The secret deal bringing an $11b US intel giant to Melbourne
The Victorian government has refused to reveal the amount of taxpayer funds spent on the set-up of a shadowy US military-linked intelligence operation in the heart of the Melbourne CBD.
A secret deal was hatched last month to expand the Australian footprint of the massive Science Applications International Corporation (SAIC), which rakes in $11 billion each year in revenue in its role as the private information arm of the US government.
An opaque press release issued by Ted Baillieu’s government two weeks ago — unreported by the mainstream media — stated only that the centre, employing 50 people, would “focus on global challenges in national security, energy and environment, health and cyber security” to protect the state from “cyber attacks”. Researchers in the Melbourne “will conduct advanced research in data mining and analysis systems”.
But the state government has refused to be drawn on the amount of support gifted to SAIC, telling Crikey only that the arrangements were “commercial in confidence”. Follow-up questions directed at ministers Richard Dalla-Riva and Gordon Rich-Phillips asking exactly what “data” SAIC planned to “mine” were ignored.
SAIC — the subject of a damning 2007 Vanity Fair article — is at the heart of the US military industrial complex. According to its 2011 annual report, the Fortune 500 firm, established in 1969, boasts more than 43,000 global employees and made close to a billion dollars on $11 billion in revenue last financial year, 70% of which was Hoovered from the pockets of American taxpayers.
It has also done very nicely from Australian taxpayers, too. Over the past three years SAIC has scored more than $4 million in contracts with Defence, Customs and the parliament — it was responsible, for example, for the decidedly clunky new parliamentary information system introduced in 2010.
SAIC has a long and controversial history as one of the most important players in the US security state. Its executives and board members regularly move between SAIC and key US military and intelligence positions. The company is a repeat participant in some of the most significant procurement debacles of recent years. Its highest-profile moments include:
- It was a key advocate for war against Iraq on the basis of Saddam Hussein’s weapons of mass destruction; when no WMDs were found, SAIC helped staff the commission investigating the intelligence failure.
- It won a contract to house, pay and then fly to Iraq about 150 Iraqi exiles hand-picked by Bush undersecretary for defence Douglas Feith, whose deputy was a former SAIC employee, to parachute them into the new Iraqi government.
- In 1995 SAIC was fined over $US2 million for failing to produce a display screen system for fighter jets, after faking a prototype to show to Defence officials.
- In 2006, a SAIC data project, Trailblazer, for the National Security Agency was cancelled after going several hundred million dollars over budget. An NSA whistleblower, Thomas Drake, who revealed the extent of the debacle, was later prosecuted by the Obama administration, before charges were dropped amid intense criticism of the US government.
- In 2005 the FBI wrote off over $US100 million on the “Virtual Case File” data management system developed by SAIC.
- SAIC didn’t complete the security system it was contracted to provide the Greek government for the 2004 Athens Olympics until 2008, almost in time for the Beijing Olympics.
- The company has a long list of false claims and misconduct allegations against it over federal tenders, many of which it settled to avoid prosecution.
- Most spectacularly of all, in March, SAIC agreed to repay $US500 million (yes, half a billion dollars) to New York City after what the company CEO admitted was criminal behaviour by employees on a contract.
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