Private spooks for hire

Jeff Tyler Nov 17, 2006

KAI RYSSDAL: Gorgeous women and hair-raising escapes are back on the big screen this weekend. The latest James Bond movie opens with a new 007 in the title role. Lots of glamour and good reviews for the film.

Real-life intelligence work is less pleasant. Since September 11th and the invasion of Iraq no government agency has taken more heat than the CIA. Intelligence failures got more attention than successes. So it might seem counterintuitive to learn that the market for agents and analysts has never been better.

There have been calls for intelligence reform. But the real revolution’s been an increased reliance on private contractors. Marketplace’s Jeff Tyler reports the biggest customer is Uncle Sam.

JEFF TYLER: Recruiting spies has never been more public.

CIA COMMERCIAL: Are you ready to make a world of difference? Be a part of the National Clandestine Service at the Central Intelligence Agency. The CIA.

Staffing at the CIA has been thin for a long time. Budget cuts at the end of the Cold War, hiring caps imposed by Congress, and an aging workforce nearing retirement all helped decimate the ranks of experienced professionals.

But the issue really began to get attention after 9/11 when demand for intelligence sky-rocketed. So, despite the spy agency’s successful recruitment drives, large incoming classes of spooks won’t fix the immediate problem. Ron Sanders, who works for the Director of National Intelligence, says new agents aren’t trained overnight.

RON SANDERS: Eight to ten years to develop a case officer or a seasoned intelligence analyst. So while we’ve been hiring a great deal, we’ve had to rely on contractors to fill in some of the gaps.

That contractor might be a one-man operation or a massive corporation employing subcontractors, hiring out services ranging from spies to analysts to engineers.

But just how many intelligence contractors the government has hired remains a mystery. Sanders has been asked to find out. He oversees human resources for all 16 government intelligence agencies. Up til now, he says, the government hadn’t done a comprehensive headcount. Nor a calculation of the cost.

SANDERS: So, for the first time, we’re conducting this inventory, from the analyst who is brought on as an independent contractor to do a report, to a larger firm, where the dollar value of the contract may be in the hundreds of thousands of dollars or even the millions.

Making the problem staffing shortage worse, a whole new market has evolved at the state level. State law enforcement agencies need their own intelligence personnel. Spokesman Chris Bertelli with the California office of Homeland Security, says they have to hire contractors.

CHRIS BERTELLI: We could not have hired folks in-house. The grants from the Department of Homeland Security prohibited the hiring of personnel for this function.

As a result, the private sector has been fishing in the government pond. Corporate headhunters have been barred from the CIA cafeteria after trying to poach senior managers.

The trend concerns Ron Sanders with the Director of National Intelligence.

SANDERS: They then recruit our folks to do our work and we end up leasing them back. Again, we don’t see that on a mass scale yet. But there is certainly every potential for that.

Recruiters have become very aggressive, according to Evan Lesser, founder of

EVAN LESSER: This is definitely a candidate’s market. They have their choice of employers. They have their choice of jobs. They can command higher salaries.

Many private companies will pay double the government’s rates for the same work. Michigan Congressman Mike Rogers, who chairs the House Subcommittee on Intelligence Policy, understands why even senior intelligence officers would be tempted.

MIKE ROGERS: Somebody offers them a lot of money, and they’re in their 50s, and they’re thinking, “Wow! How do I not do this?” And so, that has been a real problem that is a new trend. And it’s a new trend since 9/11, quite frankly.

That’s true across the board, he says, at all the various secret agencies. Some believe the trend is having a negative impact on the caliber of national intelligence.

ROBERT STEELE: When you outsource intelligence, you are essentially sacrificing the integrity of the government intelligence process.

That’s Robert Steele, intelligence expert and former spy.

STEELE: A government analyst is going to see things differently than a contractor who is required to put in time slips.

A public servant, for example, might hunt for the fastest way to finish a task, while a contractor has a financial incentive to linger. Just how much money taxpayers are spending on contractors should be clearer once the Director of National Intelligence publishes the results of its inventory early next year.

I’m Jeff Tyler for Marketplace.

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