Tag Archives: information technology

The DNI: Not an untenable situation

Soon, the United States will have a new Director of National Intelligence and while I wouldn’t want the position myself, it’s a situation that begs the question, “How can we win here – how can we succeed?” I say we as American citizens and taxpayers, but more specifically we as a former member of the Office of the Director of National Intelligence (ODNI) who spent over a year promoting information sharing at Liberty Crossing.

At first glance, the position of DNI (and the office) is a losing battle. A fait accompli. Bottom line: it suffers from a lack of organizational authority over the Intelligence Community, which remains split by the DOD, where the Military Intelligence Program (MIP) (which includes NSA, NRO, NGA – the eyes and ears of the IC) is directed and controlled by the Secretary of Defense. As long intelligence programs continue to be authorized and funded by defense authorization legislation, the authority of the DNI is in theory, not practice. That’s one aspect.

There’s also a little a agency proceeded by The. Technically, the CIA on the IC org chart reports to the DNI. But this hasn’t been the case, mainly because neither the previous POTUS nor the current POTUS has asked it to. While it might be tricky to gauge the success of a “covert” agency, I think the CIA is doing something right. If it wasn’t, the Executive Office would be be favoring the DNI. But it’s not, as seen in the Chief of Station turf battle and the PDB squabble. Perhaps the DNI hasn’t proven it’s value to the Executive Office. Or perhaps it’s simply human nature to favor the team in which you have more confidence when your own ass is on the line.

Regardless of whose ass is on the line, the main question is: how can the DNI succeed? The easy answer is it can when the President wants it to. Until the President says that the DNI is not just the authoritative agency for the intelligence community but his go-to, the DNI destined to fail. At a recent Palantir Night Live with Michael Chertoff (*disclaimer: Palantir is a client), the former Secretary of Homeland Security commented on the DNI’s current state: “You don’t grow a tree by pulling it up by the roots every year.” Or not giving it the environment and elements it needs to succeed.

Yes, I think the odds are stacked against the DNI. But it’s not an untenable situation. There is a way for the DNI to win (aside from legislative reform and a shift in Executive Office backing) and that’s technology: information, data, networks, platforms, tools, search, discovery, integration, visualization, analysis. The Google play.

I don’t know what James Clapper is aiming to do as DNI, but if he can build off the success of Intelink and leverage analytic tools across it, he’ll be far ahead of his predecessors. Forget who is delivering the PDB. Focus on delivering information and tools to the base, the people actually working intelligence issues. Get rid of the “consultants” and by consultants I mean $150-$300/hr professional-services-white-paper-writing managers with no IT/computer background whose firms front-load their contracts with grandiose promises and hefty price tags. Hire engineers. Hire folks like Jeff Jonas and enlist forward-leaning minds like Michele Weslander Quaid. And let the engineers sell whatever great innovations they come up with on the government’s dime back to the government. Offer a progressive working environment that looks less like a depressing status quo industrial-style grey cube farm and more like Starbucks so 20-somethings who grew up with laptops and coffee shops don’t feel like they’ve entered a sick time-warp joke.

No solution is ever simple. There’s always politics and posturing, like battles over where networks and applications reside and who should be paying for what. And the IC network terrain isn’t that same as the open internet. And offering IT solutions isn’t specifically DNI’s charter. But the network is power. Information is power. Access to information is power. If the DNI can continue to dig in the direction of presenting IT solutions to the issue of knowledge sharing in a siloed world where key knowledge holders are resistant to share beyond their agency walls, it can wield a swift undercurrent of power in the IC. Some agencies and players might buck against this but open source information coupled with a composite of inter-IC sources can threaten any individual agency’s no-play strategy.

If Clapper’s relationship is as strong as Gates makes it out to be, he can take advantage of two key opportunities for the IC: geo-location and the mobile web (which are big plays for NRO, NGA and NSA). In an increasingly geo-located world, location is where it’s at. And in an ever-growing mobile web environment, the trend of using text over voice communications could become a big opportunity for the IC for leveraging effective written language translation services.

I’m not naive or ignorant to the challenges of offering IT solutions in a highly bureaucratic world. Even if the “If you build it, they will come” mantra holds true, it certainly doesn’t mean people will play and stay. However, until the IC operates like the internet (opening agency doors and channels to data and information), I think the DNI is necessary to make sure one agency’s mission or agenda doesn’t undermine the success of the entire community and offering community IT solutions is the best play.

Don't Hate the Player, Hate the Game

Madoff, the SEC, hedge funds & the IC

After reading the testimony of Harry Markopolos, the whistleblower in the Madoff Ponzi scheme who crafted such a compelling reconstruction of events he deserves a Nobel Prize in Literature simply for the writing itself, I thought, “Don’t hate the player, hate the game.” Markopolos’ 58-page confessional and call to arms illustrates a process so painstakingly onerous, it invoked an image straight out of Kafka’s A Message from the Emperor:

The messenger started off at once, a powerful, tireless man. Sticking one arm out and then another, he makes his way through the crowd. If he runs into resistance, he points to his breast where there is a sign of the sun. So he moves forwards easily, unlike anyone else. But the crowd is so huge; its dwelling places are infinite. If there were an open field, how he would fly along, and soon you would hear the marvelous pounding of his fist on your door. But instead of that, how futile are all his efforts. He is still forcing his way through the private rooms of the innermost palace. Never will he win his way through. And if he did manage that, nothing would have been achieved. He would have to fight his way down the steps, and, if he managed to do that, nothing would have been achieved.

Markopolos began investigating Bernie Madoff in 1999, but due to consistent inadequacies and roadblocks, he was unable to elicit any action that could stop Madoff from his carrying out his odyssey of deceit. As easy as it would be to burn Madoff at the stakes and line up all the individuals guilty of inaction and ignorance for the firing squad, I’m more interested in the future of hedge funds.

For over a decade I have been fascinated by hedge funds – mainly due to the lack of transparency and oversight they have enjoyed since their inception in 1949. In reading Mr. Markopolos’ testimony, I couldn’t help but draw parallels to the Intelligence Community, who after 9/11, has been accused of “failing to connect the dots” (even though the dots in many ways were connected). Like the Intelligence Community, hedge funds are a dark market in that:

“…they do not trade on exchanges, they are not registered with the Securities and Exchange Commission, they are subject to few regulations, and their investors are not extended the same consumer-protection benefits that are given to investors in mutual funds and other entities that fall under the 1940 Investment Company Act.” (Knowledge@Wharton)

My greatest curiosity concerning hedge funds revolves around who benefits from them (and how greatly) and how have they continued to operate in such opaque circumstances after bombastic failures such as Long-Term Capital Management which required bailout supervision by the Federal Reserve. Whenever staggering amounts of money are involved, as is the case with hedge funds and the intelligence community and national security/defense, I sometimes wonder if the breadth and reach of the implications of who benefits and how becomes such a quagmire that any effort to address them with transparency seems disastrous and humiliating at the level of The Emperor’s New Clothes.

In his 30-page course of action to address securities fraud, Mr. Markapolos offers insightful, well-defined, and reasonable solutions; however, he omits two important components: 1) hedge fund transparency/regulation (which is currently being tackled by the Grassley/Levin Hedge Fund Transparency Act and 2) information technology.

If the SEC can learn one thing from the IC, it is the benefit of an integrated information technology system. The SEC, with its twelve offices across the country, along with agencies such as the IRS and DoJ, needs a better way to “talk to each other” (akin to an Intelink) – so the organizations can fluidly share information and utilize communal services to detect fraud. Markopolus’ idea of providing all employees access to a Bloomberg machine (a top-of-the-line financial, regulatory, and market database) is a plainly obvious one, noting that “most SEC offices are lucky to have even one Bloomberg machine for the entire region’s use.” The IC, via the DNI‘s Intelligence Community Enterprise Services (ICES), is provided a set of solutions that include enterprise search, a commnunity-wide wiki, blogs, instant messaging, social bookmarking, document sharing, video sharing, image sharing, and more. Our regulatory agencies need a common suite of tools, the same ones used by private/commericial financial institutions, that allow for greater analytic and data access capabilities.

If the IC can learn one thing from Markopolos and the SEC, it’s that if speaking truth to power is tough, bringing action against power is damn near impossible. Markopolos notes factors such as fear, lack of competence and vested interests as contributors to the abject failure of the regulatory system. His recommendation of creating an Office of the Whistleblower to “centralize the handling and investigation of whistleblower tips” is something the IC could implement to solicit and centralize anti-collaboration activities that would allow all IC members to contribute encountered instances of hoarding and/or resistance to knowledge-sharing in a systemic, protected manner. This would be in line with ICD 501 that strengthens the “sharing, integration, and management of information within the Intelligence Community (IC), and establishes policies for: (1) discovery; and (2) dissemination or retrieval of intelligence and intelligence-related information collected or analysis produced by the IC.”

If the IC and SEC can learn one thing from each other, it’s that while black markets will exist, there needs to be mechanisms to shed light on them.

Don’t Hate the Player, Hate the Game

Madoff, the SEC, hedge funds & the IC

After reading the testimony of Harry Markopolos, the whistleblower in the Madoff Ponzi scheme who crafted such a compelling reconstruction of events he deserves a Nobel Prize in Literature simply for the writing itself, I thought, “Don’t hate the player, hate the game.” Markopolos’ 58-page confessional and call to arms illustrates a process so painstakingly onerous, it invoked an image straight out of Kafka’s A Message from the Emperor:

The messenger started off at once, a powerful, tireless man. Sticking one arm out and then another, he makes his way through the crowd. If he runs into resistance, he points to his breast where there is a sign of the sun. So he moves forwards easily, unlike anyone else. But the crowd is so huge; its dwelling places are infinite. If there were an open field, how he would fly along, and soon you would hear the marvelous pounding of his fist on your door. But instead of that, how futile are all his efforts. He is still forcing his way through the private rooms of the innermost palace. Never will he win his way through. And if he did manage that, nothing would have been achieved. He would have to fight his way down the steps, and, if he managed to do that, nothing would have been achieved.

Markopolos began investigating Bernie Madoff in 1999, but due to consistent inadequacies and roadblocks, he was unable to elicit any action that could stop Madoff from his carrying out his odyssey of deceit. As easy as it would be to burn Madoff at the stakes and line up all the individuals guilty of inaction and ignorance for the firing squad, I’m more interested in the future of hedge funds.

For over a decade I have been fascinated by hedge funds – mainly due to the lack of transparency and oversight they have enjoyed since their inception in 1949. In reading Mr. Markopolos’ testimony, I couldn’t help but draw parallels to the Intelligence Community, who after 9/11, has been accused of “failing to connect the dots” (even though the dots in many ways were connected). Like the Intelligence Community, hedge funds are a dark market in that:

“…they do not trade on exchanges, they are not registered with the Securities and Exchange Commission, they are subject to few regulations, and their investors are not extended the same consumer-protection benefits that are given to investors in mutual funds and other entities that fall under the 1940 Investment Company Act.” (Knowledge@Wharton)

My greatest curiosity concerning hedge funds revolves around who benefits from them (and how greatly) and how have they continued to operate in such opaque circumstances after bombastic failures such as Long-Term Capital Management which required bailout supervision by the Federal Reserve. Whenever staggering amounts of money are involved, as is the case with hedge funds and the intelligence community and national security/defense, I sometimes wonder if the breadth and reach of the implications of who benefits and how becomes such a quagmire that any effort to address them with transparency seems disastrous and humiliating at the level of The Emperor’s New Clothes.

In his 30-page course of action to address securities fraud, Mr. Markapolos offers insightful, well-defined, and reasonable solutions; however, he omits two important components: 1) hedge fund transparency/regulation (which is currently being tackled by the Grassley/Levin Hedge Fund Transparency Act and 2) information technology.

If the SEC can learn one thing from the IC, it is the benefit of an integrated information technology system. The SEC, with its twelve offices across the country, along with agencies such as the IRS and DoJ, needs a better way to “talk to each other” (akin to an Intelink) – so the organizations can fluidly share information and utilize communal services to detect fraud. Markopolus’ idea of providing all employees access to a Bloomberg machine (a top-of-the-line financial, regulatory, and market database) is a plainly obvious one, noting that “most SEC offices are lucky to have even one Bloomberg machine for the entire region’s use.” The IC, via the DNI‘s Intelligence Community Enterprise Services (ICES), is provided a set of solutions that include enterprise search, a commnunity-wide wiki, blogs, instant messaging, social bookmarking, document sharing, video sharing, image sharing, and more. Our regulatory agencies need a common suite of tools, the same ones used by private/commericial financial institutions, that allow for greater analytic and data access capabilities.

If the IC can learn one thing from Markopolos and the SEC, it’s that if speaking truth to power is tough, bringing action against power is damn near impossible. Markopolos notes factors such as fear, lack of competence and vested interests as contributors to the abject failure of the regulatory system. His recommendation of creating an Office of the Whistleblower to “centralize the handling and investigation of whistleblower tips” is something the IC could implement to solicit and centralize anti-collaboration activities that would allow all IC members to contribute encountered instances of hoarding and/or resistance to knowledge-sharing in a systemic, protected manner. This would be in line with ICD 501 that strengthens the “sharing, integration, and management of information within the Intelligence Community (IC), and establishes policies for: (1) discovery; and (2) dissemination or retrieval of intelligence and intelligence-related information collected or analysis produced by the IC.”

If the IC and SEC can learn one thing from each other, it’s that while black markets will exist, there needs to be mechanisms to shed light on them.