Secrets R US

Deceptions and schemes in the
military-intelligence-industrial complex

by Greg Guma

Toward Freedom magazine, August / September 2001


It was classic spin. When NATO's US and British troops in Macedonia began evacuating Albanian rebels in June, officials claimed they were merely attempting to help Europe avert a devastating civil war. Most media dutifully repeated that as fact. But the explanation only made sense if you ignored a troublesome contradiction, namely US support for both the Macedonian Armed Forces and the Albanians fighting them. Beyond that, there's a decade of confused and manipulative Western policies, climaxing with NATO bombing and the failure to impose "peace" through aggression in Kosovo. Together, these moves have effectively destabilized the region.

In the Macedonia operation, the main "cut out" -that's spook speak for "intermediary"-has been Military Professional Resources, Inc. (MPRI), a major private military company (PMC) whose Macedonian field commander is a former US general with strong ties to Kosovo Liberation Army (KLA) Commander Agim Ceku and Macedonian General Jovan Andrejevski.

MPRI and other PMCs get much of their money from contracts with the US State Department, Pentagon, and CIA . For example, MPRI trained and equipped the Bosnian CroatMuslim Federation Army with a large State Department contract. Over the years, the company claims to have "helped" Croatia, Serbia, Bosnia, and Macedonia-in effect, arming and training all parties. Last year, it pulled in at least $70 million from its global operations.

Working closely with the Pentagon, MPRI also arranged for the KLA's training and weapons in the run up to the war on Yugoslavia just two years ago. These days, the same firm channels token military aid to the Macedonian army, new US weapons to the rebels, and military intelligence to both sides.

Actually, this is a standard tactic, applied with great success in the Middle East for decades: Keep warring parties from overwhelming one other and you strengthen the bargaining power of the puppeteer behind the scenes. Better yet, combine this with disinformation; that is, tell the public one thing while doing the opposite.

It's not a question of allies and enemies. Those designations can change for any number of reasons. Two years ago, ethnic Albanians were victims and freedom fighters. In 2001, they're "officially" a threat. Manuel Noriega, Saddam Hussein, and Osama bin Laden are just three of the friends-turned-pariahs who've learn that lesson.

So, what's the real objective in Macedonia? Hard to know. But the country is clearly in a financial straight jacket, its budget basically controlled by the IMF and the World Bank on behalf of international creditors. Since the IMF has placed a ceiling on military expenditures, the only funding option left is privatization. According to Jane's Defense Weekly, the process is already underway, starting with the sale of the government's stake in Macedonian Telekom.

There could be even more at stake-things like strategic pipeline routes and transport corridors through the country. But, in all likelihood, we won't be told that until years from now-if ever. That's another traditional tactic: Keep the true agenda under wraps for as long as possible.


Despite 24-hour news and all the US talk about transparency, there's much we don't know about our history, much less current events. What s worse, some of what we think we know isn't true. And that's no accident

Consider, for example, the proximate circumstances that led to open war in Vietnam. According to official history, two US destroyers patrolling in the Gulf of Tonkin off North Vietnam were victims of unprovoked attacks in August 1964, leading to a congressional resolution that gave President Lyndon Johnson the power "to take all necessary measures."

In fact, the destroyers were spy ships, part of a National Security Agency (NSA) eavesdropping program operating near the coast as a way to provoke the North Vietnamese into turning on their radar and other communications channels. The more provocative the maneuvers, the more signals that could be captured. Meanwhile, US raiding parties were shelling mainland targets. Documents revealed later indicated that the August 4 attack on the USS Maddox-the pretext for passing the Gulf of Tonkin Resolution-may not even have taken place. '

But even if it did, the incident was still stage managed to build up congressional and public support for the war. Evidence suggests that the plan was based on Operation Northwoods, a scheme developed in 1962 to justify an invasion of Cuba. Among the tactics the Joint Chiefs of Staff considered then were blowing up a ship in Guantanamo Bay, a phony "communist Cuba terror campaign" in Florida and Washington, DC, and an elaborate plan to convince people that Cuba had shot down a civilian airliner filled with students. That operation wasn't implemented, but two years later, desperate for a war, the administration's military brass found a way to create the necessary conditions in Vietnam.


For half a century, the eyes and ears of US power to monitor and manipulate information (and with it, mass perceptions) has been the NSA, initially designed to assist the CIA. Its original task was to collect raw information about threats to US security, cracking codes and using the latest technology to provide accurate intelligence on the intentions and activities of enemies. Emerging after World War II, its early focus was the Soviet Union. But, according to James Bamford, author of the latest and most detailed history of the NSA to date, it never did crack a high-level Soviet cipher system. On the other hand, it has used every available means to eavesdrop on not only enemies but also allies and, sometimes, US citizens.

In Body of Secrets, Bamford describes a bureaucratic and secretive behemoth, based in an Orwellian Maryland complex known as Crypto City. From there, supercomputers link it to spy satellites, subs, aircraft, and equally covert, strategically placed listening posts worldwide. It has a $7 billion annual budget and directly employs at least 38,000 people, more than the CIA and FBI. It is also the leader of an international intelligence club, UKUSA, which includes Britain, Canada, Australia, and New Zealand. Together, they monitor and record billions of encrypted communications, telephone calls, radio messages, faxes, and e-mails around the world.

Over the years, however, the line between enemies and friends has blurred, and the intelligence gatherers have often converted their control of information into unilateral power, influencing the course of history in ways that may never become known. No doubt the agency has had a hand in countless covert operations; yet, attempts to pull away the veil of secrecy have been largely unsuccessful.

In the mid-1970s, for example, just as Congress was attempting to reign in the CIA, the NSA was quietly creating a virtual state, a massive international computer network named Platform. Doing away with formal borders, it developed a software package that turned worldwide Sigint (short for "signal intelligence": communication intelligence, eavesdropping, and electronic intelligence) into a unified whole. The software package was code named Echelon, a name that's since become a term for eavesdropping on commercial communication.

Of course, the NSA and its British sister, the Government Communications Headquarters (GCHQ), refuse to admit Echelon exists, even though declassified documents have appeared on the Internet and Congress has conducted an initial investigation. A recent European Parliament report also confirms Echelon's activities, and encourages Internet users and governments to adopt stronger privacy measures in response.

The pressure to find out more is mounting.

In March, several ranking British politicians discussed Echelon's potential impacts on civil liberties, and a European Parliament committee considered its legal, human rights, and privacy implications. The Dutch held similar hearings, and a French National Assembly inquiry urged the European Union to embrace new privacy enhancing technologies to protect against Echelon's eavesdropping. France is launching a formal investigation into possible abuses for industrial espionage.


A prime reason for Europe's discontent is the growing suspicion that the NSA has used intercepted conversations to help US companies win contracts heading for European firms. To date, the alleged losers include Airbus-a consortium including interests in France, Germany, Spain, and Britain-and Thomson CSF, a French electronics company. The French claim they lost a $1.4 billion deal to supply Brazil with a radar system because the NSA shared details of the negotiations with Raytheon. Airbus may have lost a contract worth $2 billion to Boeing and McDonnell Douglas because of information intercepted and passed on by the agency.

According to former NSA agent Wayne Madsen, the US used information gathered from its bases in Australia to win a half share in a significant Indonesian trade contract for AT&T. Communication intercepts showed the contract was initially going to a Japanese firm. More recently, a lawsuit against the US and Britain was launched in France, judicial and parliamentary investigations began in Italy, and German parliamentarians demanded an inquiry.

The rationale for turning the NSA loose on commercial activities, even involving allies, was provided in the mid-90s by Sen. Frank DeConcini, then chairman of the Senate Intelligence Committee. "I don't think we should have a policy where we're going to invade the Airbus inner sanctum and find out their secrets for the purpose of turning it over to Boeing or McDonnell Douglas," he opined. "But if we find something, not to share it with our people seems to me to be not smart." President Bill Clinton and other US officials buttressed this view by charging that European countries were unfairly subsidizing Airbus. In other words, competition with significant US interests can be a matter of national security concern, and private capitalism must be protected from state-run enterprises.

The US-Europe row about Airbus subsidies also has been used as a "test case" for scientists developing new intelligence tools. At US Defense Department conferences on "text retrieval," competitions are staged to find the best methods. Recently, a standard test has featured extracting protected data about "Airbus subsidies."


In the end, influencing the outcome of huge commercial transactions is but the tip of this iceberg. The NSA's ability to listen to virtually any transmitted communication has enhanced the power of unelected officials and private interests to set covert foreign policy in motion. In some cases, the objective is clear and arguably defensible: taking effective action against terrorism, for example. But in others, the grand plans of the intelligence community have led it to undermine democracies.

The 1975 removal of Australian Prime Minister Edward Whitlam is an instructive case. At the time of Whitlam's election in 1972, Australian intelligence was working with the CIA against the Allende government in Chile. The new PM did not simply order a halt to Australia's involvement, explains William Blum in Killing Hope, a masterful study of US interventions since World War II. He seized intelligence information withheld from him by the Australian Security and Intelligence Organization (ASIO), and disclosed the existence of a joint CIA-ASIO directorate that monitored radio traffic in Asia. Whitlam also openly disapproved of US plans to build up the Indian Ocean Island of Diego Garcia as a military-intelligence-nuclear outpost.

Both the CIA and NSA became concerned about the security and future of crucial intelligence facilities in and near Australia. The country was already key member of UKUSA. After launching its first space-based listening post-a microwave receiver with an antenna pointed at earth-NSA had picked an isolated desert area in central Australia as a ground station. Once completed, the base at Alice Springs was named Pine Gap, the first of many listening posts to be installed around the world. For the NSA and CIA, Whitlam posed a threat to the secrecy and security of such operations.

The first step was covert funding for the political opposition, in hopes of defeating Whitlam's Labor Party in 1974. When that failed, meetings were held with the Governor-General, Sir John Kerr, a figurehead representing the Queen of England who had worked for CIA front organizations since the 50s. Defense officials warned that intelligence links would be cut off unless someone stopped Whitlam. On November 11, 1975, Kerr responded, dismissing the prime minister, dissolving both houses of Parliament, and appointing an interim government until new elections were held.

According to Christopher Boyce (the subject of a film, The Falcon and the Snowman) -who watched the process while working for TRW in a CIA-linked cryptographic communications center-the spooks also infiltrated Australian labor unions and contrived to suppress transportation strikes that were holding up deliveries to US intelligence installations. Not coincidentally, some unions were leading the opposition to development of those same facilities.

How often, and to what effect, such covert ops have succeeded is just another of the mysteries that comprise an unwritten history of the last 50 years. Beyond that, systems like Echelon violate the basic human right to individual privacy, and give those who control the information the ability to act with impunity, sometimes destroying lives and negating the popular will in the process.


In May 1960, when a U-2 spy plane was shot down over Soviet territory, President Dwight Eisenhower took great pains to deny direct knowledge or authorization of the provocative mission. But, in truth, he personally oversaw every U-2 mission, and had even riskier and more provocative bomber overflights in mind.

It's a basic rule of thumb for covert ops: When exposed, keep denying and deflect the blame. More important, never, never let on that the mission itself may be a pretext, or a diversion from some other, larger agenda.

Considering that, the April 20, 2001, shoot down of a plane carrying missionaries across the Brazilian border into Peru becomes highly suspicious. At first, the official story fed to the press was that Peruvian authorities ordered the attack on their own, over the pleas of the CIA "contract pilots" who initially spotted the plane. But Peruvian pilots involved in that program, supposedly designed to intercept drug flights, insist that nothing gets shot down without US approval.

Sometimes innocent planes are attacked, but most of them are low flying puddle-jumpers that don't file flight plans and have no radios or instrumentation. This plane maintained regular radio contact and did / file a plan. Yet, even after it crash-landed, the Peruvians continued to strafe it, perhaps in an attempt to ignite the plane's fuel and eliminate the evidence.

"I think it has to do with Plan Colombia and the coming war," says Celerino Castillo, who worked in Peru for Drug Enforcement Agency (DEA) in the 80s. "The CIA was sending a clear message to all non-combatants to clear out of the area, and to get favorable press." The flight was heading to Iquitos, which "is at the heart of everything the CIA is doing right now," he adds. "They don't want any witnesses."

Timing also may have played a part. The shoot down occurred on the opening day of the Summit of the Americas in Quebec City. Uruguay's President Jorge Ibanez, who had proposed the worldwide legalization of drugs just weeks before, was expected to make a high-profile speech on his proposal at the gathering. The downing of a drug smuggling plane at this time, near territory held by Colombia's FARC rebels, might have helped defuse Uruguay's message and reinforced the image of the insurgents as drug smugglers.

If you doubt that the US would condone such an operation or cover it up, consider this story, exquisitely documented in Bamford's book: In 1967, Israel torpedoed the USS Liberty, a large floating listening post, as it was eavesdropping on the Arab-Israeli war off the Sinai Peninsula. Hundreds of US sailors were wounded and killed, probably because Israel feared that its massacre of Egyptian prisoners at El Arish might be overheard.

How did the Pentagon respond? By imposing a total news ban, and covering up the facts for decades.


A further wrinkle in the Peruvian shoot down is the involvement of another private military company, DynCorp, which is also active in Colombia and Bolivia under large contracts with various US agencies. The day after the incident, ABC news reported that- according to senior administration officials- the crew of the surveillance plane that first identified the doomed aircraft "was hired by the CIA from DynCorp." Within two days, however, all references to DynCorp were removed from ABC's Website. A week later, the New York Post claimed the crew actually worked for Aviation Development Corp., allegedly a CIA proprietary company.

Whatever the truth, State Department officials won't talk on the record about DynCorp's activities in South America. Yet, according to CorpWatch, which obtained a copy of DynCorp's State Department contract, the firm has received at least $600 million over the last few years for training, drug interdiction, search and rescue (which can include combat), air transport of equipment and people, and reconnaissance in the region. And that's only what they put on paper! It also operates government aircraft and provides all manner of personnel, particularly for Plan Colombia.

There's more. DynCorp is not only the largest US contractor operating in Latin America, but also a high-tech company with expertise in information systems and Internet technology. In 1999, it acquired GTE Information Systems to help it win government mega-projects. Its main operating center is located at Patrick Air Force Base in Florida, sharing space with the State Department in buildings also occupied by defense contractor Raytheon. High-speed data lines link the buildings directly with CIA headquarters.

In other words, DynCorp is a trusted partner in the military-intelligence-industrial complex. "Are we outsourcing order to avoid public scrutiny, controversy or embarrassment?" asks Rep. Janice Schakowsky, the Illinois Democrat who has submitted legislation to prohibit US funding for private military firms in the Andean region. "If there is a potential for a privatized Gulf of Tonkin incident, then the American people deserve to have a full and open debate before this policy goes any further."

If and when that ever happens, the discussion will have to cover a lot of ground. Private firms, working in concert with various intelligence agencies, constitute a vast foreign policy apparatus that is largely invisible, rarely covered by the corporate press, and not currently subject to congressional oversight. The Freedom of Information Act simply doesn't apply. Any information on whom they arm or how they operate is private, proprietary information.

Nevertheless, the companies are staffed by former generals, admirals, and highly trained officers. The two leading firms, MPRI and DynCorp, currently have operations in Bosnia, Macedonia, Croatia, Colombia, Bolivia, Peru, Nigeria, and Equatorial Guinea. Name another hot spot and some PMC has people there, too. DynCorp has worked on the Defense Message System Transition Hub and does long-range planning for the Air Force. MPRI had a similar contract with the Army, and has coordinated the Pentagon's military and leadership training in at least seven African nations. The next stops, according to its CEO Ed Soyster, include Poland, Argentina, and Bahrain. Think NATO and EU expansion, free trade and the IMF, and-of course-oil.

Before coming to MPRI, by the way, Soyster directed the US Defense Intelligence Agency (DIA).


Although the various departments and private contractors within the military-intelligence-industrial complex occasionally have turf battles and don't always share information or coordinate strategy as effectively as they could, close and ongoing contact has always been considered essential. And it's certainly growing as a result of the information revolution. The entire intelligence community has its own secret Intranet, known as Intelink, which pulls together FBI reports, NSA intercepts, analysis from the DIA and CIA, and more deeply covert sources.

Private firms are connected to this information web through staff, location, shared technology, and assorted contracts. For example, MPRI is now owned by L-3 Communications, itself a spinoff from major defense contractor Lockheed Martin.

Working primarily for the Pentagon, L-3 manufactures hardware like control systems for satellites and flight recorders; meanwhile, MPRI provides services, like its current operations in Macedonia. L-3 also built the NSA's Secure Terminal Equipment, which instantly encrypts phone conversations.

Another private contractor active in the Balkans is Science Applications, staffed by former NSA and CIA personnel, and specializing in police training. When Janice Stromsem, a Justice Department employee, complained that its program gave the CIA unfettered access to recruiting agents in foreign police forces, she was relieved of her duties. Her concern was that the sovereignty of nations receiving aid from the US was being compromised..

DynCorp'.s day-to-day operations in South America are overseen by State Department officials, including the Narcotic Affairs Section and the Air Wing, the latter a clique of unreformed cold warriors and leftovers from 80s operations in Central America. It's essentially the State Department's private air force in the Andes, with access to satellite-based recording and mapping systems. In the 60s, a similar role was played by the Vinnell Corp., which the CIA called "our own private mercenary army in Vietnam." Today, Vinnell is a subsidiary of TRW, a major NSA contractor, and employs US Special Forces vets to train Saudi Arabia's National Guard. In the late 9()s, TRW hired former NSA director William Studeman to help with its intelligence program.

In l999, faced with personnel cuts, the NSA offered over 4000 employees "soft landing" buy outs to help them secure jobs with defense firms that have major NSA contracts. NSA offered to pay the first year's salary, in hopes the contractor would then pick up the tab. Sometimes the employee didn't even have to move away from Crypto City. Companies taking part in the program included TRW and MPRI's parent company, Lockheed Martin.

Lockheed has also been a winner in the long-term effort to privatize government services. In 2000, it won a $43.8 million contract to run the Defense Civilian Personnel Data System, one of the largest human resources systems in the world. As a result, a major defense contractor will also be in charge of consolidating all Department of Defense personnel systems, covering hiring and firing for about 750,000 civilian employees. This will put the contractor at the cutting edge of Defense Department planning, and make it a key gatekeeper at the revolving door between the US military and private interests.


Shortly after his appointment as NSA director in 1999, Michael Hayden went to see the film Enemy of the State, in which Will Smith is pursued by an all-seeing, all hearing NSA and former operative Gene Hackman decries the agency's dangerous power. In Body of Secrets, author Bamford says Hayden found the film entertaining, yet offensive and highly inaccurate. Still, the NSA chief is comforted by "a society that makes its bogeymen secrecy and power. That's really what the movie's about.''

Unlike Hayden, however, most people don't know where the fiction ends and NSA reality begins. Supposedly, the agency rarely spies on US citizens at home. On the other hand, the Foreign Intelligence Surveillance Act allows a secret federal court to waive that limitation, and, outside the US, only the Attorney General's approval is needed. The rest of the world doesn't even have that much protection.

Clearly, an agency that eavesdrops on phone calls from Osama bin Laden (and plays them back to impress visitors) is capable of closely monitoring the rest of us. Designating thousands of keywords, names, phrases, and phone numbers, NSA computers can pick them out of millions of messages, passing anything of interest on to analysts. One can only speculate about what happens next.

In the near future, the agency apparently hopes to go even further with a project code named Tempest. The goal is to capture computer signals such as keystrokes or monitor images through walls or from other buildings, even if the computers aren't linked to a network. An NSA document, "Compromising Emanations Laboratory Test Requirements, Electromagnetics," describes procedures for capturing the radiation emitted from a computer-through radio waves and the telephone, serial, network, or power cables attached to it.

Other new NSA programs include Oasis, designed to reduce audiovisual images into machine-readable text for easier filtering, and Fluent, which will expand Echelon's multilingual capabilities. And let's not forget the government's Carnivore Internet surveillance program, which can collect all communications over any segment of the network being watched.

Put such elements together, combine them with business imperatives and covert foreign policy objectives, then throw PMCS into the mix, and you get a glimpse of the extent to which information can be translated into raw power and secretly used to shape major events. Although most pieces of the puzzle remain obscure, there's already enough visible to justify suspicion, outrage, and a concerted effort to pull away the curtain on this Wizard of Oz. But fighting a force that's largely invisible and unaccountable-and able to eavesdrop on the most private exchanges-is a daunting task, perhaps even more difficult than confronting the mechanisms of corporate globalization that it protects and promotes.

But should we be concerned? And, if so, how much fear is reasonable? Fortunately, the bogeyman isn't invincible-yet. It's still too compartmentalized and bureaucratic to be consistently effective. There's no one "Big Brother" watching. Thus, the outcome of a struggle to tame it isn't certain.

On the other hand, what we know about the past suggests that failing to act-out of fear, cynicism, or just plain apathy-means surrendering control of both history and destiny. In the long run, nothing less than the survival of individual liberty and meaningful democracy may be at stake.


Greg Guma is the editor of Toward Freedom.

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