Afghanistan Spy Contract Goes Sour for Pentagon

A top Pentagon official ran a covert network of contractors that supplied the U.S. government surveillance information for drone strikes and assassinations in Afghanistan and Pakistan, according to a complaint filed by the Central Intelligence Agency and revealed by the New York Times. The official, Michael D. Furlong, is a civilian employee of the U.S. Air Force with a decade-long record of running psy-ops propaganda programs for the military in Bosnia, Kosovo and Iraq.

Officially Furlong worked in strategic communications for Gen. David Petraeus, head of the U.S. Central Command. In reality, the former 82nd Airborne Ranger was in charge of "CAPSTONE," a project under which he hired civilians, mostly former CIA and Special Forces operatives, to gather intelligence on the whereabouts of "suspected militants and the location of insurgent camps." The information was then transmitted to high-ranking Pentagon and CIA officials for "possible lethal action in Afghanistan and Pakistan."

Furlong funded the project under the Joint Improvised Explosive Device Defeat Organization, a Pentagon research organization tasked with reducing the threat from roadside bombs. The $24.6 million stream of money was funneled through two obscure contracting offices: the Cultural Engagement Group at the Special Operations Command Central in Tampa, Florida; and the Counter Narcoterrorism Technology Program Office in Dahlgren, Virginia.

With this money, Furlong hired a newly minted company, International Media Ventures (IMV), of St. Petersburg, Florida, and attempted to sub-contract other individuals and companies to run surveillance operations in South Asia.

One potential sub-contractor was AfPax Insider, a subscription service run by Robert Young Pelton, author of The World's Most Dangerous Places and Eason Jordan, a former chief news executive for CNN. In late 2009 Pelton told CorpWatch that after he learned more about Furlong's real intentions, AfPax opted out of the program: "When we suspected that he was doing ... we protested. That moral stand cost us millions." Pelton said he was concerned that Furlong had set up IMV for clandestine operations, and told Furlong that "kinetic action" (i.e., drone strikes) were incompatible with "the now accepted counter-insurgency strategy."

The allegations remained unsubstantiated until March 15 when a New York Times front-page story documented how Furlong's secret operation was exposed after the CIA filed an official complaint with the Pentagon's inspector general. Furlong boasted to unnamed military officials that "a group of suspected militants carrying rockets by mule over the border had been singled out and killed as a result of his efforts," wrote reporters Mark Mazetti and Dexter Filkins.

Contract Spies

The Capstone contract was International Media Ventures' first major business deal. But before coming to IMV, current CEO Richard Pack had experience running special operations for an L-3 subsidiary - Chantilly, Virginia-based Government Services Incorporated. (GSI also provided the Pentagon with 300 intelligence analysts, including interrogators in Iraq, under a $426.5 million contract signed in 2005. See "Intelligence in Iraq: L-3 Supplies Spy Support.")

On IMV's website, Pack, who once ran the elite U.S. commando unit Delta Force, also claims to have been a mission planner for an undated rescue of U.S. prisoners-of-war in Laos, the aborted 1980 rescue mission to free U.S. embassy hostages in Tehran, the U.S. invasion of Grenada in 1983, as well as operations officer for the Pentagon responding to the hijacking of a TWA plane to Beirut in 1985.

Another company that Furlong sub-contracted was Boston-based American International Security Corporation (AISC) run by Mike Taylor, a former Green Beret turned private investigator. A 1995 lawsuit by Massachusetts State Trooper Robert Monahan accused Taylor of helping drug traffickers by providing phony Greek passports, and even arranging a jailbreak in Florida.

AISC also employed Duane "Dewey" Clarridge, a former senior CIA official who was indicted in 1991 for his role in the Iran-Contra affair. In 1992, just before leaving office, President George H.W. Bush pardoned Clarridge.

In a previous scandal, Clarridge admitted arranging the mining of Nicaraguan harbors in 1984 to destabilize the leftist Sandanista government reviled by the Reagan administration. "I was sitting at home one night, frankly having a glass of gin, and I said you know the mines has gotta be the solution. I knew we had 'em, we'd made 'em outta sewer pipe, and we had the good fusing system on them, and we were ready. And you know they wouldn't really hurt anybody because they just weren't that big a mine, all right? Yeah, with luck, bad luck we might hurt somebody, but pretty hard you know?" he told the National Security Archive.

Clarridge has long had a close relationship with Robert Gates, now the head of the Pentagon. "If you have a tough, dangerous job, critical to national security, Dewey's your man," Gates is quoted as saying in a book by Joseph E. Persico. "Just make sure you have a good lawyer at his elbow - Dewey's not easy to control."

The Pentagon's Propaganda Networks

Despite the fact that Furlong is now being portrayed as a rogue operator, running an illegal spying operation unknown to his superiors at the Pentagon, he has a long history of working at the highest levels of the military and creating propaganda networks for the Pentagon. According to his official biography, his career in psy-ops started when he was appointed commander of the Joint Psychological Operations Task Force in Bosnia, where from 1995 to 1997 he established transmitting and broadcasting networks in former Yugoslavia.

After he left the military, Furlong took a job as the director of the Strategic Communications and Information Operations Division of San Diego-based Science Applications International Corporation (SAIC). Founded in 1969 by physicist J. Robert Beyster, SAIC's biggest source of income has always been surveillance for U.S. spy agencies including the CIA and the National Security Agency. For example, in 2002 SAIC won the $282 million job of overseeing the latest phase of Trailblazer, the most thorough revamping in the NSA's history of its eavesdropping systems. It was also the principal contractor for the Federal Bureau of Investigation's Virtual Case File database project that was scrapped in 2005.

"We are a stealth company. We're everywhere, but almost never seen," Keith Nightingale, a former Army special ops officer, told the now defunct magazine Business 2.0.

Furlong's background in propaganda helped him set up a small media empire for SAIC with Pentagon funding, the Iraqi Media Network (IMN). It sat on the third floor of the Baghdad convention center, in a suite of offices tucked away from the bustle of American and Iraqi bureaucrats and soldiers who were using the sprawling complex as a nerve center to run the country in the weeks following the 2003 invasion. The public face of IMN was the Al Iraqiya radio and television network.

In December 2003, when I met with IMN's second in command, Alaa Fa'ik, he denied that the Pentagon had any influence on IMN reporting. The Iraqi American from Ann Arbor, Michigan, was dressed casually in a sweater, with short-cropped grey hair and glasses; a military-issued badge hanging on a blue strap round his neck identified him as a SAIC employee. He described his company as the wave of the future for Arabic media.

"Yes, we are getting money from the Department of Defense.  That is from you and me, the taxpayer. Are you reporting the fact that the Ministry of Education is funded by the United States government, the Ministry of Health is funded by the United States? I don't understand why when it comes to the media, you say, no, no, no. So who is going to fund it?"

Fa'ik may have believed that he was building democratic media institutions but his own employees had their suspicions about Furlong. "He had some TV experience, but not much. He was doing other stuff on the side, so he was running away from meetings. He didn't establish a professional-running TV station," one worker told the now defunct Baghdad Bulletin.

As a project, IMN was a failure. Don North, who had reported from Vietnam, Washington and the Middle East for ABC and NBC News, called Al Iraqiya "Project Frustration" when he quit in July 2003. "IMN has become an irrelevant mouthpiece for CPA [the U.S. provisional government in Iraq] propaganda, managed news, and mediocre programs. I have trained journalists after the fall of tyrannies in Bosnia, Romania, and Afghanistan. I don't blame the Iraqi journalists for the failure of IMN. Through a combination of incompetence and indifference, CPA has destroyed the fragile credibility of IMN," he wrote in Television Week.

SAIC removed Furlong from the IMN project in late 2003. Shortly after that he went to work for Virginia-based Booz Allen Hamilton, another major CIA and NSA contractor.

In August 2005, Furlong returned to work with the Pentagon but as a senior civilian official - deputy director for the Pentagon's Joint Psychological Operations Support Element (JPSE) out of the U.S. Special Operations Command in Florida.

At the time, he set up a $300 million contract in Iraq to hire three contractors for "media approach planning, prototype product development, commercial quality product development, product distribution and dissemination, and media effects analysis" - in other words, propaganda. ""We're looking at programs, for example, to counter suicide bombers," Furlong told USA Today. "While the product may not carry the label, 'Made in the USA,' we will respond truthfully if asked" by journalists."

The first contractor was SAIC, his old employer; the second was L-3 subsidiary Sy Coleman; and the third was the Lincoln Group, a new outfit set up in Washington by Christian Bailey, a co-chairman of Lead 21, a political group aligned with the Republican Party.

The Lincoln Group's efforts ran into trouble when Mark Mazetti, then a reporter with the Los Angeles Times, revealed that the company was secretly paying Iraqi newspapers to publish stories written by U.S. troops.

Willem Marx, a former intern at the Lincoln Group, later described to the radio program Democracy Now! how his boss worked: "He was choosing which of those articles would be published in Iraqi newspapers. He was sending them to Iraqi employees, getting them translated into Arabic, getting them okayed by the command back at Camp Victory, and then having other Iraqi employees run them down to Iraqi newspapers, where they would pay editors, sub-editors, commissioning editors to run them as news stories in the Iraqi newspapers."

Despite the controversy, the Lincoln Group continued to win more contracts to conduct "information operations" in Iraq as recently as September 2008.

The AfPak program

When the attention of the new Obama administration and the Pentagon turned to Afghanistan, so too did Furlong.

In February 2008 Furlong left the U.S. Special Operations Command to take a job at the Joint Information Operations Warfare Command at the Lackland Air Force Base in San Antonio, Texas, where his official title was "Strategic Planner and Technology Integration Adviser." One of the projects that he was put in charge of that first year was CAPSTONE.

At about the same time Pelton and Jordan were meeting with Gen. David McKiernan, the top U.S. general in Afghanistan, to offer an information gathering service on Afghanistan and Pakistan. The Pentagon bit and introduced them to Furlong.

Unknown to either Pelton or Jordan, Furlong then set up a contract with IMV to bring together at least six unrelated companies on the back of this proposal including AfPax Insider. It remains unclear whether or not Furlong had approval from higher-level officials to provide covert information gathering program for drone strikes.

Some senior officials felt that Furlong was doing a good job. In an August 2009 assessment, Gen. Stanley McChrystal, the top U.S. commander in Afghanistan, wrote that CAPSTONE contracts "should be supported as these will significantly enhance . . . monitoring and assessment efforts."

But Furlong seems to have had a grandiose view of what he was doing, referring to Taylor and Clarridge as his "Jason Bournes" (the fictitious assassin played by Matt Damon in the Bourne Identity series of films).

He also boasted about achievements that others said never happened. For example he told Pelton that his people had helped David Rohde, a New York Times reporter who was kidnapped by the Taliban in Logar province in November 2008, by sending an U.S. doctor to drug the guards and supply the rope for Rohde's dramatic escape in June 2009. Pelton says these claims aroused his skepticism.

What made the situation complicated was that the New York Times had in fact hired Taylor and Clarridge to help it track down Rohde. The newspaper revealed that relationship in the March 15 story, but insisted that the paper had no dealings with Furlong.

A senior New York Times staffer, who spoke on condition of anonymity, told CorpWatch: "The newspaper, Rohde and his family had no contact with Furlong. They had not heard of Furlong until Dexter Filkins and Mark Mazzetti began working on their story. As Rohde stated in the series, no one helped them escape. Any claim by Furlong that he helped them escape is false."

The day after the Times story broke, the Pentagon said it had placed Furlong under criminal investigation for his activities. The investigation was sparked a couple of months previously when the CIA's station chief in Kabul sent a cable to the Pentagon complaining about the covert operations. Furlong's bosses at the U.S. Strategic Command Joint Information Operations Warfare Center  (JIOWC) voiced similar concerns. (Exactly why the CIA was worried about Furlong's surveillance operations when it was doing much the same thing is unclear, but there has been a long history of animosity between the two agencies.)

The question remains: Was Furlong running rogue operation under the guise of information gathering, or did he have tacit approval from his bosses? After the news broke in the March 15 New York Times, a Pentagon official told the Washington Post on the condition of anonymity, that it was "not apparent who authorized" the operation, but that the "potential for disaster" was obvious.

* This article was produced in partnership with Inter Press Service News Agency. Pratap Chatterjee may be reached at "pchatterjee@igc.org."

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• 24 Intelligence
• 106 Money & Politics
• 185 Corruption
• 187 Privatization