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Consultants profit from their Pentagon ties

Ex- CIA couple reflect a pattern

WASHINGTON -- Suzanne H. Woolsey is a trustee of a little-known arms consulting group that had access to senior Pentagon leaders directing the Iraq war. In January, she joined the board of Fluor Corp.

Soon afterward, Fluor and a joint-venture partner won about $1.6 billion in reconstruction contracts in Iraq.

Woolsey's husband, the former CIA director, R. James Woolsey, a leading advocate for the war, also serves as a government policy adviser. He, too, works for a company with war-related interests.

The Woolseys' overlapping affiliations are part of a pattern in Washington, in which individuals play key roles in organizations advising officials on major policy issues, whileinvolving themselves with businesses in related fields.

Such activities generally are not covered by conflict-of-interest laws or ethics rules. But they underscore an insiders' network, in which contacts and relationships developed in government meld with individual financial interests.

Suzanne Woolsey, 62, is a former executive with the National Academies, the institution that advises the government on science, engineering, and medicine. She does not appear to have had a substantive background in military or national security affairs before she was named a trustee of the Institute for Defense Analyses, a nonprofit corporation paid by the government to do research for the Pentagon. She has been on the board since October 2000.

James Woolsey, 62, who headed the CIA from 1993 to 1995, is a member of the Defense Policy Board, an unpaid advisory panel serving Defense Secretary Donald H. Rumsfeld and other senior Pentagon officials. Woolsey is on CIA and Navy advisory boards; he was a founding member of the Committee for the Liberation of Iraq, a private advocacy group that was set up in 2002 at the instigation of the White House to build public backing for the war.

He is also a vice president at Booz Allen Hamilton, a consulting company that cosponsored a conference in May 2003 on business opportunities in the reconstruction of Iraq. Woolsey was one of the keynote speakers.

Booz Allen is a subcontractor for a $75-million telecommunications project in Iraq. The company does extensive work for the Defense Department as well. Recently, the Navy awarded it $14 million in contracts. The former CIA director said in an interview that he had not been involved in Booz Allen's Iraq contracts.

Last month, Woolsey appeared at a Capitol Hill news conference to announce the creation of a group called the Committee of the Present Danger, which he said would attempt to focus public attention on the threat ''to the US and the civilized world from Islamic terrorism."

Others with overlapping interests include Richard N. Perle and Christopher A. Williams.

Perle, a national security specialist who served as an assistant defense secretary under President Reagan, was chairman of the Defense Advisory Board, but stepped down from the chairmanship and eventually the board itself after questions were raised about possible conflicts between his advisory role and his business interests.

Christopher A. Williams, also a Defense Policy Board member and a former ranking staff member in the Defense Department, has registered as a lobbyist for Boeing and other arms contractors. A former aide to Senator Trent Lott, Republican of Mississippi, Williams is a partner with Johnston & Associates, the lobbying enterprise that was founded by former Sen. J. Bennett Johnston, Democrat of Louisiana, and that is now headed by his son, Hunter Johnston.

In Suzanne Woolsey's case, during the US-led attack on Iraq, the Institute for Defense Analyses provided senior Pentagon officials with assessments of the operation.

Staff members from the institute formed part of an 18-member civilian analysis team working from the Joint Warfighting Center in Virginia.

The operation was described in a June 3, 2003, briefing by Brigadier General Robert W. Cone of the Army. ''This team did business" within the Army Central Command ''on a daily basis, by observing meeting and planning sessions, attending command updates, watching key decisions being made, watching problems being solved, and generally being provided unrestricted access to the business of the conduct of this war," Cone said, according to a transcript of the session.

Tax records show that in 2003, Suzanne Woolsey was paid $11,500 in trustee fees for serving on the Institute for Defense Analyses board.

An official within Fluor declined to discuss why Woolsey had been invited to become a director, or what role, if any, she had played in the company's Iraq contracts. He confirmed Securities and Exchange Commission filings that show Fluor pays outside directors $40,000 a year, plus stock options and additional fees for attending meetings.

At the National Academies, Woolsey was chief operating officer from 1993 to 2000 and chief communications officer from 2000 to 2003.

Woolsey was appointed Fluor's board in January 2004, while Fluor and a partner, AMEC, were competing for two federal contracts to do reconstruction work in Iraq.

A little more than a month after she was named, Fluor and AMEC got both contracts, with a combined value of $1.6 billion.

Fluor's stock has risen steadily since the war began; it now has a price of about $45 a share, up from a little more than $30 a share in March 2003. According to reports filed with the SEC, Woolsey owns 1,500 shares of Fluor stock.

Earlier, Fluor had won two other government contracts for work in Iraq. These had a potential value of more than $1.5 billion over five years, according to a company spokesman, Jerry Holloway.

Holloway said all the contracts (the first dates to April of last year) had been awarded on a competitive basis. Many of Fluor's contracts were awarded before Woolsey's appointment, he said. Fluor considered the Iraq contracts an important element in its financial performance. In a recent SEC filing, the company reported that its revenue for the first quarter of the current fiscal year from work in Iraq totaled ''approximately $190 million. There was no work in Iraq in the comparable period in 2003."

Suzanne Woolsey did not respond to messages.

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