Blowing the Whistle on Murky Deals

By Kanupriya Vashisht

The move from Time magazine to Vanity Fair hasn't doused the desire of America's top investigative duo for exposing waste, fraud and cozy alliances. In the March issue of Vanity Fair, Don Barlett and Jim Steele author a powerful expose of one of the country's biggest, yet relatively unknown, defense contractors: SAIC -- Science Applications International Corporation - and its controversial ties to government.

In Washington, contractors such as SAIC are called "body shops." They do the specialized work that downsized government agencies no longer can. The 10-page article reveals some staggering statistics about these private contractors. They absorb an amount equal to the taxes paid by every American with incomes less than $100,000.

Steele explained to BusinessJournalism.org associate editor Kanupriya Vashisht how this investigation came about, how access was gained to a very secretive business and what bothered him most about this story. Read the Vanity Fair story here.

Question: How did you become aware of this issue?

Steele: Don and I were researching Homeland Security when we were still at Time Inc. SAIC -- the very name made Don curious. And then it struck us. How could a company be so big and influential, have such large revenues and be almost anonymous?

When we came to Vanity Fair we discussed it with editor Cullen Murphy. He found the idea interesting as well. Further digging revealed the defense department is at the heart of their operation. More than half of SAIC's contracts come from the National Security Agency, some others from the office of Homeland Security.

Question: How did you get started on writing this story?

Steele: The first thing we did was read, read, read -- all sorts of primary and secondary material. We went through inspector general audits and numerous court cases filed against SAIC. SEC filings also provided a lot of information because SAIC had been trying to hem an initial public offer.

We also got annual reports dating back to the very beginning of the company in 1969 from a disgruntled employee who had won two court cases against SAIC. She had saved everything. Trial transcripts provided all sorts of details and information about the company. SAIC has lots of pending cases, almost all of them from women employees.

Question: What kind of resources did you use?

Steele: We used Department of Defense files, Inspector General reports, Pentagon reports, Nuclear Regulator Commission reports, litigation reports, SEC filings, 10 K filings, and company annual reports. There was some fascinating bit of litigation from Russian National Science Foundation -- SAIC literally ripped them of their software.

I also made several trips to San Diego. I traveled to Alaska to meet the former SAIC employee who had sued SAIC. The woman was very happy to talk.

Question: What bothered you most about writing this story?

Steele: Details are like your children; you want them all to have a home in your story. Leaving out details is the most bothersome part of doing an in-depth story. When you start an investigative story, you need to dig deep. The deeper you go the richer the story becomes. But with a very big story, due to space constraints, what goes into print is still the tip of the iceberg.

Question: What was your biggest challenge?

Steele: The biggest challenge is always in writing the story. In doing a lot of our big stories we are faced with adeptly "connecting the dots." Molding facts into a cohesive theme. There is a lot of rewriting.

We usually take blocks of information and write them out individually without worrying where it is all going. Then we try and stitch it together, give it a lede, body, and an ending.

Question: Is there a specific technique you use for most of your investigative stories?

Steele: We always start by reading. Calling people comes later. We like to create a base of knowledge before we start talking to people. Research has become easier today. Don and I used to travel to Washington a lot more in the past. We can get a lot of that information online these days.

Question: Have you ever felt threatened after your stories got published and created a furor? Have you ever felt scared?

Steele: Never.

Question: What is your next project about?

Steele: It is also about influence peddling triumph of special interests in Washington.

 

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Robert Beyster, founder of SAIC, posted the following response on his blog http://www.beyster.com/blog/

"I am bothered by the article in Vanity Fair. They sent us a list of questions which they were going to address in the article, and both SAIC and I made responses. As far as I can tell, they ignored these responses in their article. The issues brought up in the article were old ones. The company had long ago addressed and resolved them. As for the personal attack on me, the events cited came up in legal depositions and I am bound legally not to discuss them with anyone. For your information, none of the scandalous remarks are true."

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Copyright © 2008 Donald W. Reynolds National Center for Business Journalism