[Peace-discuss] SAIC and all that…

[Morton K. Brussel]

 From Vanity Fair, FYI.  --mkb

Washington's $8 Billion Shadow

Mega-contractors such as Halliburton and Bechtel supply the  
government with brawn. But the biggest, most powerful of the "body  
shops"—SAIC, which employs 44,000 people and took in $8 billion last  
year—sells brainpower, including a lot of the "expertise" behind the  
Iraq war.
by DONALD L. BARLETT and JAMES B. STEELE
March 2007


The McLean, Virginia, offices of Science Applications International  
Corporation, a "stealth company" with 9,000 government contracts,  
many of which involve secret intelligence work. Photograph by Coral  
von Zumwalt.
O
ne of the great staples of the modern Washington movie is the dark  
and ruthless corporation whose power extends into every cranny around  
the globe, whose technological expertise is without peer, whose  
secrets are unfathomable, whose riches defy calculation, and whose  
network of allies, in and out of government, is held together by webs  
of money, ambition, and fear. You've seen this movie a dozen times.  
Men in black coats step from limousines on wintry days and refer  
guardedly to unspeakable things. Surveillance cameras and  
eavesdropping devices are everywhere. Data scrolls across the movie  
screen in digital fonts. Computer keyboards clack softly. Seemingly  
honorable people at the summit of power—Cabinet secretaries, war  
heroes, presidents—turn out to be pathetic pawns of forces greater  
than anyone can imagine. And at the pinnacle of this dark and  
ruthless corporation is a relentless and well-tailored titan— 
omniscient, ironic, merciless—played by someone like Christopher  
Walken or Jon Voight.
To be sure, there isn't really such a corporation: the Omnivore  
Group, as it might be called. But if there were such a company—and,  
mind you, there isn't—it might look a lot like the largest  
government contractor you've never heard of: a company known simply  
by the nondescript initials SAIC (for Science Applications  
International Corporation), initials that are always spoken letter by  
letter rather than formed into a pronounceable acronym. SAIC  
maintains its headquarters in San Diego, but its center of gravity is  
in Washington, D.C. With a workforce of 44,000, it is the size of a  
full-fledged government agency—in fact, it is larger than the  
departments of Labor, Energy, and Housing and Urban Development  
combined. Its anonymous glass-and-steel Washington office—a gleaming  
corporate box like any other—lies in northern Virginia, not far from  
the headquarters of the C.I.A., whose byways it knows quite well.  
(More than half of SAIC's employees have security clearances.) SAIC  
has been awarded more individual government contracts than any other  
private company in America. The contracts number not in the dozens or  
scores or hundreds but in the thousands: SAIC currently holds some  
9,000 active federal contracts in all. More than a hundred of them  
are worth upwards of $10 million apiece. Two of them are worth more  
than $1 billion. The company's annual revenues, almost all of which  
come from the federal government, approached $8 billion in the 2006  
fiscal year, and they are continuing to climb. SAIC's goal is to  
reach as much as $12 billion in revenues by 2008. As for the  
financial yardstick that really gets Wall Street's attention— 
profitability—SAIC beats the S&P 500 average. Last year ExxonMobil,  
the world's largest oil company, posted a return on revenue of 11  
percent. For SAIC the figure was 11.9 percent. If "contract backlog"  
is any measure—that is, contracts negotiated and pending—the  
future seems assured. The backlog stands at $13.6 billion. That's one  
and a half times more than the backlog at KBR Inc., a subsidiary of  
the far better known government contractor once run by Vice President  
Dick Cheney, the Halliburton Company.
It is a simple fact of life these days that, owing to a deliberate  
decision to downsize government, Washington can operate only by  
paying private companies to perform a wide range of functions. To get  
some idea of the scale: contractors absorb the taxes paid by everyone  
in America with incomes under $100,000. In other words, more than 90  
percent of all taxpayers might as well remit everything they owe  
directly to SAIC or some other contractor rather than to the IRS. In  
Washington these companies go by the generic name "body shops"—they  
supply flesh-and-blood human beings to do the specialized work that  
government agencies no longer can. Often they do this work outside  
the public eye, and with little official oversight—even if it  
involves the most sensitive matters of national security. The  
Founding Fathers may have argued eloquently for a government of laws,  
not of men, but what we've got instead is a government of body shops.
T
he unhappy business practices of the past few years in Iraq—cost  
overruns, incompetence, and corruption on a pharaonic scale—have  
made the American public keenly aware of the activities of mega- 
contractors such as Halliburton and Bechtel. Although SAIC takes on  
government projects such as those pursued by contractors like these,  
it does not belong in exactly the same category. Halliburton and  
Bechtel supply the government's brawn. They pour concrete, roll out  
concertina wire, build infrastructure. They call on bullnecked men to  
provide protection.
In contrast, SAIC is a body shop in the brain business. It sells  
human beings who have a particular expertise—expertise about  
weapons, about homeland security, about surveillance, about computer  
systems, about "information dominance" and "information warfare." If  
the C.I.A. needs an outside expert to quietly check whether its  
employees are using their computers for personal business, it calls  
on SAIC. If the Immigration and Naturalization Service needs new  
record-keeping software, it calls on SAIC. Indeed, SAIC is willing to  
provide expertise about almost anything at all, if there happens to  
be a government contract out there to pay for it—as there almost  
always is. Whether SAIC actually possesses all the expertise that it  
sells is another story.
What everyone agrees on is this: No Washington contractor pursues  
government money with more ingenuity and perseverance than SAIC. No  
contractor seems to exploit conflicts of interest in Washington with  
more zeal. And no contractor cloaks its operations in greater  
secrecy. SAIC almost never touts its activities in public, preferring  
to stay well below the radar. An SAIC executive once gave a press  
interview and referred to the enterprise as a "stealth company," a  
characterization that is accurate and that has stuck. "Nobody knows  
who they are," says Glenn Grossenbacher, a Texas lawyer who has  
battled SAIC in court on a whistle-blowing case. "Everybody knows  
Northrop Grumman and G.E., but if you went out on the street and  
asked who the top 10 [defense] contractors are, I can guarantee you  
that SAIC would not be one of them."
Which is all the more remarkable in light of two developments. The  
first is a mounting collection of government audits and lawsuits  
brought by former employees for a variety of reasons, some of them  
personal and some coming under federal whistle-blower statutes. In a  
response to written queries, SAIC characterized itself as a "highly  
ethical company and responsible government contractor, committed to  
doing the right thing." But a review by Vanity Fair of thousands of  
pages of documents, including corporate e-mail messages, offers  
disturbing revelations about the company's inner workings, its  
culture, and its leadership.
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