million for goods or $3.5 million for services. That’s not a problem for the ANCs, which are exempt from this restriction because of their special Native Alaskan status. ANCs captured a flood of 8(a) contracts in 2000-2008 valued more than the stated maximum.

 In that eight-year period the federal government issued $6.3 billion in contracts to ANCs like Ahtna, Chugach, ASRC Management Services, and Chenega that far out-stripped the $3.5 million set by the federal government to give preference to small businesses. Generally, sole-source 8(a) contracts must be valued under $5.5 million for goods or $3.5 million for services. ANCs, which are exempt from this restriction, received $6.3 billion in 8(a) contracts valued at more than $3.5 million each between 2000 and 2008.

 Key Findings of the Senate’s Homeland Security

Contracting Oversight Subcommittee T


The key findings (below) of the contracting oversight committee are alarming. They point to widespread and systematic abuse of preferential contracting by the ANCs and their subcontractor partners. 


 • ANCs are now among the largest federal contractors. In 2008 four ANCs – Arctic Slope Regional Corporation, Afognak Native Corporation, NANA Regional Corporation, and Chugach Alaska Corporation – were among the top 100 recipients of federal contract awards. 


• ANCs are big businesses.

The majority of the Alaska Native Corporations surveyed by the Subcommittee exceed the size requirements applicable to other 8(a) companies. 11 out of 19 surveyed companies have had annual revenues higher than the Small Business Administration’s limit since 2002. 


• ANCs have created multiple 8(a) subsidiaries. The ANCs have taken advantage of the exemption from the size requirements to create multiple 8(a) subsidiaries. Over the last 9 years, the 19 companies surveyed by the Subcommittee have enrolled 248 subsidiaries, joint ventures, or partnerships in the 8(a) program. 


• ANCS are awarded multiple large federal contracts on a sole-source basis. Between 2000 and 2008, ANCs received $6.6 billion in 8(a) sole-source contracts valued at more than $3.5 million each. The single largest ANC 8(a) contract is the $1.13 billion Inter-Service Supply Support Operations Program (ISSOP) contract that was awarded by the Defense Department to FSS-Alutiiq, a joint venture of Arctic Slope Regional Corporation and Afognak Native Corporation, in 2002. 


 • ANCS are passing work through to subcontractors. The Afognak Native Corporation can be viewed as a case study of how ANCS create subcontracts to pass work to large, non-Native companies. Nine subcontractors alone received more than 70% of all subcontract awards under Afognak contracts. For 91 individual contracts collectively worth more than $827 million, Afognak paid subcontractors more than 50% of the total prime contract revenue on each contract. 


• ANCs employ a relatively small percentage of shareholders. The 19 Alaska Native Corporations that provided information to the Subcommittee employ more than 45,000 individuals throughout their corporations. Of these, approximately 2,400 employees – 5.2% - are shareholders (or relatives of shareholders) of the employing corporation. On average, nearly 95% of ANC employees are not ANC shareholders. 


 • ANCs have relied heavily on highly-paid, non-Native executives. Of the 13 corporations that provided detailed information to the Subcommittee regarding executive compensation for non-Native executives, 69% of executive compensation was paid to individuals who were not shareholders in the Native Corporations. The information produced to the Subcommittee also shows that for one or more years between 2000 and 2008, eight Alaska Native Corporations paid their Chief Executive Officer, who was a shareholder, substantially less than a non-shareholder holding a lower-ranked position. 


* Little Trickle-Down to ANC Community Members or Shareholders. One of the primary rationales for the ANC contracting preferences is that they provide economic support and other benefits for Native shareholders and communities. The Subcommittee’s investigation shows that the 19 ANCs have provided cash, scholarships, preservation of cultural heritage, or other benefits valued at approximately $720.1 million over the last nine years to members of the Alaska Native community as a result of federal contracts. On average, that amounts to a value of $615 per person per year. 

 Border Security Bonanza Boondoggle

 The awarding of homeland security, defense, and intelligence contracts to ANCs has been on the upswing since the late 1990s but has experienced a major up-tick since 2001 when national security outsourcing has become core to post-Sept. 11 national security and operations.

It’s not that there is a new federal emphasis on doing business with Native America corporations. Rather, it’s simply that there has been a surge in outsourcing as a result of hurried attempts by DOD to keep the Iraq and Afghanistan wars going while the military itself is overstretched, and also as the result of a dramatic surge in homeland security and intelligence contracting.

 From the beginning of this upswing in outsourcing, ANCs have been plied with federal contracts. Some of the most stunning problems with this outsourcing to ANCs have been associated with border security. One of the earliest cases of wasted money and failed projects that came to the attention of government investigators and brought unwanted attention to one of the Democratic Party’s rising stars in intelligence, defense, and homeland security issues – U.S. Rep. Silvestre Reyes (D-Tx.), who represents the El Paso area.

 Like many of the Native American national security contracts, a 1998 Border Patrol contract for border electronic surveillance with Chugach Development Corporation also involved a non-ANC subcontractor, International Microwave Corp. The Integrated Surveillance Intelligence System (ISIS), which was to be deployed along portions of the southern and northern borders, was a predecessor of the Border Patrol’s current SBInet. T

The chief promoter of ISIS, which operated through two successive no-bid contracts, was Rep. Reyes, who served as district Border Patrol chief of the El Paso sector before his election to Congress in 1997. Reyes was closely tied to the project not only through his role in Congress but also through family members who found high-level jobs at Chugach and later ISIS (and still later in the management of L-3 Communications, which bought IMC).

Questions about Reyes' campaign financing and possibly related contracts have surrounded the congressman's persistent and longtime support for high-tech electronic surveillance along the border, involving two no-bid contracts. Since coming to Washington in January 1997 Reyes has been a key advocate of constructing a "virtual fence" along the southwestern border, despite the all-too-real multibillion dollar price tag and absence of hard data that the billions result in improved border security.

Although the oversight problems with ANC contracting – and with border electronic surveillance projects – had existed since the late 1990s with the launching of the ISIS pilot project, it wasn't until the Inspector General (OIG) of the federal government's General Services Administration in December 2004 released an audit of the border electronic surveillance project that some of the details of the electronic surveillance project were publicly revealed.

The audit focused on the Border Patrol's relationship with the two ISIS contractors, starting with the Alaska native-based Chugach Development Corp. (headquartered in Virginia) and continuing with its successor, International Microwave Corp. Rebecca Reyes, daughter of Rep. Reyes, directed the ISIS project for the two contractors.

According to GSA, the audit review of ISIS encountered serious management issues that undermined the value of the more than $200 million that had been spent on the surveillance project.

The GSA inspector general found, among other things, that ISIS suffered from: "lack of competition in the awarding" of the contract, "inappropriate contract for construction services," "inadequate contract administration and project management," "providing equipment without contract approval," and "ineffective management controls."

The GSA inspector general's audit concluded that the government had paid for "shoddy work" or "for work that was incomplete or never delivered." Official inattention to the contracted project "placed taxpayers' dollars and … national security at risk."

Also See:

New National Security Complex:Bringing Together Homeland Security, Intelligence, and Defense

Native Corporations as National Security Corporations

Native American corporations, particularly an array of Alaska Native Corporations, have become major defense and homeland security contractors – responsible for a wide range of national security operations, including electronic surveillance on the border, running immigrant detention centers, and supplying security and other services in U.S. overseas wars and energy exploitation.

Ahtna Inc., one of the thirteen Alaska Native Corporations (ANCs) established in 1971 through the Alaska Native Claims Settlement Act, received an infusion of federal funds in compensation for common lands lost to government and the private sector. Its subsidiary Ahtna Technical Services operates the Varick Street Detention Facility in Greenwich Village under a 2008 contract with Immigration and Customs Enforcement (ICE), which is an agency of the Department of Homeland Security.

Its role at the NYC immigrant detention center was reported recently in a New York Times article by Nina Bernstein. Ahtna is a major federal contractor. In addition to fifteen DHS immigrant-detention related contracts in 2009, the Native American corporation has multiple contracts with the Department of Defense, Department of Energy, and Veterans Affairs.

 Why does a Native American company from distant Alaska, one that was initially capitalized with federal funds, operate an immigrant detention center in the heart of New York? Because the Native Alaskan company specializes in penal services? Because it is intent on reviving the Indian connection with the original Manhattans who sold their island to the Dutch West India Company – and now want a better financial return? Because the federal government, and in particular the Department of Homeland Security, believes that these Alaskan natives deserve favored treatment in securing federal contracts?

 There is no ready answer that explains why Ahtna Technical Services has the ICE contract to manage, operate, and maintain the Varick Street Detention Facility in New York City. Nor is there a good explanation or rationale why Homeland Security has selected Ahtna, which has no experience in correctional services, to provide operational, maintenance, and other support services at two other ICE immigrant detention centers – Buffalo Federal Detention Facility and Krome Service Processing Center in Miami. In addition, ICE has contracted the Alaskan corporation to manage food services at six other ICE processing centers.

 The explanation lies in complex mix of well-intentioned economic development theory, grave historic grievances, modern identity politics and affirmative hiring, preferential contracting, political contrivances, a recent surge in government outsourcing, and ostensibly strict federal contracting requirements that are easily manipulated. Ahtna’s recent entrance into the immigrant incarceration business is but one example of how federal programs and statutes that were created to alleviate Native American poverty and promote development have become badly distorted and misused.

What Does Ahtna Do?

 That’s not easy to determine given the corporation’s own lack of specificity and the variety of its contracts. The simplest thing would be to say, as it does, that it is “A Full-Service Operations and Maintenance Company.”

 Or if you want a slighter more fleshed out description the Ahtna Development Corporation, the umbrella entity that spins out all the Ahtna subsidiaries, asserts that it “possesses the talent, vision and resources to the leader by providing our clients with customized solutions and the technological edge needed to meet their goals and to build partnerships, cultivate talent, invest in resources and integrate services in the marketplace of tomorrow.”

 What is more, Ahtna says it has:

“…positioned itself for future growth, both financially and geographically, by offering clients a strong, balanced, and diverse portfolio of services in both the private and public business arenas. [We are] a multi-disciplinary operations and maintenance (O&M) services company which offers a suite of service capabilities to federal agencies and private sector that are essentially global in nature.”

With respect to its “Business Classifications,” the Ahtna Development Corporation highlights its following four classifications for federal contracts: Alaska Native-owned, Woman-owned, Minority-owned, and Small Disadvantaged Business. Alaska Native Corporations have come under escalating criticism in the last couple of years from congressional oversight committees, governmental investigative bodies, angry competitors, and government watchdogs.

 At the heart of the mounting criticism of Ahtna and other Native American corporations, particularly the ANCs and the numerous Alaska Native Village Corporations, is the breakdown and abuse of federal contracting. Preferences are given to these Native American corporations in federal procurement as part of an affirmative action social and economic policy framework that was intended to offer economic development opportunities to impoverished, disadvantaged communities.

 But the preferences have functioned as shields to deflect competition, to gain access to no-bid contracts, and to pass the bounty of federal defense, homeland security, energy, and services contracts to non-Native partners. Nine of the top ten federal contractors based in Alaska were ANCs in 2009. Chugach Alaska Corporation, the top ANC federal contractor, won $496.7 million in federal contracts in 2009, according to preliminary estimates. Ahtna Inc. was sixth with $86.9 million.

Top 10 Federal Contractors in Alaska, 2009

Chugach Alaska Corporation $496,679,772
Nana Regional Corporation, Inc. $294,486,882
Afognak Native Corporation $207,556,969
Arctic Slope Regional Corporation $195,743,314
Inuit-Nci JV $90,490,505
Ahtna, Incorporated $86,865,509 
Watterson Construction Company $80,786,703
Suulutaaq/Sloan Fencing JV $73,496,604
The Kuskokwim Corporation $68,961,125
Ukpeagvik Inupiat Corporation $63,486,802

Source: USASpending.gov

Through skillful political intervention and corporate maneuvering, the ANCs began to develop a higher profile in the late 1990s and blossomed this decade as national security corporations. More than 70% of ANC contracts in 2000-2008 came from the Department of Defense. From 2000 to 2008 DOD had $16.9 billion in contracts with Alaska Native Corporations. Next largest federal contractor was the Department of Interior with $1 billion in ANC contracts, followed by the Department of Homeland Security with $980 million in ANC contracts in the same period.

Next: Rise of the Native National Security Corporation Also see: New National Security Complex: Bringing Together Homeland Security, Intelligence, and Defense