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Consulting and Policy Overlap

Advisor Perle has given seminars on ways to profit from possible conflicts discussed by defense board he sits on.

May 07, 2003|Ken Silverstein and Chuck Neubauer | Times Staff Writers

WASHINGTON — In February, the Defense Policy Board, a group of outside advisors to the Pentagon, got a classified presentation from the super-secret Defense Intelligence Agency on crises in North Korea and Iraq.

Three weeks later, the then-chairman of the board, Richard N. Perle, offered a briefing of his own at an investment seminar on ways to profit from possible conflicts with both countries.

Perle and his fellow advisors also heard a classified address about high-tech military communications systems at the same closed-door session in February. He runs a venture capital firm that has been exploring investments in that very area.

The disclosures in recently released board agendas and investment documents are the latest illustrations of how Perle's private consulting and investment interests overlap with his role on the board, which advises the secretary of Defense.

Perle resigned as board chairman on March 27 after published reports that he had been employed as a consultant by bankrupt telecommunications firm Global Crossing Ltd., which was trying to get Pentagon clearance to be sold to Asian investors. The reports also had him soliciting investment money from a Saudi who was seeking to influence U.S. policy on Iraq.

In a letter to Secretary of Defense Donald H. Rumsfeld, Perle said he was relinquishing the chairmanship because at a time of war, "I am dismayed that your valuable time ... might be burdened by the controversy surrounding my chairmanship." He remained on the board as a member, and denied any wrongdoing.

Perle did not return phone calls or e-mails seeking comment. He is considered to be one of Washington's most influential defense thinkers and was a leading supporter of the war in Iraq. He is close to Rumsfeld and his top deputy, Paul D. Wolfowitz, as well as to Undersecretary of Defense Douglas J. Feith, who oversees the policy board and who formerly worked with Perle as a consultant to the government of Turkey.

Perle has a broad range of business interests. He serves on the board of several defense contractors and is a lead player in Trireme Partners, a venture capital fund seeking investments in the defense and homeland security industries.

In July 2001, Perle became chairman of the 30-member Defense Policy Board, which meets regularly with Rumsfeld. The board's meetings are classified and members are allowed access to top-secret intelligence reports.

On Feb. 27, 2003, two speakers -- Henry D. Sokolski of the Nonproliferation Policy Education Center and Michael Pillsbury, a Pentagon advisor under Feith -- gave presentations to the Defense Policy Board on the risks and prospects of U.S. conflict with North Korea. The same day, the Defense Intelligence Agency, which works for the Pentagon, also briefed the board on North Korea and Iraq among other subjects, according to several people in attendance.

Three weeks later, Perle participated in a Goldman Sachs conference call in which he advised investors on opportunities tied to the war in Iraq. Perle's talk was called "Implications of an Imminent War: Iraq Now. North Korea Next?"

The New York Times first reported the conference call. But the classified briefings had not been disclosed previously.

Fred C. Ikle, who worked at the Pentagon under President Reagan and who joined the board in August 2001, said he was not troubled by Perle's talk to Goldman Sachs so soon after the board briefing. "Anyone who has been reading the newspapers for the past year knows about the crisis in North Korea," he said. "There was nothing discussed at the board meeting that was news."

'Certainly Questionable'

But another person who attended the Feb. 27 meeting called Perle's subsequent engagement with Goldman Sachs inappropriate. "That bothered me because the title of the talk made it sound like he had the inside track on what we were going to do," said this person, who asked to speak off the record.

Retired Rear Adm. Thomas Brooks, who served on the policy board during the Clinton administration, said Perle's actions were "certainly questionable."

"It sounds like he's squeezing every nickel out of the Defense Policy Board," he said.

At the same Feb. 27 policy board meeting, Assistant Defense Secretary John P. Stenbit gave a classified presentation on "network centric efforts," which concerns emerging high-tech military communications systems. It is a fundamental component of the so-called revolution in military affairs, or RMA, which envisions battlefields dominated by precision-guided weapons wedded to high-tech communications and surveillance systems.

Berel Rodal, a former Canadian government official and defense consultant who now serves as a Trireme advisor, described the RMA as one of the areas of interest to the investment fund. Fund planning documents said the fund would be looking for communications sector investments related to the RMA, which the documents describe as "an area where the Management Group has experience and insight."

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