Conning the government

Thanks to tODD for pointing me to this story:

A onetime biomedical technician with a penchant for gambling, Mr.[Dennis] 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. . . .

Justice Department officials declined to discuss the government’s dealings with Mr. Montgomery, 57, who is in bankruptcy and living outside Palm Springs, Calif. Mr. Montgomery is about to go on trial in Las Vegas on unrelated charges of trying to pass $1.8 million in bad checks at casinos, but he has not been charged with wrongdoing in the federal contracts, nor has the government tried to get back any of the money it paid. He and his current lawyer declined to comment.

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. A Pentagon study in January found that it had paid $285 billion in three years to more than 120 contractors accused of fraud or wrongdoing.

via Government Tries to Keep Secret What Many Consider a Fraud – NYTimes.com.

This fiasco raises a number of issues:  (1)  The blind faith in technology on the part of people who don’t know that much about it. (2) How the left hand does not know what the right hand is doing in our government, including in its anti-terrorism activities that were supposed to get all co-ordinated after 9/11 (3) Why the government thinks it’s competent to run health care or the financial system when it’s so cumbersome as to fall for scams like these.

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • http://www.thirduse.com fws

    “This fiasco raises a number of issues:…(3) Why the government thinks it’s competent to run health care or the financial system when it’s so cumbersome as to fall for scams like these.”

    Extend the question as a critique of conservative ideas: why does the govt think it is competent to know how to……(fill in the blank).

  • http://www.thirduse.com fws

    “This fiasco raises a number of issues:…(3) Why the government thinks it’s competent to run health care or the financial system when it’s so cumbersome as to fall for scams like these.”

    Extend the question as a critique of conservative ideas: why does the govt think it is competent to know how to……(fill in the blank).

  • WebMonk

    I would agree with fws here (well, maybe, depending on where he is heading with @1), I don’t think issue (3) is necessarily valid – just because an organization got scammed in one area doesn’t necessarily mean it is incompetent in all areas. To make that sort of assumption valid, one needs to show that the two areas of comparison are substantively similar.

    That the military gets scammed doesn’t mean that the entire military is incompetent or that the government is incapable in other areas.

    I happen to think that the government will do a lousy job of instituting a healthcare system, but the fact that they got scammed in the military area has exactly zero impact on my reasoning.

    As for (1) and (2), education is a big part of the answer. If the colonels, generals, and deputy directors of XYZ had anything beyond the foggiest knowledge of what the current state of computer development is, they would have seen this for the obvious scam it was. To cut them some slack, for several years after 9/11 there was a huge rush to try any and every possible tool – there were a lot more bad ideas tried than just this one.

    Heck, some of the dumb ideas are still being worked on!

  • WebMonk

    I would agree with fws here (well, maybe, depending on where he is heading with @1), I don’t think issue (3) is necessarily valid – just because an organization got scammed in one area doesn’t necessarily mean it is incompetent in all areas. To make that sort of assumption valid, one needs to show that the two areas of comparison are substantively similar.

    That the military gets scammed doesn’t mean that the entire military is incompetent or that the government is incapable in other areas.

    I happen to think that the government will do a lousy job of instituting a healthcare system, but the fact that they got scammed in the military area has exactly zero impact on my reasoning.

    As for (1) and (2), education is a big part of the answer. If the colonels, generals, and deputy directors of XYZ had anything beyond the foggiest knowledge of what the current state of computer development is, they would have seen this for the obvious scam it was. To cut them some slack, for several years after 9/11 there was a huge rush to try any and every possible tool – there were a lot more bad ideas tried than just this one.

    Heck, some of the dumb ideas are still being worked on!

  • Tom Hering

    It’s the Pentagon, the CIA, and a Republican administration that got suckered. Saying these three are representative of government competence is like saying Moe, Larry, and Curly Joe are exemplars of gentleness.

  • Tom Hering

    It’s the Pentagon, the CIA, and a Republican administration that got suckered. Saying these three are representative of government competence is like saying Moe, Larry, and Curly Joe are exemplars of gentleness.

  • WebMonk

    Tom, it’s not just those branches. I’ve seen several similar semi-scams happen in other areas as well. I’ve also seen a couple private companies get suckered in the same way.

  • WebMonk

    Tom, it’s not just those branches. I’ve seen several similar semi-scams happen in other areas as well. I’ve also seen a couple private companies get suckered in the same way.

  • Chris

    I know it’s tangential to the story, but $1.8 million in bad checks?!!? That’s pretty audacious.

  • Chris

    I know it’s tangential to the story, but $1.8 million in bad checks?!!? That’s pretty audacious.

  • DonS

    This goes to show that government is not good at stewardship of the taxpayers’ money. All the more reason why we should be very cautious about entrusting it to do more, no matter what function we are talking about. Since government has to provided for the common defense, we should eliminate its other non enumerated functions so that we can better oversee this one.

  • DonS

    This goes to show that government is not good at stewardship of the taxpayers’ money. All the more reason why we should be very cautious about entrusting it to do more, no matter what function we are talking about. Since government has to provided for the common defense, we should eliminate its other non enumerated functions so that we can better oversee this one.

  • Porcell

    This would be another example of the modern tendency to entertain the delusion that computer calculation can somehow replace human judgment. Prof. Joseph Weizenbaum, one of the early pioneers in computer “science” at M.I.T., prophetically warned about this in his 1976 bookComputer Power and HumanReason: From Judgment to Calculation.

    The problem is not limited to government. In the field of finance quantitative analysis of investment decision making has led to major errors, the most recent being the “quants” computer models for the management of housing mortgage risk.

    Apparently, this fellow, Montgomery, is an ordinary fraud; the more prevalent danger is an over reliance on computer modeling.

  • Porcell

    This would be another example of the modern tendency to entertain the delusion that computer calculation can somehow replace human judgment. Prof. Joseph Weizenbaum, one of the early pioneers in computer “science” at M.I.T., prophetically warned about this in his 1976 bookComputer Power and HumanReason: From Judgment to Calculation.

    The problem is not limited to government. In the field of finance quantitative analysis of investment decision making has led to major errors, the most recent being the “quants” computer models for the management of housing mortgage risk.

    Apparently, this fellow, Montgomery, is an ordinary fraud; the more prevalent danger is an over reliance on computer modeling.

  • http://www.redeemedrambling.blogspot.com/ John

    Late to the party. Dang. My 2 cents: the issue is not so much about competency as using my money well. It seems as if the government would rather spend billions trillions in casting a large net and hope something sticks. I suspect they would not be so cavalier if they were self financed…

  • http://www.redeemedrambling.blogspot.com/ John

    Late to the party. Dang. My 2 cents: the issue is not so much about competency as using my money well. It seems as if the government would rather spend billions trillions in casting a large net and hope something sticks. I suspect they would not be so cavalier if they were self financed…


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