Since Crypt Newsletter has mentioned Science Applications International Corporation (SAIC) so many times, it would seem only logical to spend some time explaining exactly what SAIC is.
A trip to the company's Website exposes the reader to an exercise in pitiless bragging and corporate puffery that makes the grandiose press releases of the anti-virus industry seem almost anemic by comparison. Press releases and files describe SAIC's contributions to the world which turn out to be -- somewhat comically -- almost everything.
Like silly Pavel Chekhov, who had an amusing penchant for insisting anything discussed was the invention or intellectual property of Russia during various episodes of Star Trek, SAIC engineers, scientists, mouthpieces and ex-Pentagon staffers can be seen tooting the company horn for everything from karaoke to therapies for AIDS.
"Karaoke?" Crypt hears you ask. Yes, you read right.
A press release on SAIC's O'Fallon, Illinois, office proclaims, "Today, SAIC produces roughly 30% of the U.S. karaoke CD+Graphics product for various publishers . . ."
But SAIC's company magazine is where the firm's promotion really shines.
According to SAIC magazine, the company is building computing infrastructures to support HMO's in Northern California, has won Midwestern medical information systems contracts for linking hospitals in Kansas and Missouri, ensures clean disposal of hazardous waste, is working on preventing train derailments, designs simulations to analyze plasma eruptions on the sun and is working on helping the Department of Energy determine spending priorities and resource allocations.
However, SAIC's real bread and butter is military work and while the magazine mentions it, you'll find no fascinating details or even a comprehensive overview of this world. A more realistic SAIC footprint emerges upon examination of newspaper databases for the company's business dealings.
SAIC has countless offices worldwide and large installations in San Diego; McLean, VA, and Ft. Meade, Maryland. SAIC employs thousands of workers, 22,000 by a citation in the Los Angeles Times. The vast majority of its contracts -- 83 percent -- are with the government and military, meaning the company survives almost solely on taxpayer dollars.
In recent years, SAIC has been purchasing other companies including nine in 1996, alone. In the 1996 spurt, SAIC purchased Network Solutions, the Herndon, VA, company that runs the Internic and administers the registration of addresses on the Internet. The Network Solutions purchase resulted in a flurry of news articles noting that SAIC, as a secretive Pentagon contractor, was gaining control of one of the lynchpins of the Internet.
However, one of the most interesting deals was one that was shot down. SAIC was ready to spend $200 million in an attempt to purchase Aerospace Corp. in El Segundo, California, in 1996.
Last November, the U.S. Air Force rejected SAIC's bid to acquire the Pentagon-funded installation as "not in the best interest of of the U.S. government." Aerospace Corp. was a non-profit federally funded laboratory. Ninety three percent of its yearly $350 million dollar business went to the Pentagon and the Air Force, according to a November 15 article in the Los Angeles Times, said it didn't like the "prospect of losing the objectivity, independence and freedom from conflict of interest" that the company provided U.S. space operations, particularly those through the super secret National Reconnaissance Office.
"We're disappointed, obviously," Aerospace Chief Executive Edward C. "Pete" Aldridge Jr. said of the thwarted merger for the Los Angeles Times. "We were looking forward to doing something new and different." Aldridge, of course, would have been a SAIC chief executive had the deal succeeded.
Remember the name Edward C. Aldridge? No? Check in Crypt Newsletter 41. Yep, that's the same Edward Aldridge seen as a co-author on the recent Duane Andrews/Pentagon Defense Science Board report about looming electronic Pearl Harbor. The report recommends a "czar" be appointed to stave off electronic Pearl Harbor. It recommends crash investment -- millions of taxpayer dollars, $280 million, actually -- be spent on the task. And, as a good Crypt Newsletter reader, who is one of the loudest advertisers for protecting the infrastructure from electronic Pearl Harbor? That's right. SAIC! Duane Andrews is a SAIC very-important-person. In effect, Edward Aldridge was negotiating to become a SAIC employee while the DSB report was being written. Heh-heh. Nice deal, no? Sometimes Crypt News wishes it possessed this kind of business moxie.
Ironically, the LA Times included paraphrased comment from one of Aerospace's former presidents, Eberhardt Rechtin: "Fear of . . . conflicts of interest was what prompted the [U.S.] government in 1960 to create Aerospace by spinning off the systems engineering unit of TRW . . . The idea was to place some distance between engineers who were making recommendations on high-tech hardware and the manufacturers of the same hardware . . ."
But wait. Lets take a look at another intriguing SAIC business venture.
In 1995, a movement started within the Pentagon to outsource a function of the Defense Logistics Agency -- the supervision of DoD junkyards around the country.
The DoD junkyards weren't profitable, according to companies wishing to take control of them in the name of better business practices.
Guess what company wanted to be put in charge of military junk? That's right. In 1995, SAIC in conjunction with EG&G, a Boston firm, was interested in taking control of DoD junk.
Here's the scenario. Taxpayer dollars -- your money -- pays for everything bought by DoD, including, for example, PCs, keyboards, peripherals, funny pictures from the officer's clubs, etc. Eventually, a great deal of the material winds up in the military junkyards, where it rots, or is not sold at competitive price, according to the people who want this business.
But if SAIC were in charge, then it could sell goods that you already paid for back to you at more competitive pricing. So the U.S. citizenry could pay for the items twice, with SAIC making a profit and the rest, presumably, going back to DoD.
Neat! Include Crypt News in for a share of that business when it starts.
And here's some more SAIC business activity not included in the company's press releases. At the end of 1995, federal prosecutors in San Diego announced a division of SAIC, Science Applications International Technology, had agreed to pay a $2.5 million settlement to the government stemming from a whistle-blower's claim the company had tricked the U.S. Air Force over navigational equipment.
Of course, a SAIC mouthpiece said the settlement did not constitute admission of wrongdoing. Rather, it was a business decision based on evaluating the cost of litigation against the amount of the settlement.
SAIC raided by military investigators in 1994
Crypt News also found military investigators had raided SAIC offices in San Diego in 1994 while investigating alleged fraud in the DoD's Comanche helicopter program.
Agents from the Defense Criminal Investigative Service, a part of the U.S. Defense Department, and the U.S. Air Force Office of Special Investigations, entered SAIC and seized dozens of boxes of documents.
SAIC developed liquid crystal displays used in the control panels of the Comanche. The company said it would cooperate fully with the investigation.
SAIC convicted of false statements in 1991-2 federal case
SAIC has also been charged with falsifying the results of test samples taken from a Superfund hazardous waste site it managed.
This particular case, from 1991, resulted in what was termed by federal prosecutors "the largest environmental fraud fine" they'd seen at the time.
SAIC, in this settlement, pleaded guilty to seven counts of making false statements to the Environmental Protection Agency and three counts of making false claims for payment in the Superfund case.
The company had been taking in more samples from the site than it could do. Melanie K. Pierson, an assistant U.S. attorney who prosecuted the case said, "They were more interested in money than they were in health and safety concerns."
SAIC later fired six employees after an internal company investigation. No senior managers were involved, according to the SAIC probe.
And SAIC was ordered to pay $1.3 million as a result. Federal Judge Rudi M. Brewster called the case an example of "corporate greed."
Can you say the words corporate criminal? Crypt knew you could.
But we've strayed from SAIC's business endeavors in the realm of cyberfear.
Getting back to it, Crypt readers will be pleased to learn SAIC has linked up with the Encino, California-based Pinkerton's detective agency. In a venture slated to run at least two years, Pinkerton's and SAIC have joined together to protect the citizenry (big business, actually; the citizenry isn't suitably fungible) from the faceless shadows of Internet evil. Again, can you say the magic words? Cybergangs, terrorists, computer hackers and cyber-criminals.
SAIC is even promising an "information warfare center." However, no Website is up yet, company mouthpieces say. Stay tuned.
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More SAIC-relevant links: