Lebanese billionaire is drawn into BAE arms deal inquiry as 'second middleman for Saudis'

[DoYouEverWonder]

December 2, 2006

Another billionaire Saudi middleman was named last night in the Serious Fraud Office's controversial Saudi arms deal inquiry, according to potential witnesses. The SFO is seeking information about any Swiss bank accounts belonging to Mohammad Safadi, a Lebanese politician who has acted for relatives of Prince Sultan, crown prince of Saudi Arabia.

Mr Safadi would not comment last night at his office in Beirut, where he holds the office of public works minister and also controls the Safadi Group. His property firms have received contracts from the British arms company BAE and have interests in office blocks in London worth £120m.

<snip>

Claims that the Saudis had given Tony Blair a 10-day ultimatum to drop the police probe were not being confirmed last night from any quarter. The Saudi embassy said the claims were "a repackaged old story". In Paris, where Prince Sultan's son Bandar met President Jacques Chirac a week ago for private talks, the French said they would not seek to snatch the £6bn contract for 72 Eurofighters from the British. A French official said: "There is no initiative from the ministry of defence on the Rafale . We are not trying to do anything to sell the Rafale . This is a British contract." But industry sources said France had been lobbying for a rival deal and was a long-term competitor of the British.

<snip>

The SFO inquiry, which began when the Guardian obtained documents in 2003 suggesting BAE was running a £60m slush fund to bribe Saudi generals, has expanded to cover secret BAE payments in half a dozen countries, alleged to total more than £1bn.

http://www.guardian.co.uk/uk_news/story/0,,1962155,00.html

[seemslikeadream]

1. BAE

BAE Systems Recieves $35 Million For HAARP Program


June 14 2004

Washington (SPX) Jun 14, 2004 - The Office of Naval Research has awarded BAE Systems a $35.4 million contract to manufacture 132 high frequency (HF) transmitters for installation in the High Frequency Active Auroral Research Program's (HAARP) phased array antenna system. The contract was finalized April 19 with BAE Systems Information & Electronic Warfare Systems in Washington, D.C.

The HAARP program collects and assesses data to advance knowledge of the physical and electrical properties of the Earth's ionosphere. "We look forward to contributing to this critical program. This is an opportunity for BAE Systems to play an important role in expanding knowledge of the Earth's ionosphere.

Significant potential applications include long-range communication, sensing and satellite vulnerability to nuclear effects," said Ramy Shanny, BAE Systems vice president and general manager for Advanced Technologies (AT).

In 1992, AT was awarded a contract to design and build the Ionospheric Research Instrument (IRI), the HAARP program's primary tool used to study ionospheric physics. The IRI is currently composed of 48 antenna elements and has a power capacity of 960,000 watts.

When installed, the additional 132 transmitters will give HAARP a 3.6 mega-watt capacity. The HAARP build-out is jointly funded by the U.S. Air Force, the U.S. Navy and the Defense Advanced Research Projects Agency (DARPA).
more
http://www.spacedaily.com/news/missiles-04zi.html


BAE SYSTEMS North America has reached a definitive agreement with Advanced Power Technologies, Inc. (APTI), to purchase the corporation for $27 million in cash.

APTI, a private company with headquarters in Washington, D.C., focuses on intelligence, surveillance, reconnaissance exploitation and information processing for defence, civil and commercial uses. APTI's core competencies include radio frequency (RF) and optical engineering, communications and networking, signal and data exploitation and knowledge creation.

Other disciplines include microwave engineering; antenna design and development; optical sensors, plasma and shock physics; advanced ordnance systems; non-destructive testing; signal and image processing; and digital control systems, including industrial-based process controls.

...

Mark Ronald, president and chief executive officer, BAE SYSTEMS North America said, "APTI's demonstrated performance, growth and high quality technical workforce align well with BAE SYSTEMS growth strategy in network centric warfare and information operations.

...

About BAE SYSTEMS:

BAE SYSTEMS is a systems company, innovating for a safer world. BAE SYSTEMS employs nearly 100,000 people including joint ventures, and has annual sales of around $19 billion. The company offers a global capability in air, sea, land and space with a world-class prime contracting ability supported by a range of key skills. BAE SYSTEMS designs, manufactures and supports military aircraft, surface ships, submarines, radar, avionics, communications, electronics, guided weapon systems and a range of other defence products.

BAE SYSTEMS is dedicated to making the intelligent connections needed to deliver innovative solutions.
more
http://www.globenet.free-online.co.uk/index.htm


How and why was electronic warfare carried out in rural Tennessee?

From the known profile of electronic weaponry, the electronic attack upon WJKM appears to have been caused by a tactical electromagnetic weapon, emitting a directed electromagnetic plasma, beam, pulse, etc. at the target. Electronic weapons with this capability are known, and can be land mounted in a facility like the former power plant, mounted in portable facilities like vans, trucks, helicopters or airplanes.

Electronic weapons may even be space-based, on satellite platforms. This reporter has personally met with an Assistant Secretary of Defense at the Pentagon who confirmed the existence of such secret space-based weapons as early as 1977.

An alternative electronic warfare delivery system may involve newly constructed relays for the HAARP installation in Alaska. The potential tactical electronic warfare applications of HAARP are under investigation. Serious public interest researchers maintain that HAARP's electromagnetic energy may cause effects such as earthquakes, such as occurred on July 7 in Hartsville. Electromagnetic weapons have been used in tectonic warfare, intentionally causing earthquakes. Electromagnetic pulse energy accompanies most earthquakes. Research shows that ultra low frequencies emitted by the HAARP installation may affect the human limbic system, and be used for mood management and mind control.

The close resemblance of the Hartsville attack to other U.S. Air Force electronic warfare led to speculation that radio station WJKM may have been chosen as a test target for a clandestine electronic warfare unit located within the power facility, or to which the power facility serves as electronic relay point. The likelihood that the electronic attack was accidental, rather than an intentional military test, is low, given that the targets were media outlets.
more
http://www.ecologynews.com/cuenews31.html


BAE Systems is Europe's largest arms exporter. BAE Systems is dedicated to producing innovative and high-specification ways of killing and maiming people. Satisfied BAE customers include Saddam Hussein in Iraq, General Pinochet in Chile, and the House of Saud. Are you a feudal Middle Eastern dictatorship that tortures your political opponents - and innocent British citizens? BAE Systems says: No problem! We just want your cash.
more
http://www.angloarabia.com /

Carlyle Interested in BAE's Shipbuilding Unit, Telegraph Says
July 25 (Bloomberg) -- U.S. buyout firm Carlyle Group, whose senior advisers have included former President George H.W. Bush, has expressed interest in buying BAE Systems Plc's shipbuilding business, the Sunday Telegraph reported, without citing sources.

The paper said Carlyle hasn't decided if an offer would include BAE's submarine operations at Barrow-in-Furness, England, and the sale of Britain's only submarine business to a foreign company may be politically sensitive.

BAE's Chief Executive Mike Turner said July 12 that Europe's largest weapons maker is in talks with several ``interested parties'' about selling its unprofitable shipbuilding unit, which makes Type 45 destroyers and Astute submarines. The company hasn't yet outlined what assets would be included in a sale.

Any bidder for Barrow would compete with DML, which runs the Devonport Royal Dockyard, and is 51 percent owned by Halliburton Co., the oilfield contractor led by Vice President Dick Cheney before he returned to politics in 2000, the paper said. The U.K.'s VT Group Plc has also said it's interested in BAE's shipbuilding yards in Barrow and Glasgow, Scotland.
more
http://quote.bloomberg.com/apps/news?pid=10000102&sid=a ...

From The Sunday Times
Snip
David Leppard and Robert Winnett

BRITAIN’S biggest defence company has been accused by a whistleblower of operating a £60m “slush fund” to channel “bribes” to members of Saudi Arabia’s royal family. BAE Systems now faces a criminal investigation over allegations that it used Peter Gardiner, a reputable travel agent from St Albans, Hertfordshire, to lavish its Saudi clients with gifts and luxury holidays.

Gardiner has given details of the payments in interviews with the Serious Fraud Office (SFO). Speaking publicly for the first time, he told The Sunday Times that he had spent £60m on BAE’s behalf. “It was an enormous amount of money. It’s more a question of what we didn’t spend it on than what we did,” said Gardiner.

The slush fund — spent by Gardiner over 13 years from 1989 and 2002 — provided a £170,000 Rolls-Royce, other luxury cars, London apartments, private air travel and accommodation in five-star hotels in Hawaii, Los Angeles, Paris and New York. Under separate arrangements, middlemen also arranged prostitutes for some dignitaries.

The largesse was extended to Saudi officials and members of the country’s large royal family who controlled the kingdom’s arms procurement, the chief source of BAE’s income over the past 18 years.
more
http://www.timesonline.co.uk/article/0,,2087-1190953,00.html

By Sylvia Pfeifer (Filed: 25/07/2004)

An American private equity group with close links to the Bush administration has emerged as a leading contender to acquire the shipbuilding business of BAE Systems, Britain's largest defence company.

Carlyle, which specialises in defence deals, is known for its links to the White House.

Until last year it counted George Bush Sr, the former US president, among its advisers. George W Bush, the US president, once served on the board of directors of Caterair, an airline catering company owned by Carlyle. James Baker, the former US secretary of state, and John Major, the former prime minister, both hold senior positions in the private equity group.

Carlyle has not yet decided whether its possible offer would include BAE's submarine operations at Barrrow-in-Furness. However, the sale of what is Britain's only submarine business to a foreign company could be politically sensitive.

Any bidder for Barrow will face competition from DML, the company that runs the Devonport Royal Dockyard. DML is 51 per cent owned by Halliburton, the US oil services company that used to be run by Dick Cheney, the US vice-president.


Analysts say one possibility would be for DML to link up with either VT or Carlyle to buy the yards. However, it is still not certain that BAE will proceed with the sale. The company has yet to issue a formal sales memorandum
more
http://www.money.telegraph.co.uk/money/main.jhtml?xml=/money/2004/07/25/cnbae25.xml&menuId=242&sSheet=/money/2004/07/25/ixfrontcity.html

The defence firm and the slush fund
Robert Winnett and David Leppard

FOR the Saudi princes and princesses it was just another luxury trip to the paradise island of Oahu in Hawaii. Under the shadow of Diamond Head, the island’s volcano, they enjoyed the run of one of the world’s best hotels while spending thousands in gourmet restaurants and designer boutiques.

The party of 50 people checked into its usual floor of suites at the Kahala Mandarin Oriental hotel. It has its own dolphins in a private blue lagoon, spas and “beach butlers” to provide face sprays, cooling drinks and sunshades. They hired a fleet of cars and after a few days travelled in a private Boeing 707 to another Hawaiian island, Maui, to stay at the five-star Grand Wailea hotel. The total cost of the trip in August 1998 was more than £250,000, including £25,000 on car hire.

For the Saudis, such holidays are part of the trappings of their royal status and influence in the oil-rich desert kingdom. But the trip to Oahu and similar jaunts are now attracting the attention of Britain’s Serious Fraud Office (SFO).

This weekend, details of the trip and others funded by BAE Systems, Britain’s biggest defence company, have been disclosed by a whistleblower to The Sunday Times.
more
http://www.timesonline.co.uk/newspaper/0,,176-1190346,0 ...


BAE probed on £60m Saudi slush fund
From The Sunday Times
Snip
David Leppard and Robert Winnett

BRITAIN’S biggest defence company has been accused by a whistleblower of operating a £60m “slush fund” to channel “bribes” to members of Saudi Arabia’s royal family. BAE Systems now faces a criminal investigation over allegations that it used Peter Gardiner, a reputable travel agent from St Albans, Hertfordshire, to lavish its Saudi clients with gifts and luxury holidays.

Gardiner has given details of the payments in interviews with the Serious Fraud Office (SFO). Speaking publicly for the first time, he told The Sunday Times that he had spent £60m on BAE’s behalf. “It was an enormous amount of money. It’s more a question of what we didn’t spend it on than what we did,” said Gardiner.

The slush fund — spent by Gardiner over 13 years from 1989 and 2002 — provided a £170,000 Rolls-Royce, other luxury cars, London apartments, private air travel and accommodation in five-star hotels in Hawaii, Los Angeles, Paris and New York. Under separate arrangements, middlemen also arranged prostitutes for some dignitaries.

The largesse was extended to Saudi officials and members of the country’s large royal family who controlled the kingdom’s arms procurement, the chief source of BAE’s income over the past 18 years.

From:
http://www.timesonline.co.uk/article/0,,2087-1190953,00 ...

BAE wins £1bn Hawk contract

from the Guardian
Wednesday September 3, 2003
BAE Systems, Britain's biggest weapons maker, today clinched a contentious £1bn order to supply Hawk training aircraft to India, in a contract for which Tony Blair personally lobbied.
The deal, in negotiation for more than a decade, has sparked much political contention in Britain.
(snip)
Critics have argued that the sale lays the British government open to charges of hypocrisy, as it was pushing for a big arms deal at the same time as playing peacemaker between India and Pakistan over the disputed territory of Kashmir.
ales to India and Pakistan, despite political tension between the two regional rivals.

more
http://www.guardian.co.uk/india/story/0,12559,1034880,00.html

400 boxes of documents --- from Traveller’s World

Although such hospitality is considered routine in some Third World countries, it is a criminal offence for British companies to pay bribes to overseas officials. Fraud investigators are also concerned about the way the payments were described in the company’s accounts.
The SFO is now studying Gardiner’s statement, together with the contents of nearly 400 boxes of documents that he has volunteered from Traveller’s World, his company.

Last week Gardiner said his company had acted entirely properly. He approached the SFO in March and has been helping them and the police uncover full details of the slush fund since then. The possibility of a criminal investigation into BAE marks a new low for the defence company, once the darling of new Labour. It has fallen out of favour after being accused of massive overspending on a series of Ministry of Defence contracts.

Gardiner’s evidence spans much of the period of the Al-Yamamah arms deal, Britain’s biggest export contract. It resulted in the sale of more than £20 billion worth of aircraft, such as Tornado and Hawk jets, and other military equipment to the oil-rich state.

Whitehall officials said last week they were shocked by the scale of the alleged slush fund. The government is determined to show that all cases of alleged corruption will be fully investigated, but the case is highly sensitive.
more
http://www.timesonline.co.uk/article/0,,2087-1190953,00 ...


UK arms firm's £60m Saudi slush fund
Police inquiry into arms firm's £60m slush fund

David Leigh and Rob Evans
Tuesday May 4, 2004
The Guardian

...

Files have been seized by Ministry of Defence police alleging corruption on a massive scale by Britain's biggest arms firm, BAE Systems. Payments totalling more than £60m to prominent Saudis are listed, a far greater amount than has been previously alleged.
MoD fraud squad detectives investigating allegations of bribery of a civil servant have seized 386 boxes of "slush fund" accounts.

Most explosively, the documents detail £17m in benefits and cash allegedly paid by BAE, which is chaired by Sir Dick Evans, to the key Saudi politician in charge of British arms purchases, Prince Turki bin Nasser. He is recorded under the codename "PB", alleged to mean "principal beneficiary".

BAE is trying to secure another £1.5bn of arms deals from the Saudi regime, following the sale of planes, missiles and warships worth £50bn to them over the past 15 years.

The documents list by name every Saudi official alleged to have received benefits from BAE in recent years. These include a number of military attaches at Saudi Arabia's London embassy, recorded as being provided with luxury London houses at BAE's expense.
more
http://www.guardian.co.uk/armstrade/story/0,10674,1209014,00.html

BAE Systems is offering its staff in Saudi Arabia an extra £1,000 a month in an attempt to stop the exodus of staff, one employee has told BBC News Online. The indefinite monthly payment follows a one-off payment of £4,500 in December after housing compounds were bombed in May 2003, killing 35 people.

The security situation has deteriorated since then. Earlier this month al-Qaeda militants beheaded an American engineer they had been holding hostage.

The British-owned defence firm made the £1,000 cash offer in an e-mail to each of its 2,400 staff in Saudi Arabia, describing it as an "emergency security payment", the employee said.

The employee said that people have been on edge since the housing compounds came under fire in May 2003 but that employees were encouraged to stay on the payroll to get the lump-sum offer in December.
more
http://news.bbc.co.uk/1/hi/business/3837407.stm

Includes replies to:
"Are you an expatriate working in Saudi Arabia? Are you pondering to leave or is the security situation still under control? And how is your company persuading you to stay? Tell us your experiences.At the request of our readers in Saudi Arabia e-mailing us their stories, all names have been withheld"


US war system reaps $2bn for BAE

David Gow
Saturday July 19, 2003
The Guardian

BAE Systems, Britain's biggest defence manufacturer, yesterday secured its place at the heart of the Pentagon's visionary new electronic warfare programme, with a contract from Boeing worth up to $2bn.

It is seen by the Pentagon as capable of delivering a precise firepower that will dwarf the "shock and awe" seen in Iraq this year.
BAE's selection, along with Lockheed Martin, Northrop Grumman and Raytheon, America's biggest defence contractors, buttresses its ambition to become a substantial US military supplier.

The company, at loggerheads with the British government, has made no secret of its ultimate plans for merger with the big US players such as Boeing or Lockheed, though talk of an imminent deal is too premature.

The highly classified work of BAE's two US units, one of them acquired from Lockheed and both run by US citizens, will be kept secret from the company's main British businesses under US laws, which forbid such technology transfer - a restriction that Tony Blair asked to be lifted in his Washington visit this week.

Jack Dromey, chief defence industry negotiator at the TGWU, said the plans would mean the end of a £70m project, known as Red Dragon, to build a repair facility in the centre of a new aviation park at RAF St Athans, near Cardiff.
more
http://www.guardian.co.uk/military/story/0,11816,1001427,00.html

BAE Systems enters agreement with Carlyle Group

BAE Systems North America has reached agreement with The Carlyle Group, Washington, D.C., to spin out its Imaging Sensors business located at Milpitas, Calif.
Imaging Sensors was previously part of BAE Systems Reconnaissance and Surveillance Systems of Syosset, N.Y. In the transaction, BAE Systems provided the assets of Imaging Sensors to form a new company, Fairchild Imaging, Inc. Closing of the agreement occurred April 6, 2001.
The core competencies of the new company, Fairchild Imaging, are in charged coupled device development and fabrication and electronic imaging systems. This company pioneered the development of CCD imaging technologies and has continued to innovate in a number of commercial product areas serving medical, dental and industrial surveillance markets. It currently employs 123 people.
"Fairchild Imaging is an excellent business. This transaction is part of our continuing strategic alignment to our aerospace core competencies, and provides Fairchild Imaging with great opportunity for future investment growth and success in its new commercial markets as well," said Mark Ronald, president and CEO, BAE Systems North America.
Under the terms of the transaction, BAE Systems North America retains an equity interest in Fairchild Imaging. The new company will continue to provide CCD products to the Reconnaissance and Surveillance Systems business within BAE Systems North America. Financial terms were not disclosed.
MORE
http://www.defense-aerospace.com/cgi-bin/client/modele.pl?prod=5120&session=dae.4457831.1091081148.QQiTvMOa9dUAAHr5Xjo&modele=jdc_1
UK: MoD official took BAE gifts
David Leigh and Rob Evans
Tuesday April 6, 2004
The Guardian

A slush fund run by Britain's biggest arms firm, BAE Systems, has been providing free holidays to a low-paid civil servant at the Ministry of Defence, according to allegations made to the Guardian.

The information has been passed to the Serious Fraud Office, which is planning to interview a key witness today.

...

The firm, which uses a battery of methods to persuade Britain and regimes all over the world to buy its weapons, has frequently been at the centre of corruption allegations abroad. The Guardian disclosed this year that since Labour legislated against bribery of foreign public officials, BAE has secretly shifted its files of payments to agents and foreign politicians into a vault in Geneva. BAE is also alleged to be using Swiss banks and offshore companies in the British Virgin Islands to conceal its transactions.

The Guardian also disclosed allegations that BAE has been operating a £20m slush fund to provide prostitutes, yachts and free trips for Saudis. This fund, according to the documents, also appears to have been used to finance the free holidays for Mr Porter. BAE has refused to respond to all these allegations, other than to make a generalised denial of wrongdoing.
more
http://www.guardian.co.uk/military/story/0,11816,1186782,00.html

BAE chairman named in 'slush fund' files
David Leigh and Rob Evans
Wednesday May 5, 2004
The Guardian

...

Sir Dick Evans, the retiring chairman of BAE who faces his his final shareholders meeting today, has been named in allegations concerning the arms firm's £60m "slush fund", according to documents seen by the Guardian.

His name is referred to in a number of alleged phone calls, emails and meetings. The slush fund allegations are under investigation by Ministry of Defence police.

Sir Dick, who also faces questioning on arms procurement by MPs on the Commons defence committee this afternoon, remained silent yesterday in the face of the allegations about him.

Documents previously seized by MoD police detail £17m of alleged payments to a Saudi responsible for arms purchases from Britain, Prince Turki bin Nasser.
more
http://www.guardian.co.uk/armstrade/story/0,10674,1209753,00.html

DRS Technologies Receives $23.3 Million Contract to Provide High-Frequency Radio Transmitters for U.S. Government
Tuesday June 15, 9:30 am ET

PARSIPPANY, N.J.--(BUSINESS WIRE)--June 15, 2004--DRS Technologies, Inc. (NYSE: DRS - News) announced today that it has received a $23.3 million contract, including options, to provide high-frequency (HF) radio transmitters for the High-Frequency Active Auroral Research Program (HAARP), which supports a U.S. government Arctic research facility being built to study the Earth's upper atmosphere.
The $11.5 million base contract was awarded to DRS by BAE Systems PLC (LSE: BA.L - News). For this award, DRS will manufacture more than 60 Model D616G 10-Kilowatt Dual Transmitters to fulfill the transmitter requirements for the HAARP program. Work for this order will be performed by the company's DRS Broadcast Technology unit in Dallas, Texas. Product deliveries to BAE Systems' Information and Electronic Warfare Systems in Washington, D.C., are scheduled to begin in March 2005 and continue for approximately one year.

"We are pleased to continue our role as a premier supplier of transmitters for the HAARP program," said Steven T. Schorer, president of DRS's C4I Group. "This award enhances DRS's position as a leader in high-technology radio frequency solutions for secure and tactical communications systems supporting the applications of the government scientific research community."

The high-frequency or short-wave Model D616G Transmitters were designed specifically for the U.S. government HAARP research facility. Currently, the ionosphere provides long-range capabilities for commercial ship-to-shore communications, transoceanic aircraft links, and military communications and surveillance systems.

A primary goal of HAARP is to understand how variations in the sun's radiation affect the performance of radio systems and to improve military command, control, communications and surveillance systems.

DRS Broadcast Technology, formerly known as Continental Electronics, is a global leader in broadcast transmitter equipment. It is the foremost supplier of advanced radio frequency transmission technology and the world's most experienced provider of the highest power radio broadcast equipment, offering a full range of products for broadcasting, military and scientific applications.

DRS Technologies, headquartered in Parsippany, New Jersey, provides leading edge products and services to defense, government intelligence and commercial customers. Focused on defense technology, DRS develops and manufactures a broad range of mission critical systems. The company employs 5,800 people worldwide
more
http://biz.yahoo.com/bw/040615/155095_1

[lovuian]

2. WHOAH what a corrupt fraud minefield and Blair in the middle

Its almost like the Saudis are scared and Britain is taking advantage

Who came to the Saudis when the Boxer Group in the wargames The british flew in their carriers to protect the Saudi ports!!!

Saudis are our buddy's

but do they know they are being played as fools

[goforit]

3. Woooah!!! Thanks for the info.

[leveymg]

4. BAe is also a major player in privatized intel

The Outsourcing of U.S. Intelligence Analysis Sebastian Abbot
Sat Oct 28, 8:00 PM ET
http://news.yahoo.com/s/news21/20061029/ts_news21/the_outsourcing_of_u_s_intelligence


If Clancy were writing his novel today, the paths open to Ryan would have been far more numerous. Why rejoin the CIA when it would be just as easy, and even more lucrative, to sign on at one of the private intelligence analysis firms conducting a growing share of the government's "long war" against terrorism? Companies like The Analysis Corp. (TAC), BAE Systems' Global Analysis Group and DGI's Center for Intelligence Research and Analysis (CIRA) would be eager to hire someone of Ryan's caliber. He could be sitting right beside his former CIA colleagues doing the exact same work.

To a degree never before witnessed in American history, many core functions of the U.S. intelligence community are being outsourced to the private sector. Outsourcing has taken place in almost every aspect of intelligence work -- collection, counterintelligence, covert operations –- but nowhere has the recent trend been more dramatic than in the analysis that informs what the President receives on his desk every morning. "The outsourced analysis piece, particularly since 9/11, is a significant portion of the analysis that's done," said John Gannon, a former CIA Deputy Director for Intelligence and now head of BAE Systems' Global Analysis Group. "And it's growing."

Unlike the rest of the government, the intelligence community is allowed to keep its entire budget secret –- "black," in spy jargon -– so it's impossible to say exactly how much outsourcing has occurred. But some experts have speculated that at least 50% of the entire budget now flows to the private sector. Undeniably, the tentacles of the private sector have worked their way deep into the intelligence world, with thousands of the community's 15,000 analysts drawing private-sector paychecks. Private citizens are now performing critical and sensitive national security functions, like analyzing the video and audio messages of Abu Musab al-Zarqawi.

CIRA's website illustrates the range of analysis functions private companies perform:
CIRA supports a variety of national security operations such as interpersonal deception detection, undercover/clandestine operations, psychological operations and mass persuasion, ... Understanding and mitigating terrorist recruitment, threat assessment, interview and interrogation techniques, and risk communication, among others.


Interviews with dozens of experts, including current and former intelligence officials, suggest that the intelligence community is divided about outsourced intelligence analysis. There are disputes over everything from cost to quality.The most troubling aspect, however, centers on the future of outsourcing. In less than two years, the country's reliance on the private sector for vital intelligence analysis may well become the Achilles heel of the intelligence community, and in turn, national security. By 2008, the supplemental appropriations that have funded the war in Iraq and fueled the growth of the intelligence community are expected to disappear.

SNIP

The Rapid Expansion of Private Intelligence Analysis

After Sept. 11, Congress dramatically increased the level of funding flowing to the intelligence community. In November 2005, a CIA official accidentally revealed the intelligence budget to be $44 billion, a significant increase from the $26.6 billion budget officially reported by CIA Director George Tenet in 1997.

SNIP

As evidence of the rapid push to use contractors for intelligence analysis, look no further than to the growth these private companies have enjoyed since Sept.11. TAC's revenue has increased fivefold, and its headcount is up proportionately. BAE Systems' Global Analysis Group, which only seriously started ramping up in the past two years, has grown 42% over that time period and has more than 500 analysts deployed to various agencies. Booz Allen Hamilton, SAIC, Centra Technology, SRA International, and ManTech International, just to name a few, have also enjoyed robust growth.
That has led to a phenomenon known as "butts in seats" -- contractors literally sit beside their public sector counterparts and perform equivalent tasks. According to Gannon, "'Butts in seats' within the analytic community... is really a post-9/11 phenomenon, for the most part." John Brennan, former acting Director of the National Counterterrorism Center (NCTC) and currently President and CEO of TAC, says that more than half of the 200 analysts at the NCTC were from the private sector while he was there. Freidberg reports his surprise at learning that the vast majority of Booz Allen's intelligence work is not classic management consulting, but simply providing "butts in seats" to the intelligence community.

SNIP

[BeFree]

5. Wonderful

I feel so safe, knowing that all these hard working private companies are making new weapon systems that are far better than shock and awe, and that private companies have taken intelligence into their own hands. Loyalty to the green back is far more reassuring than loyalty to the constitution, after all, ever try to buy anything with the constitution?

Surely the world will be a safer place with bigger, better weapons and stronger strong men. Merry Christmas!

[seemslikeadream]

6. Ex-BAE chairman is recruited by Kazakhstan

:hi:

http://www.guardian.co.uk/international/story/0,,1963338,00.html

Ex-BAE chairman is recruited by Kazakhstan


· Evans becomes head of state holding company
· Appointment to bolster London flotation plans

Mark Hollingsworth and David Leigh
Monday December 4, 2006
The Guardian


Sir Richard Evans, former chairman of Britain's biggest arms company, BAE Systems, has gone to work for the president of Kazakhstan, Nursultan Nazarbayev.
Sir Richard is to become chairman of Samruk, the oil and gas-rich central Asian country's state holding company. It was formed earlier this year to control a collection of state enterprises, many of which are said to be linked to the Nazarbayev family. They include KazMunaiGas; Kazakhstan Temir Zholy (railways); Kazakhtelekom; KEGOC (Kazakhstan Electricity Grid Operating Company), and Kazpost (postal services).


It is intended to float some, or all, of the companies in London. The potential flotation of KazMunaiGas was flagged in September when the oil and gas group said it wanted to raise more than £1bn by selling 40% of its exploration and production arm. It is chaired by Mr Nazarbayev's son-in-law, Timur Kulibayev, who was appointed six months ago. The Kazakh embassy in London says it is also planning to float the airline, Air Astana, which was launched as a joint venture with BAE Systems when Sir Richard was chairman.
A Kazakh official said: "The key reason behind the establishment of Samruk is to improve asset management, corporate governance and transparency of the national companies and their budgets."

Sir Richard is one of a string of leading British businessmen recruited in recent months to improve the prospects of a successful London stock market flotation for central Asian and Russian firms.

Many institutional investors, including CIS, Hermes and F&C Asset Management, are wary of the flood of companies from Russia, former Soviet states and eastern Europe joining the London Stock Exchange, believing that their corporate governance standards are inadequate. Less than three months ago, Kazakhmys, the FTSE-listed Kazakh copper mining group, announced the resignation of its chief executive, YK Cha, and broke governance guidelines by handing his duties to the chairman, Vladimir Kim. Kazakhmys was also unable to guarantee that Mr Cha would not dump his 16% stake in the group, which would hit the share price.