General Hayden's nomination to be the next CIA Director came as another
scandal involving the intelligence agency emerged in addition to the "Hookergate"
scandal centered on the Watergate and another Washington hotel. Under
Goss, the CIA's venture capital arm, IN-Q-TEL, which provides CIA money to promising
high-tech start-up firms, became the subject of a Securities and Exchange Commission
(SEC) investigation for possible massive misappropriation of taxpayer money
and private money involving IN-Q-TEL, NASA's venture capital branch -- Red Planet
Capital -- The US Special Operations Command's venture capital firm On Point,
and the infamous Carlyle Group -- the war profiteering company in which George
H. W. Bush, the Bin Laden family, and former Secretary of State James Baker
have held major financial interests.
Suspicions about IN-Q-TEL were raised in late April when its 35-year-old CEO,
Amit Yoran, abruptly resigned to "spend more time with his family."
Yoran, an Israeli-American, had been on the job for just four months after he
succeeded IN-Q-TEL's first CEO, Gilman Louie, a well-known Silicon Valley investor
and technical guru. Before taking over IN-Q-TEL, Yoran was the director of the
National Cyber Security Division at the Department of Homeland Security. Under
Yoran, IN-Q-TEL's operating budget increased exponentially and the firm began
negotiating with various high-tech firms to develop deep data mining programs
and spy technology. Yoran's rumored successor was said to be Mark Frantz, who
Yoran brought from The Carlyle Group to be IN-Q-TEL's managing general partner
and board of trustees member. Frantz worked for George H. W. Bush and held a
senior position with Alex Brown, later merged with Deutsche Bank, the firm where
the CIA's former Executive Director, A. B. "Buzzy" Krongard served
as Chairman. IN-Q-TEL's board of trustees chairman is Lee A. Ault III of Delray
Beach, Florida, who also serves on the board of Office Depot.
Individuals familiar with IN-Q-TEL report that the company is suspected
of steering CIA funds to start-up firms with close ties to the GOP as well as
"pump and dump" penny stock firms tied to three foreign nations --
Israel, Dubai, and Malaysia. The emerging IN-Q-TEL scandal is mirrored by the
financial scandal involving favoritism in CIA contracts to Brent Wilkes' ADCS
and its subsidiaries.
Deputy DNI Gen. Michael Hayden, who presided over dubious multi-billion dollar
contracts -- including Groundbreaker and Trailblazer -- as NSA director, has
a great deal of experience in covering up cost overruns, contractor fraud, and
contract favoritism. Beyond the need to have a good foot soldier at the helm
of the CIA, the Bush administration is clearly hoping that Hayden, using his
special form of intimidation through the use of psychiatric and security personnel
to threaten whistleblowers, can tamp down the emerging financial "Watergate"
emerging at the CIA.
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