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08.09.10

The Newsweek Owner's Intelligence Connection

Sidney Harman, who just bought Newsweek magazine, has for years been influential in the area of national security—and not just through his marriage to Rep. Jane Harman.

It’s well-known that Sidney Harman, the electronics mogul who just bought Newsweek, is married to Rep. Jane Harman, one of Washington’s heavyweights on intelligence.

Rep. Harman, a Democrat, spent eight years on the House Intelligence Committee and is chairwoman of the Homeland Security Subcommittee on Intelligence & Terrorism. She has had an intimate, and sometimes controversial, relationship to America’s spy agencies during her eight terms in Congress.

But few in Washington are aware that the real intelligence insider of the Harman family may be Sidney himself, through his connections to an obscure but highly influential organization known as Business Executives for National Security.

Few in Washington are aware that the real intelligence insider of the Harman family may be Sidney himself, through his connections to an obscure but highly influential organization known as Business Executives for National Security.

In many ways, BENS can be considered the godfather of the contracting revolution that transformed the U.S. government into a vast, $600 billion market for corporate America and made national security—and spying in particular—a gross vehicle for private enterprise. Over the past 28 years, BENS has participated in dozens of high-level commissions that have altered the way the Pentagon and the intelligence community do business, and has become a favored perch for former high-ranking officials and generals, from Henry Kissinger to Gen. Peter Pace.

Its leaders have historically been quite conservative; barely two months after the 9/11 attacks, founding BENS Chairman Stanley Weiss called on the Bush administration to remove Saddam Hussein’s regime in Iraq in the pages of the International Herald Tribune.

But it can also be pragmatic and run against the grain, as it did last year when it sent a delegation of American executives, including Ross Perot, to North Korea to meet with the government of Kim Jong Il to use the incentive of U.S. investments to convince North Korea to abandon its nuclear program.

Founded by Weiss, a mining and chemical executive who for years served as a director of Harman’s audio-equipment company, BENS today represents about 350 of the country’s largest manufacturing, transportation, information technology, communications, and national-security firms.

Harman himself chaired the organization’s executive committee from 1982 to 2009 and “contributed over $1 million over the years” to the organization, Weiss told The Daily Beast in an email from Indonesia. Although its CEO, retired Army General Montgomery C. Meigs, manages the organization, its corporate members, led by Harman, have set the pace. “Dr. Harman played an important role [in BENS] for a quarter century,” Weiss told me. “He was deeply involved in all aspects of BENS’ work.” Harman could not be reached for comment.

Jacob Bernstein: Newsweek's New Owner: The 92-Year-Old WunderkindOriginally, it was a kind of liberal alternative to the hawkish business organizations that flourished during the Cold War, and its early efforts focused on arms treaties. But it has evolved into a full-time consultant to the Pentagon on business practices, functioning as a liaison between government and industry. (Weiss, speaking for the organization, said BENS' efforts in defense, intelligence and homeland security are aimed at "helping the country deal with the very bloated element of the miltary-industrial-congressional complex.")

In its advisory role, BENS has been a driving force in the privatization of U.S. defense capabilities, including the outsourcing of the precious intelligence assets that Rep. Harman had direct oversight over for eight years as the senior Democrat on the House Intelligence Committee.

Since 2001, it has expanded its ties with the intelligence community; last year, it elected Gen. Michael V. Hayden, the former director of the CIA and the National Security Agency (and now a contractor himself), to its advisory council.

One of BENS’ biggest advisory projects came during the “reinventing government” days of the Clinton administration. The Tail-to-Tooth Commission, which included Harman and numerous defense contractors and privatization advocates, proposed a sweeping array of policy changes, and its recommendations were enthusiastically embraced by both the Clinton and Bush administrations.

Thus began a massive push toward outsourcing—and a new era defined by companies like Halliburton, and later, Blackwater.

After the terrorist attacks of 9/11 and the intensified support for privatization under George W. Bush, logistics, security, and intelligence contracting grew by leaps and bounds. Despite attempts by the Obama administration to rein in outsourcing and reduce the government’s reliance on contractors, they still play an enormous role at the Pentagon. That’s especially true in intelligence, where they eat up more than 70 percent of the budget.

BENS is still at it: Just last month it was asked by Obama’s Defense Department to review its recommendations for reducing the cost of military business operations. It came up with a dense, three-page list of suggested changes, among them: outsourcing more “non-core functions” and a recommendation that the Pentagon eliminate “the practice of treating ‘excessive profits’ as improper.”

The organization has also worked with the CIA, the Office of the Director of National Intelligence, and the Defense Intelligence Agency as a consultant on acquisition, procurement, and investment. And as the U.S. has stepped up drone warfare in Afghanistan and Pakistan, it has become a close adviser to the most secretive of all military intelligence branches, the U.S. Special Operations Command, or SOCOM.

Since 2007, BENS has participated in more than two dozen events with SOCOM. At a June 2010 luncheon in Houston, for example, SOCOM commander Adm. Eric Olson updated 40 BENS members on the role of Special Forces in U.S. wars and thanked them for their contributions to the war effort.

Ken McGraw, a public-affairs officer with SOCOM, told The Daily Beast that the organization provides “information about areas terrorist groups and networks can use and exploit to finance and facilitate their operations.” The military doesn’t have expertise in finance and emerging technologies, he added, but these are subjects where “some members of BENS do have a great deal of expertise.”

Some of SOCOM’s activities—including its reliance on contractors—would have had to come to the attention of Rep. Harman when she had authority over intelligence programs. Plus she has often been at her husband’s side when he held court at BENS’ glitzy Eisenhower Award dinners over the years. In 2004, for example, Rep. Harman delivered a speech to the organization’s gala in San Francisco for Carly Fiorina, then-CEO of Hewlett-Packard. Fiorina, now a Republican Senatorial candidate, also sits on BENS’ board.

So it’s fair to ask if Rep. Harman has had any conflict of interest with BENS’ involvement in intelligence activities. The congresswoman was traveling last week and unable to comment, but Pamela Hess, her spokeswoman, said the Harmans always “keep business and politics separate.” And it’s clear from the public record that the California lawmaker has said very little about the intelligence community’s employment of contractors. “I've never seen her weigh in on the issue,” says Marcy Wheeler, who blogs about intelligence at Emptywheel.

Tim Shorrock is a Washington-based investigative journalist and the author of Spies for Hire: The Secret World of Intelligence Outsourcing, published in 2008 by Simon & Schuster. His articles have appeared in The Atlantic, Salon, Mother Jones, The Nation and many other publications at home and abroad. He can be reached through his website at timshorrock.com.