Reyes the Rainmaker: Electronics and earmarks on the border

Editor's note: This is the last of a three-part series titled “Reyes the Rainmaker,” focusing on the power and influence of U.S. Rep. Silvestre Reyes in national security, homeland security, border security, and intelligence operations, how those programs have been integrated into regional economic development efforts, and how Reyes has drawn increasing support from the military contracting sector. In addition, there is a sidebar story to the series, Reyes and the Aerospace Missions Corporation earmark.

The series:

-- Part 1: Building the Paso del Norte security system, from academics to economics

-- Part 2: Contributions and contracts

-- Part 3: Electronics and earmarks on the border.

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Questions about Reyes’ campaign financing and possibly related contract have surrounded the congressman’s persistent and longtime support for high-tech electronic surveillance along the border, involving two no-bid contracts. Since coming to Washington in January 1997 Reyes has been a key advocate of constructing a “virtual fence” along the southwestern border, despite the all-too-real multibillion dollar price tag and absence of hard data that the billions result in improved border security.

Reyes and family have been involved in promoting virtual fencing since Border Patrol contractors started laying out the first components of the electronic surveillance system in the late 1990s.

But it wasn’t until the Inspector General (OIG) of the federal government’s General Services Administration (GSA) in December 2004 released an audit of the border electronic surveillance project, then-called the Integrated Surveillance Intelligence System (ISIS), that the some of the details of the electronic surveillance project were publicly revealed.

The audit focused on the Border Patrol’s relationship with the two ISIS contractors, starting with the Alaska native-based Chugach Development Corp. (headquartered in Virginia) and continuing with its successor International Microwave Corp. Rebecca Reyes, daughter of Rep. Reyes, directed the ISIS project for the two contractors.

According to GSA, the audit review of ISIS encountered serious management issues that undermined the value of the more than $200 million that had been spent on the surveillance project. The GAO inspector general found, among other things, that ISIS suffered from: “lack of competition in the awarding” of the contract, “inappropriate contract for construction services,” “inadequate contract administration and project management,” “providing equipment without contract approval,” and “ineffective management controls.”

The GSA inspector general’s audit concluded that the government had paid for "shoddy work" or "for work that was incomplete or never delivered." Official inattention to the contracted project "placed taxpayers' dollars and . . . national security at risk."

A follow-up investigative report by the Washington Post (April 11, 2005) detailed the chronology of ISIS deployment in which Rep. Reyes and his daughter, Rebecca, played major roles.

The Post recounted how Walter Drabik of the Immigration and Naturalization Service (INS) had launched the ISIS project in 1996 shortly after former Border Patrol Chief Reyes arrived in Washington. Reyes came to Congress as a strong proponent of electronic surveillance, while opposing proposals for an extended border fence.

A $2-million contract with the Alaska-based Chugach Development Corp. was soon succeeded by a series of multimillion contracts with International Microwave Corp. From its 1999 beginning ISIS was subject to controversy, intra-agency tensions, and allegations of inside dealings.

According to the Post report:

"Over the objections of Border Patrol officials, INS official Walter Drabik chose cameras distributed by a firm called ISAP. U.S. officials and contractors said IMC [International Microwave Corp.] had bought the ISAP firm without disclosing it to U.S. officials. This allowed IMC to buy cameras from its own subsidiary, substantially increasing profits. Undisclosed self-dealing could be illegal."

Because of escalating concerns about the failed implementation of the project and about failed Border Patrol oversight, Congress was by the end of the decade threatening to eliminate the ISIS project. According to the Washington Post article, IMC then turned to Rep. Reyes and other allies in 2000 to help rescue ISIS. “Within months, INS and GSA officials granted IMC a contract expansion worth $200 million, with no competitive bidding.” The Post described Reyes as “a former Border Patrol official and key backer of the system of 12,000 sensors and several hundred cameras installed for the Border Patrol between 1998 and last year [2004].”

Family connections to shoddy border surveillance project

INS’ Drabik said, according to the Post’s report, that he recommended that first Chugach, then IMC, hire Rebecca Reyes as liaison to the INS. Both did so. Rebecca Reyes, 33, ultimately became IMC's vice president for contracts, and ran the ISIS program. Rebecca is one of three children of the congressman. The others are Silvestre Jr. and Monica.

As the El Paso Times (April 25, 2005) reported: "All three children of U.S. Rep. Silvestre Reyes worked in some capacity for defense contractors that were criticized by the Office of Inspector General of the U.S. General Services Administration for installing faulty or incomplete equipment for a border security technology system. International Microwave Corp. and L-3 Communications Holdings Inc. — through their political action committees and others — also gave Reyes about $17,000 in campaign contributions during the past five years."

In 2001 Silvestre Reyes Jr., a former investigator for the Immigration and Naturalization Service (INS), was hired by IMC as an ISIS technician. According to the congressman, his son helped set up the Border Patrol repair center in New Mexico that employed 19 IMC employees and two Border Patrol agents. The GSA audit found that “little to no work” was done at this center. Silvestre Jr. became a L-3 employee after the company bought IMC.

Monica Reyes, according to her father, was employed by IMC to conduct training.

After International Microwave was purchased in late 2002 by L-3 Communications, a major defense, homeland security, and intelligence contractor, Rebecca Reyes became a vice-president at that corporation, which assumed control of the ISIS project. As vice president for surveillance systems, Reyes described a remote electronic surveillance deployed by L-3 as “a force multiplier.”

Commenting on the involvement of the Reyes children in the border electronic surveillance debacle, Gene Davis, a retired deputy Border Patrol chief for the Blaine sector in Washington state, told the El Paso Times: “I am very concerned when I look at Congressman Reyes and his kids. I don’t like the way it looks. And what really upsets me is the amount of money taxpayers put into a system that wasn’t working, and that put our nation’s security at risk.”

The Post also noted that David Watters, the Border Patrol officer overseeing the much-criticized ISIS repair center in New Mexico, had a daughter and a niece working at the center.

“What we have here, plain and simple, is a case of gross mismanagement of a multimillion dollar contract,” said Congressman Mike Rogers (R-Ala.). “This agreement has violated federal contracting rules. And it has wasted taxpayers’ dollars. Worst of all, it has seriously weakened our border security.” Rogers, then-chairman of the Homeland Security Subcommittee on Management, Integration and Oversight, conducted a hearing on June 16, 2005 to determine why the L-3 subsidiary failed to execute the border security project.

L-3’s then-CEO Frank Lanza said that the Rebecca Reyes was cleared of any wrongdoing by the GSA investigation.

Reyes made her way to a vice-presidency at L-3 Communications from Chugach, where she worked as a technical writer, and then to IMC (which acquired a part of Chugach), where she directed the ISIS project, and then to L-3 in late 20002, when L-3 acquired IMC. At L-3 Reyes first served as vice president of surveillance systems.

Reyes later became director of policy, procedures and administration at L-3 subsidiary MPRI (Military Professional Resource Inc.), according to a report on intelligence outsourcing by CorpWatch and Amnesty International. Essentially, MPRI is an employment service for mercenaries, and has, for example, a major Army contract to supply interrogators, translators, and private intelligence agents for Iraq operations. MPRI says it maintains a “database of select former military (or military related), DOD civilians, Homeland Security and law enforcement professionals who would like to be considered for MPRI requirements.”

When asked as part of the research for this article about his children’s work for government contractors, Reyes’ aide Vince Perez said that "None of the Congressman's children work or have ever worked for companies that receive funding from a project requested by the Congressman. Nor do any of the Congressman’s children work for entities that have contributed to his campaign."

The current places of employment of Monica Reyes and Silvestre Reyes Jr. could not be determined. L-3 Communications is a longtime source of contributions to the Reyes campaign committee.

L-3 Communications denied that its newly acquired subsidiary IMC overcharged or failed to install the surveillance technology for which the government had paid. However, Joe Samprano, chief of the company’s subsidiary Government Services Incorporated, said that ISIS had grown too quickly for IMC to effectively manage – a problem that was rectified by the takeover of the project by the much larger L-3 Communications team in November 2002. Government Services Incorporated is the parent of MPRI, which it bought in 2000, and outsources interrogators and intelligence agents throughout the world but primarily in the Middle East.

Rep. Reyes and IMC’s Acri

Anthony Acri, IMC’s president, defended his firm’s work, saying the system was well-built and was a good investment for taxpayers. Acri said the halt in work on the system "is very dangerous for our country."

The OIG report prodded L-3 Communications to repair the faulty work of International Microwave, and L-3 fired Acri.

In addition to the charges of nepotism that surrounded the ISIS project, IMC and Reyes were linked by campaign contributions from IMC’s president and his family. In 1999-2001, IMC President Anthony Acri, Ann Acri, and Anthony Acri Jr. from Bramford, Conn. (home of IMC’s corporate headquarters) gave Reyes’ campaign committee $9,500 in ten separate donations.

Responding to the charges about the surveillance project, Rep. Reyes said:

"I had no role in whatever way of anyone getting these contracts. These contracts, whether they're bid or no-bid or whatever, that's done by the different government) agencies. My job, as I see it, since I used systems like this and since I know how important they are to Border Patrol agents in those situations, is to make sure we're out there funding them so that we can get these systems installed throughout the border.”

A continuing record of failure and poor oversight

A year after the GSA issued its audit review DHS’ own Office of Inspector General (OIG)issued its own scathing report on border electronic surveillance operations. The DHS concluded that Border Patrol oversight of the project’s contracting was “ineffective.” Rather than checking invoices from contractors, the Border Patrol simply approved them and certified them after the contractors had been paid.

As to the effectiveness of ISIS remote electronic surveillance, the OIG stated:

“We determined that more than 90 percent of the responses to sensor alerts resulted in ‘false alarms’ - something other than illegal alien activity, such as local traffic, outbound traffic, a train, or animals. On the southwest border, only two percent of sensor alerts resulted in apprehensions; on the northern border, less than one percent of sensor alerts resulted in apprehensions.

“Lack of defined, stabilized, validated requirements increases likelihood of program changes, interoperability problems, equitable adjustments, and cost overruns. A broadly defined Statement of Objectives approach coupled with undefined requirements leaves programs vulnerable to failure and cost overruns.

The Border Patrol claims that electronic surveillance is a “force multiplier,” meaning that the technological barrier increases the efficiency and impact of individual agents. But the DHS report of December 2005 found the Border Patrol was “unable to quantify force-multiplication benefits” and what is more found that one of the many flaws of ISIS was that the project was badly undermanned, especially in monitoring the output of the surveillance system.

Reyes stance on border security

Although a supporter of comprehensive immigration reform, Reyes is a major force in Congress for more border security. But unlike many border security advocates, Reyes opposed building border fences along open, nonurban stretches of the border. He has won praise from immigrant rights advocates for both his support for immigration reform and his opposition to the border wall part of DHS’ Secure Border Initiative.

But Reyes has been a longtime supporter of electronic surveillance projects, despite their high cost, history of failed government oversight, and persistent technical failures.

At a July 20, 2006 homeland security hearing, Reyes said:

“That is why I have consistently lobbied my colleagues for greater resources for border security, including additional Border Patrol agents, equipment, and technology; more immigration inspectors and judges; and thousands of new detention beds.”

Declaring his opposition to the then-proposed 700-mile border fence, Reyes argued instead for a virtual fence:

“In these more remote areas our limited border security resources would be much better spent on additional personnel, equipment, and technology such as sensors to create what is often referred to as a ‘virtual fence.’ A virtual fence could also be implemented more quickly and therefore could help us gain operational control of our borders sooner.”

The July 20, 2006 statement by Rep. Reyes is prefaced on the Reyes blog with this assertion of his strong border security credentials: “As usual, the Congressman grapped [sic] everybody's attention with his rock-solid, common sense border vision and his sweeping command of policy and facts.”

The virtual fence has been part a favored project of the Border Patrol and homeland security contractors since 1997. But its 12-year history gives little assurance that it is a rock-solid, common sense approach to border control.

A series of OIG reports continuing into 2009 have offered blistering criticisms of the succession of electronic surveillance projects undertaken by the Border Patrol. Yet the plans for the virtual fence have not only continued but have continually expanded in ambition scope – with scant evident of impact.

After having spent $239 million in the ISIS project, the Border Patrol in 2004 launched a new electronic surveillance project called America’s Shield, which received strong congressional and Bush administration support. By 2006 another $200 million had been spent on federal contractors with homeland security firms – still without any documented impact.

In December 2005 SBInet became the latest iteration of the electronic border surveillance project. In fiscal year 2007 alone, prior to any deployment of the system, the virtual fence project cost the U.S. taxpayer $219 million in contracts with Boeing. SBInet subcontractors include many leading homeland security firms, including L-3 Communications, Unisys, DRS Technologies, Lucent Technologies, and USIS.

DHS estimates that SBInet will cost $6.7 billion to fully deploy SBInet, but DHS’ own inspector general said that the final cost may triple the current estimates.

Because of the repeated Border Patrol management failures since 2006 in the planning and implementation of SBInet, the House Homeland Security Committee charged CBP, through a provision in FY 2009 appropriations, with meeting 12 legislative conditions for the release of further appropriated funding ($400 million). A new GAO report (April 2009), building on a series of critical reports about SBInet management, found that CBP met only three of the dozen conditions. A year earlier, GAO had concluded: "Important aspects of SBInet remain ambiguous and in a continued state of flux, making it unclear and uncertain what technology capabilities will be delivered, when.”

A June 2009 report on SBInet from DHS’ inspector general concluded that the Border Patrol lacked sufficient control over the project – whose short-term costs are estimated to exceed $8 billion. "With continued heavy reliance on contractor support services, CBP risks losing control of program decisions while remaining accountable for mission results," DHS Inspector General Richard Skinner wrote in the latest OIG report slamming the virtual fence.

Earmarks bring home bacon and weapons

Rep. Reyes is proud of his military earmarks -- the special appropriations inserted in the defense authorization bill every year for special projects not contained in proposed budget presented to Congress by the Pentagon and White House.

Reyes points out that his “appropriations requests” are not just defense-related and that they support “many other important projects for the El Paso community.” But he acknowledges the military focus of his earmark activity.

“When I was first elected to represent the people of El Paso,” says Reyes, “many of the weapons systems based at Fort Bliss and in El Paso were in jeopardy, so I focused my efforts on protecting MEADS, Patriot, THAAD, and other programs. Each year, I work closely with Fort Bliss leadership, REDCO, and others to determine which appropriations projects are of the highest priority. All of the defense appropriations requests are carefully vetted beforehand to ensure they benefit Fort Bliss, other regional military installations, and El Paso.”

Reyes isn’t one of the top earmarkers in Congress, but he does rank among the top third. For the 2009 budget, Reyes ranked 143rd out of 435 congressional representatives who inserted “appropriations requests.”

Critics who oppose defense earmarks for private companies have three main criticisms: funds go to no-bid contracts with little oversight, earmarks are routinely accompanied by campaign contributions, and the earmarked projects are not associated with any integral military strategy or Pentagon review but are an arrangement solely between the congressional representative and the earmarked project, which is often a corporation doing business in the congressional district.

All three criticisms could be directed at Reyes’ defense earmarks, and the congressman has been the subject of media reports about the abuse of earmarks, notably in the case of Digital Fusion which has been the recipient of a series of special appropriation requests by Reyes.

The insertion by Reyes of a $2.6 million earmark for Digital Fusion in a markup of the 2008 defense appropriations bill brought unwanted national media attention to the Texas congressman. In the several years, Digital Fusion has become a major contributor to Reyes’ campaign fund – ranking the second highest contributor, after The PMA Group, in the 2008 election.

Digital Fusion, which merged with the San Diego-based Kratos Defense & Security Solutions, is a major contractor for the Army’s Space and Missile Defense Command (SMDC) in Huntsville, Alabama. There are close operational relations between SMDC and Army and Air Force operations in the El Paso area.

An investigative article by the Wall Street Journal (April 14, 2008), “Defense Firm Forged Close Ties To Congress to Get No-Bid Contracts," reported that Digital Fusion may have illegally reimbursed company executives for political contributions made to Reyes.

The article described how company officials "legally give money to the politicians they are lobbying for federal contracts. Often, these companies are seeking earmarks -- spending items backed by individual lawmakers, usually bypassing federal- contracting and competition rules."

In the previous five years, Digital Fusion executives had given $150,000 to lawmakers, notably three lawmakers from Alabama -- Sen. Richard Shelby (R-Ala.), Rep. Terry Everett (R-Ala.), Rep. Robert Cramer (D-Ala.) -- nd Rep. Reyes. In the same period, the company through its operations in Huntsville, Alabama benefited from at least $31 million in contracts funded by earmarks.

Responding to a query from the online El Paso Newspaper Tree about the possible link between the campaign contribution and the earmark for Digital Fusion, Reyes’ press secretary wrote that they were “completely unrelated. Earmarks are congressionally-directed funding, and the request for this project was made in consultation with Fort Bliss officials, who said this funding would assist training of Fort Bliss soldiers and the ongoing transformation of the post."

The 2008 earmark was one is a series of earmarks for Digital Fusion by Reyes -- $1.95 million in 2007, $2.4 million in 2009, and $1 million in the 2010 defense bill markup.

As part of the 2008 defense authorization bill, Reyes inserted $8.4 million in earmarks, according to Taxpayers for Common Sense.

These included the controversial $2.6 million earmark for Digital Fusion, a $2 million earmark for Raytheon Technical Services, $1 million to Aerospace Missions Corp, a classified earmark for Tactical SPIRNET that went to “T2/C3,” $2 million to contractors for the Mobile Operating Tracking System, and an $800,000 earmark to the PMA-linked Romanyk Consulting.

For the 2009 defense appropriations bill, according to the nonpartisan Taxpayers for Common Sense, Reyes solely (without other cosponsors) inserted $29 million in defense earmarks. According to the group, Reyes’ defense earmarks included $1 million for Aerospace Missions Corporation (a listing provided by his office doesn't include this earmark), $2.4 million for Digital Fusion, $1 million for UTEP’s Center for Defense Systems Research, $3 million for Trex Enterprise’s All Sky Imager, $1 million for the Institute for Creative Technologies’ Cognitive Air Defense Trainer System, $600,000 for U.S. Army Sergeants Major Academy, $5 million for Fort Bliss Data Center, and $12.5 million for the medical parking garage at Ft. Bliss.

Other companies that repeatedly appear in the list of Reyes’ earmarks over the past several years are Trex Enterprises, Aerospace Missions Corporation, and Raytheon – all of which contribute to his campaign chest.

The San Diego-based Trex Enterprises has partnered with Digital Fusion in research and development of Unmanned Aerial Vehicles (UAVs) and, like Digital Fusion, is a major contractor for the Space and Missile Defense Command in Huntsville.

Trex Enterprises is another high-tech defense industry close to Reyes. In the 2000-2008 period Trex has received $138.5 million in defense contracts, and it has benefited from four earmarks in FYs 2006-2009 amounting to almost $6.4 million. Trex’s CEO contributed $1,000 to Reyes’ 2008 campaign, and the company was a major donor to Randy Cunningham, the San Diego congressman who was convicted of securing federal contracts for companies that bribed him.

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Tom Barry directs the TransBorder Project of the Americas Program (www.americaspolicy.org) at the Center for International Policy in Washington, DC. He blogs at borderlinesblog.