Misconduct of Intelligence Employees Revealed

Of the 15 allegations of misconduct, one resulted in a prosecution

Intelligence agencies should create a periodic reporting requirement for employees approved for outside employment

In a new classified report to Congress, US intelligence officials reveal that they have seen more than a dozen allegations in three years of misconduct by American intelligence community employees who were moonlighting at outside jobs.


A summary of the report, which was obtained by CNBC, shows that US intelligence officials have conducted 15 investigations in the past three years into allegations of misconduct by American intelligence employees as a result of their part-time work in the private sector.

Still, the inspector general concluded that the moonlighting does not present a “systemic problem” for the intelligence community.

The report was requested by Rep. Anna Eshoo, a Democrat from California and member of the House Permanent Select Committee on Intelligence, after news broke early last year that the CIA and other intelligence agencies allowed serving intelligence officers to moonlight in jobs in the private sector to earn extra money.

In one instance several years ago, active-duty CIA employees went to work part time at a private intelligence firm that consulted for hedge funds and financial firms. There, the CIA employees worked on “deception detection” analysis of corporate earnings conference calls, trying to determine if corporate executives were misleading investors as they presented their financial performance information.

It has never been clear to the public just how many intelligence community employees moonlight outside their jobs each year and which employers, exactly, they are working for.

One concern for critics of the moonlighting policy is that intelligence officers could be taking on outside employment at contracting firms that work for US intelligence agencies—effectively forcing taxpayers to pay twice for the same work product.

Supporters say it is necessary to allow some intelligence officers to earn extra money in order to keep them from quitting their jobs in favor of higher paying private sector work, and that the moonlighting is not significant, and generally not done in sensitive areas.

The entrance to the Central Intelligence Agency headquarters in Langley, Virginia.
Source: Central Intelligence Agency
The entrance to the Central Intelligence Agency headquarters in Langley, Virginia.

The existence of the moonlighting policy appeared to catch senior intelligence officials off guard when it was revealed last year. "Sometimes I, too, am surprised about what I read in the press about my own organization, I will tell you," then-Director of National Intelligence Dennis Blair told Congress in February.

The summary report obtained by CNBC provided no details on the 15 investigations into outside employment related misconduct, except to say that some of the alleged offenses included serious charges such as conflicts of interest, spouses inappropriately providing privileged information during government contract award processes, and improper relationships with contractors.

But other alleged misconduct appeared much less serious, including “jewelry sales” and “cookie sales.”

Of the 15 allegations of misconduct, one resulted in a prosecution by the US attorney’s office, the summary report noted. In that case, Wayne J. Schepens, 37, of Severna Park, Md., pleaded guilty in 2007 to a conflict of interest, after using his position as an employee at the super-secret National Security Agency to send government contracts to companies that he or his wife owned and operated.

At the time, United States Attorney Rod J. Rosenstein said, “While he was working for NSA, Wayne Schepens arranged to award government contracts worth over $770,000 to companies in which he and his wife had a financial interest. It is a crime for government employees to participate in awarding contracts that bring them personal financial benefits."

The summary report found that each intelligence agency has its own moonlighting policy and the inspector general said those policies “adequately notify [Intelligence Community] employees of their obligations and unique considerations for obtaining approval for outside employment activities.”

And the inspector general suggested that the intelligence agencies should create a “periodic reporting requirement for IC employees approved for outside employment” and that they should maintain records to track the number of moonlighting requests and the whether or not those requests were approved by senior management.