Spies, Federal Grants, and Cronyism

The Office of Net Assessments (ONA) is the U.S. Department of Defense’s internal think tank, whose purpose is provide the Secretary of Defense with “comparative assessments of the prospects of the military capabilities of the United States relative to other actors, as well as the political, economic and regional implications of those assessments.”

The Inspector General for the U.S. Department of Defense recently completed an audit of the role of the ONA in funding research performed by Stefan Halper, one of the central figures in the so-called “Russia-gate” investigation of President Trump’s 2016 political campaign.

RealClearInvestigations‘ Eric Felten relays Halper’s role in that investigation and reports on the money he received from the ONA during that time:

In the months leading up to the 2016 election, Halper famously approached and questioned – sometimes amiably, sometimes aggressively — two men who became linchpins of the now-debunked Trump-Russia conspiracy theories: George Papadopoulos, whose supposed knowledge of Russian “dirt” on Hillary Clinton allegedly sparked the FBI’s official probe of the Trump campaign, and Carter Page, whose Russian connections led the Department of Justice to wiretap him.

The report, completed by the Department of Defense inspector general, does not address Halper’s interaction with Papadopoulos and Page, nor does it question or answer whether Halper was a spy, a confidential human source, or just a curious professor. But it makes clear that Halper signed his richest contract award with the Department of Defense’s Office of Net Assessment — $411,575 for two studies on China’s economy — on Sept. 26, 2016, around the time Halper was meeting with Page and Papadopoulos.

The IG report has left some observers asking whether the ONA is the government think-tank equivalent of “Universal Exports,” the cover used in James Bond’s exploits for paying and explaining the movements of intelligence operatives.

If the experience of Halper is any sort of example, then writing a research project for the ONA is a sweet gig. So sweet that Halper managed to collect $1.05 million from the office over four years for work that appears to be barely supervised and of dubious value.

It would be a lot of fun at this point to conclude that ONA is simply a front for paying spies, but there is an alternate explanation that is perhaps more compelling, based on Felter’s description of how the DoD’s internal think tank chooses what to study and who to award research grants:

Instead of deciding on a needed analysis and then having academics compete to do the work, the contracting process used by the ONA, known as the Broad Agency Announcement, just asks analysts to pitch their own ideas, which can be chosen without competition – a far cry from the rigorous grant application process used to direct federal money to academic research….

It’s possible that Halper received repeated and minimally supervised contracts from ONA as part of some agreement to fund the professor in one sort of clandestine activity or another. But it’s also possible that Halper received large sums of federal money for third-rate work because he was a regular. In choosing among the proposed studies, the Office of Net Assessment considers the “Offeror’s capabilities, related experience, and past performance, including the qualifications, capabilities and experience of the proposed personnel .” Which is a prescription for creating a club of preferred academics and think-tankers whose projects are green-lighted this year because they produced a study last year and the year before. It also helps explain how such obscure outfits as the Long Term Strategy Group and the National Institute for Public Policy score repeat business.

That is cronyism, pure and simple. In Halper’s case, he received contracted payments for what appears to be both minimal and shoddy work that cost U.S. taxpayers more than $1 million over four years, ending with quarter-million-dollar payouts for a study on China that he produced at the same time he was personally seeking to engage with Trump 2016 campaign officials.

Cronyism that enables favored academics to regularly receiving federal grants to fund their research is not limited to the Department of Defense’s Office of Net Assessments. A 2017 study found something similar happening in how research was being funded at the National Institutes of Health, with older researchers being favored over younger researchers in receiving new funding:

Young researchers represent the future of science and often make unexpected discoveries. Yet National Institutes of Health grants to principal investigators under the age of 46 have dropped steadily since 1982, according to a new study in Proceedings of the National Academy of Sciences. That’s despite a near tripling of inflation-corrected federal funding for the NIH over the same period, meaning age bias, not scarcity of resources was likely at play, the study says. The PI success ratio, or the fraction of basic-science researchers receiving grants, also dropped for younger scientists (under 46) and increased for those over 55.

In this study, the phenomenon is described as the result of age bias, but since the NIH’s funding favored older researchers who had often previously been awarded federal grants, a reasonable explanation is that their previous connections with NIH grant appropriators gave them a significant advantage in obtaining new funding at the expense of funding younger researchers as they preferred to fund the people they already knew over those they did not.

This cronyism in awarding federal grants likely produces very little return on the taxpayers’ investment in the government-funded research, with Halper’s China study being a clear example where the return to taxpayers for the research has been negative.

Following the 2017 study, the NIH took steps to clean house and address its “age-bias” problem in funding new research. Will the ONA follow suit?

Craig Eyermann is a Research Fellow at the Independent Institute.
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