3 Keys to Responding Intelligently To A Cyber Attack

Cyber Attack

(Natali_Mis/Getty Images)

“FIFTH DOMAIN”  #CyberAvengers

“Don’t lose in minutes what has taken you years to build just because you think it is okay to cut a few corners or believe “this won’t happen to me.”

As the old vaudeville joke goes: “How do you get to Carnegie Hall? Practice, practice, practice.”

“Intelligent responses depend on three elements:

  1. Incident Response Planning
  2. Business Continuity Planning
  3. Crisis Communication Planning

There are numerous articles and memos deal with the topic of incident response, business continuity, and crisis communication plans. Many have been distributed through media outlets even. So you may be asking: why us, why now, and what more could we possible offer in this space?

We think the answer is pretty simple: sometimes you can’t get enough of a good thing. Similarly, there are fundamental topics that people still are having problems with. Translation: more homework to do. One subject area that evidently needs work is responding confidently to a cyberattack in an intelligent and public manner. There are a great deal of texts and certifications out there on these issues (some better than others of course), but if we could, we’d like to give you some “basic street talk” on these issues. Essentially, we want to present to you the issues in a way that you could discuss while having a coffee or drink.

We won’t name names, but there are real life examples of “good” responses. You intuitively know a good response. You feel a level of confidence that the company has the facts, knows the circumstances of what has happened, and is going “full steam ahead” to clean up whatever the mess is. Despite the situation being bad, you know that whoever is steering the ship has things “under control.”

And then there are the “other” responses. You intuitively know a bad response also. It’s the one with the bad smell, the train wreck you can’t watch but still want to, and the one where you throw up your arms and say to yourself “are you kidding me?! You can’t be that out of control!” In cases like this, you’ll normally see a swarm of regulators, stakeholders, investors, and the public directing a lot of “ahem” to the organization and its executives.

Paradoxically almost, you seldom remember the “good” responses, but you never forget the bad one (they usually end up as case studies in business reviews and university textbooks).

Like we said, not naming names, but we want to give you some “quick hits” as to what we, the #CyberAvengers, feel works and what does not work when you have a cyber train wreck at your fingertips. Here goes:

Incident Response Planning

There are plenty of things that often come up concerning the importance of incident response (or “IR”) planning. First, the importance of having a plan cannot be understated. The worst time to figure out what to do or say if there is in the middle of cyberattack. Simply put, things get too crazy to think.

For instance, internet access might get disrupted, files might get encrypted, executives might get fired or suddenly retire, or revelations might occur indicating a major loss of customer information or financial data. All of these issues might indicate a range of problems from either a “manageable” to a “catastrophic” problem depending upon what happened. Problems get further compounded if the company is publicly traded, or is regulated by a federal or state agency (such as the SEC or the NY DFS) where the timeliness and accuracy of disclosures matter greatly, along with the reputation of the company or firm being attacked.

All stuff you know so far. Now comes the moment of not mucking it all up.

To minimize the impact of such an attack and to protect the company and its stakeholders, strong incident response plans have the following attributes:

1) The IR Plan needs to be practiced often and not left in the desk drawer waiting for the first disaster to strike. Do even the top athletes of the world practice before the big game? Yes. They do. So if the very best need practice for something routine (like playing a game they’ve played their entire life), you can sure as bet you need a lot of practice for something that is hopefully not routine (check your business model if you’re running into disasters a bit too often). And practice your IR plan with all people internally, such as the board, executives, IT, HR, and the general counsel’s office. It’s not a bad idea to have an outside lawyer and cyber forensic advisor as well because in a real disaster, you’re probably going to need them too. Failure to practice your IR plan is more or less the number one “YOU LOSE!” issue we see.

2) We recognize you have limited resource and can’t think of every possible disaster, but you need multiple plans and you need plans to test your limits. Practicing touch football will do little for you if you’re preparing for the Super Bowl. So think small and large breaches in various forms, such as DDoS, ransomware, insiders, corporate espionage, and depending on your size, even nation-state attacks. Make sure all of your plans have mechanisms to notify/activate the right people. This includes law enforcement, regulators, stakeholders, and investors. And plans can’t stay static, so keep in mind that plans need to address personnel changes and organizational restructures. No two cyberattacks are alike, so all IR plans cannot be alike either. In the heat of battle, you will simply be overwhelmed if you’re applying your DDoS scenario to your ransomware issue. They have different characteristics and implications, meaning they are not easily interchangeable.

Practice hint: if you are a multinational, you should have different regional plans and see if and how they would need to interact, particularly if an attack in jurisdiction A can have an effect on jurisdiction B. Different people involved, different laws, different vendors. You need to know all this stuff ahead of time.

3) Who’s the boss? You need an incident commander. Somebody needs to be in charge (they may be able to hand off if the situation changes) but somebody has to be the boss. Crisis handling by committee usually ends up in a boil over. Identify who needs to be the boss for the scenario at hand and who their support team will be. Sometimes it’s the CEO taking all the hits. Sometimes is the general counsel leading, with the CEO being the public face. Other times it’s a technical specialist running the table internally, but helping the PR team craft the external message. Experienced crisis management firms are helpful for disclosures, but if you go this route, make sure they know have experience in cybersecurity issues, because cyber is an animal we still do not know well. Just be sure to have somebody calling the shots. And support them. Now is not the time for puffy chest.

4) Timing is everything, especially for public companies that are trading daily on information available to investors. We are often told that we should “just get the information out there” and there is reason for that advice, but be prudent. Trying to outrun a potentially out of control speeding locomotive without some safety precautions could result in … well, use your imagination. We’re trying to keep this article G-rated. With that said though, don’t sit back to watch and enjoy the show because once that train cross state lines, you may have no control at all. We admit this is not an easy task. You have to find that sweet spot between “doesn’t have its act together” or “is potentially hiding something.” It’s sort of like mastering that delicate art of like tap dancing on the head of a needle without getting pricked. By the way: this is why we practice!

5) The best way to respond to an incident is to know about it before anybody else so you can kick the attackers off your system. We covered this issue in detail in our recent book, Take Back Control of Your Cybersecurity Now, but here are some notes: used prudently, machine learning, automation, and orchestration solutions are your friend. They can significantly reduce the time to discovery of the breach (also known as “dwell time”). These tools may even help you prevent the breach all together.

Business Continuity Plans

Business Continuity Planning (or “BCP”) is an essential part of corporate resiliency. We see them activated for issues like natural disasters and even terrorist strikes. But in the face of cyberattacks, they are more important than ever. Effective BCP helps get you back in the game sooner. This is critical because too much down time could completely destroy your business. Think of it like this: you have the ability to bend while others are breaking. And just like IR and crisis management have evolved, so has BCP. Therefore, lead with skepticism if your BCP is being conducted by somebody who has little understanding of cybersecurity issues.

Good BCP relies on proper investigation and remediation of attacks. Forensic cyber experts and lawyers are well versed in these issues. And BCP relies on IT experts who create proper, segmented, offline backup media (daily! … and is regularly tested to ensure it will actually work in time of crisis) so that the endpoints and network assets can be restored quickly and easily. Reminder: #BackItUp!

Here is a thought for your scenario testing and planning: take your busiest day or time period, say Black Friday or the two weeks before Christmas and imagine losing your services to whatever scenario (ransomware, DDoS, etc.). Just play out your nightmare scenario and see how you’d deal with it. PS – we just took out your first line of third-party suppliers/vendors/experts because of supply chain integration. They’re down now too. What do you do now? PPS – Sorry, but don’t say we didn’t warn you!

Just like with IR, review, update, and test BCP regularly. Businesses are dynamic. We have accepted that into our corporate culture. But we have not necessarily adopted the same feeling in terms of continuous improvement for IR or BCP. These are those things where we don’t see return-on-investment until they’re actually needed. Just remember things can always be improved and in this modern interconnected world, effective BCP must deal with the variety and complexity of vendor dependency. Long gone are the days where you could do everything “in house” unfortunately, so you need to regularly review and update vendor roles and responsibilities. Yes, it’s cheaper during “peace time” to have a vendor-dependent/subscription-based business model, but if you’re not ready for the war, your losses could be catastrophic.

Crisis Communications Planning

Worst time to exchange business cards is the middle of a crisis. Over-thinks cause delays. Analysis paralysis can turn a press release into a bunch of gobbledygook. And seriously, do you really want to be doing this for the “first time” during a crisis? The #CyberAvengers are an adventurous bunch, but even we have our limits.

You see, crisis communications is there to manage the intangible, the things that rely on confidence, such as reputation and market capitalization. You may in fact have your act together but if the message coming out of your organization seems like utter chaos, the public will make up their mind on that information, not what is actually going on. If you accept for a moment that emotions and images are more powerful in impacting our decision-making over rationality and words, then you see our point of view crystal clear. So toss out the window you are in control of this situation (in terms of how the public views you) and do your best to manage what you have to deal with. Here are a few pointers to help with the management.

1) A pre-meet with the FBI and Secret Service is not a bad thing. In fact, we strong believe in doing so. Why? Go back to our “worst time to exchange business cards is in the middle of a crisis” comment. Meeting beforehand gives all parties a chance to meet without someone’s hair being on fire (and incredibly reduces the possibility of an errant punch to the face when frustrations boil over). During the pre-meet you can discuss systems and IT networks. You can also discuss expectations and levels of support. It makes a difference. And of course, you do that good ole fashioned thing called “building a relationship” with persons and institutions. Not a bad thing. We know. We do this religiously in fact. There are instances where a pre-meet, coupled with time and accurate disclosure, have discouraged lawsuits. This is a very good thing. So remember, a friend in need is a friend indeed. And if you got a nation-state or transnational crime syndicate smashing through your network (or being the stealthiest little bugger you have ever encountered), having friends of this kind are good to have.

2) Pre-draft your disclosures for different scenarios. Much like planning for different attacks, having these different templates in your back pocket saves you valuable time. Consider that most significant breaches will require disclosures to regulators, shareholders, investors, employees and others. The European Union’s GDRP has given consumers a mighty hammer and if you’re not ready for the GDPR, you may be facing a world of hurt on that (keep an eye out for the #CyberAvengers playbook coming out soon which talks more about the GDPR). And some of you may giggle at this, but have some disclosures ready to go with 140 characters. In case you haven’t noticed, Twitter, social media, and bloggers sort of play a big role these days. It’s your way of speaking directly to the people without an intermediary filtering your message.

3) Use people who have experience. This point is the pièce de résistance. As we mentioned above a few times, it is important for all companies to project an air of confidence in the middle of a breach. Confidence goes a long way. It shows the company has its act together. It shows that it understands and appreciates its different constituents. It can move markets. Somebody who understands all these moving parts are a system – not a bunch of individual goals – can turn a crisis into a success within 72 hours. But don’t be fooled, these skills are not acquired overnight. A good way to identify somebody experienced is if they (FIGURATIVELY!!!) have been battered, bruised, full of battle scars, but are still going on with a smile on their face, plugging away.

This, dear friends, is called resilience. And get used to it, because life today that is so reliant on cyber will require a lot of resilience.

Much the same way you wouldn’t go do a podiatrist for your dental issues (despite increased cases of foot-in-mouth syndrome, particularly over social media), you shouldn’t be using real estate counsel to handle a cyber breach. Remember, cybersecurity is still a loosely defined concept that we have mystified, meaning that you may very well need a “jack of all trades and master of many” to get the job done for you. A well-rounded cybersecurity professional may not have all the answers for you, but the will have somebody in their rolodex that can be pulled in as a free agent in time of need. Point is, know these people beforehand.

On a final note, with the advent and increasing prevalence of firm state, federal and international breach disclosure timing standards, time has become even more precious. Having ready-to-go-IR, tested BCP, and executable crisis communication plans not only save you time, but could save you from the enormous tangible issues, like fines and penalties, and spare you the intangible carnage, like stock price drops and reputational damage.

Don’t lose in minutes what has taken you years to build just because you think it is okay to cut a few corners or believe “this won’t happen to me.” As the old vaudeville joke goes: “How do you get to Carnegie Hall? Practice, practice, practice.”

In Defense of the United States of America,

The #Cyber Avengers

The #CyberAvengers are a group of salty and experienced professionals who have decided to work together to help our country by defeating cybercrime and slowing down nefarious actors operating in cyberspace seeking to exploit whatever their tapping fingers can get a hold of.

  • Paul Ferrillo
  • Chuck Brooks
  • Kenneth Holley
  • George Platsis
  • George Thomas
  • Shawn Tuma
  • Christophe Veltsos”





“Warrior Games” Help Veterans Adapt



Warrior Games


“Former Tech Sgt. Joshua Miller and Capt. Mitchell Kieffer, both medically retired, suffered significant injuries during their time in service. 

Those injuries led to a string of surgeries for both veterans and, ultimately, a choice: between reaching out to overcome those injuries or to isolate themselves.”

“Two Air Force veterans who were severely injured during their service, and who suffered from the “invisible wounds” of post-traumatic stress, said they had to overcome fear of the stigma sometimes associated with getting help ― and their own pride ― to recover from their wounds. 

The airmen talked about their roads to recovery during the Air Space Cyber Conference at National Harbor, Md., Monday.

Smith joined the Air Force in 2003 as an aircrew flight equipment specialist and served on active duty for 13 years.

During Combat Survival School, he was injured after being thrown into a culvert, which led to surgeries on both hips, his right shoulder and elbow.

When a friend suggested he join the Air Force Wounded Warrior Program, Smith hesitated because he felt his non-combat injuries didn’t warrant joining the program. He didn’t “fit the bill” of those wounded in combat, he said.

“I felt [the program] was really sacred and that I didn’t belong,” Smith told the audience.
“But everybody has a story. It doesn’t matter if it’s combat or non-combat related,” he said. “So many airmen are kind of afraid to go to their first camp because of what they’re struggling or dealing with,” Smith said.

Being around others who can relate to what you’re going through makes it easier to share your stories and your feelings, he said.

Kieffer, who was injured while on a voluntary deployment with the Army Corps of Engineers in 2011, echoed those sentiments.

“Whenever we go to these [Wounded Warrior] camps and events, we know we’re not going to be judged,” said Kieffer.

He was part of a convoy that was attacked by an improvised explosive device, rocket-propelled grenades and small-arms fire. He sustained seven broken vertebrae and had memory issues. Because of this, Kieffer is rated 100 percent disabled.

For both men, dealing with their physical injuries was difficult, but dealing with the unseen wounds of post-traumatic stress was also quite tough. Perhaps the biggest reason troops don’t want to admit their unseen wounds is pride, they said. Their initial reaction is not to seek help but to tough it out.

“That’s been the biggest issue I’ve seen and dealt with,” Kieffer said. Pride has held a lot of recovery back,” he said. “Stop letting pride affect you.

Becoming involved with Warrior Games was a transformative experience for both airman, they said. Kieffer was the 2015 and 2016 ultimate champion, which is based on five athletic categories. of competition.

“Any time you have the opportunity to tell your story, tell it,” said Chief Master Sgt. Nicole Johnson, chief of the Air Force Wounded Warrior Program. “Your story will help others tell theirs.”


Former Whistleblower Starts Legal Aid Group to Guide Would-Be Tipsters


Image: Corruptionwatchconnected.org


“John N. Tye wants to make it easier to expose government wrongdoing without getting fired or breaking the law.

Whistleblowing can be a challenge for people who have taken an oath of office to support and defend the Constitution against all enemies, foreign and domestic”

 September 18 at 6:00 AM
“In a city filled with leakers, congressional committees with subpoena powers and investigative reporters, John N. Tye wants to make it easier to expose government wrongdoing without getting fired or breaking the law.Tye, a former State Department whistleblower, and lawyer Mark S. Zaid have formed Whistleblower Aid, a nonprofit law office to help would-be tipsters in the government and the military navigate the bureaucratic and legal morass involved in reporting governmental misdeeds.

Whistleblowing can be a challenge for people who have taken an oath of office to support and defend the Constitution against all enemies, foreign and domestic, Tye said in a telephone interview.

“Then you get into government and you see something wrong,” he said. “You’ve sworn to stop it, but there aren’t a lot of tools at your disposal, especially if it’s your supervisor who’s breaking the law. People are scared. They’re worried about their jobs. If it involves classified information, they can be criminally prosecuted.”

Tye’s interest in whistleblowing came from a stint as section chief for Internet freedom in the State Department’s Bureau of Democracy, Human Rights and Labor, from 2011 to 2014. He came forward as a whistleblower to publicize the government’s electronic surveillance practices. He wrote about it in 2014 in a Washington Post opinion piece that he submitted to the State Department for approval. His quest to air his concerns cost him $13,000 in legal fees.

It is not entirely coincidental that Whistleblower Aid is being launched during the presidency of Donald Trump, whose 2016 campaign is under investigation for contacts with Russians.

“We want to advise people what to do, whether it’s going to Congress, or an inspector general or Robert Mueller,” Tye said when asked about the timing, referring to the general counsel handling the investigation.

“This is not a partisan effort,” he added. “At the same time, yes, the rule of law starts with the office of the president. Like many other people, we are definitely concerned about things that are happening in the administration. The decision to fire [FBI Director] James Comey. The lack of transparency. A lot of people have questions about whether this administration respects the rule of law.”

Tye says he will never divulge classified information he learned while at the State Department. If a whistleblower comes to Whistleblower Aid with classified information, he or she will be steered to investigators with security clearances and the power to do something about it.

We’re not WikiLeaks,” Tye said.

“We provide legal advice and information to people who have sensitive information and want to explore their lawful options. We’re not advising anyone how to leak anything.”

Clients seeking that advice will not be charged. The firm is seeking donations from foundations and crowdsource funding to cover expenses.

Starting Monday, the start-up will be blitzing Washington to publicize its services with ads on Metro trains. It will have people on street corners handing out branded whistles. And throughout the week, two mobile billboards advertising Whistleblower Aid will spend 10 hours a day circling the White House, the Capitol, the Pentagon, the CIA and the National Security Agency to try to attract clients.

The organization has a website, whistlebloweraid.org. But contacting it takes some forensic skills. To maintain security, it won’t accept phone calls, text messages or emails, because someone in the government could be surveilling communication.

Instead, to reach someone at the organization, it’s necessary to install a special Tor browser that allows access to an encrypted, anonymous part of the Internet. Whistleblowers.org has two encrypted sites there.”


Let Defense Innovators Breathe Free

Innovation propertycasualty360 dot com

Image:  Propertycasualty.com

“BREAKING DEFENSE” By  Col. Richard Hough 

“America’s defense industry is struggling to boost its innovative entrepreneurs, who need freedom and resources to come up with creative ideas.

Like other industries, defense acquisition innovation must recognize that “inspiration flows best when individuals ‘can breathe free,’ thinking creatively without limits of fear.”

“Unlike other industries, defense innovators do not benefit from capital incentives to encourage research and development investment. Instead, innovative defense concepts have traditionally been nurtured in an environment combined of countercultural activity, legislative prompting, necessity (often fear), re-orientation and re-organization; which are rarely effective when implemented in isolation. Outlined below is a summary of the current state of the defense acquisitions system and how Congress must help us overcome the status quo.

  • Decades of tweaking the system based on the limited findings of panels and oversight committees has resulted in no perceptible cultural change.
  • We do not use our broader cultural strengths and corporate traditions to inform acquisition policy.
  • We have lost sight of long-term and emergent threats while becoming overly focused on current contingencies.
  • Appropriations and regulatory requirements have created a consensus-based decision-making environment that is risk-averse.
  • The acquisition workforce understands that excessive layers of bureaucratic review provides protection from direct accountability.
  • And, it is painfully obvious that centralized management and overly prescriptive statutes undermines trust – trust being the central tenet of a positive command climate.

What is less obvious is whether or not Congress understands its contributions to defense acquisition shortcomings and the resulting dilution of authority and accountability.

No Perceptible Cultural Change 

The 2017 National Defense Authorization Act told the Pentagon to split the undersecretary of acquisition, technology and logistics into two separate jobs: undersecretary for acquisition and sustainment; and a new undersecretary for research and engineering (R&E). The new offices, particularly the R&E, are intended to increase innovation and “change the culture.”

James O’Bryon, former deputy director of Operational Test and Evaluation, questioned whether this was the best approach, essentially taking us back 40 years ago when the Pentagon had essentially the same setup: “I’m not sure, however, that returning to where we were in 1986 is the total answer.” O’Bryon ponders, “So what are we possibly missing in this process as it grinds away?” I would answer that what is missing is honest self-reflection within Congress on its contribution to sustained cultural influences within the acquisition system.

Our Broader Cultural Strengths 

Congressional testimony and defense reports have noted that government constraints on profit margins have compromised acquisitions because, “culturally, we have evolved to a point where the system would rather pay $1 billion and 5% profit for a defense good, than $500 million and 20% profit” from a more innovative supplier.

Overhauling the Code of Federal Acquisitions Regulations (FAR) is overdue. The FAR seeks to promote an accountable system that protects U.S. taxpayers, but it has become the epitome of a bureaucratic risk-averse culture that undermines innovation, partnerships, accountability, and fiscal responsibility.

Congress expects the services to improve relationships with existing and potential defense industry partners, but corporate and government regulators must translate “up to 186,000 pages with over 2,000 pages” added annually by various federal departments.

As a result, current defense firms have traditionally focused their innovation delivery models simply on meeting what the government wants. But what if what the government wants isn’t what it needs?

According to John Kenkel and Andrew Jesmain, of PA Consulting Group, this creates problems:

First, industry has not been incentivized to create new ideas and must deliver solutions defined by the customer, who often lacks awareness or understanding of the array of solutions industry is capable of providing. The result of this paradox is a laundry list of programs and solutions that have been over budget, delayed or canceled outright. Second, this reality creates a sharp contrast in approaches to research and development that differentiates defense firms from their commercial counterparts.

For the Army, these “failures” have cost tax payers billions and are the most obvious reason why oversight is overly centralized. Since 2011 alone, the Army has ended 20 programs, delayed 125 and restructured 124 others.

Figure 1: Major Army Defense Acquisition Programs Cancelled

While acquisition decision-making must improve, sequestration and the focus on present operational requirements hasn’t encouraged bold decision-making on new program initiation either. Plagued by bureaucracy, budget cuts, and canceled programs, mounting legacy equipment costs, and the lack of a major operational concept for over a decade, the Army just doesn’t know what to ask for.

Until the service explores the art of the possible with Congress, industry, and academia, requirements will “have — far too often — proven too ambitious, too expensive or too inimical to innovation.”

Meanwhile, the Pentagon has used various non-traditional acquisition approaches — Section 804 Middle Tier Programs — to avoid establishing new long-term acquisition programs. However, Congress is concerned with the near-term productivity and value of such programs. Unfortunately, where their scrutiny should lie is on the impacts on basic research and how such programs sustain long-term overmatch capabilities.

Figure 2: A History Of Rapid Fielding In Support Of Near-term Requirements

Losing sight of long-term threats

The good news is Army executives are embracing change. Thomas Russell, deputy assistant secretary for research and technology, says he’s seeking “innovations from industry and other partners wherever possible” to guarantee success of the “most important” acquisition programs. Acting Army Secretary of the Army Ryan McCarthy says that, “the Army must also focus efforts on modernizing today to be ready to fight tomorrow, against increasingly capable adversaries and near-peer competitors”. But any attempt to channel near-term innovation delivery into a disciplined long-term strategy is shortsighted.


At this juncture, when 25 percent of Army acquisition spending is invested in pre-1991 programs and 55 percent in 1991-2001 programs, near-term program changes cannot overcome the lack of a long-term strategy. The “most important” thing the Army can do is to work with Congress to fund a long-term strategy.

Over the last 15 years, the Army has prioritized near-term readiness and equipment needs to combat non-state actors. This has limited its ability to modernize so it can engage in high-end  combat against near-peer challenges.

Meanwhile, the Army is facing increased sustainment costs and reduced funding for concept development and new programs. In turn, major program failures have undermined the Army’s ability to: encourage innovation by major defense partners; solidify a strategic concept; and, formulate consensus on a long-term procurement strategy. If the Army maintains this “demand pull” approach, over an extended period of time, the “likelihood of generating disruptive capabilities” will decline and lend itself to fear-based decision-making in the future.

A Risk-Averse System

In the 2016 NDAA, Congress established the Section 809 Panel whose initial findings include identified influences that Congress must reflect on if real progress is to be achieved.

As an independent panel with credible qualifications, Section 809 Panel has described in their initial report that those operating within the system respond to Congress in ways that Congress fails to recognize or appreciate. Overly complex laws and regulations result in suboptimal risk-averse decision-making. Excessive hearings on non-traditional acquisition pathways have undermined prototyping of new systems; buying commercial off-the-shelf items; and created cultural barriers that undermine technology companies from working with the DoD. And, the “acquisition workforce understands congressional intent thru bureaucratic reviews, budget cuts, hiring freezes, salary freezes, furloughs, continuing resolutions, sequestration, hearings, and statements that it must change.”

While Section 809 Panel has found several other shortcomings and conclusions unrelated to Congress, its final report, due early next year, can highlight that cultural change must start at the top.

Bureaucratic Review Shields Failures From Direct Accountability

Within the acquisition enterprise decision-makers have multiple layers of bureaucracy and accountability. A single Army decision may cross four multi-star organizational boundaries and be subject to 10 flag officer reviews. The requirement is generated by one TRADOC organization, ranked by another, and then transmitted by a third, before senior Army officials review it during three committees.

Why? The obvious answer is a lack of trust and misplaced values imposed at the top of the acquisitions enterprise – authorizations and appropriations.

Overly Prescriptive Laws Undermine Trust

In an effort to highlight how present legal constraints undermine the miltiary’s ability to leverage corporate advantages or to seek disruptive technologies, let us review Section 219 of the 2017 NDAA.

DoD lab directors are permitted to use not less than 2 percent but not more than 4 percent of all funding available to the lab for “off-roadmap”, or disruptive, technologies, according to Section 219, . While the authorities may be helpful, those funds are rarely used because they are only a fraction of those required for bold initiatives without having to seek outside funding — often from PMs — where other priorities and funded near-term concepts trump untested concepts.

Various studies have recommended increasing lab directors’ flexibility and Congress improved a previous 3 percent cap to 4 percent. But we will fall further behind civilian researchers and potential competitors unless we think more creatively.


Congress must clarify the long-term concepts and acquisitions strategies governing DoD weapons buying. Once they are better defined, congressional oversight can then lend itself to overcoming sustainment engineering of existing legacy systems and the risk-averse culture that maintains it.

Additionally, Congress should implement “succeed-fast” and “fail-fast” policies regardless of a system or subsystems Technology Readiness Levels (TRLs). A principle reason why Section 804 innovation initiatives remain relevant is that they are one of the few means available for maturing technologies along such lines. If “fast-fail” policies had been applied to long-term programs the Army might have avoided the numerous failures of major acquisition programs over the last two decades.

Also, Congress should

  • Identify and eliminate internal influences affecting DoD’s risk-aversion culture.
  • Eliminate line item acquisition funding. Retract or cut FAR, eliminate statutes, and reform NDAA development processes.
  • Incentivize corporate and defense decision-making to drive modernization concepts and capabilities development.
  • Increasing lab director authorities to fund disruptive programs.
  • Return acquisition funding to historical norms, and, program for multiple years. Expand limits imposed on acquisition funding authorities across the board.

As we move forward into the twenty-first century, we must put twentieth century bureaucratic practices behind us. In a more complex world trust is the only means of establishing an acquisition and defense strategy capable of avoiding the “we aren’t fearful enough” drumbeat for defense innovation. Like other industries, defense acquisition innovation must recognize that “inspiration flows best when individuals ‘can breathe free,’ thinking creatively without limits of fear.”


Army Col. Richard Hough is a senior strategic study fellow in the Army Future Studies Group. The opinions, conclusions and recommendations are those of the author and do not reflect the views of any entity of the U.S. government.



Corrosive Effects of Continuing Resolution on National Defense


Continuing Resolution


“Uncertain funding has caused the Defense Department to defer unit training, miss routine ship maintenance, delay personnel hiring and fund programs in increments.

In 2017, more service members have died in training than have died in combat. Two recent collisions involving two Arleigh Burke-class destroyers [are]  warning lights that we were asking too much of our folks and of our equipment.”

“As the Defense Department braces for its ninth continuing resolution over the past decade, lawmakers and officials are sounding familiar laments about a process they say damages the military, as the legislative maneuver limits long-term planning and new procurement.

But lawmakers say the military’s ongoing challenges have moved a lethargic Congress to quickly move through a series of appropriations, with a goal of passing a full budget bill by the end of the year — a likely extension of current funding levels notwithstanding.

Rep. Mac Thornberry, R-Texas, said Sept. 6  at the Defense News Conference in Arlington, Virginia that he anticipates Congress will pass a continuing resolution “at least until December”  to fund the government beyond Sept. 30, the end of the fiscal year.

“I cannot hide the fact that I am disheartened by this state of affairs,” said the chairman of the House Armed Services Committee. “I think a CR is a mistake, and I regret very much we are in a position where it seems … the best option.”

Two recent major accidents involving Navy ships, a fighter pilot shortage across the Air Force and an uptick in North Korean missile tests have “awakened the American people … that they don’t want to see this continue,” he said

Grover Norquist, the Pentagon’s comptroller and chief financial officer, did not mince words when describing the “corrosive” effects on the U.S. military after nearly 10 years of dealing with continuing resolutions.

“Under a CR, readiness and operational costs are unrecoverable,” he said at the conference. “The longer a CR lasts, the more damage” it does, he added.

Uncertain funding has caused the Defense Department to defer unit training, miss routine ship maintenance, delay personnel hiring and fund programs in increments, he noted.

“By deferring or scaling back training … units arrive at each subsequent level less prepared and unable to take full advantage of the more sophisticated training environment,” he said.

In 2017, more service members have died in training than have died in combat, Thornberry said. These tragic events reflect the “stresses and strains that have been put on the military because of high operational demands and … a world that is not slowing down,” he said.

Two recent collisions involving two Arleigh Burke-class destroyers — the USS Fitzgerald in June and the USS John McCain in August — have been “warning lights that we were asking too much of our folks and of our equipment,” he said.

House Defense Appropriations Subcommittee Chair Rep. Kay Granger, R-Texas, noted that the Air Force’s current pilot shortage was a consequence of the uncertainty caused by operating under a continuing resolution.

Service leadership, including Secretary Heather Wilson and Chief of Staff Gen. David Goldfein, have frequently noted the challenge of retaining enough fighter pilots. A lack of  training aircraft is part of the problem, they have said.

The Air Force’s forthcoming end-to-end jet trainer program, known as T-X, could be delayed if funding remains at current spending levels into December, Wilson recently said in an interview with Defense News and Air Force Times. Service efforts to recruit cybersecurity personnel could also be affected, she said.

The F-35 joint strike fighter program should remain on schedule even with a continuing resolution through December, but could face issues if the mechanism remains in place through next spring, said Vice Adm. Mathias Winter, F-35 program executive officer.

“Based upon the current plan, we should see no major impact until the April timeframe,” Winter told reporters at the conference. The program office should know by January if an extended continuing resolution is likely, he noted. If so, it could slow down upcoming tests and development as the joint program office prepares for a follow-on software modernization program to begin in 2019, he said. The office can also submit an anomaly request to boost funding, above the fall 2017 allocation levels, he added.

Despite the budget limitations under a continuing resolution, there are opportunities to include extra spending for personnel, maintenance, training and missile defense as North Korea races to develop its nuclear missile program, Thornberry said.

“If you’re going to have this dreaded thing, how can you make it less bad?” he said. “Look at the events of the world. … We need more money in interceptors; we need more money in research.”

The Defense Department and lawmakers are making efforts to minimize the damage of a continuing resolution.

The Pentagon will soon begin an agency-wide financial statement audit, which provides “an opportunity for sustained reform,” Norquist said. The Defense Department is the only major federal agency not to have received a full-scope audit since Congress passed the Chief Financial Officers Act of 1990, he noted.

“What we learn from the audit process will allow us to make better decisions across the department and help us make better use of taxpayer’s money,” he said.

The House-passed version of the FY 2018 defense spending bill includes a $28.6 billion fund that could be used at the discretion of the secretary. Proposed by Granger, the National Defense Restoration Fund could be used to increase end strength, improve military readiness, modernize equipment and invest in future technology, she said June 29 in her opening statement for the House Appropriations Committee’s markup of the bill.

And lawmakers are moving quickly through appropriations hearings to work toward funding a full spending bill by the end of the year, Granger said at the conference.

“There’s just a different attitude right now of getting things done,” she said. “We have some things to prove to people.”

Thornberry said he sees hope for a path toward increased defense spending, “unfortunately some of that better path may have to wait until later in the year.”

Norquist said he was optimistic that “stable, robust funding is achievable.”

“I believe the stakes are high, the parameters are clear and our legislators — like the rest of us — have lived under the sword of sequestration for too long,” he said.”


Military Kills Recruiting Contracts for Hundreds of Immigrant Recruits


Thirty-seven service members from 22 different countries take the Oath of Allegiance during a naturalization ceremony held at Bagram Air Field, Afghanistan on July 4, 2013. (Army/Sgt. Anita VanderMolen)  


“Many of these enlistees have waited years to join a troubled recruitment program designed to attract highly skilled immigrants into the service in exchange for fast-track citizenship.

U.S. Army recruiters have abruptly canceled enlistment contracts for hundreds of foreign-born military recruits since last week, upending their lives and potentially exposing many to deportation, according to several affected recruits and former military officials familiar with their situation.

Now recruits and experts say that recruiters are shedding their contracts to free themselves from an onerous enlistment process, which includes extensive background investigations, to focus on individuals who can more quickly enlist and thus satisfy strict recruitment targets.

Margaret Stock, a retired Army officer who led creation of the immigration recruitment program, told The Washington Post that she has received dozens of frantic messages from recruits this week, with many more reporting similar action in Facebook groups. She said hundreds could be affected.

“It’s a dumpster fire ruining people’s lives. The magnitude of incompetence is beyond belief,” she said. “We have a war going on. We need these people.”

The nationwide disruption comes at a time when President Trump navigates a political minefield, working with Democrats on the fate of “dreamers” — undocumented immigrants brought to the country as children — while continuing to stoke his anti-immigrant base. It was not immediately clear whether Pentagon officials have taken hard-line immigration stances from the White House as a signal to ramp down support for its foreign-born recruitment program.

Stock said a recruiter told her there was pressure from the recruiting command to release foreign-born recruits, with one directive suggesting they had until Sept. 14 to cut them loose without counting against their recruiting targets, an accounting quirk known as “loss forgiveness.”

The recruiter told Stock that the Army Reserve is struggling to meet its numbers before the fiscal year closes Sept. 30 and that canceling on resource-intensive recruits is attractive to some recruiters, she said.

On Friday, the Pentagon denied ordering a mass cancellation of immigrant recruit contracts and said there were no incentives to do so. Officials said that recent directives to recruiters were meant to reiterate that immigrant recruits must be separated within two years of enlistment unless they “opt in” for an additional year.

But some recruits among half a dozen interviewed for this article said they were not approaching that two-year limit when their contracts were canceled, sowing confusion about the reason they were cut loose. The Pentagon declined to address whether messages to recruiters contained language that could have been misinterpreted.

Lola Mamadzhanova, who immigrated to the United States from Kyrgyzstan in 2009, said she heard that Army recruiters in Evanston, Ill., texted immigrant recruits last week asking whether they still wanted to enlist, with an unusual condition: They had 10 minutes to respond. She never received the text message.

“The recruiters did some dirty trick just to get me out so I won’t be trouble anymore,” Mamadzhanova, 27, told The Post on Thursday. Her active-duty contract was canceled Sept. 7, according to a separation document obtained by The Post that said she “declined to enlist.” She later learned the recruiters used a wrong number to text her.

The senior recruiter at Mamadzhanova’s station contacted by The Post declined to comment and called Mamadzhanova seven minutes afterward to reverse previous guidance, saying her unlawful immigration status was the reason she was released. She enlisted in December 2015, which puts her three months outside the two-year limit.

Mamadzhanova was assured by other recruiters that her status would not be an issue and that she would ship for training soon after her immigration status slipped, around her enlistment date. Mamadzhanova, who is fluent in Russian, said the shifting and unclear rules have blindsided her.

“Joining the Army was a dream of mine since America has treated me so well,” she said. She applied for asylum in April, joining other recruits who have sought asylum or fled.

Some anti-immigration sentiment has swirled in the Pentagon for years, former staffers have said, with personnel and security officials from the Obama administration larding the immigrant recruiting process with additional security checks for visa holders already vetted by the Departments of State and Homeland Security.

“Immigrant recruits are already screened far more than any other recruits we have,” Naomi Verdugo, a former senior recruiting official for the Army at the Pentagon, told The Post.

“It seems like overkill, but there seems to be a sense that no matter what background check you do, it’s never enough,” she said. Verdugo, along with Stock, helped implement the recruitment program.

One Indian immigrant, a Harvard graduate and early recruit who is now a Special Forces soldier, was called back to undertake the updated security checks, she said.

“Even though you’re in the Army, even though you’re naturalized, these policies say ‘we’re not going to treat you like any other soldier,’” Verdugo said of the concerns over immigrants held by some at the Pentagon.

Internal Pentagon documents obtained by The Post have said the immigrant recruitment program, formally known as the Military Accessions Vital to National Interest (MAVNI) program, was suspended last fall after the clearance process was paralyzed and officials voiced concern over foreign infiltrators, though it remains unclear whether any threats have ever materialized.

Experts say the relatively small number of recruits in the MAVNI program possess skills with outsize value, such as foreign languages highly sought by Special Operations Command. The program has rotated 10,400 troops into the military, mostly the Army, since its inception in 2009.

Although the military says it benefits from these recruits, they can generate a disproportionate amount of work for recruiters who must navigate regulations and shifting policies. The layered security checks can add months or years to the enlistment process, frustrating recruiters who must meet strictly enforced goals by quickly processing recruits.

In a summer memo, the Pentagon listed 2,400 foreign recruits with signed contracts who are drilling in reserve units but have not been naturalized and have not gone to basic training. About 1,600 others are waiting to clear background checks before active duty service, the Pentagon said.

The document acknowledges 1,000 of those troops waited so long that they are no longer in legal status and could be exposed to deportation. That number probably has climbed since the memo was drafted in May or June. Lawmakers have asked Trump and Defense Secretary Jim Mattis to intervene on behalf of those recruits.

Sens. Kamala D. Harris (D-Calif.) and Richard J. Durbin (D-Ill.) filed an amendment in the defense authorization bill Tuesday to retain MAVNI recruits until their lengthy background investigations are finished.

“These brave men & women enlisted & the Administration turns its back on them,” Harris tweeted Friday. “We must pass Sen. Durbin’s & my bill to protect these recruits.”

During July 19 testimony in a lawsuit filed by recruits who said the federal government unlawfully delayed their naturalizations, Justice Department attorney Colin Kisor assured a district court in Washington that recruits would see their contracts canceled only if “derogatory” information was found in extensive background investigations.

Mamadzhanova and others said their screenings, which take months to complete, have begun recently and could not have returned results.

Meanwhile, confusion reigned for recruits in multiple states.

At one office in Illinois, a senior recruiter restored a contract less than two hours after The Post inquired about a case. In Texas, a recruiter did the same 12 minutes after a call seeking to confirm whether a recruit’s contract was canceled.

An immigrant recruit who came to the United States in 2006 and enlisted in Virginia said her contract was canceled Tuesday after she had waited for two years, just as her legal immigration status expired. She asked to opt-in for another year, but her contract was dissolved days later, she said.

Recruiters had assured her, saying her contract was a shield from federal immigration authorities, she said. She spoke on the condition of anonymity for fear of retribution.

She now fears deportation to her native Indonesia, which strips native-born people of citizenship if they enlist in a foreign military or pledge loyalty to another country, as she has done.

“I feel devastated,” she said. “The Army was my only hope.”

New Federal Fiscal Year – Have You Managed Contract Funding Risk?


Fiscal Year End


“As the federal fiscal year draws to a close and the new year opens this month, an astute contractor will have examined the funding status of all government contracts for risk.

Limitation of funds and funding exposure must be a vital topic for every government contractor.


Many federal contracts are funded incrementally, usually based on the government fiscal year that runs from 1 October to 30 September. Although the government may negotiate dollar price ceilings for cost plus and time and materials contracts or firm, fixed total price arrangements, the contracts themselves may be incrementally funded, particularly if they extend over two government fiscal years. A contract may contain negotiated prices or a cost ceiling but also specify an incremental funding value.

The contractor is required to inform the government when actual costs incurred plus obligations to suppliers or payroll on a specific contract reach certain thresholds of the current incremental funding specified in the contract (usually 80%). The government is then obligated to further fund the contract.

In the event the contract is not funded further, the contractor has the right to stop work before he exceeds the incremental funding. Some contractors choose to operate on “risk,” continuing to perform on a contract while exceeding the incremental funding in booked cost and obligations.

The government is under no obligation to reimburse the contractor for invoiced amounts exceeding incremental funding. Nearing the end of a government fiscal year, a contractor may find delays in funding reaching all the way to congress. This situation must be managed with the government contracting officer. Limitation of Funds and Funding Exposure


In the current political climate with Sequestration still in vogue and new fiscal year appropriations being incrementally approved by Congress, contractors may receive stop work orders from agencies unless their contracts were fully funded in the previous fiscal year.   Even then, the government reserves the right to de-obligate funding on contracts, which can effectively bring them to a halt.

Stop work orders are serious matters and require special handling to comply with government direction and manage the associated financial risk.

Upon receipt of a stop work order you have no guarantee of payment for any transaction date-stamped in your accounting system after the date of the stop work order (or the commencement date of a stop work order specified in a Contracting Officer’s Letter).

Applicable charge numbers in the accounting system must be closed until the stop work order is lifted and any effected suppliers and subcontractors must be notified to do the same.

To the degree the government has made progress payments or has any other form of payment invested in a physical product to date it has ownership rights. If that is the case, treat the physical material work-in-process as government owned, store it as such without performing any more effort on it and await further disposition.

To the degree the government has not paid anything on the contract or delivery order they have no ownership rights to the physical product and you are free to complete it and sell it to another customer (commercial or government that has not stopped work). If the government recommences the order, quote a new price and delivery from ground zero.

At the bottom line a stop work is blunt and to the point.  Treat it as if you will never hear from this customer again to manage the risk.

To the degree you do hear from the Contracting Officer again and he or she has the funding to recommence work, be prepared to submit a proposal for what it will take to start the effort and a realistic delivery schedule to complete it, but do not build any retroactive costs incurred during the stop work period into your logic and expect to bill them; they may not come to payment fruition.

Continuing effort on a contract after receipt of a stop work is high risk. Astutely managing your options is a far better approach.   What is a Government Contract Stop Work Order?


Having a limitation of funds and funding exposure process in the company should be a standard part of doing business.  A, shrinking, remaining funding level condition on incrementally funded contracts should trigger a risk analysis and government notification process throughout the year.  The federal fiscal year-end brings an additional element of risk to the process with the annual budgeting, approval and appropriations process required by law. ”


How the Vietnam War Broke the American Presidency

Vietnam Broke the Presidency

WG600; Photos: Associated Press; Bettman Archive; Corbis; Fred W. McDarrah; Getty; Horst Faas; Kevin Schafer; Michael Ochs; PhotoQuest


The war undermined the country’s faith in its most respected institutions, particularly the military and the presidency. The military eventually recovered. The presidency never has.

[It] opened the credibility gap. What we’ve learned since has only widened it.”

“On April 30, 1975, when the last helicopter lifted off the roof of the U.S. Embassy in Saigon, the Vietnam War, the most consequential event in American history since World War II, ended in failure. More than 58,000 Americans and as many as 3 million Vietnamese had died in the conflict. America’s illusions of invincibility had been shattered, its moral confidence shaken.

It did not happen all at once, this radical diminution of trust. Over more than a decade, the accumulated weight of critical reporting about the war, the publication of the Pentagon Papers in 1971, and the declassification of military and intelligence reports tarnished the office. Nor did the process stop when that last chopper took off. New evidence of hypocrisy has continued to appear, an acidic drip, drip, drip on the image of the presidency. The three men who are most responsible for the war, John F. Kennedy, Lyndon B. Johnson, and Richard Nixon, each made the fateful decision to record their deliberations about it. The tapes they left behind—some of them still newly public, others long obscured by the sheer volume of the material—are extraordinary. They expose the presidents’ secret motives and fears, at once humanizing the men and deepening the disillusionment with the office they held.

For most of American history, that office conveyed authority, dignity, and some measure of majesty upon its occupant. The great presidents—Washington, Jefferson, Lincoln, the Roosevelts—came to be viewed not merely as capable executives but as figures of myth: They were heroic, selfless, noble, godlike. Time has a way of burnishing reputations. But as late as the middle of the last century, Americans were inclined to view even incumbent presidents with reverence. Faith in the presidency may have reached its apogee soon after the Second World War. The public generally trusted Harry Truman and Dwight Eisenhower to be honest and well intentioned and to put the interests of the nation above their own.

It is no coincidence that the last president to inspire such trust was also the last president elected before the Vietnam War began in earnest. Kennedy’s charisma, and his military bona fides, encouraged Americans to believe in their young president as he confronted a complicated and dangerous world. His promise, in his inaugural address, that the United States would “pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, to assure the survival and the success of liberty” reinforced Americans’ vision of their country as a muscular force for good around the globe.

As president, Kennedy immediately faced the challenge of how to use that power. He refused to send American troops to secure a pro-Western government in Laos. But after the Bay of Pigs fiasco, and having been bullied by Soviet Premier Nikita Khrushchev at a summit in Vienna, he made a different calculation when it came to the continuing crisis in Vietnam, one influenced by domestic political concerns. Kennedy confided to an aide: “There are just so many concessions that one can make to the Communists in one year and survive politically.” With the Vietcong gathering strength in South Vietnam, he felt he had to act.
If not for his untimely death, Kennedy’s legacy might have been sullied while he was in office. Instead, not until the Pentagon Papers were published did Americans discover that he and his administration had harbored misgivings about the political and military progress in Vietnam but never shared their reservations with the public, even as they steadily increased America’s commitment of special forces and military “advisers.”In August 1963, disturbed by the authoritarian South Vietnamese President Ngô Đình Diêm’s failure to win over the populace or thwart the Communist insurgency, Kennedy approved a plan to encourage a cabal of dissident generals to overthrow Diêm’s regime. In November, rebel troops seized key installations in Saigon and promised Diêm and his ruthless brother Ngô Đình Nhu safe passage out of the country. As soon as the brothers surrendered, they were murdered by rebel leaders. South Vietnam plunged into chaos, and a bad situation got worse.On November 4, 1963, shortly after the coup, Kennedy recorded his thoughts about what he had allowed to happen. The Kennedy who speaks on this rarely heard tape is not the bold young man of the inaugural address, but a president consumed by doubt, even remorse. He rues having made such a crucial decision without adequate consideration.

Over the weekend the coup in Saigon took place. It culminated three months of conversation … which divided the government here and in Saigon … I feel that we must bear a good deal of responsibility for it, beginning with our cable of … August in which we suggested the coup … I should not have given my consent to it without a roundtable conference … I was shocked by the death of Diêm and Nhu … The question now is whether the generals can stay together and build a stable government or whether … public opinion in Saigon … will turn on this government as repressive and undemocratic in the not-too-distant future.

Kennedy did not live to learn the answer to his question. He was murdered in Dallas 18 days later.

Lyndon Johnson inherited both the presidency and the rapidly deteriorating situation in Vietnam. As vice president, he had opposed the Diêm coup, and he now dreaded being drawn more deeply into the conflict. He hoped the South Vietnamese would “get off their butts and get out in those jungles and whip hell out of some Communists,” he told an aide. “And then I want ’em to leave me alone, because I’ve got some bigger things to do right here at home.” Yet, like Kennedy, he allowed political calculations to affect his approach to the war.

It was not until the 1990s that most of the Johnson recordings began to be processed, digitized, and made accessible to the public—they are still not fully transcribed, and some remain classified. But the 700 mesmerizing hours of tape that are available cast new light on the inner workings of his presidency. In public, Johnson confidently reassured the country that the war in Vietnam was going well. Privately, his frustrations and misgivings were on excruciating display. In May 1964, less than six months before the presidential election, Johnson confessed to National-Security Adviser McGeorge Bundy that he did not know what to do.

johnson: I just stayed awake last night thinking about this thing—the more I think of it, I don’t know what in the hell … It looks like to me we’re getting into another Korea. It just worries the hell out of me. I don’t see what we can ever hope to get out of there with once we’re committed … I don’t think it’s worth fighting for and I don’t think we can get out. And it’s just the biggest damn mess I ever saw.

bundy: It is, it’s an awful mess …

johnson: I just thought about ordering those kids in there, and what in the hell am I ordering [them] out there for?

bundy: One thing that has occurred to me—

johnson: What the hell is Vietnam worth to me? … What is it worth to this country? …

bundy: Yup. Yup.

johnson: Now, of course, if you start running the Communists, they may just chase you right into your own kitchen.

bundy: Yup. That’s the trouble. And that is what the rest of that half of the world is going to think if this thing comes apart on us …

johnson: It’s damned easy to get in a war, but it’s going to be awfully hard to ever extricate yourself if you get in.

Johnson’s doubts about whether the war was winnable or worth fighting persisted throughout his presidency. But he could not countenance being seen as the first commander in chief to lose a war. In 1965, Defense Secretary Robert McNamara told the president that even if he committed more men, the chances of victory were no better than one in three. Johnson still decided to escalate.

As American casualties mounted and news filtered back home that the war was not going nearly as well as the White House had been claiming, the public’s faith in Johnson began to wane. Politicians and journalists described a “credibility gap”—the space between the president’s assertions and the facts on the ground. Skepticism eventually gave way to disillusionment with the presidency itself.Richard Nixon’s presidency carried that process of disillusionment much further. Nixon’s fondness for audio recordings is notorious. We rightly remember that it was transcripts revealing the president’s crude, cutthroat willingness to conceal his crimes that shocked the nation and forced him from office. But we often forget that the war and the Watergate scandal were inextricably intertwined. Before the White House Plumbers botched the break-in at the headquarters of the Democratic National Committee, they attempted to discredit Daniel Ellsberg, who had leaked the Pentagon Papers, by stealing files from his psychiatrist’s office.

When audio of the Nixon tapes eventually became public in 1980—2,658 of the 3,400 hours are now accessible—Americans could hear for themselves just how cynically the president had approached the war. On tape, he is frequently ruthless, amoral, and self-interested. Nixon had promised peace with honor, but as he weighed the consequences of American withdrawal, chief among his concerns was the potential effect on his reelection in 1972 if Saigon fell to the North Vietnamese. Nixon and his national-security adviser, Henry Kissinger, returned to this worry again and again, including on May 29, 1971, in a conversation not released to the public until 1999:

kissinger: The only problem is to prevent the collapse in ’72 … If it’s got to go to the Communists, it’d be better to have it happen in the first six months of the new term than have it go on and on and on.

nixon: Sure.

kissinger: I’m being very cold-blooded about it.

nixon: I know exactly what we’re up to …

kissinger: But on the other hand, if Cambodia, Laos, and Vietnam go down the drain in September ’72, then they’ll say you went into these … You spoiled so many lives, just to wind up where you could’ve been in the first year.

nixon: Yeah.

The revelations of the Nixon tapes destroyed his presidency and further eroded American faith in the office itself. The presidents of the post-Vietnam era have never managed to fully restore that faith, and lately, it seems, confidence in the chief executive is at a new low, even if tape recorders are no longer running in the Oval Office.

But we needn’t succumb to the cynicism often on display in the Vietnam recordings. The war may have robbed America of its innocence, but it also reminded us that the duty of citizens in a democracy is to be skeptical—not to worship our leaders, who have always been fallible, but to question their decisions, challenge their policies, and hold them accountable for their failures.”


Leadership at the Root of Wasteful Pentagon Programs


"The boss spent years in business and government. His door isn't just open, it's revolving!"


“Raytheon elected retired Marine General James Cartwright to its board six months after he retired and a mere two years after he came to the rescue of the Raytheon-built JLENS, the failed $2.7 billion balloon-based radar system.

Northrop Grumman elected former Air Force Chief of Staff Mark Welsh to its board six months after he had retired and only a little more than a year after the Air Force selected Northrop Grumman for the B-21 bomber $55 billion contract.”

US Air Force Chief of Staff Gen. Mark A. Welsh retires

Former US Air Force Chief of Staff Gen. Mark A. Welsh (right) shakes hands with his son during his retirement ceremony at Joint Base Andrews, MD, June 24, 2016. Northrop Grumman elected Welsh to its board six months later. (Photo: Tech. Sgt. Joshua L. DeMotts / US Air Force)

News about the F-35 nearly always focuses on technical issues: what is working or not at that particular time. Constant reporting along those lines sets the narrative that at the most fundamental level, the F-35 program’s faults are the result of deeply flawed technologies. Longtime readers know the Project On Government Oversight and its Center for Defense Information is as guilty of this as anyone. But that reporting leaves out the real fundamental issue: a leadership problem closely tied to the infamous “revolving door” between the military’s senior ranks and defense contractor boardrooms.

The Revolving Door

Why do senior Pentagon leaders demonstrate such poor leadership? The culture of the senior ranks certainly plays a big part. National security journalist Thomas Ricks wrote about this in his book, The Generals. He described how most senior officers today aspire to be viewed as “good guys.” Andrew Bacevich, a retired Army colonel and historian, described the type this way:

“The good guy projects the right attitude, strikes the right pose, and recites all the right clichés. Good guys are team players. They don’t rock the boat. They get ahead by going along. In practical terms, demonstrated adherence to orthodoxy becomes the premier qualification for admission. Heretics need not apply.”

Perhaps the fastest way for an officer to be ostracized from this exclusive fraternity is to do anything to interrupt the smooth transfer of taxpayer dollars from the Treasury through the Pentagon into the coffers of a defense contractor—say by raising questions about the need for or the efficacy of a Service’s new pet weapons program. An officer doing so would doubtlessly offend his team-playing superiors within the Service, risking promotions and desirable assignments. An officer who did so would also find few defense contractors willing to offer lucrative sinecures upon his or her retirement. Air Force Colonel Jim Burton, of Pentagon Wars fame, is the most famous example of what happens to an officer who violates the code of silence.

Because of course it is only a coincidence that Raytheon elected retired Marine General James Cartwright to its board six months after he retired and a mere two years after he came to the rescue of the Raytheon-built JLENS, the failed $2.7 billion balloon-based radar system that famously went for an off-the-leash joyride over Pennsylvania in October 2015. This program consumed 17 years’ worth of time, effort, and money with little to show for it other than the amusing headlines. The Army deactivated the unit in June 2017.

And clearly it’s also coincidence that Northrop Grumman elected former Air Force Chief of Staff Mark Welsh to its board six months after he had retired and only a little more than a year after the Air Force selected Northrop Grumman for the B-21 bomber $55 billion contract.

These are only two of the most recent and well-known examples of the Military-Industrial-Congressional Complex’s “revolving door.” This is where retired generals and admirals take highly paid positions in the defense industry. Their status as retired flag officers lends credibility and access to the companies.

As POGO reported in 2004 in The Politics of Contracting:

“The revolving door is a story of money, information, influence, and access—access that ensures that phone calls get through to policymakers and meetings get scheduled. The American taxpayer is left with a system that sometimes compromises the way the government buys goods and services from its contractors.”

Senior officers used to consider behavior like this to be deeply shameful. Following World War II, the most senior Army generals—George Marshall, Dwight Eisenhower, Douglas MacArthur, Hap Arnold, and Omar Bradley—all turned down many lucrative offers in the defense industry. Upon retiring after serving as Secretary of State and Defense, Marshall led the Red Cross. Eisenhower became President of the United States, but before that led Columbia University. Arnold created a think tank and wrote his memoirs. Bradley served on the board of the Bulova Watch Company. Even the imperious MacArthur went to work for a typewriter manufacturer.

Alas, those days are long gone.

The F-35 Case Study

 Eglin Air Force Base firefighters move toward a 33rd Fighter Wing F-35 Lightning II during a major accident response.

(Photo: Samuel King Jr. / US Air Force)

The F-35 was conceived to be a multi-mission aircraft that would meet the very different requirements of three separate services. Add to that the needs of eight partner countriesand various foreign military sales customers, and no one should be surprised by the results. In attempting to be all things to all people, the F-35 can’t perform any single missionparticularly well, and the entire thing ends up costing a fortune.

The problems with creating a one-size-fits-all aircraft should have been well known to the decision-makers at the time. The Pentagon tried to do the same thing in the 1960s with the F-111 program, when then-Defense Secretary Robert S. McNamara converted the Air Force’s single mission F-111 nuclear bomber project into a multi-mission, multi-Service aircraft for the Air Force and Navy (note that McNamara never conceived the F-111, just as SecDef Les Aspin didn’t conceive the F-35 in 1993—he simply approved turning it into a multi-Service plane). The results pleased no one and the Navy dropped out of the program entirely before it went into production. The Air Force cut short the number of F-111s it bought and quickly initiated a single mission air-to-air fighter that became the F-15 program.

The technical shortcomings of the F-111 were secondary to the main shortcoming of the program: the leadership’s decision to build a one-size-fits-all aircraft. When they came up with the idea, at least those in charge then might not have known better because they did not have a glaring historical failure staring them down as they made their decision; the DoD political appointees and the general officers in charge of acquisition at the inception of the F-35 have no such cover. They had the clear example of the F-111 that most of them had lived through (specifically, Les Aspin and all the generals and admirals), but they chose to push ahead with an acquisition concept they should have known was flawed, anyway.

Leadership, or the lack thereof, is the most serious factor in what is perhaps the most pervasive and expensive of all flawed acquisition strategies, concurrency. This is the term for the deliberate overlap of development, testing, and production. The F-35 will likely go down in history as one of the most egregious examples of this form of “acquisition malpractice.” At the current rate, the services will likely have nearly 800 deficiency-laden F-35s in production before the fixes have been completed and fully tested.

Senior leaders knew this was a bad idea.

Concurrency, as a RAND Corporation analyst explained in testimony before the House Committee on Government Reform on May 10, 2000, is rooted “in the politics of the acquisition process.” This practice serves to limit the available political options for restructuring programs experiencing significant test failures or cost overruns. When the Pentagon makes substantial procurement commitments well before development or testing is complete, it severely increases the political costs of cancelling the program due to all the money already invested and all the jobs already created.

What makes this even worse is that these production commitments are made at the point in the process when the programs are most likely to need revision or restructuring due to unanticipated technical problems. During the phase of the development process when prototypes are being tested, “the data almost always is going to contradict the optimism of early assessments.” This means the airplane, tank, ship, or other weapon system may well not be performing up to the level promised when votes were being solicited to get the program off the ground. And it is precisely at this point that Congress and the taxpayer are stymied from exercising the reasonable options of either cancelling the buy or slowing down the program to implement fixes. Instead, they are forced to continue buying the early production units of the airplane or tank or ship, exactly the ones that invariably have the highest price tags. As Air Force cost analyst and whistleblower A. Ernest Fitzgerald often bemoaned, “It’s either too early to tell, or too late to do anything about it.”

Sailors from the USS Gerald R. Ford (CVN 78) prepare to test the ship’s Electromagnetic Aircraft Launch System.

US Navy Sailors from the USS Gerald R. Ford (CVN 78) prepare to launch a “dead-load” from the ship’s Electromagnetic Aircraft Launch System (EMALS). (Photo: Mass Communication Specialist 1st Class Joshua J. Wahl / US Navy)

Another example of this is the USS Ford aircraft carrier. In order to secure significant new funding, the Navy promised the new design would outperform existing carriers and save money in the long-term. Both claims remain dubious. The Service scrapped the long-proven technology of steam-powered catapults and hydraulic arresting gear and replaced them with the brand new and wholly untested EMALS and “water twister” arresting-gear technology. Those two systems, in turn, required an all-new ship design to support their radically different space and electrical requirements. Because of the massive electrical charge and the reduced steam supply the EMALS requires, the Ford-class ships needed a newly designed nuclear reactor, new turbine generators, and a new electrical distribution system. And the water twister arresting gear required the entire aft end of the carrier to be reconfigured. In the event of failure, neither the EMALS nor the water twister can be replaced by their steam or hydraulic predecessors without tearing the entire carrier apart. But the Navy committed to all of that while EMALS and the water twister were still only engineering sketches. The Service took an enormous gamble by building a $13 billion ship around technology that had never been demonstrated.

That is an incredibly and unnecessarily risky acquisition strategy. There is the question about whether the advertised performance improvement of 25 percent improved sortie rate, which would be marginal at best (it is still an aircraft carrier), is worth the investment. The last Nimitz-class aircraft carrier cost $6.9 billion. The Navy claims it will save $5 billion over the lifetime of the Ford due to manpower savings that may never be realized. So the American people are paying upfront an extra $6 billion before overruns to save an unproven $5 billion over 50 years.

That is not a technology problem. That is a leadership problem. No admiral and no senior civilian in the acquisition chain of command stood up to put a stop to such a risky scheme or to even raise an objection to the kind of arithmetic that only makes sense to a defense contractor looking for business.

Possible Solutions

A four-star general who retires after 30 years receives a pension of more than $250,000 a year (sometimes earning more than while they were on active duty). They also receive generous health care benefits through TRICARE, and base privileges that allow them to shop tax-free in the commissaries and base exchanges. These are benefits retired admirals and generals earn for the years of sacrifice and service on behalf of the American people. Doubtless few citizens would seriously take issue with the government rewarding honorable service in such a manner.

However, this does become an issue when retired flag officers cash in on their service by taking highly paid positions with firms attempting to do business with the Pentagon. The problem is not just what they do after they retire. It is obviously disappointing to see someone betray the public trust for their own personal or financial gain. But, the real problem is what they had to do, or not do, while still in uniform to increase their chances of being offered the lucrative post-retirement positions. Again, how likely would a defense contractor be to hire someone who criticized or cancelled a big acquisition program?

The most drastic solution to discourage that kind of behavior in future generations of military leaders would be to strip retired generals and admirals of their rank and/or retirement benefits if they make the choice to travel through the revolving door and accept positions with defense contractors. The idea behind this is not to punish anyone (which it wouldn’t anyway—a board membership at Northrop Grumman, for example, is worth an average of $260,621 per year in 2016). This is about combating the possibility of senior officers compromising their integrity while in uniform to position themselves for a big payout after taking off the uniform.

This idea may seem a bit extreme on the surface. But it is less so than others put forward recently. Then President-elect Trump floated a proposal shortly after the election to permanently bar military procurement officials from ever working for defense contractors. So far that proposal has not received much traction, but something must be done to curb the soft corruption of the revolving door.

Military pensions and retirement benefits are rewards for honorable service. Officers dishonor that service by selling their influence to firms doing business with the Pentagon. Stripping those benefits sends the message in a very tangible way that such behavior is dishonorable. At the very least, this proposal would prevent the American people from subsidizing such behavior.

A less extreme solution would be to suspend rank and retirement benefits during the period of employment with a defense contractor. A precedent does exist for suspending a service member’s pension because of post-retirement work. A retired Marine Major, Stephen Hartnett, went to work for Basil, Inc. in May 1985 to teach “Marine Corps Seamanship Instruction” for the Saudi Naval Forces in Jeddah, Saudi Arabia. When investigators looked into the case, they found Mr. Hartnett was really working directly for the Saudi government without the consent of Congress, a violation of the emoluments clause in Article I of the U.S. Constitution. He had his retirement pay suspended while employed by the Saudi government. This could serve as a model to combat the revolving door problem domestically.

Either of these solutions would significantly (perhaps completely?) remove the current incentives baked into the revolving door system.

The goal is to reattach the stigma once attached to those who use their rank and position for personal gain. At best, it may remind officers that their first obligation is to the young men and women they are supposed to lead into battle, the same young people who are the very first to be hurt in combat by any bad decisions made in the pursuit of a corner office, say at Raytheon, Boeing, Northrop Grumman, or Lockheed Martin.”


Slave Labor Widespread at Immigration and Customs Enforcement Detention Centers


ICE Slave Labor

As Huge Corporations Benefit


“As POGO previously reported, the majority of America’s detention centers are run by a handful of companies that are largely secretive about what goes on in these taxpayer-funded facilities. What’s no secret is how much money these companies earn.

CoreCivic and GEO Group are two of the largest private detention contractors in the country. In 2016, CoreCivic reported over $1.8 billion in revenue, while GEO Group reported over $2.1 billion, according to the companies’ official filings with the Securities and Exchange Commission.”

“There are nearly 200 federal detention centers across the country. Here, people suspected of violating U.S. immigration laws wait for court hearings to find out if they’ll stay in the United States or be deported. While they wait, many detainees work as part of the Immigration and Customs Enforcement (ICE) “voluntary work program.” They clean, they cook, they do laundry, and they garden—some advocates say they keep the facilities running.

For their labor, the detainees are supposed to be paid at least $1 per day, or just under $0.13 per hour for an 8-hour work day. This arrangement has the blessings of both ICE and Congress, the latter of which set the rate over a half a century ago and hasn’t changed it since.

However, a growing body of legal experts says paying detainees $1 per day not only violates state minimum wage laws, but also violates the 13th Amendment of the Constitution, which abolished slavery and involuntary servitude in all instances except as punishment for people convicted of crimes. Experts argue that, because the majority of detainees have not been convicted of crimes, they should be fairly compensated for their labor.

From California to Colorado to Massachusetts, detainees have recently taken legal action against the for-profit companies and local governments that operate the majority of ICE detention centers. The detainees argue they should be paid minimum wage—some allege that they weren’t even paid the minimum $1 per day. They also allege that the voluntary work program is sometimes not voluntary at all, and that they face violent retaliation from guards if they refuse to work.

Many of these lawsuits will play out as the Administration ramps up its enforcement of immigration laws, including the possible end of the Deferred Action for Childhood Arrivals (DACA) program—which protects 800,000 undocumented immigrants from deportation—indicating that the number of people held in detention centers will likely increase in the coming years.

Meanwhile, the companies in question have crafted a lucrative business model in which the U.S. government pays them billions of dollars to operate federal detention centers. While the companies promise to bring jobs and other economic benefits to the communities where they set up shop, many experts say these promises are overblown because the companies rely on low-paid detainee labor instead.

Blurring the Line Between Detention Centers and Prisons

The detainee voluntary work program was created decades before ICE itself was created in 2003. In 1950, Congress passed a law to make money available for the U.S. government to pay non-citizens for work they performed while in detention. While the law did not specify the wage, Congress appropriated funds to pay detainees $1 per day, which had the same buying power that about $10 per day has today.

While Immigration and Naturalization Service, a now defunct federal agency that was a precursor to ICE, requested that Congress increase the rate to $4 per day in 1982—again, equivalent to about $10 today—Congress did not do so, and the rate has remained “at least $1 per day.” As recently as December 2016, ICE listed the rate in its voluntary work program manual.

Anita Sinha, director of the International Human Rights Law Clinic at the American University Washington College of Law, told the Project On Government Oversight (POGO) that participation in the voluntary work program is often not a voluntary matter for detainees, which, coupled with the low pay, raises questions as to the program’s constitutionality.

“Involuntarily labor is only permissible if it’s due to a punishment of a crime,” she said, referring to the 13th Amendment, which abolished slavery in most instances, but includes a carve-out for anyone convicted of a crime. “Immigration detention is not meant to be punishment for a crime. It’s a civil issue.”

However, all of the experts POGO spoke to said that the ICE detention centers look a lot like prisons, and detainees are often treated like prisoners. While a 2016 report by the Homeland Security Advisory Council notes that “ICE has been clearly on record as favoring a civil detention model, rather than a model designed for the criminal-justice process, because ICE detention is not based on a criminal charge or on punishment,” the report also states that “The full potential of the civil model has not been realized.”

Sinha explained that one reason for this is the companies that run the majority of ICE detention centers are also major players in the prison contracting world. A significant percentage of detainees are actually housed in local jails rather than detention centers. And, in some cases, former prisons are converted into detention centers.

“You have the same exact brick and mortar,” she said of the facilities.

Maru Mora Villalpando, co-founder of NWDC Resistance, an advocacy group for detainees at a detention center in Tacoma, Washington, told POGO, “The detention system is just an extension of the prison system.”

The major difference? The prison system, which is largely government-run as opposed to company-run, is far more transparent. And, as POGO previously reported, the federal Bureau of Prisons proactively provides much more information to the public about its facilities and the people it houses than either ICE or its detention center operators do.

According to Villalpando, who described the conditions at detention centers as “inhumane,” the companies who operate detention centers are only interested in making money.

“If there was real oversight, all of these places would be shut down already,” she said.

“You Want to Go to the Hole?”

In the first class-action lawsuit of its kind, nine former detainees from the Aurora Detention Facility outside of Denver are suing detention center operator GEO Group (formerly Wackenhut Securities) on behalf of over 60,000 detainees who have gone through the doors of the detention center.

The lawsuit alleges that GEO Group coerced Aurora detainees into participating in the ICE voluntary work program under threat of being thrown into solitary confinement.

”GEO pays detainees $1 per day, or no wages at all, for their labor,” according to the complaint, which calls this practice a violation of Colorado minimum wage law.

In signed legal declarations, Aurora detainees described how they or other detainees were forced to work—under threat of solitary confinement—cooking, cleaning, and performing other tasks necessary to keep the contractor facility running.

“None of us got paid anything for the work we did on the cleaning crews,” Carlos Eliezer Ortiz Muñoz, who was detained in 2014 and 2015, wrote. “People who refused to clean were put in solitary.…Some of the guards would threaten us by saying: ‘¿Quieres ir al oyo?’ – ‘You want to go to the hole?’”

Another former Aurora detainee, Lourdes Argueta, wrote that she was assigned to clean the detention center’s medical unit. She wrote that her work involved “cleaning up blood, feces and urine” of other detainees.

Several of the detainees wrote that, when they asked GEO Group guards if they could be paid more, they were told the company was not allowed to increase their wage.

A spokesman for GEO Group said the company denies the lawsuit’s allegations and that the standards and pay for the voluntary work program are set by the federal government, not GEO Group.

“Our facilities, including the Aurora, Colo. Facility, are highly rated and provide high-quality services in safe, secure, and humane residential environments pursuant to the Federal Government’s national standards,” he said in a written statement to POGO.

This response echoes arguments the company made in 2014, when it filed a motion to dismiss the Aurora lawsuit. GEO Group noted then that the $1 per day rate was set by Congress decades ago, and that ICE includes it in the contracts it makes with companies like GEO Group.

ICE did not respond to POGO’s requests for comment on either the Aurora lawsuit or the agency’s detention center system in general.

A Systemic Issue

The Aurora lawsuit, while unprecedented in its scale, is only one of a growing number of lawsuits recently filed by detainees.

In 2006, a detainee in Tacoma, Washington, filed a lawsuit alleging that GEO Group failed to pay him all of the wages for work he did as part of the voluntary work program. The detainee alleged that the failure of payment was tantamount to slavery. A judge dismissed the case, saying that the detainee had submitted his complaint of non-payment too late, and that the detainee “was not compelled to work but participated in a voluntary work program.”

In 2015, a detainee in Boston filed a class action lawsuit against the local county sheriff’s department saying that he and other detainees should be paid Massachusetts minimum wage for participating in the voluntary work program. The detainee is one of thousands of ICE detainees who are held in local jails rather than in federal facilities.

And in June, detainees in San Diego filed a class action lawsuit against private detention center operator CoreCivic (formerly Corrections Corporation of America) alleging that they and thousands of other detainees were threatened with punishment—including solitary confinement and physical restraint—if they refused to participate in the voluntary work program. In addition to providing services for fellow detainees, the San Diego detainees say they also performed clerical work for CoreCivic, cleaned the medical staff’s offices, and helped cater meals for law enforcement events hosted by CoreCivic.

Detainees at other facilities have similar complaints about the voluntary work program, although they haven’t taken legal action.

In 2011, detainees at a CoreCivic-operated detention center in Georgia told the ACLU of Georgia that they were threatened with solitary confinement for not participating in the voluntary work program—an assertion that CoreCivic confirmed.

“Three weeks ago, some detainees who worked at the kitchen wanted to stop working. The guards told them that if they stopped working, they would be charged by the disciplinary board. The guards then tried to get them to sign a document,” Josue Cervantes told the ACLU. “The detainees refused to sign the document and shortly thereafter they were transferred from the blue to the orange unit for a couple days as punishment.”

The “orange unit” is another name for a segregation unit—essentially solitary confinement—where the sanitation was so bad some detainees referred to these units as “portable toilets.” CoreCivic told the ACLU that it investigated the incident and confirmed that it occurred. The company said it took action, such as counseling its guards.

And earlier this year, detainees in the Northwest Detention Center in Tacoma, Washington, made news when as many as 750 detainees staged a hunger strike in protest of their $1 per day wages and poor living conditions, The Seattle Times reported in April.

Villalpando of NWDC Resistance told POGO that, despite detainees’ widespread frustration with their wages, detainees often chose to participate in the voluntary work program—in fact, she said there is a waiting list for the program at the 1,575-person Tacoma facility. The reason? Detainees have few activities to fill their days while they wait for their immigration hearings.

According to ICE’s Performance-Based National Detention Standards manual, which was last updated in December 2016, this is one of the reasons the voluntary work program exists.

“The negative impact of confinement shall be reduced through decreased idleness, improved morale and fewer disciplinary incidents,” the manual says of the work program.

Villalpando told POGO that, in the Tacoma facility, detainees are allowed only one hour per day to work on their legal cases in the detention center library. Some detainees passed the time playing dominos—that is, until the detention center outlawed the game, according to Villalpando. And other detainees use discarded food wrappers to create art to decorate their “pods,” or living areas—until detention center guards almost inevitably pull down the artwork to throw it away, she added.

“All of this means people try to find something to do,” she said of the work program. “They [GEO Group] make you feel like you are the one requesting the job.”

The Business of Detention

As POGO previously reported, the majority of America’s detention centers are run by a handful of companies that are largely secretive about what goes on in these taxpayer-funded facilities. What’s no secret is how much money these companies earn.

CoreCivic and GEO Group are two of the largest private detention contractors in the country. In 2016, CoreCivic reported over $1.8 billion in revenue, while GEO Group reported over $2.1 billion, according to the companies’ official filings with the Securities and Exchange Commission.

A significant portion of the companies’ profits come from government contracts. CoreCivic was awarded nearly $1 billion in government contracts in 2015, while GEO Group was awarded $1.3 billion the same year.

And profits for these companies are up from 2015, which financial analysts attribute to President Trump’s campaign promise to be tough on people who violate immigration laws. 2017 may be an even better year for detention center companies, given that ICE agency awarded GEO Group a $110 million contract for a new detention facility outside of Houston in April.

Both GEO Group and CoreCivic told investors in early August that, despite the fact Customs and Border Protection apprehended fewer people than usual illegally crossing the U.S.-Mexico border at the beginning of 2017, the Administration’s proposed immigration policies will be good for business.

According to GEO Group CEO George C. Zoley, the company expects to win a contract by the end of the year to manage a 700-bed ICE facility in Florence, Arizona.

And CoreCivic CEO Damon Hininger told investors on a call that the Administration’s plan to increase immigration enforcement in the interior of the country means more opportunities for the company.

“…it is clear to us based on kind of mostly some of the numbers we are seeing, but also the feedback we are getting from our Federal partners that they are making us big investors,” Hininger said.

However, despite the sizeable government contracts these companies win, sources who spoke to POGO said GEO Group and CoreCivic wouldn’t be nearly as profitable—if at all—if it weren’t for the $1 per day detainee work program. The Aurora lawsuit alleges that detainees perform “vital functions” for the GEO Group facility. In fact, the facility employs only one full-time janitor who is not a detainee, the Associated Press reported.

ICE does not proactively disclose how many detainees participate in its voluntary work program, but The New York Times reported in 2014 that at least 60,000 detainees were part of the program the previous year.

While detention center companies looking to construct new facilities try to woo locals with the promise of jobs, the companies’ reliance on detainee labor means that many of the centers actually provide few jobs for locals, according to the Detention Watch Network.

Villalpando told POGO that the Tacoma facility only employs a few overworked, undertrained guards—many of whom live out of town.

And Jacqueline Stevens, a professor of political science and legal studies at Northwestern University and director of the school’s Deportation Research Clinic, told POGO, “Facilities hire a small number of guards through private security firms; they often complain about their own poor treatment.”

“The vast bulk of the labor running the facilities, including dining services, repairs, cleaning, painting, and even hair cutting is by those locked up for slaving wages of $1 to $3 [per] day or on threat of solitary confinement, not workers hired from the community,” she said.

Stevens has extensively studied ICE’s voluntary work program and has successfully obtained documents that shed insights into it. Based on these documents, Stevens has calculated that, by paying detainees at the Aurora detention center in Colorado $1 per day—well below both the federal minimum wage of $7.25 per hour and Colorado’s recently increased minimum wage of $9.30 per hour—GEO Group saves itself over $4 million each year.

So what would happen if detention companies started paying detainees minimum wage? According to Sinha of the International Human Rights Law Clinic, detention companies would make significantly less money—but it might not be enough to shut them down. As long as the federal government continues to award these companies billions of dollars in contracts, the companies will continue to operate detention centers and build new ones.

“Their contracts are sizeable,” she said of detention companies. “They’ll still profit, but they’ll think twice.”


Now more than ever, Congress must conduct more oversight of ICE and its detention center system. Based on this investigation, the Project On Government Oversight recommends the following actions for Congress:

  1. Appropriate funds to ICE to increase the minimum wage for detainees who participate in the voluntary work program while in detention.
  2. Implement greater oversight of contractor-run ICE detention centers to ensure that detainee participation in voluntary work programs is not coerced and that detainees have better channels to file complaints.
  3. Investigate detention center company claims that new detention centers benefit local communities’ economies and job growth.”