Homeland Security Office Creates ‘Intelligence Spam,’ Insiders Say

By Andrew Becker and G.W. Schulz, CIRThis article was originally produced by the Center for Investigative Reporting.

In the days after the terrorist attacks on Sept. 11, 2001, the White House and Congress demanded the government find better ways to “connect the dots” of terror threats to prevent a repeat of the carnage.

A year later, a new bureaucracy was created to gather, analyze and share intelligence related to terrorism inside the United States. Now called the Office of Intelligence and Analysis at the Department of Homeland Security, it was envisioned as the center of gravity in a new era of domestic security.

But despite a clear mandate from Congress and hundreds of millions spent on personnel and technology, the office has fallen far short of its mission and done little to improve the accuracy and quality of the nation’s intelligence data, according to an examination by the Center for Investigative Reporting.

The office stands as an acute example of the federal government’s decade-long struggle to bridge bureaucratic and communication gaps among federal law enforcement and intelligence agencies. It also illustrates the shortcomings of a heavy reliance on contractors, who for years made up the bulk of the office’s personnel.

From its start, the analysis office has been hindered by a poorly defined mission, an inexperienced workforce, changing leadership and turf wars with more established law enforcement and intelligence agencies, such as the FBI and CIA, documents and interviews show. The office’s budget, including how many employees and contractors it has, is classified. As a result, oversight to hold its leaders accountable for spending and performance happens behind closed doors, if at all.

For years, many of the office’s reports have been outdated, irrelevant or vague, or have regurgitated stories that appeared in the media, according to CIR’s review of internal records, intelligence reports and interviews with more than 70 current and former government officials, intelligence officers and contracting consultants.

At the same time, relatively few law enforcement authorities bothered to read the reports, according to documents and interviews. Some critics deride them as “intelligence spam,” according to interviews with several current and former government officials.

“Intelligence has value because it’s not accessible elsewhere,” said Chet Lunner, a former deputy undersecretary in the office who agreed the critics have a point. “They produce almost nothing you can’t find on Google.”

Since 2003, the office has published more than 21,000 intelligence reports, averaging about 300 a month in recent years, according to figures from the Department of Homeland Security. Because of the widespread distribution, and because of past controversies, the reports typically are stripped of sensitive detail. As a consequence, they sometimes lose their relevance for law enforcement officials.

In one report, the intelligence and analysis office warned law enforcement officials to be aware of suspicious vehicle fires – more than seven months after the attempted Times Square attack left a bomber’s car in flames, according to documents and interviews.

The Department of Homeland Security issued a bulletin with the FBI about a man who allegedly told police he intended to kill doctors who perform abortions. But the one-page document relied on the same publicly available material that had been used in news reports in the days after the man’s arrest.

In another instance, the intelligence and analysis office wrote an ominous-sounding document called “Incendiary Devices: Potential Terrorist Attack Method.” But the report essentially described an old-fashioned Molotov cocktail made with a laundry detergent bottle. It said one indicator of trouble might be the presence of a “large number of matches,” along with the “Smell of gasoline.”

A report in 2009 went through 28 rewrites before it was released, according to documents and interviews.

The office is issuing so many reports that it has generated a long backlog. As of March 2010, the office had 144 overdue reports, nearly two-thirds of which were three months behind schedule, according to an October report [PDF] by the Department of Homeland Security’s Office of Inspector General.

Department officials confirmed there was still a backlog related to “non-critical” reports but declined to be specific.

Despite well-documented problems, the office has not instituted an effective internal review process to measure its own management performance. But it has set goals on the number of intelligence reports its analysts are supposed to produce.

No exact accounting for spending for the office is publicly available because the budget was made classified several years ago. Documents submitted to Congress show that at least $2 billion has been spent on the office and the Department of Homeland Security’s operations branch combined.

Congressional overseers for years have urged the intelligence and analysis officce [PDF] to replace contractors with government employees, fix its budget problems and improve the quality of its work to better serve law enforcement within the department and across the country.

But the office has not faced rigorous public scrutiny or accountability, in part because its operations are cloaked in secrecy, and because lawmakers and others do not want to be blamed for shutting it down in the event of another major terrorist attack, current and former government officials said.

“I stopped paying attention to (the office’s) analysis a long time ago because it had become redundant and therefore irrelevant,” said Louis B. Tucker, who recently stepped down as a staff director of the U.S. Senate Select Committee on Intelligence. “It seemed for a while that they were just trying to justify their existence.”

A senior official in the department acknowledged the problems that have hindered the intelligence and analysis office. But the official said the office has made “significant” progress under the Obama administration and now plays an increasingly important role in homeland security.

John Cohen, one of the department’s top counterterrorism leaders, said the operation has a stronger focus on its state and local government “customers” and offers more training, technology and access to information. He said the quality and timeliness of reports have improved.

“The results of our progress have been clearly demonstrated on the (Capitol) Hill and by others,” Cohen said. “If you look at (the office) over the course of its lifetime, its role and emphasis has evolved.”

Off to a rough start

The Office of Intelligence and Analysis got its start in early 2003, not long after Congress approved the creation of the Department of Homeland Security.

The nation’s leaders gave the new office a mandate that went to the core of post-9/11 security: to gather and share available intelligence to head off domestic threats. The office was supposed to take on roles once assigned to the CIA and FBI.

The hurdles to success were immense. In the wake of the 2001 attacks, qualified analysts were in high demand across the federal government. As established agencies scooped up the available talent, the new homeland security team turned to private contractors.

Booz Allen Hamilton, a multibillion-dollar consulting firm in Virginia, was hired to boost the operation. The company, which has hundreds of former CIA, FBI and high-ranking federal officials on its payroll, received a $2 million contract without competition in 2003.

With almost no oversight by the Department of Homeland Security or Congress, the contract quickly ballooned to $73 million in spending – even while homeland security lawyers declared the arrangement contractually illegal, according to a Washington Post account at the time.

Four years after the original contract, spending reached $124 million. When the department finally held a competition for additional work, it awarded more contracts to Booz Allen. At the time, a Booz Allen executive defended the firm’s work, saying they had followed federal rules and charged fair prices, according to the Post.

Joining Booz Allen were other contractors, including defense industry giant General Dynamics. That firm’s task was to provide intelligence analysis, write and publish reports, ensure network security, develop strategy plans, and offer other support.

The new office would not have its own intelligence agents, spy satellites or informants. Instead, it would gather information on potential threats from a variety of other law enforcement and intelligence agencies.

Despite its vaunted mission, the office did not get off to a comfortable start. The operation was anchored in an outmoded building in northwest Washington, D.C., on a 37-acre former naval facility used during World War II to crack secret codes. Government employees and contractors worked on plastic card tables, without secure telecommunication lines. For a time, the office was so provisional that other intelligence agencies didn’t even know where it was.

“We literally had to wait for them to call us and complain they weren’t getting any reports from us,” said a former high-ranking CIA official. “It took them 30-plus days.”

Gaps in leadership also hindered the operation in its early days. The first chief of the Department of Homeland Security’s information analysis office, a former CIA counterintelligence official named Paul Redmond, quit less than four months after taking the job in March 2003.

When his successor, retired Army Lt. Gen. Patrick Hughes, a former Defense Intelligence Agency chief, arrived in November 2003, only 27 people worked there.

As more employees eventually arrived, the office moved to what is known as Building 19, its current location at Homeland Security headquarters. Constructed in 1946, the building had bad plumbing that caused toilets to overflow. Asbestos had to be removed from the walls. Employees sweltered inside the building during the sticky D.C. summer and sat at their desks bundled up in hats and coats in the winter. Power failures were common.

Word about the ill-equipped and inexperienced office quickly spread through the intelligence community. The CIA and FBI maneuvered to keep their old duties, essentially undercutting the authority of the new office.

“DHS (the Department of Homeland Security) has to earn its right to have a seat at the (intelligence community) table,” said Jack Thomas Tomarchio, who served as a deputy undersecretary in the intelligence and analysis office. “Just because there’s a congressional fiat doesn’t mean ‘we’ll put our arms around you.’ ”

Reports lack new information

Dissatisfaction with the intelligence and analysis office has been stoked by the quality of its reports, which many law enforcement and intelligence authorities consider to be useless, lacking in context or simply lifted from news accounts. Those problems persist.

In one report released in late January, the office announced that there had been a nationwide spate of police shootings, a fact that already had appeared days before in The New York Times, The Seattle Times and other newspapers across the country.

In other cases, the intelligence and analysis office claims to share “raw intelligence” reports that receive no analysis but might contain information valuable to other local, state and federal agencies. But those reports sometimes were a simple rehash of other publicly available reports.

Since 2004, the office has produced more than 14,000 such documents – known as Homeland Intelligence Reports – many of them with little tactical value to law enforcement and security officials, documents and interviews show.

In early October, for instance, the analysis office issued the first of several weekly reports about the problem of cyber-terrorism in Louisiana but made no mention of a successful attack that recently had occurred on the state’s computer network.

Subsequent reports also failed to mention the attack but did include tallies, without specifics, of thousands of thwarted hacking attempts on computer systems around the state. The reports read like local crime blotters, offering little useful information about who had attempted the attacks. Each was sent to more than two-dozen agencies, including the Justice Department’s Alcohol, Tobacco and Firearms and Explosives Bureau, the Drug Enforcement Administration and NASA.

The New Orleans CityBusiness journal reported on the successful attack on the state’s computers in November.

In another report, the intelligence and analysis office focused on a traffic stop in Texas in August 2010. A state trooper had found more than 3,000 pounds of marijuana hidden between the floorboards of a trailer. Details about the arrest became public the next day in a court filing that included the trafficker’s itinerary. The intelligence and analysis office did not issue its report about the arrest until early October 2010, two months later. Among the recipients of its two-paragraph intelligence alert: U.S. Immigration and Customs Enforcement, the federal agency that had been investigating the case for weeks.

Earlier this year, municipal workers in Spokane, Wash., found an unexploded bomb along a parade route on Martin Luther King Jr. Day. The attempted bombing received top billing on NBC, ABC and other news outlets.

The office published “raw” intelligence more than three weeks after the incident. The report offered little new information, besides borrowing the FBI’s description of the bomb. One of the report’s insights: “The Washington State Fusion Center continues to monitor the investigation,” the office wrote.

Daryl Johnson, a former analyst in the intelligence and analysis office, said the tendency to rewrite newspaper stories is a consequence of relying on inexperienced analysts and contractors. Leaders of the office have “the expectation that anyone can be assigned to any topic and start writing comprehensive intelligence reports within days,” he said. “That’s a bit much to ask of any analyst.”

Johnson said he was involved in the report that went through 28 rewrites. He said contractors edited them. That report, issued two years ago, was a nine-page assessment on the potential rise of right-wing extremists and their efforts to recruit U.S. veterans. Not long after its release, it was leaked. Some members of Congress and veterans groups said it smeared conservatives and offended U.S. troops.

Shortly before this year’s Major League Baseball All-Star Game in Phoenix, the office issued a joint threat assessment with the FBI and Arizona law enforcement agencies.

The 12-page document included maps and satellite photos of the venue, convention center and a prominent hotel. The document was labeled “For Official Use Only.”

There was just one problem: There apparently was nothing of substance to report.

“The FBI, DHS, and Phoenix metropolitan-area law enforcement agencies have identified no credible terrorist threats to the MLB ASG or its associated events and venues,” the document concluded. “Nevertheless, we assess that the MLB ASG’s high profile could make it a desirable target for terrorists or individuals seeking to cause casualties and to exploit media coverage to promote their cause.”

There’s no way to know how much the document cost U.S. taxpayers to produce.

Homeland security officials regularly have defended the reports. They say thousands of police officials read them, and they cite internal surveys that they say show 80 percent of respondents find “finished reports” either critical or very important. On average, about a dozen of the potentially thousands who received the reports responded to each survey.

Despite its problems, the office has supporters across the country, mostly state and local police, who applaud the training, security clearances and technology the Department of Homeland Security provides in a way other federal agencies, like the FBI, have not.

“DHS has done the best they can with … what they have,” said Steve Hewitt, co-director of the Tennessee Fusion Center, one of scores of new organizations in the states that gather, analyze and share information about terrorism and crime. “I don’t think they’re just getting by – I think they’re successful.”

No one really knows how many people actually read the reports. Homeland security officials did not provide an estimate. Critics, including some who worked in the office, say the reports, large and small, are a waste of time and money.

“They (the intelligence office staff) don’t know quality from quantity,” said Lunner, the former official in the office.

Low standing in intelligence community

The intelligence and analysis office suffers from chronically low morale, in part because it has a reputation as being a member of the intelligence community’s junior varsity squad.

For years, contractors dominated the office, making up as much as nearly two-thirds of its staff. About a third of the government jobs went unfilled [PDF].

Homeland security officials said they’ve flipped that number around, having reached a majority of government employees [PDF] for the first time in 2010.

While the overall intelligence community last year remained in the top 10 places to work in the federal government, surveys from the intelligence and analysis office put it again near the bottom of all government workplaces. The employees said they were not satisfied with their jobs or the organization. They said they would not recommend the office as a good place to work, according to the survey.

Current and former employees said the office is seen merely as a way station for rising stars and a dumping ground for mediocre or inexperienced analysts.

Such internal problems have plagued the office for years, even as pay for its government employees rose. The average salary for analysis and operations employees in 2010 reached $122,000, relatively high for the government, while executive pay hit $185,000. One internal report from 2009 [PDF] described the office as “stuck in its nascency, unable to evolve.”

“Today’s most pressing concerns are the same as those that have been frustrating employees for the past several years,” the report said.

Homeland security figures show the turnover rate has decreased slightly over the past two years.

But more than 60 percent of the employees in an internal survey last year said they planned to take jobs elsewhere within a year.

“That is a very high percentage,” said John Palguta of the nonprofit Partnership for Public Service, which compiled the rankings. “Even knowing that many of them will not succeed in finding another job, to have over half of the organization’s staff interested in being someplace else within a year is not a good sign.”

Charles E. Allen, who took over the office in 2005, tried to tackle the morale and perception problems. After a distinguished career that lasted nearly 50 years at the CIA, Allen brought gravitas to the office and standing in the intelligence community. Joining him was a cast of former CIA veterans dubbed “Charlie’s Angels,” credited with improving the office’s analytical ability.

In an interview, Allen said the office had only four or five analysts with national intelligence analytical experience when he arrived. He had to rely heavily on contractors, particularly Booz Allen.

“For us to compete within national intelligence and to send out to other intelligence agencies or the Northern Command or the El Paso Intelligence Center – DEA – we had to have quality work,” Allen said. “And I refused to have any (bad product) released.”

In a 2006 assessment, however, the White House Office of Management and Budget gave the Department of Homeland Security’s intelligence outfit failing marks for performance and accountability. One of the performance measures was the number of unfinished intelligence reports, a metric that Allen highlighted in speeches and congressional testimony.

While Allen and his top deputy were considered brilliant analysts, they struggled as managers, current and former officials said. They said Allen wanted to build a mini-CIA, and was slow to embrace state and local efforts.

Allen disputed those criticisms, saying the office during his tenure deployed technology and intelligence officers to aid state and local police around the country. “There was an extraordinary paradigm shift when it came to state and locals,” he said.

The Obama administration has pushed the office to focus more of its attention on state and local law enforcement – turf that traditionally is the FBI’s responsibility. It also appears the administration has diminished the office’s counterterrorism role, former U.S. Rep. Jane Harman, D-Calif., testified in May [PDF].

Harman and others say that the office should focus more on information developed by other DHS agencies, such as the Transportation Security Administration, Customs and Border Protection, and Immigration and Customs Enforcement – what’s unique to the department.

The office has also tried to implement reforms, including more legal reviews to weed out inappropriate reports. It also has shifted the balance of employees by hiring more government workers. In February, it released a new strategic plan.

Cohen, the Department of Homeland Security’s counterterrorism official, said critics don’t have the most current view of the office. The office still has a robust counterterrorism role, he said. As office leaders steer analysts toward producing reports better suited to state and local police, a dip in morale is expected, he said.

“One of the key roles for (the office) is to be a purveyor of knowledge to inform day-to-day crime-fighting efforts,” he said. “That’s not something that was clearly understood in the early days.”

Allen, the office’s former chief, acknowledges missteps. But he said he also believes that critics are misguided. He said the office is hitting its stride and needs more time.

“We accomplished a great deal,” he said. “I think it’s a five- to 10-year process to build a new culture and get the leadership that is required and the kinds of intelligence officers who are really good.”

But critics said such talk is not new. Even some congressional supporters question the value of the office’s voluminous output.

In an interview, Rep. Mike McCaul, R-Texas, who heads a House Homeland Security oversight subcommittee, said the office improved recently by focusing on state and local partners. But the office must make the information it shares more relevant, he said.

“If no one’s reading the product, what’s it worth?” he said.

Grace Mastalli, a former U.S. deputy assistant attorney general with the Department of Homeland Security, agrees. She said something has to change. There’s too much at stake for the nation’s security, and too great a cost to taxpayers, to do nothing, she said.

“It’s way too much money for way too few results,” she said. “I know everyone has been working hard, but the public record speaks for itself.”

A version of this story ran in Newsweek.

This story was edited by Robert O’Harrow Jr., Mark Katches and Robert Salladay. It was copy edited by Nikki Frick.

The Center for Investigative Reporting is the nation’s oldest independent, nonprofit investigative news center. You can contact the reporters at [email protected] and [email protected].