by Tim Cushing

Filed Under:
oakland, surveillance


Oakland's City Wide Surveillance Network Being Built By Contractor With A History Of Fraud And Little Regard For Civil Liberties

from the city-must-want-this-system-built-in-the-worst-way dept

I don't know what version of its CV Science Applications International Corporation (SAIC) handed in to the city of Oakland, but it must have been one that glossed over a whole lot of its recent history. "A fool and his money are soon parted," it's often said, but if SAIC's "work" with New York City is any indication, a fool and his money are painfully separated exponentially over the next decade.

In the late 1990s, New York began a program to transition tens of thousands of municipal employees from paper punch cards to digital palm scanners, ostensibly to counter fraud. Dubbed CityTime, the project's initial budget was $68 million. But after SAIC acquired the company that had won the competitive bidding process for the work, CityTime's cost mushroomed to more than $740 million in ten years.
What NYC received in exchange for three-quarters of a billion dollars was a network of well-financed kickback recipients… and not much else. As Mike wrote back in 2011, one of things you don't do to Mayor Mike Bloomberg is screw him over in a business deal.
Apparently, NYC Mayor Michael Bloomberg has had a similar experience with SAIC and the new computer system for NYC it's been building. But, Bloomberg is a businessman by trade, rather than a politician, so when a company charges you $600 million (way over budget from the original $63 million), he knows that you ask for your money back. So that's what he's doing. He's demanding a $600 million refund from SAIC.
Bloomberg demanded $600 million and, backed by the DOJ, managed to recover $500 million of that. This means SAIC walked away with $240 million on a job quoted at $68 million. On the strength of that experience alone, Oakland should have had serious reservations about bringing SAIC on a new project, but it appears to be blissfully unaware of SAIC's past.
It's unclear if Oakland's mayor, city council, or city administrator vetted the company before approving the DAC contract. Nothing in the Oakland Public Safety Committee meeting records, nor the meetings of the full council, indicate that the city looked into SAIC's record before handing over millions in federal grant dollars. In an interview last month, neither of the two city officials in charge of the DAC — Domingo and Ahsan Baig, the city's information technology manager — were aware of SAIC's past record of fraud, cost overruns, and failed projects.

Councilman Dan Kalb said he also wasn't aware of SAIC's record with other cities or its various military and Department of Homeland Security contracts. "The administration made the decision as to which contractor to go with," Kalb said, referring to City Administrator Deanna Santana's office. "Apparently, last year the council gave the administration the authority to work with the port to decide on the contractor." Other members of the council did not respond to a request for comment.
This is already bad -- no one involved appears to have the faintest idea about SAIC's past -- but it gets much worse. SAIC has been contracted to build a surveillance network in Oakland called the Domain Awareness Center (DAC). This expansion of the Port of Oakland's DAC to a citywide entity is being battled by civil liberty advocates and other citizens of Oakland. Putting SAIC on the project adds its rap sheet of white collar crime and human rights abuses to the mix.
In recent years, SAIC has been accused of defrauding municipal governments, bribing foreign officials, and delivering shoddy products. And when the company does deliver the goods at cost and on time, it's often for militarized projects linked to human rights abuses. Among SAIC's recent contracts: training the Egyptian military, operating drones used to kill foreign citizens, building and operating portions of the NSA's internet spying system used on Americans, and more.
Because of its inability or unwillingness to vet its bidders, Oakland is basically setting itself up to be defrauded and placing its citizens in the hands of a contractor willing to perform nearly any job for the right price. (A price which seems to vastly exceed the quote a majority of the time.)

Here's what SAIC has failed to get off the ground in recent years, despite taking home millions of tax dollars.
- From 2000-2004, SAIC collected $600 million to build a new computer system for the FBI and delivered an end product so disastrous, the FBI immediately scrapped it and began looking for another contractor and a new system. (Not that it mattered. Work began in 2006 and the system finally went 100% live in August of 2012.)
- A several-hundred-million dollar project for Greece (actual amount seemingly unknown due to multiples layers of shady accounting), which (again) suffered from major cost overruns, fraudulent activity and (of course) didn't work as advertised with "only a fraction of the cameras installed actually providing footage."
- Received $46 million to train Egypt's army under the US Army's supervision -- several members of which have gone on to kill "hundreds of protesters" in recent months.
- This:

"SAIC was also responsible for a failed multibillion-dollar intelligence system project for the National Security Agency called Trailblazer that was junked in 2006 and characterized as one of the worst intelligence failures in US history."

Despite this failure, the NSA brought SAIC as a contractor on XKEYSCORE.
In addition to this list of failures, SAIC has also tormented the private sector by birthing patent troll VirnetX, which managed to secure $368.2 million in damages from Apple despite being on track to gross $72,000 for the entirety of 2012.

This is the entity the city of Oakland has chosen to do business with on a surveillance project -- a contractor whose primary contracts are with the military and who sports a horrendous track record on the both the contracting side and the civil liberties side. Maybe the city's hoping it will just get the civil liberties-violating side (one high-ranking city official has suggested the program should be used to "control public demonstrations") and walk away without being gouged too horribly on the contracting front. And if it doesn't it's all just play money tax dollars anyway.

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  • identicon
    Anonymous Coward, 11 Sep 2013 @ 4:12am

    that's why he's been employed to install it! no point in having someone that cares about civil liberties, is there? nothing private would ever be found out about the people!

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 11 Sep 2013 @ 5:00am

    It boggles the imagination that they have managed to get themselves embedded this deeply.
    We really should find out who they are donating cash to, and vote them out.

    On the upside for privacy advocates, they seem unable to produce what they promise. Just keep track of the cash thats going to be drained from the city coffers and post those numbers at election time.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 11 Sep 2013 @ 5:31am

    How are these expenditures justified?

    Certainly a majority of the voting public disapproves, so why are there no recall efforts based upon these transgressions?

    Possibly, CA does not allow recalls? .... checking .... hmmm seems that CA does allow it. OK, so wtf?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 11 Sep 2013 @ 5:46am


      "Certainly a majority of the voting public disapproves, so why are there no recall efforts based upon these transgressions?"

      The voting public doesn't normally have to agree on how any of their tax money is spent. My grandmother is complaining a lot about the school district in her neighborhood building a really expensive new sports stadium, and only telling the public/voters about it after they've already signed a contract to build it and need a big school tax hike to pay for it.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 11 Sep 2013 @ 5:06pm

        Re: Re:

        "The voting public doesn't normally have to agree "

        Yes, the whole representative democracy thing - etc.
        However, what makes one issue they do not have to agree upon more important to them than others which have at least as much if not more real impact upon their lives? I find it almost shocking how much fervor the 2nd amendment creates compared to the snooze fest found amongst all the other so called rights we should be afforded. Seriously - wtf?

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 11 Sep 2013 @ 5:55am

    Follow the money

    In this case, if I read the linked article correctly, Oakland is spending a piddly $2 million more on an exiting project, and the money comes from federal war-on-terror slush. So Oakland doesn't do much checking (it's mostly not their money), and the amount is hoped small enough to fly under the radar of the Bay Area media. Typical.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 11 Sep 2013 @ 6:08am

    I wonder what Americans in 1913 who passed the 16 Amendment would think of their creation if they had had the knowledge of what is being done today with their reporting requirements in terms of security.

    reply to this | link to this | view in chronology ]

  • icon
    Carl "Bear" Bussjaeger (profile), 11 Sep 2013 @ 6:24am

    Could be worse

    Look on the bright side: Just imagine the rights abuses Oakland could inflict if they went about surveilling free people efficiently and cost-effectively.

    reply to this | link to this | view in chronology ]

  • icon
    Ima Fish (profile), 11 Sep 2013 @ 7:01am

    In related news, Oakland has hired James McCormick to build and operate the city's landmine detection network. So at least the city is safe in that regard.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 11 Sep 2013 @ 7:05am

    It's time for some massive recall elections on all levels.

    reply to this | link to this | view in chronology ]

  • identicon
    Michael, 11 Sep 2013 @ 7:23am

    Let's be realistic

    We have to be realistic here. When you are looking for a contractor to build a city-wide surveillance network intended to strip away the civil rights and privacy of it's citizens, you don't start by looking at companies riding a white horse.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 11 Sep 2013 @ 12:26pm

    Oakland's City Mgr

    Some good friends just moved from Oakland and told me the City Mgt is as crooked as a barrel of fish hooks.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 11 Sep 2013 @ 3:39pm

    Defense of SAIC

    Tim, I have a deep respect for you and the others that write the articles here on Techdirt. I mostly agree with the things you say. But this article is too one-sided, even for you. I must note that I do work for SAIC, but have never worked on any projects mentioned in your article nor know anyone that has.

    Specifically, the CityTime contract increased because the requirements changed, drastically. Of course, this doesn't excuse the criminal acts that occurred.

    How can you blame SAIC for killing Egyptian civilians? That's like blaming gun manufacturers for gun deaths.

    The FBI project was a failure because it occurred before and after 9/11. The requirements changed from a criminal database to a terrorist database and with the constantly changing people in charge at the FBI and the requirements, it just couldn't be done.

    The Greece Olympics were problematic from the start. The bid was accepted 1 year late but no extra time or money was provided to do the expected work. The people of Greece did not like getting their pictures take so they managed to destroy or steal many of the cameras. SAIC was even dinged for not putting cameras on the roof of the swimming stadium. The roof was never put on the swimming stadium.

    SAIC is just one of many contractors that do what the government asks them to do. If SAIC won this proposal, it is probably because SAIC has a good deal of experience in doing this type of work. If you are upset about surveillance in Oakland, blame the people that are asking SAIC to do the work, the politicians in Oakland.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 11 Sep 2013 @ 5:12pm

    "SAIC is just one of many contractors that do what the government asks them to do"

    SAIC is just one of many corporations that tell the government what to do


    reply to this | link to this | view in chronology ]

  • icon
    toyotabedzrock (profile), 11 Sep 2013 @ 9:28pm

    NSA linked company uses patents to weaken Apple Crypto

    So this NSA linked company only does work for public sector and defence and sued Apple into redesigning their VPN.

    So maybe they sue to keep people from using proper crypto?

    reply to this | link to this | view in chronology ]

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