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NRO Officials Accused of Contracting Crimes

WASHINGTON - A senior officer with the nation's spy satellite agency is being investigated over criminal allegations related to contracting even as the agency's No. 2 official is accused of trying to illegally shield the subordinate from scrutiny, McClatchy Newspapers has learned.

The inspector general of the National Reconnaissance Office opened the criminal inquiry after meeting secretly in May with four top officers of the agency, who told her about "a series of allegations of malfeasant actions" by a colleague, according to agency documents obtained by McClatchy Newspapers.

The agency's deputy director, Air Force Maj. Gen. Susan Mashiko, then heard about the investigation and made what the inspector general described as an illegal threat of retaliation against the whistleblowers.

"Four directors went to the IG," the inspector general quoted Mashiko as saying to a senior officer. "I would like to find them and fire them."

When the officer reacted with surprise, Mashiko backed off, saying she would have preferred if the directors had come to her first, the inspector general said in a memo. However, the inspector general, Lanie D'Alessandro, wrote that she had learned of a "history of intimidation" by Mashiko and the senior official who's being investigated.

"Now, rather than pledging to address the underlying issues, General Mashiko has responded with threats of reprisal against those who revealed the information to the IG," the inspector general wrote in a memo. "It is this threat of reprisal, by one of the most senior leaders in the NRO, that constitutes the violation of law."

The whistleblowers told the inspector general they had tried previously to raise the concerns with Mashiko and the then-principal deputy director of the agency, but that none of the accusations had been "addressed to the best of their knowledge," the inspector general wrote. D'Alessandro, who didn't return calls requesting comment, didn't reveal the names of the target of the investigation nor of the whistleblowers. National Reconnaissance Office officials, including Mashiko, refused to comment on the allegations, but federal officials with knowledge of the investigation said it involved improprieties in the agency's handling of contracts.

The drama is unfolding as Congress debates whether to toughen anti-leak laws to crack down on classified information being provided to the news media. The Obama administration has responded by ordering that thousands of U.S. intelligence and law enforcement employees be questioned about media leaks when they're polygraphed during security clearance screenings. In an unprecedented move, the administration also has criminally prosecuted numerous government employees for leaking. Whistleblower and media advocates fear that the aggressive efforts will have a chilling effect on the reporting of government wrongdoing but won't stop classified information from being leaked when it's politically advantageous to administrations.

After McClatchy Newspapers published stories raising questions about the National Reconnaissance Office's polygraph program in July based on whistleblower allegations, top agency officials told polygraphers in a meeting that the accusations McClatchy detailed were unfounded and based on incidents that were taken out of context, said one person familiar with the meeting. One official vowed to "take action" against polygraphers named and unnamed who had cooperated with the reporter, said the source, who asked not to be named. The statement was taken as a threat that polygraphers who raise similar concerns about the agency's practices - even to the inspector general - would be punished or criminally prosecuted as leakers. At the same meeting, polygraphers then were asked whether they had any problems with the way the program was being run. "You could hear crickets," the source told McClatchy.

The inspector general recently agreed to investigate the National Reconnaissance Office's polygraph program, but "people are going to be reluctant to talk with NRO's inspector general now," said the source, who was afraid to be identified for fear of being seen as cooperating with the media. Among some employees, the agency's inspector general office is perceived as overly aligned with the CIA and out to protect the CIA's interests rather than root out government misconduct. In an unusual relationship, the CIA shares responsibility with the Defense Department in overseeing the National Reconnaissance Office, which is staffed by CIA and Air Force employees.

However, the inspector general's recent reaction to the allegations of retaliation signals independence from the NRO's leadership, other officials said.

D'Alessandro, a senior intelligence service officer with the CIA who became inspector general in 2009, raised the alarm about the retaliation and other criminal allegations in what's known as a "seven-day letter," a mechanism for inspector generals to report serious misconduct of agencies to Congress. D'Alessandro officially notified the agency's director in the letter, dated July 3. D'Alessandro didn't name the principal deputy director who's accused of disregarding the whistleblowers' allegations, but according to the agency's website Betty Sapp held that title until July 6, when she became director.

D'Alessandro's predecessor, Eric Feldman, said he had never sent a seven-day letter during his six years as the NRO's inspector general. "It's reserved for serious matters," said Feldman, who said he didn't know about the investigation until a reporter called him. "For four senior officials to go to the inspector general about a fifth, I would say it would have to be a serious matter."

Feldman said he was surprised to hear of the allegation against Mashiko, whom he said he'd had "favorable dealings" with when he was inspector general. However, he said he wasn't surprised to hear of allegations against an NRO official related to the handling of contracts.

"You're talking about a lot of money at this agency and a culture within the intelligence community that isn't really comfortable with the idea of transparency," he said. "Generally speaking, people in that agency are ethical but there is a certain dependency on contractors and closeness with contractors that can create an awkward environment."

Sen. Charles Grassley, R-Iowa, told the inspector general in a letter sent Monday that the criminal investigation only added to his concerns about the agency. Grassley, the ranking Republican on the Judiciary Committee, is seen as a whistleblower advocate and he has previously scrutinized the use of polygraph by the federal government.

Grassley said in his letter he also was concerned that some law enforcement agencies had told McClatchy Newspapers that they weren't notified of child molestation confessions that came out during the NRO's polygraph screenings.

"These allegations raise a number of questions about the NRO leadership," Grassley wrote about the various issues, adding that he wanted D'Alessandro to turn to the inspectors general for the Pentagon or the intelligence community for help "if you deem it appropriate and necessary."

McClatchy Newspapers tried to talk with Mashiko, but she hung up as soon as she understood that a reporter was calling. Mashiko is a decorated 30-year Air Force veteran who is described on the agency's website as working in a "wide variety of space and acquisition assignments."

Former director Bruce Carlson, who announced his retirement before the criminal investigation was opened, declined to comment on the inquiry even though the controversy occurred during his tenure.

"I'm really not interested in commenting," he said. "I'm no longer on the payroll."

Carlson, however, spoke at length in praise of the agency's work, calling its last three years "the most successful in the past quarter century."

"NRO has some of the most dedicated and hardworking people I've ever been around," said Carlson, who singled out Mashiko for praise.

Referring to a long-ago accounting scandal at the NRO, Carlson said the agency had finally succeeded in leaving behind its "horrible record." In 1996, the NRO's director and deputy director were fired in the wake of accusations that the agency had kept a slush fund and hadn't adequately informed Congress about the construction of its headquarters in Chantilly, Va.

The NRO's budget is classified, but according to some estimates it could be more than $10 billion annually and it rivals the budgets of the National Security Agency and the CIA. In 2005, the NRO faced questions about its financial stewardship when it canceled a major satellite program, called Future Imagery Architecture, because of cost overruns and delays.

In contrast, Carlson said the agency got a "clean audit" every year of his three-year tenure. "That's a big deal for Congress. We can account for our money."

Other officials with knowledge of intelligence operations questioned Carlson's characterization.

"Given the lack of transparency over intelligence operations, we can't go on the word of agency officials that everything is fine," said one official, who asked not to be identified because of the sensitivity of the matter. "There needs to be a neutral and outside review of what's going on."

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Tish Wells and Michael Doyle contributed to this article.

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