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November 24, 2007 at 11:36:35

For God's SAIC!

by Michael Shaw Page 1 of 2 page(s)

www.opednews.com

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About SAIC from SAIC......A Commitment to "Ethical" Performance & "Integrity".....

Who in the hell is SAIC? Who in the hell is it's former chairman, J. Robert Beyster? For that matter, who in the hell is its current chairman, Kenneth C. Dalhberg? Well after some virtual footstepping and some practical considerations, my conclusions lead to the word, trouble. Big trouble! From Vanity Fair: "Nobody knows who they are," says Glenn Grossenbacher, a Texas lawyer who has battled SAIC in court on a whistle-blowing case. "Everybody knows Northrop Grumman and G.E., but if you went out on the street and asked who the top 10 [defense] contractors are, I can guarantee you that SAIC would not be one of them...... which is all the more remarkable in light of two developments. The first is a mounting collection of government audits and lawsuits brought by former employees for a variety of reasons, some of them personal and some coming under federal whistle-blower statutes. In a response to written queries, SAIC characterized itself as a highly ethical company and responsible government contractor, committed to doing the right thing."

"The second development is that several of SAIC's biggest projects have turned out to be colossal failures, failures that have occurred very much in public. But a review by Vanity Fair of thousands of pages of documents, including corporate e-mail messages, offers disturbing revelations about the company's inner workings, its culture, and its leadership"

Just after a brief look at its creator, J. Robert Beyster, we can draw some disturbing conclusions. On the outside, Beyster referred to his business as being based on intergrity, while behind the scenes he was allegedly yachting his "baby boys" around the San diego Bay, a pre-requisite to advancement on his SAIC managerial team.

Regardless of its creator and the implications, SAIC is a monster! It's the mother of all government contractors and yet no one ever hears much about them. Why? Especially when we look at current and past government projects(and blunders) they were directly involved in and also the funneling of billions of unaccountable tax dollars into projects (ranging from national intelligence to the proliferation of nuclear power) they suck up like an immense vacuum cleaner!

As for the blunders, we again quote the Vanity Fair article: "One involves the National Security Agency, America's intelligence-gathering "electronic ear" and for many years SAIC's biggest customer. The volume of telephone, e-mail, and other electronic communications that the N.S.A. intercepts worldwide is so massive that the agency urgently needs a new computer system to store it, sort it, and give it meaning—otherwise it will keep missing clues like the Arabic message "Tomorrow is zero hour," intercepted the day before 9/11 but not translated until the day after. SAIC won the initial $280 million, 26-month contract to design and create this system, called Trailblazer. Four years and more than a billion dollars later, the effort has been abandoned. General Michael V. Hayden, the former head of the N.S.A. and now the director of the C.I.A., blamed the failure on "the fact we were trying to overachieve, we were throwing deep and we should have been throwing short passes." Happily for SAIC, it will get the chance for a comeback in the second half. The company has been awarded the contract for a revised Trailblazer program called ExecuteLocus. The contract is worth $361 million."

"Another failed effort involves the F.B.I., which paid SAIC $124 million to bring the bureau, whose computer systems are among the most primitive in American law enforcement, into at least the late 20th century. The lack of information-sharing is one reason why the F.B.I. failed to realize that in the year leading up to 9/11 two of the future hijackers—including one with known "jihadist connections"—were actually living in the San Diego home of an F.B.I. informant. SAIC set to work on a system called the Virtual Case File. V.C.F. was supposed to become a central repository of data (wiretap transcripts, criminal records, financial transactions) from which all F.B.I. agents could draw. Three years and a million lines of garbled computer code later, V.C.F. has been written off by a global publication for technology professionals as "the most highly publicized software failure in history." The failure was due in part to the bureau's ever shifting directives, which points up the perverse nature of government-by-contract. When the government makes unrealistic demands, the contractors go along anyway: They are being paid not to resist but to comply. If it turns out they can't deliver, new contracts will simply be drawn up. Responding to questions about the F.B.I. project, the company conceded that "there were areas in which SAIC made mistakes, particularly where we failed to adequately communicate our concerns about the way the contract was being managed."

The article continues: "These and other SAIC activities would seem to be ripe targets for scrutiny by the new Democratic Congress. But don't be surprised if you hear nothing at all: SAIC's friends in Washington are everywhere, and play on all sides; the connections are tightly interlocked. To cite just one example: Robert M. Gates, the new secretary of defense, whose confirmation hearings lasted all of a day, is a former member of SAIC's board of directors. In recent years the company has obviously made many missteps, and yet SAIC's influence in Washington seems only to grow, impervious to business setbacks or even to a stunning breach of security."

"Much to the embarrassment of a company entrusted with some of the nation's most precious secrets, its San Diego offices were mysteriously burgled in January of 2005. A censored San Diego police-department report reveals the basic outline. The report notes that the building "is patrolled by DOD certified security" and that "the interior lights are on motion sensors and would have been activated by the suspects." Nevertheless, burglars managed to break into SAIC's headquarters, pry open 13 private offices, and walk out with one desktop-computer hard drive and four laptops. By SAIC's account, the computers contained personal data on thousands of present and past employees, presumably including the company's many former CIA operatives, NSA executives, and Pentagon officials. To date the burglary remains unsolved."

The most chilling aspect of the article is the following: "SAIC has displayed an uncanny ability to thrive in every conceivable political climate. It is the invisible hand behind a huge portion of the national security state-the one sector of the government whose funds are limitless and whose continued growth is assured every time a politician utters the word "terrorism." In other words, SAIC represents a private business that has become a form of permanent government."

Private business as permanent government! Dare I suggest this has a major ring to Mussolini's corporatism? Add a perpetual war to the equation and a company who can't keep the padlocks on its top secret information and one can only ask, " How bad can it get?" Just read the entire article posted by Donald L. Barlett and James B. Steele in March 2007 about SAIC and perhaps you'll begin to understand.

Washington's $8 Billion Shadow: Politics & Power: vanityfair.com

Science Applications International Corporation, or SAIC, a Fortune 500 Company, has been operating under the radar for a long time now. In media, it is nearly always overshadowed by its smaller (yes I said smaller) but viable cohorts, Halliburton and the Bectel corporation. Unlike the latter, SAIC is the "intellectual" rather than the "muscle" end of defense contracting. It's origins stem back as early as 1960, right after the advent of the military industrial complex and Eisenhower's chilly warning that we should be a "forever vigilant" and a "well educated" society, to check the potential dangers to democracy the MIC presented. SAIC, it seems, may well be one of, if not the greatest of dangers president Eisenhower warned us about.

SAIC's first government contract came from the Defense Atomic Support Agency, or the post war Manhatten Project. Indeed Beyster himself was involved in the original. "As Eisenhower spoke, a quietly ambitious man on the other side of the country, John Robert Beyster, was going about his business as head of the accelerator-physics department at the General Atomic corporation, in La Jolla, California, one of many secretive companies that sprouted early in the atomic era. Beyster had grown up outside of Detroit, served in the navy during World War II, and earned a Ph.D. in nuclear physics from the University of Michigan before migrating to Southern California in the 1950s."

Dissatisfied with General Atomic, Beyster felt they were exploiting him and not utilizing his talents correctly. Thus the creation of SAIC. Eisenhower opened Pandora's box and Beyster ran with it!

SAIC's involvement in the nuclear energy program and more importantly, the push for nuclear energy should come as no surprise. Today they trod along in lockstep with the current administration, just as they have with every other administration since their inception.

The current Bush Administration (just like it's "daddy" predecessor) loves anything nuclear. Afterall, there is money involved. Big money! This is why they are pushing so readily for the nuclear alternative "to solve," among other things, our current energy crisis, at a time when we can't figure out how to get rid of the ever growing stockpile of nuclear waste we are now swimming in and have accumulated over the past 50 odd years!

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7 comments

Joel S. Hirschhorn is the author of Delusional Democracy - Fixing the Republic Without Overthrowing the Government (www.delusionaldemocracy.com). His current political writings have been greatly influenced by working as a senior staffer for the U.S. Congress and for the National Governors Association. He advocates a Second American Revolution, beginning with an Article V Convention to propose constitutional amendments. He is Chair of the Independent Party of Maryland.
Joel S. HirschhornJoel S. Hirschhorn is the author of Delusional Democracy - Fixing the Republic Without Overthrowing the Government (www.delusionaldemocracy.com). His current political writings have been greatly influenced by working as a senior staffer for the U.S. Congress and for the National Governors Association. He advocates a Second American Revolution, beginning with an Article V Convention to propose constitutional amendments. He is Chair of the Independent Party of Maryland.

EXCELLENT EXPOSE

As someone who has worked inside the DC beltway since 1978 and known countless people who work for SAIC, I can attest that it is in so many ways the invisible workhorse of the federal government, and by the way enormously profitable, giving its employees incredible wealth. It has such clout that it does not really have to compete for federal business. But remember, it is just one of a number of huge federal contractors running things behind the scenes....

by Joel S. Hirschhorn (131 articles, 33 quicklinks, 60 diaries, 526 comments) on Sunday, November 25, 2007 at 3:59:16 PM

I'm a concerned, middle aged blogger and member of the ACLU. I hail from the Bay Area. I Lobbied congress with the ACLU over the more unconstitutional elements of the USA Patriot Act. Marched in peace protests, lost a former school chum in the world trade center on 9/11.
Michael ShawI'm a concerned, middle aged blogger and member of the ACLU. I hail from the Bay Area. I Lobbied congress with the ACLU over the more unconstitutional elements of the USA Patriot Act. Marched in peace protests, lost a former school chum in the world trade center on 9/11.

RE For God's Sake ..."Excellent Expose"

Thank you Sir! And you are so right! They are just one of the many. No wonder we're going broke and our living standards spiraling downward. What I wonder is for how long can we keep this up before we implode?

by Michael Shaw (8 articles, 1 quicklinks, 1 diaries, 340 comments) on Sunday, November 25, 2007 at 4:30:44 PM

just a hard working guy, trying to make it in the world
Scott MacLeodjust a hard working guy, trying to make it in the world

how wrong can two people be?

1. Even though you correctly identifed the current CEO of SAIC as Kenneth Dahlberg, on the second page you created a new CEO named "Mr. Walhberg", made him a WW2 fighter ace, VP of GD and tied to nuclear submarines, and member of the Artic Research Commission -- and created myriad conspiracy theories connected to each. For the record, none of these "facts", concerning the current CEO of SAIC, are true.

2. Second, Mr. Hirschborn, SAIC is not "enormously profitable". Its annual operating margin, for the most recent fiscal year, is 7.01%, compared to Microsoft's 37% or Google's 31%.

Guess when your version of intellectual rigor is to regurgitate Vanity Fair articles, a reader shouldn't expect much. Conspiracy theories are so much harder when you have to base them on facts.

by Scott MacLeod (0 articles, 0 quicklinks, 0 diaries, 2 comments) on Monday, November 26, 2007 at 4:27:03 PM

Well Scott.....

....as far as the type error goes, nobody's perfect. Least of all me. I will correct it however and I appreciate your pointing that out.

As for SAIC's earnings according to the Vanity Fair article, I suppose that depends on which kinds of earnings they were talking about and perhaps more importantly, when. They weren't very specific. It could have been the fiscal period for 2006 which ended in January of 2007. They were talking about earnings a full year before their article, which came out in early 2007. So I imagine it may well have even been the 2005 fiscal period since that ended in January of 2006. It would be a good question for the authors for some further clarification. They didn't mention whether they were net or gross profit margins either. Currently here is where SAIC stands:

Gross Profit Margin (LFY)	13.38
Operating Profit Margin (LFY)	7.05
Net Profit Margin (LFY)	4.98

http://finance.aol.com/quotes/saic-inc/sai/nys/fundamentals

I'll admit I did base much of my article on the Vanity Fair story, but not all of it. Actually a Vietnam Veteran pointed me out to SAIC in the first place in a truthdig about the military industrial complex. Prior to that I had never heard of them. I know a whole lot more now.

As for trying to fabricate conspiracy, there is no conspiracy about the military industrial complex, its contractors and their strong influence on government. Although you are essentially correct in pointing out that Google and Microsoft recorded higher profit earnings, those earnings did not for the most part come from the federal government as 93.3% of SAIC's earnings did. Also since many of their government projects are secret, no one really knows how much money they make. Even Forbes magazine admits that, at least concerning any attempts to forecast them. "In the case of San Diego-based SAIC, there's another complication in gauging its prospects: a significant chunk of its 9,000 active government contracts involve classified work for secretive agencies." "While many classified contracts can be relatively stable, their obvious lack of visibility presents some challenges for analysts and investors trying to determine the long-term performance of companies operating in this area," says Scott Sacknoff, manager of the SPADE Defense Index, an exchange-traded fund that tracks 57 defense companies.

click here also imagine that some, if not most of their projects are black budgeted. Also their immense backlog isn't taken into account. Heck they didn't even go public until Oct, 2006.

No one can deny they had their share of blunders under Dalhberg either or that Dahlberg is a member of Bush's Artic Research Committee. Their support of the nuclear energy program is common knowledge. They have a long history of working for nuclear energy companies. They are the DOE's choice contractor.

At any rate, I appreciate your comments. I'm always willing to learn whether that means standing corrected or not. I believe this company deserves some limelight it doesn't generally get. This was the intent of my article.

by Michael Shaw (8 articles, 1 quicklinks, 1 diaries, 340 comments) on Tuesday, November 27, 2007 at 12:22:06 AM

just a hard working guy, trying to make it in the world
Scott MacLeodjust a hard working guy, trying to make it in the world

it wasn't a typo....

1. Ken Dahlberg, the current CEO, is 63, I think. That means he was born in 1944, and could not possibly be a WW2 fighter ace.

2. Here is a link to the Arctic Research Commission http://www.arctic.gov/staff.htm and here is Dahlberg's bio http://www.saic.com/about/leadership/dahlberg-bio.html. There is no reference, in either place, to him being a member of that commission.

3. Dahlberg headed GD's IT group -- which has nothing to do with building nuclear submarines.

4. Your statement "Also since many of their government projects are secret, no one really knows how much money they make" is fallacious on the surface. SAIC is publicly traded. All of their profits are reported, in accordance with SEC and FASB standards. You can read the annual reports, back to 2003, online. They are audited financials -- and clearly show revenue, operating income, and net income.

5. You somehow link the founding of SAIC to the growth of nuclear energy. In fact, Beyster left General Atomics because after GA's purchase by Gulf Oil, the focus became building nuclear reactors. All Beyster wanted to do was experimental physics research, and that is why he left GA and started SAIC. If he really wanted to be hip deep in nuclear power, he would have stayed at GA.

I salute your curiosity. SAIC is a fascinating company, and an excellent long term investment. It is a tribute to the power of employee ownership. If you are really curious, then look past the smarmy VF article. The truth is probably somewhere between a SAIC press release, and VF. So far, you appear to have only explored one end of that continuum.

by Scott MacLeod (0 articles, 0 quicklinks, 0 diaries, 2 comments) on Wednesday, November 28, 2007 at 1:47:05 PM

David

You're right! I linked to Kennth H. Dalhberg of watergate fame instead of Kenneth C Dalhberg who is in charge of SAIC and the primary target of discussion in the article. My google search was for Ken Dalhberg and Kenneth H was the top pick. I jumped the gun! It was unintentional and I should have been more diligent. I shall correct the error. Kenneth C did begin his career in 1967 but he was not a WW2 ace pilot. The overall story and its implications have not changed. Only this oversight stands corrected.

Also I never said Dalhberg started the Polaris missile program. I said General Dynamics did. I merely mentioned his being its president. Whether or not he is directly responsible or has taken part in this current nuclear upswing by the Bush administration is up to the reader to decide. The fact that SAIC is the main "go to" contractor for the nuclear energy program and that Dalhberg is a current active member of the Bush administration might be deemed as coinsidental to some, but I doubt it. Obviously you do and that's OK.

As for your putting down Barlett and Steele and their article in Vanity Fair, perhaps you should take into account that these guys are two of the most renouned investigative journalist's around, have won numerous awards, including the pulitzer and have been doing what they do since 1971. The Washington Journalism Review has called them two of the best investigative news journalists in history. Of course no one is infallible. I have contacted them about the SAIC profit margins they posted in their Vanity Fair article. I hope to hear from them soon. If I ever do I'll provide the source for their information.

by Michael Shaw (8 articles, 1 quicklinks, 1 diaries, 340 comments) on Wednesday, November 28, 2007 at 3:49:45 PM