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Intelligence nominee's contractor ties draw scrutiny

Obama's pick as national intelligence director has woven between federal work and jobs with private contractors. Congress is asking whether the next intelligence chief should rein in outsourcing.

July 25, 2010|By Ken Dilanian, Tribune Washington Bureau

Reporting from Washington —

Four months after James R. Clapper left his federal job as head of the National Geospatial-Intelligence Agency in June 2006, he joined the boards of three government contractors, two of which had been doing business with his agency while he was there.

It was not the only revolving door entered by Clapper, who is now President Obama's nominee to be director of national intelligence.

In October 2006 he was hired full-time by DFI International, which was trying to boost its consulting with intelligence agencies. In April 2007, when he returned to public service as the chief of the Pentagon's intelligence programs, DFI paid him a $50,000 bonus on his way out the door, according to his financial disclosure statement. Five months later, DFI landed a contract to advise Clapper's Pentagon office, though company officials do not recall collecting any revenue from the deal.

There was nothing illegal or unusual about any of those moves in Washington, where former officials frequently land jobs with private contractors they previously dealt with as government employees. When Clapper entered the private sector, he was prohibited by federal ethics laws from representing his new employers before his former agency for one year. The White House says Clapper played no direct role in the selection of his former firm to advise his Pentagon office.

Now, however, Clapper is poised to become intelligence chief at a time when Congress is asking questions about the explosive growth of private contracting in the $75-billion U.S. intelligence operation. With lawmakers calling on the Obama administration to reduce the outsourcing, a logical question is whether a veteran of the close alliance between government and contractors — Clapper strongly defended the practice in response to a lawmaker's question about a Washington Post series last week — is best suited to bring that system to heel.

Clapper, a retired Air Force general, was not asked about his private-sector ties during his confirmation hearing on Tuesday, but senators peppered him with questions about the Post series.

Thirty percent of those with top-secret clearances are contractors, the Post estimated, a level of privatization the paper said calls into question "whether the government is still in control of its most sensitive activities."

Clapper challenged those conclusions. Acknowledging there are problems with contractor management, he nevertheless described the growth of contractors as "in some ways a testimony to the ingenuity, innovation and capability of our contractor base."

Clapper, who also spent six years with government contractors after retiring from the Air Force in 1995, is hardly alone in his frequent movement between government and contractors. A former director of national intelligence, retired Navy Vice Adm. J. Michael McConnell, was earning a reported $2 million a year at Booz Allen Hamilton, one of the biggest intelligence contractors, before he was named to the federal post in January 2007. McConnell returned to Booz Allen in January 2009 to lead the firm's national security business.

Clapper was paid a total of $172,842 by four companies from October 2006 to April 2007, his disclosure statements show, and $36,500 by Georgetown University, where he was a part-time instructor.

Those figures include the $50,000 DFI bonus. Barry Blechman, DFI's chief executive at the time, said Clapper "walked away from a larger possible payoff" because DFI was being purchased by a British company just as he was leaving.

"Because of his dedication to public service, he really lost out on a lot of money," Blechman said. "Once he left DFI, he never met with me or anybody else from the company."

Matthew Travis, another former DFI official, said the intelligence contract did not end up being lucrative for the company. "I am almost positive we never saw a dime of work out of this," Travis said.

In a statement released Friday on Clapper's behalf, the White House said, "Jim Clapper has devoted 40 years of his professional life in service to our country in and out of uniform. It is without doubt that he passed up large private-sector salaries to come back into government service after he retired from a 30-plus-year military career."

Clapper's first private-sector stint came after he retired from the Air Force in 1995 as a lieutenant general. He worked for Booz Allen and SRA International, both major intelligence contractors. After the Sept. 11 attacks, he was tapped to lead the geospatial agency, which purchases satellite imagery from private firms and analyzes it for military and intelligence agencies.

Clapper left in June 2006 and joined two corporate boards — 3001, a mapping and surveying company whose main clients included the geospatial agency; and GeoEye, whose predecessor firm in 2004 had won a $500-million contract from the agency while Clapper was chief. Clapper also joined the advisory board of Sierra Nevada, an Air Force contractor.

Clapper told senators last week that he is well suited to examine the use of contractors.

"I worked as a contractor for six years myself, so I think I have a good understanding of the contribution that they have made and will continue to make," he said. "I think the issue is, what's the magnitude? And most importantly … how do we ensure that we're getting our money's worth?"

ken.dilanian@latimes.com

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