FOIA

Spy fraud

Taxpayers are paying intelligence contractors to browse Facebook, watch porn, and commit crimes

U.S. taxpayers are paying intelligence contractors to browse Facebook, watch porn, and commit crimes

When contractors and employees who work for America’s most powerful intelligence agencies get bored at work, they sometimes kill time by viewing pornography on their government computers, browsing online dating services, engaging in “sex chats” with minors, and playing games on Facebook.

And they charge U.S. taxpayers millions of dollars for it.

Between 2013 and 2015, the Intelligence Community’s Inspector General, the watchdog entity overseeing 16 federal intelligence agencies, investigated dozens of instances of employee misconduct and crimes based on referrals it received from intelligence agencies. Many of them centered on widespread contracting fraud involving individuals who worked on highly classified intelligence programs for the NSA, the CIA, and the Office of Director of National Intelligence (ODNI) on behalf of well-known contractors such as IBM, Booz Allen Hamilton, Boeing, and General Dynamics.

That’s according to hundreds of pages of top-secret internal watchdog reports that were declassified and released to VICE News in response to a Freedom of Information Act lawsuit.

Because much of the inspector general’s work is shrouded in secrecy, very few of its investigative reports are ever publicly released. This is the first broad-based, behind-the-scenes look at how the office, headed by Charles McCullough, has handled misconduct. McCullough is the watchdog who reviewed Hillary Clinton’s State Department emails and referred the case to the FBI after finding that a few dozen messages stored on her private email server contained highly classified information.

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Presumably, lawmakers on the House and Senate intelligence committees, which conduct oversight of the intelligence community, have seen the inspector general’s reports. But several key lawmakers, including the ranking Democrat on the Senate Intelligence Committee, Dianne Feinstein, declined to comment on the substance of the investigations or how such misconduct negatively impacts intelligence work.

Experts said this type of misconduct is problematic on multiple levels and can pose a threat to national security. Scott Amey, the general counsel of good government group the Project on Government Oversight, which tracks waste and fraud by government contractors, reviewed the reports for VICE News.

“The contractors are primarily to blame, but these records show that intel agencies don’t have a handle on the situation, and no one seems to enforce contract requirements,” Amey said. He likened the waste uncovered in the reports to an infamous instance of defense contractor excess uncovered during the Reagan administration. “We have stated that time-card fraud is the next $436 hammer, and these records prove that.”

“The mischarging is in the millions, which shows the lack of contract administration and oversight by everyone involved,” Amey added.

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In one case, a contractor for the massive Science Applications International Corporation admitted that “95% of his time spent on the Internet was for personal use” at the ODNI, and that he spent nearly all day emailing and instant-messaging his friends. He also worked for the National Counterintelligence Center, which is responsible for collecting, monitoring, and analyzing information on potential terrorist threats.

Over the course of six years, the person billed the government $974,470 for 10,573 hours of work, even though much of it, he said during an administrative hearing, was spent accessing “online dating and social accounts to view images of scantily clad or naked women.” After a two-year investigation, the person was found to have violated internal intelligence community policies, which included the misuse of government equipment. His access to classified information was revoked and he was fired.

Several contractors for Science Applications came under investigation for fraud and misconduct. For nearly a year, the inspector general investigated one who was assigned to ODNI for engaging in “graphic sexual chat” on a near daily basis from 2010 through 2013 using the agency’s internal network. The contractor “often engaged in as many as 20 exchanges per day seeking sex partners. The majority of [his] sex chat included attempts to establish after work sexual encounters, descriptions of desired sex acts and graphic descriptions of his genitalia,” according to the report.

After the inspector general learned that the contractor may have also used the agency’s network to “establish a sexual relationship with a possible minor residing in northern Virginia,” the watchdog referred the case to the FBI and a local task force on internet crimes against children. As the FBI began to probe the matter, ODNI officials detected that the contractor attempted to establish a sex chat with another possible minor in Colorado.

The contractor’s access to government computer systems was suspended and he was swiftly escorted out of ODNI facilities. The FBI and law enforcement in Virginia took over the investigation, but neither would comment on whether the case was ever prosecuted.

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In another case, a contractor working for the National Reconnaissance Office, which oversees spy satellites, allegedly abused his infant son between 2008 and 2009. The allegations surfaced in the contractor’s 2009 polygraph examination. But the spy satellite agency’s internal protocols apparently prohibited employees from reporting the incident to local law enforcement. The inspector general spent four years probing the case and recommended “a thorough review of the responsibility for reporting Federal and state crimes amongst the relevant NRO offices.”

In another report, the inspector general said it opened up an investigation into a General Dynamics subcontractor — he worked for technology company ManTech — and found that while assigned to work for ODNI from 2005 to 2012, he didn’t work. At all.

During a hearing, the contractor told the inspector general that he “took advantage of the lack of supervision and lack of work on the contract. He said that since 2005 he recorded [thousands of] hours which he did not work.” This cost taxpayers $410,300.

The nature of the contracts and the type of the intelligence work performed is classified and was redacted from all but one of the reports VICE News obtained. (In that case, a program manager was found to have done nothing wrong when he played a role in selecting Honeywell as a contractor after his wife inherited about $45,000 in Honeywell stock.) But intelligence sources said the watchdog’s investigations could involve contractors who work on any number of programs that involve analyzing NSA signals intelligence, CIA covert operations, and sensitive military programs and operations.

The outsourcing of intelligence work exploded after 9/11, and now five major corporations control most of it. Budget cutbacks were partly responsible for the explosion, and experienced people who worked for the government were lured to the private sector by higher pay. But outsourcing is risky because government agencies don’t have an adequate workforce to oversee the contractors, meaning there’s plenty of opportunity for waste, fraud, and abuse.

“It’s a lot easier to track people and their work when fewer government and contractor program and personnel layers exist,” said Amey, the good government group lawyer. “The move to outsource work seems to come with an acceptance of risk and tolerance for waste and fraud.”

And, perhaps, negligence. The reports show that contractors and employees with access to top-secret information used public Wi-Fi to perform their work, at times on their personal computers, and in so doing risked exposing classified intelligence information.

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Of all the investigations the watchdog launched over the past three years, only one involved a media leak. In 2012, McClatchy reporter Marisa Taylor obtained a letter sent to Congress by the inspector general of the National Reconnaissance Office. The letter regarded claims that an official there retaliated against four whistleblowers who raised red flags about contracting crimes.

Ultimately, the Intelligence Community Inspector General was unable to determine who was responsible for leaking the letter to Taylor (it appeared to have been a member of Congress). But as the subsequent report said, the letter did not contain “restricted handling guidance and was unclassified, [and] the release of the letter was not a criminal act as typically required in official leak investigations.”

Steven Aftergood, the executive director of the Project on Government Secrecy at the Federation of American Scientists, told VICE News the kind of widespread abuse by government contractors revealed by the reports “defrauds the taxpayer.”

“More subtly, it spreads corruption among the workforce and reduces expectations of competence and high performance,” Aftergood said. “Contractors have always played an important role in intelligence, but in recent years they have assumed greater prominence in intelligence collection, analysis, and production. So messing around on the job could occasionally have serious consequences.”

The bright side, Aftergood said, is that the watchdog is “actively investigating” the misconduct and aggressively trying to weed it out.

Read the documents in full below:

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