Wednesday, May 28, 2008

Machete Attack in Bromley, Kent

It said in the Metro today that on Monday night (26th May 2008) 5 men were injured when a gang of 15 men wielding machetes burst in to the Bird in hand Pub in bromley and threatened to kill everyone . Two men wre seriously injured and three received minor injuries during the attack. all the victims were aged between 30 and 50 years old . One regular said 'They started hacking at people and shouting"We're going to kill you" I saw one on the men who was stabbed in the stomach. You could see all of his insides and there was blood everywhere. It was like a scene out of a Slasher film' Four men were arrested over the Bird In Hand stabbings...

Thursday, May 15, 2008

Is this why they named the horse at today's York Races Fascinating Rhythm?

Carlyle Group May Buy Major CIA Contractor: Booz Allen Hamilton

The Carlyle Group, one of the world’s largest private equity funds, may soon acquire the $2 billion government contracting business of consulting giant Booz Allen gHamilton, one of the biggest suppliers of technology and personnel to the U.S. government’s spy agencies. Carlyle manages more than $75 billion in assets and has bought and sold a long string of military contractors since the early 1990s. But in recent years it has significantly reduced its investments in that industry. If it goes ahead with the widely reported plan to buy Booz Allen, it will re-emerge as the owner of one of America’s largest private intelligence armies.

Reports of a potential Carlyle acquisition of Booz Allen’s government unit began circulating amon U.S. military contractors in December 2007, after Booz Allen’s senior partners and board members – a group of 300 vice presidents who own the privately-held firm – gathered at company headquarters in McLean, Virginia, for an extraordinary two-day meeting.

According to a December 15 letter to Booz Allen employees from CEO Ralph W. Shrader that was released by the firm, the vice presidents signed off on a “new strategic direction” that would involve separating the company’s commercial and government units and operating them as separate companies. That was widely seen, both inside and outside the company, as a sign that a sale of one or both of the units was imminent. Shrader said the company hoped to come to a resolution of the issues involved by March 31, 2008.

In January 2008, major newspapers – each quoting unnamed people close to the situation – reported that discussions between Booz Allen and Carlyle about the sale of the government unit were underway. According to the Wall Street Journal, the deal will be “centered on Booz Allen’s influence in defense and intelligence contracting. If an agreement is reached the sale price will likely be around $2 billion.”

Christopher Ullman, Carlyle’s chief spokesman, could neither confirm nor deny that a deal was in the works, and declined to comment to CorpWatch about the reports. Because of Carlyle’s long experience in the defense sector, he added, such companies “would be a priority for us when the price is right and it’s the right fit for us.” George Farrar, a Booz Allen spokesman, said his company “has refused to discuss particulars of any ongoing discussions” and would not comment beyond what Shrader wrote in his December 15 missive to Booz Allen’s workforce.

Who Is Booz Allen Hamilton?

In 2006, Booz Allen Hamilton, a privately held company based in McLean, Virginia, had a global staff of 18,000 and annual revenues of $3.7 billion. Its work for U.S. government agencies accounts for more than 50 percent of its business. Notably Booz Allen is a key adviser and prime contractor to all of the major U.S. intelligence agencies – the Central Intelligence Agency (CIA), the Defense Intelligence Agency (DIA), the National Geospatial-Intelligence Agency (NGA), the National Reconnaissance Office (NRO), the National Security Agency (NSA), and – as well as the Department of Homeland Security (DHS), the National Counterterrorism Center, the Department of Defense and most of the Pentagon’s combatant commands.


Shadow Intelligence Agency

Booz Allen prides itself on the long-term personal relationships it has forged between its personnel and their government clients. “We stay for a lifetime,” Mark J. Gerencser, the senior vice president in charge of Booz Allen’s government contracting division, remarked in 2006. A quick study of their biographies posted on Booz Allen’s Website suggests that this is indeed true – the senior management have shuttled back and forth between the company and the government for their entire lives.

As the director of Booz Allen’s U.S. government business, for example, Gerencser serves in “several broad-based roles,” including “representing industry” to the Office of the Secretary of Defense and the Joint Chiefs of Staff, which manage the Pentagon’s vast intelligence operations. He is also a member of Booz Allen’s leadership team that sets the strategic direction of the company, and has run many of the war games staged by Booz Allen for its government clients.

Just below him in the company’s intelligence hierarchy is Ken Wiegand, another senior vice president. Weigand came to Booz Allen in 1983 after working for a decade in Air Force intelligence, and now leads the firm’s work for national intelligence and law enforcement agencies and the Department of Homeland Security. His specialty, the Website says, includes imagery intelligence operations, which are managed by the NGA, one of Booz Allen’s most important clients.

Senior vice president Joseph W. Mahaffee, a veteran of naval intelligence, is the leader of Booz Allen’s Maryland procurement office business, which puts him in charge of the company’s contracts with the NSA in Fort Meade. He focuses on “meeting the Information Assurance mission objectives” of the NSA with various technology services, including systems engineering, software development and “advanced telecommunications analysis.”

Another key Booz Allen figure at the NSA is Marty Hill, who came to the company after a 35-year career in signals intelligence and electronic warfare and previously served as an expert on “information operations capabilities and policy” for Donald Rumsfeld’s Pentagon. He leads of team of 1,200 professionals engaged in all aspects of “signals intelligence” including technical analysis, systems development and operations.

Vice President Pamela Lentz is a former cryptology officer with the Navy and once worked as a program manager for TRW, one of the nation’s oldest intelligence contractors (it is now owned by Northrop Grumman). She is Booz Allen’s “client service officer” for the DIA and other military intelligence markets, which includes intelligence units within the Navy, Air Force, Army, the unified combatant commands and the undersecretary of defense for intelligence. Among other tasks, Lentz manages a 120-person Booz Allen team that supports the NRO, the Pentagon agency that manages the nation’s military spy satellites. She also runs a task force that supports human intelligence collection efforts at the DIA.

Vice President Laurene Gallo, a former intelligence analyst at the NSA, leads a Booz Allen “intelligence research and analysis” team that support several agencies, including the CIA, the DNI and the National Counterterrrorism Center. Vice President Richard Wilhelm, whose job at Booz Allen is to work with the CIA and the ODNI, came to the company after a long career in U.S. intelligence that included stints directing the Joint Intelligence Center for Iraq during Operation Desert Storm and the NSA’s first director of information warfare.

Vice President William Wansley, a former Army intelligence officer, leads a team of experts in “strategic and business planning” who support the CIA’s National Clandestine Service, the part of the CIA that conducts covert operations and recruits foreign spies, as well as the DNI. Another vice president Robert W. Noonan, a retired Army lieutenant general who once served as the Army’s deputy chief of staff for intelligence and the commanding general of the U.S. Army’s Intelligence and Security Command, is in charge of expanding Booz Allen’s military intelligence business within all the armed services, the combatant commands, the DIA and the Office of the Secretary of Defense.

It is each of these vice presidents who are poised to personally profit from a corporate takeover by the Carlyle Group.

On its website, Booz Allen describes its intelligence work as part of its broader expertise in information technology. “Whether dealing with homeland security, peacekeeping operations, or the battlefield, success depend on the ability to collect, safeguard, store, distribute, fuse, and share information – on getting the right information to the right place at the right time,” it says. “Our security professionals work in partnership with clients to develop capabilities … for protecting information and networks against cyber and physical threats.”

That has not always been the case: Booz Allen Hamilton was founded as a management consultancy in 1914 in Chicago by three businessmen whose surnames gave the firm its name. In 1940, after more than three decades of giving advice to top ranking companies in America’s manufacturing and service economy, such as Montgomery Ward, Goodyear Tire and the Illinois State Railroad, Booz Allen started working for the U.S. military, where its clients included the Army, the Navy, and, after the war, the Air Force and the Pentagon.

Its initial contracts with the Navy in 1940 set the pace for its military work: as a management consultant, Booz Allen helped the Navy restructure for World War II and permeated its ranks with contractors (“Each Navy bureau had a Booz rep,” Investors Daily reported in a 2005 profile of the firm). That relationship served as a template for Booz Allen’s later work in intelligence and national security where its personnel worked inside government agencies alongside public employees.

Since the late-1990s, Booz Allen has forged a particularly close relationship with the NSA, the spy agency that monitors global telephone, e-mail and Internet traffic for the U.S. military and political leaders, which hired Booz Allen as its chief outside consultant on Project Groundbreaker. This $4 billion project outsourced the NSA’s internal communications and networking systems to a consortium led by Computer Sciences Corporation (CSC) and the IT subsidiary of Northrop Grumman.

Today, among the many services Booz Allen provides to intelligence agencies, according to its Website, are war-gaming – simulated drills in which military and intelligence officials test their response to potential threats like terrorist attacks – as well as data-mining and analysis of imagery and intelligence picked up by U.S. spy satellites, the design of cryptographic, or code-breaking, systems (an NSA specialty) and “outsourcing/privatization strategy and planning.” The company’s 2007 annual report spells out several other areas of expertise, including “all source analysis,” an intelligence specialty managed by the CIA and the Office of the Director of National Intelligence (DNI) that draws on public sources of information, such as foreign newspapers and textbooks, to add texture to data gathered by spies and electronic surveillance.

According to the company’s annual report, Booz Allen is also working on one of the most important spy initiatives launched in recent years: the Cryptographic Modernization Program. Air Force General John C. Koziol, the commander of the Air Force Intelligence, Surveillance and Reconnaissance Agency, described this program as an attempt to combine a variety of intelligence technologies to pick up tell-tale signs of chemicals and other substances – into a single electronic package that can be used by combat and special operations commanders to track the enemy.

Booz Allen is a full partner in the project, according to General Koziol, an idea that has been “fully endorsed” by the Director of National Intelligence Michael McConnell, the nation’s spy chief – himself a Booz Allen alumnus


Revolving Door

To carry out its tasks at the intelligence agencies, Booz Allen has hired a dazzling array of former national security officials and foot-soldiers. In 2002, Information Week reported that Booz Allen had more than 1,000 former intelligence officers on its payroll. In 2007, as this reporter was researching a chapter about Booz Allen for his forthcoming book, he asked the company if it could confirm that number or provide a more accurate one, and received an e-mail reply from spokesman George Farrar: “It is certainly possible, but as a privately held corporation we consider that information to be proprietary and do not disclose.”

Buried deep on the company's Web site, however, a much larger number is confirmed in an explanation of a Booz Allen information technology contract with the DIA, which carries out intelligence for the Joint Chiefs of Staff and the Office of the Secretary of Defense. It stated that the Booz Allen team “employs more than 10,000 TS/SCI cleared personnel.” TS/SCI stands for top secret-sensitive compartmented intelligence, one of the highest possible security ratings, which would make Booz Allen one of the largest employers of cleared personnel in the United States.

Many of these former intelligence officers at Booz Allen, do the same jobs as they did for the government. For example, Keith Hall, a Booz Allen vice president initially worked in Army intelligence and on one of the congressional intelligence committees. In the early 1990s, he was hired by the CIA to manage budgets and policy development for then-Director of Central Intelligence Robert Gates. During that time, he played an instrumental role in creating the National Imagery and Mapping Agency, which was later renamed the National Geospatial-Intelligence Agency. During the Clinton administration, Hall was named Assistant Secretary of the Air Force for space programs and, simultaneously, director of the NRO, the agency that manages the nation’s military satellite program.

Now, as a Booz Allen executive, Hall leads a “strategic intelligence initiative” that integrates the company’s extensive contracting activities for the NRO and the NGA. Recently, one of his most important tasks involved chairing a 2005 homeland security study group that recommended a major expansion of information and data-sharing between U.S. spy agencies that work outside the country and domestic law enforcement, like the Federal Bureau of Investigation (FBI). “The study’s findings have become a road map for the government in making decisions related to critical information sharing in support of homeland security,” Booz Allen boasts in its 2007 annual report. (See our article, Domestic Spying, Inc.)



Who is the Carlyle Group?

The Carlyle Group is a private equity fund – a group of financial advisers that invests large sums of money from pension funds, large corporations, wealthy individuals and foreign banks into privately held companies in many different industries, and then run those companies until the market is right to sell them at a substantial profit. During the early years of the George W. Bush administration, it gained attention – and some notoriety – because of the large number of former high-ranking political figures it had attracted as advisers and managers. They included former President George H.W. Bush, former Secretary of State James Baker and former British Prime Minister John Major.

Shortly after the September 11, 2001, attacks on New York and Washington, Carlyle was in the news again when newspapers revealed that Osama Bin Laden’s family in Saudi Arabia – which owns one of the world’s largest construction companies – held a stake in the fund. The stake was quickly liquidated after the news broke.

Until the recent slowdown in the financial markets, the private equity industry, with over $160 billion under its control, was widely seen as one of the most important drivers of the global economy, pumping venture capital into high-tech startups and buy-out capital into corporate reorganizations worldwide. They are extremely active in Britain, where more than 20 percent of the private sector workforce is employed by companies that are, or have been, the targets of private equity investments. Business magazines credit them with breaking up some of America’s worst-run conglomerates and bringing competition to Japan’s highly regulated and incestuous banking industry.

“Private equity funds now wield much of the transformational power at the heart of the capitalist system,” The Economist magazine recently observed. In addition to Carlyle, which has more than $75 billion under management, industry leaders include the Blackstone Group ($30 billion), Bain Capital ($27 billion), Kohlberg, Kravis, Roberts & Co. ($26 billion) and Texas Pacific Group ($20 billion).

Carlyle, the largest of the funds, is best-known for owning large military contractors and aerospace contractors, such as United Defense Industries, the maker of the Bradley Fighting Vehicle and other weapons systems, which it sold to BAE Systems in 2004, and Vought Aircraft Industries, a major producer of structural assemblies for commercial, military and business aircraft, which it still holds. Other military contractors that have gone through Carlyle’s hands include EG&G, LTV Aerospace and Magnavox Electronic Systems.

During the 1990s, when it made most of these acquisitions, the fund was led by former Secretary of Defense Frank Carlucci, who served during the Carter administration as deputy director of the CIA. During his tenure, Carlyle bought and sold nearly a dozen companies active in the intelligence industry. They include BDM International, an influential company that, during the 1990s, provided some of the U.S. Army’s first contract interpreters and, through a subsidiary known as Vinnell Corporation, once trained the Saudi National Guard. It was eventually sold to Northrop Grumman and is now part of that company’s huge intelligence division.

U.S. Investigative Service, which Carlyle bought in 1996 and sold in 2007, is the largest provider of security investigations for employees and contractors hired by the Pentagon, the National Security Agency and other agencies, and in recent months has been training Iraqi police commandoes under contract to the Pentagon. (See CorpWatch coverage of USIS.)

Another spectacular acquisition was QinetiQ, the privatized arm of Britain’s military research corporation. It was acquired by Carlyle in 2003, sold in 2007, and recently emerged as one of the premiere U.S. intelligence contractors – after netting a $470 million profit for Carlyle. (See our article “QinetiQ goes Kinetic”.)

Carlyle, however, has divested itself of most of its military holdings. “In our current U.S. portfolio, there’s none,” Carlyle’s Ullman told CorpWatch. Today, most of its investments are concentrated in commercial industries, such as real estate and banking. During a few months’ span in 2006, for instance, Carlyle did a “manufacturing deal, an education deal, a consumer products deal, and buildings deal, and a financial services deal,” according to an account in the Washingtonian magazine. Its holdings are extensive and pervasive: every time you rent a car from Hertz, catch a quick breakfast at Dunkin’ Donuts or get ice-cream at Baskin-Robbins, you’re sending money to Carlyle.

A $2 billion acquisition of Booz Allen’s contracting business would therefore put Carlyle back in the big leagues of military contractors.
Other key executives who came to Booz Allen from the spy agencies include R. James Woolsey, the former director of the CIA, who was hired in 2003 to run Booz Allen’s “global resilience” division, which advises corporations on security issues, and Joan A. Dempsey, a career U.S. intelligence official and a former top aide to former CIA Director George Tenet, who was hired in 2005 as a Booz Allen vice president with responsibility to advise the DNI and other key intelligence agencies. (See box for list of other key corporate figures that previously worked in government intelligence agencies.)

It is these senior managers who would most likely benefit from a sale to Carlyle.

Unlike many of its competitors in the intelligence industry, Booz Allen is a privately held company whose shares are owned by its 300 vice presidents of whom “approximately 80 are in government support,” Booz Allen’s Farrar told CorpWatch. For these vice presidents, Carlyle’s infusion of capital, and its $2 billion buyout of their shares, will make them very rich men and women indeed. After all, $2 billion divided by 80 is $25 million; even if Booz Allen’s shares were divided equally, which is unlikely, that’s an astounding windfall for any executive.


Booz Allen CEO Ralph Shrader

The man most responsible for Booz Allen’s growth as an intelligence contractor is Ralph Shrader, who has been running the company as chairman and CEO since 1998. Shrader, an electrical engineer by training, came to Booz Allen in 1974 after serving at senior management levels of two prominent telecommunications companies – Western Union, where he was national director of advanced systems planning, and RCA, where he served in the company’s government communications system division. These positions prepared him well for his later work at Booz Allen as a consultant to the telecommunications industry. According to his official biography, he “led major assignments” for the industry as a Booz Allen consultant and was deeply involved in the company’s “landmark work for AT&T” when that company was broken up by the government.

In those assignments, Shrader may have been exposed to the telecommunications industry’s close ties to U.S. intelligence. During the years he worked for Western Union and RCA, those companies, along with ITT World Communications, were part of a secret surveillance program known as Minaret in which telecommunication companies, with the concurrence of a handful of high-ranking executives, handed over to the NSA information on all incoming and outgoing U.S. telephone calls and telegrams – an early version of the NSA’s warrantless surveillance program launched by the Bush administration after the September 11th attacks. Minaret, and the involvement of the private companies in NSA spying, was exposed by the congressional committees investigating intelligence abuse in the mid-1970s, and was the inspiration behind the 1978 Foreign Intelligence Surveillance Act (FISA), which set the rules – including the important requirement for warrants – for domestic surveillance of telephone traffic.

None of this is alluded to in Booz Allen’s official literature, of course; but Shrader, upon his appointment as CEO in 1998, mentioned in a rare press interview (with the Financial Times) that the most relevant background for his new position of chief executive was his experience working for telecommunications clients and doing classified military work for the U.S. government – “something of a Booz specialty,” the FT pointed out.

Booz Allen adds on its website that Shrader, as CEO, has also “led important programs for the U.S. National Communications System and the Defense Information Systems Agency,” two of the most important classified intelligence networks in use by the federal government. Under Shrader, Booz Allen also became the NSA’s most important outside consultant, culminating in its advisory role in Project Groundbreaker. That project, which awarded its first contracts in the summer of 2001, put Booz Allen in a prime position to capture NSA and other intelligence work in the aftermath of the September 11th attacks, when intelligence budgets, and NSA surveillance, increased substantially.

“War on Terror” Contracts

After September 11th, 2001, by Booz Allen’s own account, the firm helped the government reshape its spying capabilities to match the new era of counterinsurgencies and terrorist threats. “The nature of intelligence changed dramatically in the wake of 9/11,” Christopher Ling, a Booz Allen vice president, explains in the company’s most recent annual report. “An entire analytic production system geared to detect large-scale cold war adversarial capabilities was suddenly required to transform.” At Booz Allen, he added, “We are finding innovative ways to integrate intelligence and operations, enabled by advanced visualization and data management capabilities, which has allowed us to pioneer tactics, techniques, and procedures.”

In addition to serving as a prime contractor on Admiral John Poindexter’s controversial Total Information Awareness project (see box), Booz Allen was active on both the military and economic fronts on the “war on terror.” For the Pentagon, it helped develop the “blue force” tracking system that allows soldiers and commanders in Iraq and other battlegrounds the ability to electronically identify friendly troops. And in the weeks leading up to the invasion of Iraq, Booz Allen sponsored and organized several conferences aimed at helping U.S. corporations secure contracts in occupied Baghdad, with former CIA director Woolsey, one of the most ardent backers of the war, as a keynote speaker.



Michael McConnell

Booz Allen Hamilton’s most illustrious alumnus is Michael McConnell, the current Director of National Intelligence, the top spy job in the country, who epitomizes the term revolving door, spinning from government job to industry and back again.

McConnell was a senior Pentagon official during George Bush Senior’s administration and the first Gulf War, where he worked for Dick Cheney, then the Secretary of Defense, as the chief intelligence adviser to General Colin Powell, the chairman of the Joint Chiefs of Staff. Cheney was so impressed with McConnell’s work during the war that he appointed him to head the NSA in 1993 (he later intervened personally to convince McConnell to take the DNI job in 2007).

McConnell subsequently spent more than 10 years as a Booz Allen senior vice president in charge of the company’s extensive contracts in military intelligence and information operations for the Pentagon. In that job, his official biography states, McConnell provided intelligence support to "the U.S. Unified Combatant Commanders, the Director of National Intelligence Agencies, and the Military Service Intelligence Directors." That made him a close colleague of not only Donald Rumsfeld, who ran the Pentagon from 2001 to 2007, but of Vice President Cheney, who has served President Bush as a kind of intelligence godfather since the earliest days of the administration.

As Booz Allen’s chief intelligence liaison to the Pentagon, McConnell was at the center of action, both before and after the September 11 attacks. During the first six years of the Bush administration, Booz Allen’s contracts with the U.S. government rose dramatically, from $626,000 in 2000 to $1.6 billion in 2006. McConnell and his staff at Booz Allen were deeply involved in some of the Bush administration’s most controversial counterterrorism programs. They included the Pentagon’s infamous Total Information Awareness data-mining scheme run by former Navy Admiral John Poindexter, which was an attempt to collect information on potential terrorists in America from phone records, credit card receipts and other databases. (Congress cancelled the program over civil liberties concerns, but much of the work was transferred to the NSA, where Booz Allen continued to receive the contracts.)

In 2002, when the CIA launched a financial intelligence project to track terrorist financing with the secret cooperation of SWIFT, the Brussels-based international banking consortium, Booz Allen won a contract to serve as an “outside” auditor of the project.

In January 2007, McConnell resigned from Booz Allen after he was appointed by President George W. Bush to his current job. He now oversees all 16 U.S. intelligence agencies, and thus much of Booz Allen’s government business. (See this reporter's 2007 Salon article.)

Under Shrader’s leadership, Booz Allen played an instrumental role after September 11th in proselytizing for a greater corporate role in national and homeland security. This was important, the Booz Allen CEO said at a CEO summit he organized in 2002, because “business leaders cannot opt out of geopolitics and leave the job of security solely to government and the military.”

Deepening the corporate alliance with the Bush administration and its war on terror also had significant advantages for Booz Allen and its fellow corporations: on one hand, it drastically increased their contracts with military and intelligence agencies; and on the other, homeland security provided a convenient excuse for reducing government oversight and regulation. These dual interests were spelled out in unusual detail in 2004 by Richard Wilhelm, a former CIA and NSA officer who once served as national security adviser to former Vice President Al Gore and now leads Booz Allen’s business with the CIA and the Office of the DNI.

Speaking to a conference on information-sharing and counterterrorism, Wilhelm explained that the “right mix of policies” for business should include a wide range of “incentives” and “cooperative arrangements,” including “appropriate protections from Freedom of Information Act requirements and other unintended consequences of more open information sharing.” Government, he argued, should “help make the business case, and then sweeten it – because industry will share information when there is a business case to do so.” In other words, corporations were happy to participate in the exchange of information about terrorism and other security threats, but only if there were enough rewards. And for Booz Allen, those rewards have been sweet indeed, as a short list of their recent unclassified contracts attests. They include:

• A $6.3 million contract to provide research on 3-D facial recognition biometric software for the Information Assurance Technical Analysis Center at Offut Air Force Base in Nebraska, awarded in 2008.
• A $48 million contract with the U.S. Air Force to conduct research on “survivability and lethality implications” of an Air Force vehicle program, awarded in 2008.
• In a partnership with CACI International, EDS, Lockheed Martin, SAIC and SRA, the right to bid on $12.2 billion worth of contracts for telecom and IT services for the Defense Information Systems Agency (DISA), awarded in 2007.
• Participation in a consortium of seven companies that will bid on up to $20 billion worth of work in Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance – a mouthful of a term usually referred to as C4ISR – for the Army’s Communications Electronics Command, which is based in Fort Monmouth, New Jersey, awarded in 2006.
• A five-year, $25o million contract to provide “systems engineering technical assistance” to the Science and Technology Directorate of the Department of Homeland Security, signed in 2005.

Little Congressional Scrutiny?

In spite of its tremendous power as a contractor, Booz Allen has received very little criticism or even scrutiny from the U.S. Congress. In January 2007, the Senate had a rare opportunity to inquire about the company when it held hearings on Michael McConnell’s nomination as Director of National Intelligence (see box). Prior to the hearing, several senators said they would question McConnell about Booz Allen’s role as a contractor; but the hearing was a desultory affair, and few questions were asked of the new DNI about the high level of contracting among the spy agencies or the specific role of Booz Allen.

A month later, a Booz Allen contract with the Department of Homeland Security came under close scrutiny in the House. In February 2007, Henry Waxman, a Democratic Congressman from California, the chairman of the House Committee on Government Oversight and Reform, charged that Booz Allen had a significant conflict of interest over its contract to oversee an $8 billion contract with the DHS Secure Border Initiative known as SBI-Net. Under the contract, Boeing and other companies will build a “virtual fence” of cameras, radar and sensors that will transmit imagery and data to border patrol agents working along the U.S. borders with Canada and Mexico. (See CorpWatch's “Fencing the Border".)

The conflict arose, said Waxman, because Booz Allen had long-standing business partnerships with Boeing, the prime contractor for SBI-Net, and could therefore not provide objective oversight of the program. At the hearing, Waxman pointed out to DHS officials that they had hired 98 people to oversee the SBI-Net contract. “But the problem is that 65 of these people don’t work for the government. They work for the contractor,” he said. “You’re relying on them to do the function that a government ordinarily would do.” DHS officials responded that Booz Allen had been hired for advice, not for oversight.

Waxman’s criticism could be made of a myriad of contracts Booz Allen holds with intelligence agencies. At the NSA, for example, it has advised the agency about several contracts that involve companies that Booz Allen has close business ties with. That is also true at the NRO, the NGA and the CIA. So far, however, no reports of conflicts of interest have emerged from Congress, which in any case exercises little oversight over intelligence contracts.

In another damaging report issued in 2007, the General Accounting Office, the audit arm of the U.S. Congress, found that the Department of Homeland Security was spending nearly $16 billion a year on goods and services from the private sector, making it the third-largest employer of contractors in the federal government. Among the beneficiaries of DHS’ spending was Booz Allen Hamilton, which in 2006 was awarded a $43 million no-bid contract to provide services to the DHS intelligence unit. Upon reading the $16 billion DHS figures in the GAO report, Joseph Lieberman, an independent U.S. senator from Connecticut, angrily commented: “plainly put, we need to know who is in charge at DHS – its managers and workers, or the contractors.”

The Washington Post later found that Booz Allen’s no-bid intelligence contract with DHS had ballooned in value from $2 million in 2003 to over $30 million in 2006 – 15 times its original value. When DHS lawyers first examined the Booz Allen deal, the Post said, they found it was “grossly beyond the scope” of the original contract and had violated government procurement rules. An open competition was ordered by DHS lawyers, but delayed for a year. During that time, the Post said, “the payments to Booz Allen more than doubled again under a second no-bid arrangement, to $73 million.”

Union Protests

So far, the only public criticism of the potential Carlyle-Booz Allen deal has come from the Service Employees International Union (SEIU), one of the country’s largest labor unions. Last year, the union launched a blistering attack on Carlyle and the private equity industry in a widely distributed report called “Behind the Buyouts: Inside the World of Private Equity.” The gist of the report was that Carlyle, Kohlberg, Kravis, Roberts (KKR) and other large private equity funds were undermining the U.S. economy by avoiding taxes and creating “harsh consequences,” such as layoffs, for workers and communities. In late 2007, when Carlyle acquired the assets of Manor Care, a chain of nursing homes where the SEIU is trying to organize workers, the union stepped up its campaign.
Of Unions, Pension Funds and the Carlyle Group

The SEIU’s campaign material on the Carlyle Group, including a 40-page white paper on private equity issued last year, fails to mention a salient fact: that many SEIU members are affiliated with a pension fund that holds a significant stake in the Carlyle Group.

That fund is the California Public Employees Retirement System, the world’s largest public pension fund, often known as CalPERS. It has held a five percent stake in Carlyle’s core management group since 2000, and therefore profits every time Carlyle makes money from one of its investments. Many of the California state officials who sit on CalPERS boards are also members of the SEIU, although they officially only represent their employer, not the union.

In 2001, this reporter attended a meeting of the CalPERS investment board where Carlyle’s three founding managers appeared as witnesses. The public meeting took place at a time when Carlyle was a hot media topic because of its close ties to the Bush administration and its prominence as the nation’s 11th largest military contractor. Several SEIU officials attended the meeting, and the questioning of Carlyle was led by a CalPERS official who belonged to the SEIU. However, the investment board didn’t ask about Carlyle’s military industry investments, and instead posed a single, softball question about Carlyle’s views on the U.S. investment climate.

Asked why the SEIU hasn’t mentioned CalPERS’ stake in Carlyle in any of its literature, Stephen Lerner, the director of SEIU’s Private Equity Project, replied that the union didn’t start investigating the pension fund’s role in Carlyle until 2007.

Until then, “we never really thought about CalPERS’ investment in Carlyle,” he said. “Now that we’re digging in deeper, we’re raising lots of questions.” Under SEIU’s initiative, a California lawmaker has introduced legislation that would prohibit CalPERS from investing in private equity funds owned in part by overseas funds from countries that don’t “generally respect human rights.” According to an SEIU handout, the legislation “is only applicable to private equity firms in which sovereign wealth funds have an ownership stake,” such as Carlyle.

Carlyle’s Ullman responded that the legislation could hurt the people it is supposed to protect. California lawmakers “should consider the detrimental impact on California pensioners who have benefited greatly from CalPERS’ investment in, and ownership of, the Carlyle Group,” he told CorpWatch.

In January 2008, after rumors of a Carlyle takeover of Booz Allen surfaced in the press, SEIU issued a blistering press release denouncing the potential deal. The union’s criticism of the proposed acquisition didn’t focus on Booz Allen’s role in intelligence outsourcing but on Carlyle’s ties with the Mubadala Development fund of the Government of Abu Dhabi. In 2007, that fund paid $1.35 billion to buy a 7.5 percent ownership stake in Carlyle’s general partnership.

As a result of that investment, the SEIU charged, Carlyle was risking national security. “The potential for a Carlyle Group-Booz Allen buyout demands urgency on the part of lawmakers and regulators to examine the risks faced by the U.S. when foreign governments potentially have access to classified and other sensitive national security information through their stake in U.S. companies,” the union declared in a press release. In an interview with CorpWatch, Stephen Lerner, the director of SEIU’s Private Equity Project, said the union launched this nationalist campaign out of concern that classified information from Booz Allen could leak into the hands of the Abu Dhabi fund, thus compromising U.S. security interests.

“When you combine buyout firms, which have much less reporting requirements because they are private, with opaque sovereign wealth funds, you get a toxic stew of secrecy,” he said. Asked how or why Booz Allen executives might leak classified information to a foreign government, he replied: “The point is, you have no way of knowing if they would or wouldn’t.” He added that, while the SEIU has not taken a position on Booz Allen’s extensive role in intelligence outsourcing, the issue of “government jobs being done by private contractors” might emerge in the future for the union.

(The SEIU does not mention in its material that the California Public Employees Retirement System, the pension fund for California state retirees where the SEIU has significant influence, owns five percent of the Carlyle Group – see box.)

Carlyle’s Ullman, who recently discussed the union campaign with SEIU president Andrew Stern during a conference on private equity, rejected the SEIU’s claims. The charges that the Abu Dhabi investment could jeopardize national security “is really an obscene allegation,” he said. Ullman added that the Abu Dhabi fund was a “passive investor” in Carlyle and would have no role in the management of Carlyle companies. “Carlyle’s portfolio companies have a pristine track record in handling sensitive government data,” he said. “Giving top secret and classified data to foreign governments is known as treason, and is punishable by jail and worse. That would be a fairly strong impediment” to leaks.

In any case, there is virtually no evidence to suggest that any US intelligence contractor has leaked classified information, and it’s unlikely the union’s allegations will be a factor if the Carlyle Group does decide to acquire Booz Allen Hamilton.

Tim Shorrock’s book on the outsourcing of U.S. intelligence, Spies for Hire, will be published in May by Simon & Schuster.

Tuesday, May 13, 2008

Some of Vodafone's history and its secret Sim Card Partner



History

In 1982 Racal Electronics plc's subsidiary Racal Strategic Radio Ltd. won one of two UK cellular telephone network licences.[3][4] The network, known as Racal Vodafone was 80% owned by Racal, with Millicom and the Hambros Technology Trust owning 15% and 5% respectively. vodafone was launched on 1 January 1985.[5] Racal Strategic Radio was renamed Racal Telecommunications Group Limited in 1985.[4] On 29 December 1986 Racal Electronics bought out the minority shareholders of vodafone for GB£110 million.[6]

In September 1988 the company was again renamed Racal Telecom and on 26 October 1988 Racal Electronics floated 20% of the company. The flotation valued Racal Telecom at GB£1.7 billion.[7] On 16 September 1991 Racal Telecom was demerged from Racal Electronics as Vodafone Group.[8]


Racal Electronics plc was a British defence electronics firm purchased by Thomson-CSF (now Thales Group) in 2000.


History

Racal was created in 1950 as Racal Ltd, the name being derived from the partners RAymond Brown and George CALder Cunningham. The first factory was located in Isleworth, West London. Although Racal had won a Royal Navy contract to build and supply a variant of the American Collins Model 51-J Radio Receiver, they were not granted a license to build these sets by Collins Inc. This meant that Racal had to design and build a radio receiver from scratch. The result was the justly famous 'RA17' - in production from 1955 to at least 1973 - designed in cooperation with Dr. Trevor Wadley and utilising his famed Wadley Loop circuit.

In 1979, Racal bought Decca Radar forming Racal-Decca.

In 1983, Racal competed for one of the original licences to operate a cellular network in the UK, both it and British Telecom were successful. Racal established the Racal Telecom (now Vodafone) subsidiary. In 1988, 20% of Racal Telecom was floated on the London Stock Exchange. This would lead to the situation where Racal Electronics was valued at less than its shareholding in Racal Telecom. Sir Ernest Harrison (Racal Chairman) demerged Racal Telecom in October 1991 forcing a positive valuation on the rest of Racal (colloquially known in the City as "the rump"). Vodafone would later become the largest mobile network in the world and the highest valued company on the FTSE 100. Immediately following the demerger, Williams Holdings launched a takeover bid for Racal. The bid, valued at £740m, failed.

In 1984, Racal bought Chubb, a security company that manufactured safes and locks. In 1992, Chubb was demerged from Racal and was subsequently taken over by Willams Holdings in 1997 for £1.3bn.



Vodafone's Sim Card Partner




Giesecke & Devrient (G&D) is a globally operating technology group. Established in 1852, the company initially specialized in banknote and securities printing, later adding automatic currency processing equipment to its product portfolio. Today, G&D is also a leading supplier of smart cards and cutting-edge system solutions in the fields of telecommunications, electronic payments, transportation, health care, identity, customer loyalty, pay-TV, multimedia and Internet security (public key infrastructure).

International orientation

The G&D Group, based in Munich/Germany, comprises above 50 subsidiaries and joint ventures in all parts of the world, employing 8,295 people, with around 4,947 outside Germany. In the financial year 2006 the group generated sales worth euro 1.3 billion. G&D has a strong international orientation. Subsidiaries and joint ventures operate in Germany, Argentina, Australia, Bahrain, Belgium, Brazil, Canada, China, Dubai, Egypt, France, Greece, Hong Kong, India, Japan, Luxembourg, Malaysia, Mexico, Morocco, Nigeria, Portugal, Russia, Singapore, South Korea, Spain, South Africa, Taiwan, Turkey, the UK and the USA.

Website:G&D Group

Boris Berezovsky




Boris Abramovich Berezovsky (Russian: Бори́с Абра́мович Березо́вский) (born January 23, 1946), is a Russian business man, billionaire and former mathematician. He is best known for his role as a Russian oligarch, media tycoon and politician during the presidency of Boris Yeltsin in the 1990s.

He has been described by critics as the epitome of Russian "robber capitalism", but he denies having ever taken part in the violence that tainted Russian business during that era.

[1] Berezovsky was at the height of his power in the later Yeltsin years, when he was deputy secretary of Russia's security council, a friend of Boris Yeltsin's daughter Tatyana, and a member of the Yeltsin inner circle, or "family".[1]

Berezovsky made his fortune importing Mercedes cars into Russia in the 1990s and setting himself up as a middleman distributing cars made by Russia's Avtovaz. As well as taking ownership of the Sibneft oil company, he became the main shareholder in the country's main television channel, ORT, which he turned into a propaganda vehicle for Boris Yeltsin in the run-up to the 1996 presidential election. Although he helped Vladimir Putin enter the "family", and funded the party that formed Putin's parliamentary base, Putin moved to regain control of the ORT television station, and to curb the political ambitions of Russia's oligarchs, who were extremely unpopular with the average Russian.[2]

After the ascent of Putin to the Russian presidency, Berezovsky went into opposition and later fled to the United Kingdom where he was granted political asylum. He has since publicly stated that he is on a mission to bring down Putin "by force".[3][1] In the UK, he became associated with Akhmed Zakayev, Alexander Litvinenko and Alex Goldfarb in what has become known as the London Circle of Russian exiles. He is a founder of International Foundation for Civil Liberties.

Berezovsky has been accused by Russian authorities of being involved in the murders of several other leading critics of the Putin's regime, including FSB defector Alexander Litvinenko and journalist Anna Politkovskaya, in an attempt to destabilize the country and discredit Putin.

Arrest warrants for him have been issued in Russia[4] and Brazil[5] for allegations of fraud, embezzlement and money laundering, and he is currently under investigation by the Swiss Bundesanwaltschaft for money laundering.[6]


Berezovsky survived an assassination attempt in 1994 unharmed. There have been several other alleged assassination attempts on him which he accuses Russian agents of carrying out.