Grasping Reality on TypePad, by Brad DeLong

Why oh why can't we have a better press corps?

Eric Lichtblau and James Risen should have simply said: "Go read Aram Roston for Playboy in December 2009 http://www.playboy.com/articles/the-man-who-conned-the-pentagon-dennis-montgomery/index.html?page=1." It's a much better article, with more detail and much more information. They don't.

Instead, Eric Lichtblau and James Risen write:

Government Tries to Keep Secret What Many Consider a Fraud: Hiding Details of Dubious Deal, U.S. Invokes National Security: WASHINGTON — For eight years, government officials turned to Dennis Montgomery, a California computer programmer, for eye-popping technology that he said could catch terrorists. Now, federal officials want nothing to do with him and are going to extraordinary lengths to ensure that his dealings with Washington stay secret. The Justice Department, which in the last few months has gotten protective orders from two federal judges keeping details of the technology out of court, says it is guarding state secrets that would threaten national security if disclosed. But others involved in the case say that what the government is trying to avoid is public embarrassment over evidence that Mr. Montgomery bamboozled federal officials.

A onetime biomedical technician with a penchant for gambling, Mr. Montgomery is at the center of a tale that features terrorism scares, secret White House briefings, backing from prominent Republicans, backdoor deal-making and fantastic-sounding computer technology. Interviews with more than two dozen current and former officials and business associates and a review of documents show that Mr. Montgomery and his associates received more than $20 million in government contracts by claiming that software he had developed could help stop Al Qaeda’s next attack on the United States. But the technology appears to have been a hoax, and a series of government agencies, including the Central Intelligence Agency and the Air Force, repeatedly missed the warning signs, the records and interviews show....

The software he patented — which he claimed, among other things, could find terrorist plots hidden in broadcasts of the Arab network Al Jazeera; identify terrorists from Predator drone videos; and detect noise from hostile submarines — prompted an international false alarm that led President George W. Bush to order airliners to turn around over the Atlantic Ocean in 2003. The software led to dead ends in connection with a 2006 terrorism plot in Britain. And they were used by counterterrorism officials to respond to a bogus Somali terrorism plot on the day of President Obama’s inauguration, according to previously undisclosed documents.... C.I.A. officials, though, came to believe that Mr. Montgomery’s technology was fake in 2003, but their conclusions apparently were not relayed to the military’s Special Operations Command, which had contracted with his firm. In 2006, F.B.I. investigators were told by co-workers of Mr. Montgomery that he had repeatedly doctored test results at presentations for government officials. But Mr. Montgomery still landed more business.

In 2009, the Air Force approved a $3 million deal for his technology, even though a contracting officer acknowledged that other agencies were skeptical about the software, according to e-mails obtained by The New York Times. Hints of fraud by Mr. Montgomery, previously raised by Bloomberg Markets and Playboy, provide a cautionary tale about the pitfalls of government contracting...

Not "what many cpnsider to be a fraud."

A fraud.

Not "hints of fraud... previously raised by Bloomberg Markets and Playboy."

Reporting previously done by Aram Roston for Playboy.

Here's Aram:

The Man Who Conned The Pentagon: The weeks before Christmas brought no hint of terror. But by the afternoon of December 21, 2003, police stood guard in heavy assault gear on the streets of Manhattan. Fighter jets patrolled the skies. When a gift box was left on Fifth Avenue, it was labeled a suspicious package and 5,000 people in the Metropolitan Museum of Art were herded into the cold. It was Code Orange. Americans first heard of it at a Sunday press conference in Washington, D.C. Weekend assignment editors sent their crews up Nebraska Avenue to the new Homeland Security offices, where DHS secretary Tom Ridge announced the terror alert. “There’s continued discussion,” he told reporters, “these are from credible sources—about near-term attacks that could either rival or exceed what we experienced on September 11.” The New York Times reported that intelligence sources warned “about some unspecified but spectacular attack....

By Tuesday the panic had ratcheted up as the Associated Press reported threats to “power plants, dams and even oil facilities in Alaska.” The feds forced the cancellation of dozens of French, British and Mexican commercial “flights of interest” and pushed foreign governments to put armed air marshals on certain flights. Air France flight 68 was canceled, as was Air France flight 70. By Christmas the headline in the Los Angeles Times was "Six Flights Canceled as Signs of Terror Plot Point to L.A." Journalists speculated over the basis for these terror alerts. “Credible sources,” Ridge said. “Intelligence chatter,” said CNN. But there were no real intercepts, no new informants, no increase in chatter. And the suspicious package turned out to contain a stuffed snowman. This was, instead, the beginning of a bizarre scam. Behind that terror alert, and a string of contracts and intrigue that continues to this date, there is one unlikely character. The man’s name is Dennis Montgomery, a self-proclaimed scientist who said he could predict terrorist attacks. Operating with a small software development company, he apparently convinced the Bush White House, the CIA, the Air Force and other agencies that Al Jazeera—the Qatari-owned TV network—was unwittingly transmitting target data to Al Qaeda sleepers.

An unusual team arrived in Reno, Nevada in 2003 from the Central Intelligence Agency.... Then they turned into an almost empty parking lot, where a sign read "eTreppid Technologies." It was an attractively designed building of stone tile and mirrored windows that had once been a sprinklerhead factory. ETreppid Technologies was a four-year-old firm trying to find its way. Some of its employees had been hired to design video games. One game under construction was Roadhouse, based on the 1989 movie in which Patrick Swayze plays a bouncer in a dive bar. Other programmers worked on streaming video for security cameras.... The CIA team was there to work with Dennis Montgomery, at the time eTreppid’s chief technology officer and part owner. Then 50 years old, with a full head of gray hair, the street-smart Montgomery stood at about five feet eight inches. Other eTreppid workers, hearing the buzz about the spooks in town, peered through their blinds and watched as Montgomery worked at his desk at the north end of the building. He wore his usual jeans and Tommy Bahama shirt. He could be seen handing off reams of paper to Sid and the CIA. “They would sit in the room and review these numbers or whatever the heck Dennis was printing out,” one former eTreppid employee, Sloan Venables, told me. “We called them Sid’s guys, and no one knew what the hell they did.”

Montgomery called the work he was doing noise filtering. He was churning out reams of data he called output. It consisted of latitudes and longitudes and flight numbers. After it went to Sid, it went to Washington, D.C. Then it found its way to the CIA’s seventh floor, to Director George Tenet. Eventually it ended up in the White House. Montgomery’s output was to have an extraordinary effect. Ridge’s announcement, the canceled flights and the holiday disruptions were all the results of Montgomery’s mysterious doings. He is an unusual man. In court papers filed in Los Angeles, a former lawyer for Montgomery calls the software designer a “habitual liar engaged in fraud.” Last June Montgomery was charged in Las Vegas with bouncing nine checks (totaling $1 million) in September 2008 and was arrested on a felony warrant in Rancho Mirage, California. That million is only a portion of what he lost to five casinos in Nevada and California in just one year. That’s according to his federal bankruptcy filing, where he reported personal debts of $12 million. The FBI has investigated him, and some of his own co-workers say he staged phony demonstrations of military technology for the U.S. government.

Montgomery has no formal scientific education, but over the past six years he seems to have convinced top people in the national security establishment that he had developed secret tools to save the world from terror and had decoded Al Qaeda transmissions. But the communications Montgomery said he was decrypting apparently didn’t exist. Since 1996 the Al Jazeera news network had been operating in the nation of Qatar, a U.S. ally in the war on terror. Montgomery claimed he had found something sinister disguised in Al Jazeera’s broadcast signal that had nothing to do with what was being said on the air: Hidden in the signal were secret bar codes that told terrorists the terms of their next mission, laying out the latitudes and longitudes of targets, sometimes even flight numbers and dates. And he was the only man who had the technology to decrypt this code.... Over the years Montgomery’s intelligence found its way to the CIA, the Department of Homeland Security, Special Forces Command, the Navy, the Air Force, the Senate Intelligence Committee and even to Vice President Dick Cheney’s office....

Back in Washington, few insiders in government knew where the intelligence was coming from. Aside from Tenet and a select few, no one was told about eTreppid’s Al Jazeera finds. Even veteran intelligence operatives within the CIA could only wonder. “These guys were trying to hide it like it was some little treasure,” one former counterterrorist official told me. The reason the whole thing worked was because Montgomery’s CIA contact was with the agency’s Directorate of Science and Technology. That’s the whiz-bang branch of the intelligence service, where employees make and break codes, design disguises and figure out the latest gadgets. S&T was eventually ordered by CIA brass to reveal its source to small groups from other parts of the agency. And when some experienced officers heard about it, they couldn’t believe it. One former counterterrorism official remembers the briefing: “They found encoded location data for previous and future threat locations on these Al Jazeera tapes,” he says. “It got so emotional. We were fucking livid. I was told to shut up. I was saying, ‘This is crazy. This is embarrassing.’ They claimed they were breaking the code, getting latitude and longitude, and Al Qaeda operatives were decoding it. They were coming up with airports and everything, and we were just saying, ‘You know, this is horseshit!’” Another former officer, who has decades of experience, says, “We were told that, like magic, these guys were able to exploit this Al Jazeera stuff and come up with bar codes, and these bar codes translated to numbers and letters that gave them target locations. I thought it was total bullshit.” The federal government was acting on the Al Jazeera claims without even understanding how Montgomery found his coordinates. “I said, ‘Give us the algorithms that allowed you to come up with this stuff.’ They wouldn’t even do that,” says the first officer. “And I was screaming, ‘You gave these people fucking money?’”

Despite such skepticism, the information found its way to the top of the U.S. government. Frances Townsend, a Homeland Security advisor to President George W. Bush, chaired daily meetings to address the crisis. She now admits that the bar codes sounded far-fetched. And, she says, even though it all proved to be false, they had no choice but to pursue the claim. “It didn’t seem beyond the realm of possibility,” she says. “We were relying on technical people to tell us whether or not it was feasible. I don’t regret having acted on it.” The feds, after all, had a responsibility to look into the technology. “There were lots of meetings going on during the time of this threat,” says Townsend. “What were we going to do and how would we screen people? If we weren’t comfortable we wouldn’t let a flight take off.” Eventually, though Montgomery continued to crank out his figures, cooler heads prevailed. The threat was ultimately deemed “not credible,” as Townsend puts it.

A former CIA official went through the scenario with me and explained why sanity finally won out. First, Montgomery never explained how he was finding and interpreting the bar codes. How could one scientist find the codes when no one else could? More implausibly, the scheme required Al Jazeera’s complicity. At the very least, a technician at the network would have to inject the codes into video broadcasts, and every terrorist operative would need some sort of decoding device. What would be the advantage of this method of transmission? A branch of the French intelligence services helped convince the Americans that the bar codes were fake. The CIA and the French commissioned a technology company to locate or re-create codes in the Al Jazeera transmission. They found definitively that what Montgomery claimed was there was not. Quietly, as far as the CIA was concerned, the case was closed. The agency turned the matter over to the counterintelligence side to see where it had gone wrong...