http://www.washingtonpost.com/ac2/wp-dyn/A17506-2005Feb11?language=printer
The Washington Post
washingtonpost.com
Break-In At SAIC Risks ID Theft
Computers Held Personal Data on Employee-Owners
By Griff Witte
Washington Post Staff Writer
Saturday, February 12, 2005; Page E01
Some of the nation's most influential former military and intelligence
officials have been informed in recent days that they are at risk of
identity theft after a break-in at a major government contractor netted
computers containing the Social Security numbers and other personal
information about tens of thousands of past and present company employees.
The contractor, employee-owned Science Applications International Corp. of
San Diego, handles sensitive government contracts, including many in
information security. It has a reputation for hiring Washington's most
powerful figures when they leave the government, and its payroll has been
studded with former secretaries of defense, CIA directors and White House
counterterrorism advisers.
Those former officials -- along with the rest of a 45,000-person workforce
in which a significant percentage of employees hold government security
clearances -- were informed last week that their private information may
have been breached and they need to take steps to protect themselves from
fraud.
David Kay, who was chief weapons inspector in Iraq after nearly a decade
as an executive at SAIC, said he has devoted more than a dozen hours to
shutting down accounts and safeguarding his finances. He said the
successful theft of personal data, by thieves who smashed windows to gain
access, does not speak well of a company that is devoted to keeping the
government's secrets secure.
"I just find it unexplainable how anyone could be so casual with such vital
information. It's not like we're just now learning that identity theft is a
problem," said Kay, who lives in Northern Virginia.
About 16,000 SAIC employees work in the Washington area.
Bobby Ray Inman, former deputy director of the CIA and a former director at
SAIC, agreed. "It's worrisome," said Inman, who also received notification
of the theft last week. "If the security is sloppy, it raises questions."
Ben Haddad, an SAIC spokesman, said yesterday that the Jan. 25 theft, which
the company announced last week, occurred in an administrative building
where no sensitive contracting work is performed. Haddad said the company
does not know whether the thieves targeted specific computers containing
employee information or if they were simply after hardware to sell for
cash. In either case, the company is taking no chances.
"We're taking this extremely seriously," Haddad said. "It's certainly not
something that would reflect well on any company, let alone a company
that's involved in information security. But what can I say? We're doing
everything we can to get to the bottom of it."
Gary Hassen of the San Diego Police Department said there are, at the
moment, "no leads."
Haddad said surveillance cameras are in the building where the theft took
place, but he did not know whether they caught the perpetrators on tape. He
also did not know whether the information that was on the pilfered
computers had been encrypted.
The stolen information included names, Social Security numbers, addresses,
telephone numbers and records of financial transactions. It was stored in a
database of past and present SAIC stockholders. SAIC is one of the nation's
largest employee-owned companies, with workers each receiving the option to
buy SAIC stock through an internal brokerage division known as Bull Inc.
Haddad said the company has been trying through letters and e-mails to get
in touch with everyone who has held company stock within the past decade,
though he acknowledged that hasn't been easy since many have since left the
company.
He said the company would take steps to ensure stockholder information is
better protected in the future, but he declined to be specific.
The theft comes at a time when the company, which depends on the federal
government for more than 80 percent of its $7 billion annual revenue, is
already under scrutiny for its handling of several contracts.
Last week on Capitol Hill, FBI Director Robert S. Mueller III testified
that the company had botched an attempt to build software for the bureau's
new Virtual Case File system. The $170 million upgrade was supposed to
allow agents to sift through different cases electronically, but the FBI
has said the new system is so outdated that it will probably be scrapped.
In San Antonio, SAIC is fighting the government over charges that the
company padded its cost estimates on a $24 million Air Force contract. The
case prompted the Air Force to issue an unusual alert to its contracting
officials late last year, warning them that "the Department of Justice
believes that SAIC is continuing to submit defective cost or pricing data
in support of its pricing proposals."
SAIC has defended its work for the FBI and the Air Force. Haddad said that
criticisms are inevitable for a such a large company and that there is no
pattern of poor performance.
"I know people will try to jump to that kind of conclusion, but it's not an
accurate reflection of how well this company is doing," he said. "This
company has always prided itself on strong ethics."
The company's alumni list reads like a roll call of the nation's
highest-profile former officials, including former defense secretaries
William J. Perry and Melvin R. Laird and former CIA director John Deutch.
Current directors of the company include former chief counterterrorism
adviser Gen. Wayne A. Downing.
Founded by a group of scientists in 1969, SAIC has been growing in recent
years at a rapid clip, right along with the government's appetite for
high-tech services in information technology and national defense. The
company named a new chief executive, Kenneth C. Dahlberg, in 2003, and he
has set a goal of doubling the company's value within three to five years,
Haddad said.
Philip Finnegan, director of corporate analysis with the Teal Group Corp.,
said SAIC is trying to push into the top tier of contractors -- a rarefied
club that includes Boeing Co. and Lockheed Martin Corp. -- and that there
are bound to be bumps along the way.
"It's inevitable that they'll face problems," he said.
Others are less sure the company's recent difficulties don't add up to
something more. "Is [the break-in] saying something about the quality of
the company?" Kay said. "It's hard to say that. It's probably just random
luck. But multiple occurrences of bad luck are often more than bad luck."
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R. A. Hettinga