Tuesday, June 10, 2008

Profile of L-3 Communications

Intelligence in Iraq: L-3 Supplies Spy Support

The official headquarters for a 300-person intelligence support operation in Iraq is discreetly located in a two-story red building in a business park in Chantilly, Virginia, just outside the border fence of Washington, DC's Dulles airport. From its nondescript corporate offices, Government Services Incorporated (GSI) supplies staff for an operation that spreads over 22 military bases in the Middle East.

Walk through the entrance and to the left of the reception desk, next to a glass case showcasing electronic surveillance gear, is an announcement congratulating employees on winning a $426.5 million intelligence contract from the Pentagon last year.

GSI is a major subsidiary of L-3 Communications, a Fortune 500 company. Retired Lieutenant General Paul Cerjan took GSI's helm in May, after spending a year running Halliburton 's multi-billion dollar military logistics contract in Iraq and around the world.

GSI is only one of several L-3 subsidiaries enjoying the Bush administration's largesse. On March 10, Titan won a no-bid contract worth $840 million over 12 months to supply translators for intelligence and regular military operations in the "global war on terror." Yet another L-3 subsidiary, MPRI, manages the recruitment of U.S. military advisors to key Iraqi ministries such as defense and interior.

Military "prime" contractors such as L-3 extend the complex web of contracts by farming out work to smaller subcontractors, sometimes disabled- or minority-owned businesses. Its partners on the intelligence contract include Florida-based, disabled-owned Espial Services and Virginia-based Gray Hawk Systems. Both are currently advertising for interrogators. Other L-3 subcontractors on the project include Future Technologies Incorporated, a South Asian-owned company which is hiring Middle East regional intelligence analysts; and Operational Support and Services, an obscure North Carolina company seeking counter-intelligence agents. ...

Despite being in business for less than a decade, L-3 is now the sixth-largest military contractor in the nation. Based in Manhattan, it is headquartered on the upper floors of a skyscraper on Third Avenue, a few blocks from the United Nations.

The company was created as a spin-off of several Lockheed Martin and Loral manufacturing units that specialized in advanced electronics. These small business units were having a hard time selling their products to major military manufacturers such as Boeing , General Dynamics , Northrup Grumman and Raytheon, because of perceived competition with Lockheed. L-3 was created as an independent "mezzanine" or middle company, not linked to Lockheed or Loral, that would supply advanced electronics to anyone.

The deal was engineered in 1997 by Wall Street investment bankers, the Lehman brothers, with the help of two former Loral executives, whose name coincidentally began with the letter L: Frank Lanza and Robert LaPenta. (L-3 stands for Lanza, LaPenta and Lehman).

Lanza told a reporter at the time that their plan was "to build one big company, that would be like a high-tech Home Depot."

The company quickly expanded through an aggressive acquisition strategy of buying up some 70 small advanced technology manufacturers. As it grew, it recruited big names to its senior management and board: General John Shalikashvili, former chairman of the Joint Chiefs of Staff of the U.S. Army and General Carl Vuono, the former deputy chief of staff for the U.S. Army, among others.

Within eight years, this new company had ousted other older companies including General Electric from the list of top ten military contractors. In the last few years, L-3 has been aggressively taking over prime contracts, especially in the field of intelligence. In 2005 alone it won $4.7 billion in Pentagon contracts. ...

Several Titan employees have been implicated in the Abu Ghraib scandal where they translated for the interrogators. A report by Major General George Fay cited one detainee's charge that an interpreter "allegedly raped a 15-18 year old male detainee." According to the report, this same interpreter was also allegedly "present during the abuse of detainees depicted in photographs." A detainee told investigators that this interpreter "hit him and cut his ear, which required stitches."

U.S. Army records show that, of 15 Titan or SOS translators working at Abu Ghraib prison last fall, only one held a security clearance. Most had no military background at all. Khalid Oman WAS a hotel manager in Kalamazoo, Michigan, and Emad Mikha, a Chaldean from Basra, managed the meat department at a supermarket in Pontiac, Michigan, before signing on for Iraq.

A Titan supervisor in the Sunni Triangle, interviewed by CorpWatch, says that contract translators underwent little or no background checking and their qualifications varied. "I'd say most of them were just there for the pay check and should never have been involved in military operations because they were incompetent or unqualified. Many of them did a terrible job," the former U.S. soldier said.

Another Titan translator says that the company hired mostly Shiite Muslims and sent them to work for the military where they would interview detainees who were primarily of Sunni heritage, causing potential conflicts.

The media have exposed several examples of Titan's problem hires. The Orlando Sentinel reported that Titan hired an Egyptian, Ahmed Fathy Mehalba, who had flunked out of Army interrogation school and been placed under surveillance by Massachusetts police. He was later arrested with what authorities said appeared to be classified information about Joint Task Force-Guantanamo, the secret detention-and-interrogation operation at the U.S. Navy base on Cuba's southern coast. ...

If the translators lack military experience, GSI's new director certainly does not. A 34 year veteran of the U.S. Army, Paul Cerjan retired from active service in 1994 to work for L-3's predecessor, Lockheed and Loral. He stayed in touch with his military roots even after retirement as a trustee of the National Defense University, and did some political work as a board member of the Jewish Institute for National Security Affairs.

Then for three years, he became president of Christian televangelist Pat Robertson's Regent University. There, the man who had been deputy commanding general of the U.S. Army in Europe and led Pentagon delegations to China, spearheaded student enrollment drives and hosted award presentations to Miss America, Nicole Johnson.

Cerjan returned to a more active military role in spring 2003, when he got a call to assist Jay Garner, the man President Bush first asked to manage the reconstruction of Iraq. Cerjan oversaw the demobilization of the Iraqi army until this project became moot when the Iraqi Army disbanded itself.

But it was not long before Cerjan found use for his military background. In July 2004, Halliburton hired him to run its worldwide military logistics operation, a multi-billion dollar behemoth that was already running into trouble with allegations of cost over-runs in Iraq. He quit the job in July 2005, nine months before he came to work at L-3. ...

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