MADELEINE BRAND, host:
This is DAY TO DAY. I'm Madeleine Brand.
ALEX CHADWICK, host:
I'm Alex Chadwick. Companies hired to manage the reconstruction efforts in Iraq are wasteful. They misuse taxpayer dollars, sometimes they commit fraud. This according to testimony today on Capitol Hill, the House Oversight and Government Reform Committee is hearing from contractors who've worked in Iraq and from surviving family members of some who died there. Steve Helvenston and three colleagues were killed three years ago while working for Blackwater. Steve's mother Catherine spoke today.
Ms. CATHERINE HELVENSTON: Our four men were told that they would be working in armored vehicles. There were supposed to be heavy machine guns to fight off any attacks. Our men were also told that they would be able to conduct a risk assessment of each mission to determine if it was too dangerous to go. Blackwater did not provide our men with any of these protections.
CHADWICK: You've probably heard of many of these businesses that are helping rebuilding Iraq - companies like Halliburton and Bechtel. But here's one less familiar: SAIC, the Science Applications International Corporation. A feature about the company appears in the March issue of "Vanity Fair".
BRAND: Donald Barlett and James Steele detail how his company has come to operate like a part of the government - so powerful and largely unaccountable that it actually played a significant role in leading the United States into the Iraq War. Donald Barlett and James Steele join me now. Welcome to the program.
Mr. JAMES STEELE (Journalist): Nice to be with you, Madeleine.
Mr. DONALD BARLETT (Journalist): Good to be here, Madeleine.
BRAND: What is SAIC? Jim?
Mr. STEELE: It's the largest company nobody's ever heard of - especially as a defense contractor. Forty-four thousand employees, half of them have security clearances, eight billion in annual revenues. And what's astonishing is how this company has grown, prospered, sort of mushroomed into this large behemoth in the space of a little over three decades.
BRAND: You write that 9-11 was a tragedy for America, but was very, very good for SAIC. How did SAIC position themselves to take advantage of the war on terror after 9-11?
Mr. STEELE: One of the things we noticed about the company even before 9-11 is that they've had this extraordinary revolving door with government agencies. In fact, we make the point in the story that they might almost run a shuttle bus between their Washington headquarters, the CIA, the National Security Agency, the Defense Department and other key entities like that. Because of these sort of interlocking relationships, they're always in a position, no matter what the issue is. So when the war on terror came along - particularly the War on Iraq -they were very well positioned.
And they played an instrumental role in basically every phase of the build up to the War on Iraq. And once the Iraqi War began, they got some very crucial contracts. Once it became clear that there were no weapons of mass destructions - which any number of SAIC executives had contended were in fact there in Iraq - they were even staffing some of the commissions that looked into why that particular intelligence failure occurred.
Mr. BARLETT: And this actually goes back to the late 1990s - you know, several years before 9-11 - when a name that is - most people will recognize today that have never connected with SAIC, David Kay, who was the, arms inspector in Iraq. But back in the late 1990s, he headed the SAIC's counterterrorism technology and analysis center, a group that SAIC had set up anticipating, quite frankly, what was coming down the road. And he testified frequently - he was on radio interviews - about the weapons of mass destruction, and what a threat they posed to the United States and how this country needed to take some action to get rid of him.
BRAND: Right. This is a part that, actually, I - my head was swimming, because here David Kay is known to most of us as the head of the Iraq Survey Group which said that the WMD's didn't exist.
Mr. BARLETT: No, that's absolutely right. And you have this - this is this problem with this contracting out government work in some ways. Because back then, he was proselytizing to go into Iraq to get the weapons of mass destruction. And he was not the only one, by the way, from SAIC who was doing this.
BRAND: You described several multi-million dollar contracts SAIC has won and then completely bungled. There are two involving the NSA and the FBI, and these relate directly to the war on terror. Tell us about those.
Mr. STEELE: One of the most significant ones is called Trailblazer with the National Security Agency, and a very similar one with the FBI called the Virtual Case File. Both of these were huge contracts, and the idea was to develop a computerized system where we would essentially be able to identify terrorists so that we would not have incidents like 9-11 in the future. Both of these contracts had been sort of staggering failures.
But as typical with SAIC, in the case of the Trailblazer - the one with the National Security Agency - if we'd had the proper identification process, especially with the FBI, the FBI might have realized that in the case of some of their own informants who were living with FBI in FBI houses, they would have been able to identify that. They weren't able to identify that, and who knows how many other incidents there are out there like that.
Mr. BARLETT: The NSA is probably the most secretive government intelligence operation, and you read very little about it. But the fact of the matter is what they wanted SAIC to do is kind of bring them into the 21st century - at least the end of the 20th century - because technology is running right by them. This isn't just a waste of money. This is an incredible breakdown in American intelligence, because now they're in a position where they are years away from getting the kind of programs they need to actually identify people.
BRAND: Why is it that SAIC is impervious to changing administrations, to changing political winds in Washington? Why is it able to hang on to these multi-billion dollar contracts year in and year out - despite, as you say, some incredible failures?
Mr. STEELE: The most significant reason for this is that they are wired into all of these agencies. They've had a very successful internal stock program that was a very powerful way to make a lot of money. So an awful lot of generals and high military people who came out on retirement who went to work for them as consultants or board members or executives could make a lot of money in a very short period of time. So there were all of these building incentives - associations with the military, the intelligence communities, the back and forth between them. It's a wonderful little closed shop they've all had that's been remarkably successful for many people in SAIC over the years.
BRAND: And when you're talking about the personnel at SAIC, we're not talking about low-level government employees now going into the private sector. We're talking about some big names. Robert Gates for example, the new defense secretary…
Mr. STEELE: Robert Gates…
BRAND: …used to work there.
Mr. STEELE: …absolutely was once a board member. John Deutch, who was a CIA director at one time, was also a board member. So they've had some very, very powerful folks at the top who've been able to show the influence of the company. So the company's been very successful in bringing those people on board which then, in turn, gives them entree and access to present their programs.
BRAND: Investigative journalists Donald Barlett and James Steele. Their article on SAIC, the largest and most powerful government contractor, is in the current issue of "Vanity Fair" magazine. And thank you both very much for joining us.
Mr. STEELE: Nice to be with you.
Mr. BARLETT: Thank you so much, Madeleine.
BRAND: Stay with us on DAY TO DAY from NPR News. Transcript provided by NPR, Copyright NPR.
