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One Man's Military-Industrial-Media Complex
Saturday 29 November 2008
by: David Barstow, The New York Times
In the spring of 2007 a tiny military contractor with a slender track record went shopping for a precious Beltway commodity.
The company, Defense Solutions, sought the services of a retired general with national stature, someone who could open doors at the highest levels of government and help it win a huge prize: the right to supply
Access like this does not come cheap, but it was an opportunity potentially worth billions in sales, and Defense Solutions soon found its man. The company signed Barry R. McCaffrey, a retired four-star Army general and military analyst for NBC News, to a consulting contract starting June 15, 2007.
Four days later the general swung into action. He sent a personal note and 15-page briefing packet to David H. Petraeus, the commanding general in
Thus, within days of hiring General McCaffrey, the Defense Solutions sales pitch was in the hands of the American commander with the greatest influence over
"That's what I pay him for," Timothy D. Ringgold, chief executive of Defense Solutions, said in an interview.
General McCaffrey did not mention his new contract with Defense Solutions in his letter to General Petraeus. Nor did he disclose it when he went on CNBC that same week and praised the commander Defense Solutions was now counting on for help - "He's got the heart of a lion" - or when he told Congress the next month that it should immediately supply
He had made similar arguments before he was hired by Defense Solutions, but this time he went further. In his testimony to Congress, General McCaffrey criticized a Pentagon plan to supply
"We've got Iraqi army battalions driving around in
Through seven years of war an exclusive club has quietly flourished at the intersection of network news and wartime commerce. Its members, mostly retired generals, have had a foot in both camps as influential network military analysts and defense industry rainmakers. It is a deeply opaque world, a place of privileged access to senior government officials, where war commentary can fit hand in glove with undisclosed commercial interests and network executives are sometimes oblivious to possible conflicts of interest.
Few illustrate the submerged complexities of this world better than Barry McCaffrey.
General McCaffrey, 66, has long been a force in
But it was 9/11 that thrust General McCaffrey to the forefront of the national security debate. In the years since he has made nearly 1,000 appearances on NBC and its cable sisters, delivering crisp sound bites in a blunt, hyperbolic style. He commands up to $25,000 for speeches, his commentary regularly turns up in The Wall Street Journal, and he has been quoted or cited in thousands of news articles, including dozens in The New York Times.
His influence is such that President Bush and Congressional leaders from both parties have invited him for war consultations. His access is such that, despite a contentious relationship with former Defense Secretary Donald H. Rumsfeld, the Pentagon has arranged numerous trips to
At the same time, General McCaffrey has immersed himself in businesses that have grown with the fight against terrorism.
The consulting company he started after leaving the government in 2001, BR McCaffrey Associates, promises to "build linkages" between government officials and contractors like Defense Solutions for up to $10,000 a month. He has also earned at least $500,000 from his work for Veritas Capital, a private equity firm in
Many retired officers hold a perch in the world of military contracting, but General McCaffrey is among a select few who also command platforms in the news media and as government advisers on military matters. These overlapping roles offer them an array of opportunities to advance policy goals as well as business objectives. But with their business ties left undisclosed, it can be difficult for policy makers and the public to fully understand their interests.
On NBC and in other public forums, General McCaffrey has consistently advocated wartime policies and spending priorities that are in line with his corporate interests. But those interests are not described to NBC's viewers. He is held out as a dispassionate expert, not someone who helps companies win contracts related to the wars he discusses on television.
The president of NBC News, Steve Capus, said in an interview that General McCaffrey was a man of honor and achievement who would never let business obligations color his analysis for NBC. He described General McCaffrey as an "independent voice" who had courageously challenged Mr. Rumsfeld, adding, "There's no open microphone that begins with the Pentagon and ends with him going out over our airwaves."
General McCaffrey is not required to abide by NBC's formal conflict-of-interest rules, Mr. Capus said, because he is a consultant, not a news employee. Nor is he required to disclose his business interests periodically. But Mr. Capus said that the network had conversations with its military analysts about the need to avoid even the appearance of a conflict, and that General McCaffrey had been "incredibly forthcoming" about his ties to military contractors.
General McCaffrey declined to be interviewed but released a brief statement.
"My public media commentary on the war labeled me as an early and serious critic of Rumsfeld's arrogance and mismanagement of operations in
In earlier e-mail messages, General McCaffrey played down his involvement in lobbying for contracts, suggesting he mainly gave companies "strategic counsel." His business responsibilities, he wrote, simply do not conflict with his duty to provide objective analysis on NBC. "Never has been a problem," he wrote. "Period."
General McCaffrey did in fact emerge as a tough critic of Mr. Rumsfeld, describing him as reckless and incompetent. His central criticism - that Mr. Rumsfeld fought the
With a few exceptions General McCaffrey has consistently supported Mr. Bush's major national security policies, especially the war in
In an article earlier this year, The New York Times identified General McCaffrey as one of some 75 military analysts who were the focus of a Pentagon public relations campaign that is now being examined by the Pentagon's inspector general, the Government Accountability Office and the Federal Communications Commission. The campaign, begun in 2002 but suspended after the article's publication, sought to transform the analysts into "surrogates" and "message force multipliers" for the Bush administration, records show. The analysts, many with military industry ties, were wooed in private briefings, showered with talking points and escorted on tours of
The Pentagon inspector general is investigating whether special access gave any of these analysts an improper edge in the competition for contracts.
General McCaffrey offers a case study of the benefits that can flow from favored access: an inside track to sensitive information about strategy and tactics; insight into the priorities of ground commanders; a private channel to officials who oversaw war spending, as the Defense Solutions example shows. In that case the company has yet to win the contract it hired General McCaffrey to champion.
More broadly, though, his example reveals the myriad and often undisclosed connections between the business of war and the business of covering it.
A Move to Television
General McCaffrey made his debut as a military analyst in the weeks after 9/11. NBC anchors typically introduced him by describing his medals or his exploits in the gulf war. Or they noted he was a
They did not mention his work for military contractors, including a lucrative new role with Veritas Capital.
Veritas was a relatively small player in 2001, looking to grow through acquisitions and Pentagon contracts. Competing for contracts is a complex and subtle sport, governed by highly bureaucratic bidding rules and the old-fashioned arts of access and influence.
Veritas would compete on both fronts.
Just days before the terrorist attacks - on Sept. 6, 2001 - Veritas had announced the formation of an "advisory council" of well-connected retired generals and admirals, including General McCaffrey. "They can really pick up the phone and call someone," Robert B. McKeon, the president of Veritas, would later tell The Times.
Access was also part of what drew NBC to General McCaffrey. Mr. Capus said General McCaffrey "opens doors with generals and others who we would not otherwise be able to talk to."
Veritas gave its advisers board seats on its military companies, along with profit sharing and equity stakes that were all the more attractive because Veritas intended to turn quick profits through initial public offerings. On Sept. 6, this might have been considered a gamble. Revenue growth - a key to successful I.P.O.'s - required sustained increases in military spending. But after Sept. 11, the only question was just how big those increases would be.
From his first months on the air, General McCaffrey called for huge, sustained increases in military spending for a global campaign against terrorism. He also advocated spending for high-tech weapons, including some like precision-guided munitions and unmanned aerial vehicles that were important to the Veritas portfolio. He called the C-17 cargo plane - also a source of Veritas contracts - a "national treasure."
In a statement, Veritas said it had gained no "discernible benefit" from General McCaffrey's television appearances and called his TV work "completely independent" from his role with Veritas.
In their corporate filings, Veritas military companies told investors they were well positioned to benefit from a widening global struggle against terrorism. The approaching conflict with
General McCaffrey harbored significant doubts about the invasion plan. An informal participant in the war planning, he was troubled by Mr. Rumsfeld's resistance to an invasion force of several hundred thousand, he acknowledged months and years later in interviews. Mr. Rumsfeld's team, he said, was bent on making an "ideological" point that wars could be fought "on the cheap." There were not enough tanks, artillery or troops, he would say, and the result was a "grossly anemic" force that unnecessarily put troops at risk.
That is not what General McCaffrey said when asked on NBC outlets to assess the risks of war. As planning for a possible invasion received intense news coverage in 2002, he repeatedly assured viewers that the war would be brief, the occupation lengthy but benign.
"These people are going to come apart in 21 days or less," he told Brian Williams on MSNBC.
In the fall of 2002 General McCaffrey joined the Committee for the Liberation of
In early 2003 Forrest Sawyer asked General McCaffrey on CNBC what could go wrong after an invasion. Anticipating this very question, the Pentagon had invited General McCaffrey and other analysts to a special briefing. Years later General McCaffrey would say he knew that the post-invasion planning was a disaster. "They were warned very categorically and directly by many of us prior to that war," he said.
Given a chance by Mr. Sawyer to raise an alarm, the general reiterated Pentagon talking points about the "astonishing amount" of postwar planning.
And when Tom Brokaw asked him, days before the invasion, "What are your concerns if we were to go to war by the end of this week?" he replied, "Well, I don't think I have any real serious ones."
Only when the invasion met unexpected resistance did General McCaffrey give a glimpse of his misgivings. "We've placed ourselves in a risky proposition, 400 miles into
Mr. Rumsfeld struck back. He abruptly cut off General McCaffrey's access to the Pentagon's special briefings and conference calls.
General McCaffrey was stunned. "I've never heard his voice like that," recalled one close associate who asked not to be identified. He added, "They showed him what life was like on the outside."
Robert Weiner, a longtime publicist for General McCaffrey, said the general came to see that if he continued his criticism, he risked being shut out not only by Mr. Rumsfeld but also by his network of friends and contacts among the uniformed leadership.
"There is a time when you have to punt," said Mr. Weiner, emphasizing that he spoke as General McCaffrey's friend, not as his spokesman.
Within days General McCaffrey began to backpedal, professing his "great respect" for Mr. Rumsfeld to Tim Russert. "Is this man O.K.?" the Fox News anchor Brit Hume asked, taking note of the about-face.
For months to come, as an insurgency took root, General McCaffrey defended the Bush administration. "I am 100 percent behind what the administration, what the president of the
A Corporate Troubleshooter
Mr. Rumsfeld's swift reaction underscored the administration's appreciation of General McCaffrey's influence. His comments were catalogued and circulated at the White House and Pentagon.
Other network analysts were monitored, too, but not the way General McCaffrey was. He was different. He was one of the few retired four-star generals on television, and his well-known friendships with men like General Petraeus and Gen. John P. Abizaid gave him added currency.
As the wars in
These were politically charged topics, and so the administration worked to influence his commentary, using carrots and sticks alike. In 2005, for example, Mr. Rumsfeld took umbrage at remarks General McCaffrey made to The
In a letter to The Times, General McCaffrey's lawyer, Thomas A. Clare, said the general's recurring criticisms had cost him "business opportunities with defense contractors." NBC executives said they, too, fielded high-level complaints, and General McCaffrey was not invited back to the Pentagon's analyst briefings.
On the other hand, when Pentagon officials noticed that General McCaffrey was scheduled to appear on programs like "Meet the Press," they asked generals close to him to suggest themes, records show. The Pentagon also began paying for General McCaffrey to travel to
The stated purpose was for General McCaffrey to provide an outside assessment in his role as a part-time professor at
After each trip General McCaffrey embarked on a news media campaign, writing opinion articles, granting interviews, publishing "after action" reports on his firm's Web site. Each time he extolled Central Command's generals and called for a renewed national commitment of money and support.
At the same time, General McCaffrey used his access to further business interests, as he did during the summer of 2005, when Americans were turning against the
Veritas had been on a shopping spree, buying military contractors deeply enmeshed in the war. Its biggest acquisition was of DynCorp International, best known for training foreign security forces for the
The crumbling public support, though, posed a threat to Veritas's prize acquisition. The changing political climate and unrelenting violence, DynCorp warned investors, could force a withdrawal from
What is more, some of DynCorp's
"It is useful both ways," Gregory Lagana, a DynCorp spokesman, said in an interview. "If there were problems, and there were, then we could get an independent judgment and fix them."
Mr. Lagana said General McCaffrey had been a troubleshooter for DynCorp on other trips. "He'll say: 'I'm going over. Is there anyone you want me to see?' " Mr. Lagana said. "And then he'd go in and say, 'I'm on the board. What can you tell me?' "
The Pentagon had its own agenda. For eight days, General McCaffrey was given red-carpet treatment. Iraqi commandos even staged a live-fire demonstration for him. But General McCaffrey also was given access to officials whose decisions were important to his business interests, including DynCorp, which was planning an I.P.O. He met with General Petraeus, who was then in charge of training Iraqi security forces and responsible for supervising DynCorp's 500 police trainers. He also met with officials responsible for billions of dollars' worth of contracts in
General McCaffrey would not discuss these sessions, and General Petraeus said in an e-mail message to The Times that he had no reason to discuss DynCorp with General McCaffrey because he would have gone directly to DynCorp's executives in
Back home, General McCaffrey undertook a one-man news media blitz in which he contradicted the dire assessments of many journalists in
After Mr. Bush gave a speech praising
His financial stake in the policy debates over
"I took as objective a look at it as I could," he told David Gregory, the NBC correspondent.
A Contract in
In his written statements to The Times, General McCaffrey said his role with Veritas was "governance, not marketing," and Veritas insisted that he never "solicited new or existing government contracts."
General McCaffrey did, however, play an indirect role in helping Veritas win one of its largest contracts, to supply more than 8,000 translators to the war in
As General Marks recalls it, General McCaffrey asked him to lead an effort to win the contract for Veritas.
General Marks, who became a CNN military analyst after his retirement in 2004, would be named president of a new DynCorp subsidiary, Global Linguist Solutions, created in July 2006 to bid for the translation contract. In August 2006 Veritas designated General McCaffrey as chairman of Global Linguist. According to a 2007 corporate filing, General McCaffrey was promised $10,000 a month plus expenses once Global Linguist secured the contract. He would also be eligible to share in profits, which could potentially be significant: the contract was worth $4.6 billion over five years, but only if the
In the fall of 2006, that was hardly a sure thing. With casualties rising, the nation's discontent had been laid bare by the November elections. Then, in December, the Iraq Study Group recommended withdrawing all combat brigades by early 2008.
That month, in a flurry of appearances for NBC, General McCaffrey repeatedly ridiculed this recommendation, warning that it would turn
General McCaffrey was hardly alone in criticizing the Iraq Study Group, and in his e-mail messages to The Times he said his objections reflected his judgment that it was folly to leave American trainers behind with no combat force protection. But in none of those appearances did NBC disclose General McCaffrey's ties to Global Linguist.
NBC executives asserted that the general's relationships with military contractors are indirectly disclosed through NBC's Web site, where General McCaffrey's biography now features a link to his consulting firm's Web site. That site, they said, lists General McCaffrey's clients.
While the general's Web site lists his board memberships, it does not name his clients, nor does it mention Veritas Capital, by one measure the second-largest military contractor in
CNN officials said they, too, were unaware of General Marks's role in the contract. When they learned of it in 2007, they said, they were so concerned about what they considered an obvious conflict of interest that they severed ties with him. (General Marks, who also spoke out against the withdrawal plan on CNN, said business considerations did not influence his comments.)
On Dec. 18, 2006, the Pentagon stunned Wall Street by awarding the translation contract to Global Linguist. DynCorp's stock jumped 15 percent.
Hiring a General
This kind of access had strong appeal to Mr. Ringgold, Defense Solutions' chief, who had a plan to rebuild
General McCaffrey soon arrived for an audition at the Defense Solutions headquarters outside
General McCaffrey liked his basic concept but told him to think bigger, Mr. Ringgold said. Instead of minimally refurbished equipment, he urged Mr. Ringgold to sell "Americanized" armored vehicles upgraded with thermal sights and other expensive extras. And why not also team up with DynCorp and others to supply the maintenance, logistics and training to keep them running?
The suggestions vastly increased the proposal's scale and price tag, but the general seemed to have a read on the complex interplay between the Iraqi government and the American military leadership, Mr. Ringgold recalled. For a retainer and an undisclosed equity stake, General McCaffrey signed on weeks later, then promptly wrote to General Petraeus.
His letter, drafted with help from Defense Solutions, explained that in the three months since his trip to
In his e-mail message to The Times, General Petraeus said he received "innumerable" letters from "would be" contractors. In this case, he wrote, he simply sent General McCaffrey's material "without any endorsement" to James M. Dubik, the general then responsible for training
General Dubik, now retired, said in an interview that he, too, received a letter and information packet, and as a result briefed
General Dubik emphasized that although he used Defense Solutions briefing materials, he first "sanitized" them of any mention of the company. He said he presented the idea as his own, intending to ask Defense Solutions to bid if the Iraqis liked the concept. But the defense minister reacted coolly, he said, arguing that
General McCaffrey also sent letters to top lawmakers and approached contacts inside the Defense Department bureaucracy that oversees foreign military sales. His influence was immediately apparent. For example, General McCaffrey reached out to Maj. Gen. Timothy F. Ghormley, chief of staff at Central Command, who promptly invited Mr. Ringgold to a meeting in
Nevertheless, by late 2007, Defense Solutions still had no deal. General McCaffrey, Mr. Ringgold recalled, said the company needed to get to
On Oct. 26, 2007, General McCaffrey wrote an e-mail message to General Petraeus proposing to return to
In early December General McCaffrey arrived in
General Petraeus said he did not recall them discussing Defense Solutions. General Dubik recalled giving General McCaffrey a detailed briefing on the effort to equip
Mr. Ringgold said General McCaffrey "made it perfectly clear" that he would not discuss their proposal with the two generals and even sent instructions that he was not to be contacted in Iraq "to avoid even the perception of conflict of interest."
But Defense Solutions used information General McCaffrey gleaned from his meetings to refine its proposal. Mr. Ringgold followed General McCaffrey to
General Petraeus forwarded Mr. Ringgold's message to General Dubik, who warned Mr. Ringgold that while he was happy to meet,
Defense Solutions turned to the White House. On May 9, Mr. Ringgold and Tom C. Korologos, a Republican lobbyist, met with a military aide to Vice President Dick Cheney and two National Security Council officials.
The next day, in an e-mail memorandum to his staff, Mr. Ringgold discussed other ways to press Iraqi and American officials, including generating news media coverage to suggest that
Mr. Ringgold said he had never asked the general to take positions supporting Defense Solutions in his news media appearances. On the other hand, he added, "I hope he was thinking of us."
Mr. Weiner, the general's longtime publicist, said General McCaffrey worked with clients "to get your mission achieved in the media." General McCaffrey, he said, often speaks out with the twin goals of shaping policy and generating favorable coverage for clients with worthy products or ideas.
"His motive is pure," Mr. Weiner said. "It is national interest."
Despite Defense Solutions' efforts,
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