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Financial firms are particularly eager to recruit former Afghan and Iraq war vets with intelligence operations experience since they can bring new technology and techniques to research and analysis, according to Michael Bagley, founder and president of Washington D.C.-based financial intelligence firm, The OSINT Group.
Washington publication Politico recently reported that the CIA is offering their members a chance to offer their expertise to private companies. "In one case, these active-duty officers moonlighted at a hedge-fund consulting firm that wanted to tap their expertise in "deception detection," the highly specialized art of telling when executives may be lying based on clues in a conversation," the publication stated.
The OSINT Group itself includes operatives formerly connected to a classified military intelligence program known as "Operation Able Danger," which used open source intelligence methods, data mining techniques and link analysis that ultimately identified several of the 9/11 hijackers prior to the attacks in New York and Washington, Bagley said.Today, the private sector needs timely, relevant and actionable "intelligence" to secure their businesses against potential threats, he explains. Some of this intelligence can be produced with open source information " publicly available information that anyone can lawfully obtain.
The OSINT Group, which counts among its clients a private equity firm based in Beijing, as well as a U.S. hedge fund, specializes in providing firms with analysis of what it calls "gray" literature, which consists of written information produced by the private sector, government sources and academia that is available only on a limited basis, either because few copies are produced, the existence of the material is largely unknown, or access to information is not readily available on the web. To analyze this wealth of largely untapped research, the OSINT Group uses an advanced analytical toolkit for pattern discovery, link analysis, data visualization and network-centric analysis. It presents data using graphical displays to show underlying relationships and patterns, and can deliver it to clients in different formats, including email alerts.
Services provided by Visual Analytics, the third-party vendor The OSINT Group works with, include placement algorithms to visually show networks of related data, weighted groups of relationships, value occurrence frequency, patterns of activity and event sequences, as well as data capture and transmission tools enabling real-time, online collaboration.
Beyond the technology it uses, the OSINT Group's key value lies in its personnel's ability to access intelligence that financial firms normally do not know how to find, analyze it and deliver it in a range of different formats.
"We use technology used by the U.S. intelligence community. Our approach, how we use the data, how we connect it, is different (from other research firms), Bagely said in an interview with Wall Street & Technology. "We specialize in accessing government data or academic data."
Particularly hot at the moment is research pertaining to upcoming financial reform legislature, he adds.
"It's very hard for people outside DC to understand financial services reform legislature. We can help clients understand what it is, what it means, by analyzing committee reports and bills. We also access academic data, so if a particular professor does a presentation, we can access the data, extract and refine it, and put it into an easier-to-read report," he says.
The OSINT Group was initially geared towards the military and intelligence community, but Bagely realized his company's expertise could translate to the corporate sector.
"We're used to carrying out a mission in a high-stress situation using military intelligence. We have technology, training, expertise and a unique breed of talent," he says.
Still, just as reports emerged that hedge funds and other financial firms are increasingly turning to intelligence experts , U.S. intelligence chiefs -- worried about a potential conflict of interest as well as brain drain -- said they will review policies allowing them to moonlight for private companies.
Testifying before the House Intelligence Committee in early February, Director of National Intelligence Dennis Blair said he'd send a report on the topic to Rep. Anna Eshoo, D-Calif., according to Politico.
Referring to revelations that CIA employees had worked for hedge funds and financial firms to apply sophisticated deception detection techniques to their investment and management practices, Eshoo told Blair that she found reports that came out over the last few days "disturbing. I really find them disturbing."
She added: "I think we need to have a full review of it. I think there is a real potential for conflict, so I think we need to know, she said. It sounded more like fiction to me than fact, and that's why I raise it," Politico reported, adding that Blair promised to produce a report on the situation.
Responding to Blair's comments, the OSINT Group's Bagely contends that the "intelligence community should pay more attention to fixing the operational security compromises across the community itself rather than outsourcing their current employees to private companies for part-time work."
"Government employees working for the intelligence agencies should be focusing on 'information sharing' rather than working elsewhere on weekends or after hours," he says.
"Private corporations have already succeeded where few foreign governments have: they've penetrated the CIA and they are integrally involved in the intelligence community's most sensitive and secretive clandestine and covert programs. Nothing is off-limits," he adds. "It is not necessary for current government employees to be working on the side for private corporations with the advances in information technology and the number of companies offering 'unique expertise' that are staffed with former or retired members of various intelligence agencies."
