Running through the list of situations that we’ve been reporting on in which the Obama administration continues to conceal evidence of torture — from the efforts of British resident Binyam Mohamed to seek justice for his “extraordinary rendition” and torture; to the administration’s continued efforts to dismiss cases alleging government-sponsored torture and illegal wiretapping by raising the “state secrets” privilege; to President Obama’s continued insistence on hiding photos of brutal detainee abuse — The Times highlights how President Obama, despite his grand promises of openness and accountability in the early days of his administration, has caved to Republicans and some conservative Democrats who want to bury the evidence of criminal and moral wrongdoing by the United States government.

“We do not take seriously the government’s claim that it is trying to protect intelligence or avoid harm to national security,” The Times writes. And it shouldn’t. As we’ve pointed out repeatedly at TWI, the outlines of our government’s abusive and in some cases criminal conduct is already well-known and can hardly endanger us further. Only by unearthing, acknowledging and accounting completely for the past can the new administration finally move beyond it to focus, unencumbered, on making sure it does not happen in the future.

President Barack Obama (WDCpix)

Although the Obama administration’s much-anticipated new policy on the use of the so-called “state secrets” privilege, announced this morning, has drawn some praise, civil liberties lawyers and other critics of the use of the privilege don’t think it solves the problem.

The state secrets privilege allows the government to conceal certain evidence in a court case that, if disclosed, would endanger national security by revealing “state secrets”. But who gets to decide what is a state secret and whether it will actually endanger national security has long been a point of contention. The Department of Justice, first under President Bush and then under President Obama, has invoked the privilege to ask courts to dismiss every single legal case that has come before them seeking compensation for torture or warrantless wiretapping by the government. That’s led critics to charge that the administration is trying to use the evidentiary privilege not to protect national security, but to conceal government wrongdoing and avoid embarrassment, or worse.

Today’s announcement says the government will use the privilege more sparingly, and requires the attorney general himself to sign off on its use. But the provision does not bar the government from using the privilege to try to dismiss cases alleging government wrongdoing.

“They don’t anywhere say, ‘we will not seek dismissal on state secrets grounds at the outset’” of a case, said Ben Wizner, a staff attorney at the American Civil Liberties Union who’s come up against the privilege while representing victims of torture. “They say we’re going to make an effort to apply it as narrowly as possible. But that doesn’t change what they’ve been doing all along.”

What the Department of Justice has been doing all along is essentially what the Obama administration has done in one case Wizner’s working on, in which a victim of torture due to the CIA’s “extraordinary rendition” program sued Jeppesen Dataplan, a subsidiary of Boeing, claiming the company was partly responsible for helping transport CIA prisoners to other countries to be tortured. The government claimed that allowing the case to go forward would reveal state secrets and endanger national security, and asked the court to dismiss it. Eventually, the ACLU won the right to proceed with the litigation, but the Obama administration in June asked the court of appeals to reconsider and dismiss the case.

“Any new policy will be an empty gesture if the administration continues to assert the same expansive theory of state secrets to dismiss cases brought by torture victims,” Wizner said Wednesday. “At the same time that they are rolling out this new policy with fanfare, they are asking the Ninth Circuit [Court of Appeals] to reverse its own decision and rehear the case because of state secrets.”

The Jeppesen case is one of several where the Obama administration has made the same expansive arguments that entire cases should be dismissed to protect state secrets, rather than simply excluding the particular piece of evidence that could actually endanger national security.

The real problem, say critics, is that the Obama administration is trying to use its new policy as a way to prevent the passage of legislation that will clarify the role of the executive versus the role of the courts.

“The Bush administration’s approach to state secrets was wrong-headed, causing significant public distrust and potentially shielding government wrongdoing and embarrassing mistakes behind a questionable legal doctrine,” said Sen. Russ Feingold (D-Wis.) in a statement released after the Justice Department’s announcement today. Feingold is a cosponsor of the proposed State Secrets Protection Act, which would provide guidance to federal courts considering cases where the government has asserted the state secrets privilege. “While I am pleased that the Obama administration recognizes that the Bush approach was a mistake, its new policy is disappointing because it still amounts to an approach of ‘just trust us.’ ”

Or as Wizner put it, “this is voluntary executive self-policing.” Legislation would “bind not just this president but the next one. That’s critical.”

What’s more, the new policy doesn’t really address the role of judges in cases where the privilege is invoked. The proposed legislation, on the other hand, “says courts cannot dismiss cases simply on the basis that the government claims the case involves state secrets. The legislation says courts are required to look at the underlying evidence” and decide for themselves.  In many of these cases that have come up so far, it’s the government agency being sued — such as the CIA — that submits a statement to the court saying that the evidence that it committed a crime would endanger national security. “The court shouldn’t be able to rely just on an affidavit filed by the perpetrator,” said Wizner.

Under the proposed State Secrets Protection Act, if a court looks at the evidence and determines that some piece of it really does constitute a state secret — say, the identity of a CIA agent — then that evidence would be removed from the case. But before making that determination, the judge would have to explore every alternative, to see if other tools, such as protective orders, could be used to protect the evidence but still allow it to be used. If carefully and narrowly applied, says Wizner, only particular pieces of evidence that are not important to the litigation would have to be excluded. “No one’s saying we can litigate the identity of covert agents in civil cases,” says Wizner.

Ken Gude, Associate Director of the International Rights and Responsibility Program at the progressive Center for American Progress, expressed similar concerns about the Obama administration’s new state secrets policy. “My main concern is that the government should not be able to have a whole case dismissed simply by asserting a state secrets claim,” he said in an e-mail on Wednesday. “There may be instances when it’s simply not possible to proceed without certain evidence, but that should result from a subsequent decision after the plaintiffs have had a chance to plead their case without the material.”

That seemed to be what President Obama supported, too, when he first spoke about the state secrets privilege back in April. At an April 29 press conference, he called the state secrets doctrine “overbroad.” He went on to say that “searching for ways to redact, to carve out certain cases, to see what can be done, so that a judge in chambers can review information, without it being an open court — you know, there should be some additional tools, so that it’s not such a blunt instrument. And we’re interested in pursuing that. I know that Eric Holder and Greg Craig, my White House counsel, and others are working on that, as we speak.”
Today’s announcement is the policy that resulted from that process. But critics aren’t convinced it that it will actually accomplish what the president has promised.

As Feingold said today: “Independent court review of the government’s use of the state secrets privilege is essential. I urge the administration to work with Congress to develop legislation that sets reasonable limits on the privilege and will not be subject to change under each successive president.”

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Mohamed is one of the plaintiffs in a lawsuit against Jeppesen Dataplan, the Boeing subsidiary that allegedly helped the CIA conduct “extraordinary renditions” of terror suspects to foreign countries to be tortured. As I reported back in June, the Obama Justice Department has asked the Ninth Circuit Court of Appeals to re-hear the case after the court ordered that it can continue, despite the administration’s assertion of the “state secrets privilege.”

Most recently, the Chronicle notes, a British government lawyer told the U.K. High Court of Justice last month “that Secretary of State Hillary Rodham Clinton had threatened to limit U.S. intelligence-sharing with Great Britain if the court disclosed details of Mohamed’s treatment in Guantanamo.”

A transcript of the British court’s July 29 hearing reveals that Lord Justice John Thomas rejected that argument, saying there was “nothing in the paragraphs (about the U.S. government’s treatment of Mohamed) that could conceivably identify anything that is of a national security interest.”

Boeing, which makes the F15-E Strike Eagle jet, funded travel for at least 37 Pentagon officials between 1998 and 2007. (Air Force photo)

The drudgery of military life can be difficult to overcome at times, and so it can be helpful to decamp to new and exotic locations to break the routine. And when travel opportunities are work-related, it can take an abstemious person to resist temptation. An Army major and Walter Reed Army Medical Center doctor named Jerome Buller understandably left the dreariness of late February in Washington in 2006 for a meeting on female urology in the Bahamas, held in the city of Freeport, where the weather hovers around the high 70s that time of year.

Illustration by: Matt Mahurin

The cost for Buller’s five-day Bahamanian meeting, according to a trove of Pentagon travel documents obtained by the Center for Public Integrity, was $2,699. The bill, however, was footed by the Henry M. Jackson Foundation, a non-profit that supports advancements in military medicine and receives funding from, among other sources, the Defense Department. Walter Reed’s communications department did not respond for comment. Everything about both Buller’s trip and the Foundation’s sponsorship of his travel is entirely legal, as a recent Pentagon memorandum on travel benefits affirms, and it would be hard to find some kind of quid pro quo at a medical conference. But the trip is an example of the hand-in-glove relationship between private organizations that do business with the Department of Defense and the department’s employees — where, to the concern of watchdog organizations, private interests frequently open their wallets to foot the travel costs of Pentagon officials, uniformed officers and department-funded civilians in order to maintain good relationships with the Pentagon.

Boeing, for instance, is one of the largest of all U.S. defense contractors, earning billions annually from a myriad of Pentagon contracts. According to the Center for Public Integrity’s newly created online database of Pentagon travel documents, Boeing paid for at least 37 officials’ travel expenses to various locations between 1998 and 2007, including a trip by seven enlisted airmen to the 2002 Asian Aerospace 2002 Airshow in Singapore. The total cost of the trip: $12,278. Boeing produces numerous aircraft for the Air Force, including the F-15E Strike Eagle and, along with Lockheed Martin, the F-22 fighter jet that Defense Secretary Robert Gates recently canceled.

“They’re sowing seeds,” said defense reform advocate Winslow Wheeler of the Center for Defense Information of contractors who foot the bill for junior officers’ and enlisted men and women’s travel. “Some of these lieutenants and captains will be colonels and above, and they want to make sure they’ve got their hands in their pockets.”

The permissible rules also extend to foreign governments engaged in defense-based diplomacy. The Saudi Ministry of Defense and Aviation, for instance, spent $9,162 to send an Army lieutenant colonel on a training trip to four locations within the U.S. in late 2005. The Chinese Ministry of Defense paid $7,650 in course expenses for a U.S. Navy captain to attend the 2001 Symposium on Asia-Pacific Security in Beijing.

A 2008 memorandum, prepared by the Standards of Conduct Office within the Pentagon’s Office of General Counsel, places few restrictions on trips Defense Department employees can accept from outside organizations. According to the memorandum, a “travel-approving authority” must affirm that “payment is for attendance at a meeting, conference, seminar, speaking engagement, symposium, training course, or receipt of an award or honorary degree related to official duties.” Payment can’t be accepted for an event in which “the primary purpose is marketing the non-Federal source’s products or services.” The approving authority has to certify that “a reasonable person with knowledge of all the relevant facts” would not be able to use the travel payment “to question the integrity of the Government’s programs or operations.” Cash is not an acceptable form of payment.

Ethics rules restricting congressional travel paid for by lobbyists — or organizations employing lobbyists, such as Boeing — are significantly more cumbersome. The Washington Independent’s Mike Lillis reports here on the discrepancies between congressional and Pentagon travel rules. Travel scandals ensnared several prominent members of Congress during the past decade, including former House Republican leader Tom DeLay (R-Texas).

But the rules for Pentagon travel payments haven’t received the same scrutiny. “The idea is that if you’re a member of the executive branch you aren’t pulling the purse stings,” said Laura Peterson, a national security investigator for Taxpayers for Common Sense. “You’re in a position to draw up strategy and request money, therefore you should be more immune from outside influence. But I don’t think that’s borne out in reality.” Members of the military services at senior levels routinely press members of Congress to draw up budgets that suit the services’ interests and desires, particularly when it comes to military procurement, which is a multi-billion dollar annual industry. “Anyone trying to influence the spending process will try to influence every step of the process, and that includes [influencing] the Pentagon,” Peterson continued.

Several prominent military officers and civilian officials have benefited from the permissibility of Pentagon travel rules. Adm. James Stavridis, recently tapped to become NATO Supreme Allied Commander, had the $2,100 tab picked up by Milbank & Tweed for delivering a speech at the financial services law firm’s February 2007 partners meeting. The Chinese government spent $3,600 so Adm. Dennis Blair could tour China for a week in 2001 when the Obama administration’s director of national intelligence led U.S. Pacific Command. The Association for Enterprise Integration, which boosts tech-based partnerships between industry and government, paid $550 in April 2004 so the then-head of U.S. Joint Forces Command, Adm. Edmund Giambastiani, could attend a Vienna, Va., conference on tech-enhanced warfare.

“Capitol Hill is notorious for its lax rules, and the Pentagon isn’t even using that standard,” said Wheeler of the Center for Defense Information, a former longtime congressional staffer. “Does it not bother Pentagon managers that future field-grade officers are being transported by defense manufacturers? You’d think in a strictly ethical system that would be against the rules.”

The three judge panel reversed the lower court’s decision, which had accepted the government’s argument (then made by the Bush administration) that allowing it to move forward would endanger national security.

The logic of the state secrets privilege, the appeals court panel writes (pdf), “simply cannot stretch to encompass cases brought by third-party plaintiffs against alleged government contractors for the contractors’ alleged involvement in tortious intelligence activities. Nothing the plaintiffs have done supports a conclusion that their ‘lips [are] to be for ever sealed respecting’ the claim on which they sue, such that filing this lawsuit would in itself defeat recovery.”

In other words, as the the American Civil Liberties Union had argued on behalf of the five victims, there is no reason to prevent the victims from having their day in court against a government contractor that they claim knowingly assisted in their torture. Pursuing those claims don’t have to reveal any secret evidence about the CIA program that could be dangerous to disclose.

This is a huge victory, not only for the five victims themselves, but also for many civil liberties advocates. The Obama administration first asserted the “state secrets” privilege in January, upsetting many of the president’s supporters who had hoped that his earlier promises of more open government would put an end to unnecessary secrecy.

Although the Obama administration didn’t change its mind, the federal court has now taken that argument out of its hands.

It remains to be seen whether Justice Department will seek re-hearing from the full court of appeals, or review by the Supreme Court.

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That’s the question raised in a letter sent today by the American Civil Liberties Union to a three-judge panel of the United States Court of Appeals for the Ninth Circuit, which is now considering the appeals of victims of that formerly secret CIA program in a pending case.

Mohamed v. Jeppesen Dataplan, which I’ve written about here, charges that Jeppesen, a subsidiary of Boeing, assisted the CIA in unlawfully sending the men abroad to be interrogated under torture. The victims seek monetary damages and an acknowledgment of what was done to them. But the government – first under President Bush and now under President Obama – has claimed the case must be dismissed because the rendition program is a “state secret” and revealing information about it would endanger national security, even though President Obama has insisted that the program is no longer active.

With the memos describing the CIA’s interrogation techniques now in the public domain, that argument makes little sense, the ACLU wrote today in a letter to the court.

The government’s invocation of the state secrets privilege relied on the claim of former CIA Director Michael Hayden that “the details of the program remain highly classified. . . . General Hayden insisted that disclosing specific interrogation techniques ‘would degrade the effectiveness of the United States’ intelligence gathering activities by, for example, providing terrorists information about interrogation methods that would assist their interrogation resistance programs,’ “ writes Ben Wizner, the lead ACLU lawyer handling the case. But “[t]hat rationale no longer exists, because the methods are now public, and because they have been expressly prohibited.”

“Now that the CIA’s detention and torture program has been publicly confirmed and officially terminated, there is no basis whatsoever for denying its victims their day in court,” he wrote.

Since the release of the memos last week, while the focus of many lawmakers and advocates has been on potential prosecution of the lawyers and policymakers who approved them, the ACLU’s letter picks up on a different part of the accountability equation that so far has gotten far less attention: granting the victims their day in court.

“This is equally important,” wrote Wizner in an e-mail this afternoon.

Attorney General Eric Holder and Katie Couric (CBS News)

In an interview that aired Wednesday night on the CBS Evening News, Attorney General Eric Holder suggested to Katie Couric that the Obama administration is unlikely to depart dramatically from the Bush administration’s position on the use of the state secrets privilege, noting just one case out of about 20 currently under review in which the Justice Department is seriously considering changing its stance. He did not say which case that was.

Most likely, the reversal won’t come in the case of Jewel v. NSA, because Holder’s Justice Department Friday again broadly asserted the “state secrets” privilege as a grounds for dismissing the case, brought by AT&T customers alleging the government used dragnet surveillance to monitor the domestic telephone communications of millions of ordinary Americans.

Illustration by: Matt Mahurin

The Department of Justice – first under President George W. Bush and now under President Obama – has repeatedly invoked this executive privilege, which allows the president to prevent public disclosure of evidence in court by claiming that its release would endanger national security. And increasingly, the Department of Justice has used the privilege not only to prevent public disclosure of documents, but to dismiss entire cases brought by victims of illegal policies, claiming that the subject matter of the case itself is a state secret, and that even the judge shouldn’t review the documents in private. A recent report by the Constitution Project, a bipartisan think tank, found that the Bush administration used the privilege to seek “blanket dismissal of every case challenging the constitutionality of specific, ongoing government programs” in 92 percent more cases per year than in the previous decade.

Last night, Holder told Couric that after he took over the attorney general’s office, he asked lawyers in the Justice Department to see “if there’s a way where we can be more surgical, whether there is a way in which we can share more information.” The state secrets privilege, he said, is appropriately invoked “at certain times”, but “I want to make sure that we only do it where it’s absolutely necessary. I would only apply the doctrine where national security was at stake, where the lives of the American people were at stake,” he said.

Yet it’s difficult to see that standard at work in the recent cases where the Justice Department has invoked the state secrets privilege.

For example, in a federal court in San Francisco on Friday, the Obama Justice Department moved to dismiss the Jewel case based in part on the state secrets privilege. The AT&T customers who filed suit, represented by the Electronic Freedom Foundation, claim the National Security Agency illegally intercepted their calls and obtained their phone records as part of a broad-reaching, ongoing national security surveillance program and in violation of the First and Fourth Amendments of the United States Constitution, the separation of powers doctrine and federal statutes.

In its legal brief filed with the court, the government’s lawyers claim the case must be dismissed because allowing it to go forward at all would disclose information about the NSA surveillance program, which is itself a state secret. Disclosure of the information the customers want to see, claims the government, “which concerns how the United States seeks to detect and prevent terrorist attacks, would cause exceptionally grave harm to national security,” Justice Department lawyers said in their filing.

This is the second attempt by ordinary AT&T customers to learn more about the government’s secret domestic wiretapping program and to hold the government or a company that assisted it accountable. An earlier case, also brought by the Electronic Frontier Foundation against AT&T itself, was quashed when, after the Bush administration had made the state secrets arguments in court, Congress passed a law granting immunity to AT&T and other telecommunications companies from lawsuits from customers who claimed the companies helped the government spy on them.

The broad use of the state secrets privilege to dismiss entire court cases challenging unlawful government actions has outraged civil liberties and open government groups such as the American Civil Liberties Union and Center for Constitutional Rights. Such advocates had counted on Obama’s promises in the first days of his presidency to run a more transparent government than his predecessor. But the Obama Justice Department already, in several cases seeking information about Bush administration counter-terrorism activities, has invoked the state secrets privilege to prevent the disclosure of critical evidence.

For example, in Al-Haramain Islamic Foundation v. Obama, which TWI has been following, the Obama administration asserted that the Bush administration’s domestic warrantless wiretapping program, or Terrorist Surveillance Program, is a state secret that cannot be revealed without endangering national security. Never mind that President George W. Bush had himself acknowledged the program’s existence, and President Obama has said it is no longer operative.

And in Mohammed v. Jeppesen Dataplan, which TWI first wrote about in January, the Obama administration asserted the state secrets privilege to seek dismissal of a case brought by five victims of the Bush administration’s “extraordinary rendition” program — which transferred prisoners to foreign countries for interrogation under torture. In that case, the victims, including Binyam Mohamed, the British resident I’ve written about, sued the subsidiary of Boeing that allegedly assisted the CIA in its torture program. The Bush administration immediately swooped in and convinced the federal court to dismiss the case because the now-defunct extraordinary rendition program is supposedly a “state secret.” In February, the Obama administration, to the surprise of even some of the judges sitting on the U.S. Court of Appeals for the Ninth Circuit that day, continued to maintain that argument.

During last night’s interview, Couric asked Holder whether he thought the state secrets doctrine had been abused by the Bush administration.

“Well, I don’t know,” said Holder. “On the basis of the two, three cases we’ve had to review so far, I think that the invocation of the doctrine was correct. We – reversed – are in the process of looking at one case. But I think we’re very likely to reverse it.”

Presumably, the three cases he’s referring to are the Jewel, Al-Haramain and Jeppesen Dataplan. But Holder went on to say that there have been more than 20 such assertions in cases that are still open. He added that a report on the Justice Department’s use of the privilege is being prepared, and his “hope is to be able to share the results of that report with the American people.”

Marc Ambinder, who obtained an early transcript of the interview, wrote Wednesday in The Atlantic that a senior Justice Department official “declined to elaborate” on in which case Holder was planning to reverse the department’s position.

Congress, meanwhile, may not leave the matter in Holder’s hands. In February, Rep. Jerold Nadler (D-N.Y.) and several co-sponsors introduced the State Secrets Protection Act of 2009, which would require a federal judge to look at the disputed evidence rather than dismiss the case outright based solely on the government’s assertion that its disclosure would endanger national security. A parallel bill was introduced in the Senate by Sen. Patrick Leahy (D-Vt.) and has six co-sponsors.

The F-22 Raptor is produced by Lockheed Martin, the largest American defense contractor. (U.S. Air Force photo)

With President Obama’s announcement Wednesday that he intends to attack wasteful Pentagon spending, one of the most powerful and entrenched interests in Washington — the multi-billion dollar defense lobby — is sure to retaliate. Obama aides insist that they’re prepared for the fight ahead. Defense reformers and lobbyists aren’t yet convinced that they are.

As part of a plan for fiscal responsibility, Obama issued a memorandum to all government agencies and departments informing them that the White House’s Office of Management and Budget will issue new guidelines by July 1 instructing them on what “inherently governmental” jobs cannot be outsourced and what new procedures are to be created to prevent government contracts from spiraling over budget — including “modifying or canceling such contracts.” At a press conference unveiling the memorandum, Obama singled out the defense industry for special opprobrium. “The days of giving defense contractors a blank check are over,” Obama said.

Illustration by: Matt Mahurin

Defense bloat has stunned auditors. A report last year from the Government Accountability Office found that 95 ongoing major defense programs exceeded their budgets, providing an accumulated excess cost of $295 billion to taxpayers. The programs include big-ticket items beloved by the military services, including the Army’s Future Combat System, the Navy’s Littoral Combat Ship and the Air Force’s Joint Strike Fighter, which are built by defense-industry giants like Lockheed Martin Corp., Boeing Co., and Raytheon Company, all of which have aggressive lobbying arms and excellent relationships with defense barons on Capitol Hill. According to the government’s Federal Procurement Database, which tracks federal contracts, the Defense Department reported over $394 billion worth of business with private contractors in fiscal 2008 alone.

Defense contractors and their allies in government will not let that money go without a confrontation, say defense reformers. If he were a lobbyist, “I’d work with the bureaucrats to do what they always do,” said Winslow Wheeler, a three-decade veteran of Senate defense-budget fights who now directs a military-reform project at the Center for Defense Information. “The way the Pentagon wags say it is: ‘I’ll make them into a mushroom: keep ‘em in the dark and feed ‘em [manure].”

Kenneth Baer, a spokesman for the Office of Management and Budget, had a combative tone for the defense lobby. “We have just lived through an era of irresponsibility where taxpayer dollars were wasted and some of the biggest challenges we face were kicked down the road and not dealt with,” he said. “We can keep our people safe and our defense strong without all of this waste and inefficiency.”

Baer pointed to Obama’s YouTube address on his budget from Saturday, in which the president adopted more strident rhetoric than he has used to date to discuss the coming budget fight. “Special interests and lobbyists” are “gearing up for a fight” over his proposals, Obama said. “My message to them is this: So am I.”

Over the past several months, as the economic picture worsened and Defense Secretary Bob Gates publicly warned the defense industry that the financial “spigot that opened on 9/11… is closing,” industry efforts have fought back. A high-profile lobbying campaign to portray the Air Force’s expensive F-22 Raptor fighter jet — which the service and manufacturer Lockheed Martin fear may be a casualty of defense cuts — as a jobs machine has accelerated.  Allies like Sen. Saxby Chambliss (R-Ga.), whose home state features a major F-22 manufacturing plant, reciting the company’s talking point that 95,000 jobs could be lost if the jet gets the budgetary axe. A flurry of op-eds and blog posts from conservative writers have portrayed Obama’s first Pentagon budget request — estimated at $663.7 billion , which represents a four percent increase over the previous year’s budget before the costs of the two wars are factored in — as irresponsibly “sacrific[ing] American primacy,” in the words of a Bush administration Pentagon comptroller.

One Pentagon official expects much more of that as the services and the defense industry push back against reform. Their “ground game,” the official said, will be run from the services’ legislative outreach and public-affairs offices, feeding talking points and strategy information to sympathetic members of Congress — something that “got the services in trouble in 2002″ with Defense Secretary Donald Rumsfeld when the Army resisted his ultimately-successful plan to scrap an archaic artillery system called Crusader. An “air game” will feature “a lot of ominous whispers on background to the press and conservative think tanks and commentators about endangering the American people and costing lives in some future fight.”

Gates, whom Obama tasked with working closely with OMB, has told confidantes that he views a sustainable long-term rebalancing of defense priorities as one of his most important tasks now that Obama has given him the chance to continue on as Pentagon chief. His service under the Bush administration was more about supporting the immediate needs of the Iraq war after Bush fired Rumsfeld in November 2006. “The services are accustomed to reviews that start out with a lot of talk about setting priorities and making tough choices but in reality usually end with leaving everything more or less intact,” the Pentagon official said. “This time they have a secretary who really means it.”

A former Lockheed Martin official who requested anonymity spelled out a substantive scenario for the defense industry to combat the OMB review process. The process would put the blame for cost overruns not on the contractors, but on the military services for failing to be specific about what precisely they want built or delivered. “I would lead with [telling the government], ‘We waste money because you can’t make up your mind,” the ex-official said.

The ex-official explained that there is an inherent dynamic in the procurement process leading to companies undervaluing the true expense of their work in order to win a contract. “I make up a budget with my engineers, ‘OK, this is how much the project will cost.’ One bid will come in low among contractors A, B, C and D.” But in order to offer the low bid and win the contract, a contractor feels an incentive to shade down the project’s true cost. “So I’ll cut [my bid] 10 percent across the board,” the ex-official continued. “The engineers gave an accurate assessment, but you just cut it. When it comes to actually building the ship, everyone says ‘I need more money,’” in line with what the original engineering assessment of cost. Since the Pentagon has few restrictions against paying the increased cost of the contract after it’s been awarded — a practice that the OMB review will study — little prevents the overages from accumulating. Even less prevents the defense industry from low-bidding on a contract.

One solution, the ex-Lockheed official proposed, is called firm fixed-price contracting, whereby the Defense Department informs contractors that it will pay for a contract up to a certain point and any overages must be paid by the contractor. Firm fixed-price contracting is in place for some defense items. “When they do that, contractors are very honest” with their cost estimates, the ex-Lockheed official said. “But then the government tends to say ‘We don’t like that number,’ or it’s too expensive. For decades you’ve been getting low bids, so when you get an honest bid you say it’s way too expensive.”

The Pentagon official said that a smart strategy for the services would be to combat reform “indirectly through industry or military and veterans’ associations rather than directly.” Noting that the Army has already started distributing information about the value of Future Combat Systems, the official added, “The Army doesn’t seem to have figured this out.”

If the ex-Lockheed official’s scenario doesn’t work, Scott Amey, the general counsel of the Project on Government Oversight, a budget watchdog organization, anticipates a different one. “I guarantee you we’re going to hear that the government can’t operate without defense contractors,” Amey said.  “They’re [portrayed as] the driving force behind technology and innovation, and so a reliance on defense contractors is justified. We’re also going to hear some kind of backlash: ‘Many contractors operate efficiently and effectively, don’t allow a few bad defense contractors to spoil the bunch.”

For Wheeler, the author of “The Wastrels of Defense: How Congress Sabotages U.S. Security,” the process will come down to how prepared OMB chief Peter Orzsag, his deputy for defense programs, Steve Kosiak, and Gates are to outmaneuver the defense lobby and its allies. “This is a real test for Gates and Peter Orzsag to write regulations that make it easier to do right thing and harder to do wrong thing and then fight the nasty brutal battles that will make it stick,” he said. “This is the first step in a long journey, if they’re serious.”

As we first reported in late January, the Bush administration had succeeded in getting the case, Mohamed v. Jeppesen Dataplan, dismissed by arguing that subject of the lawsuit — the CIA’s extraordinary rendition program — was itself a state secret, regardless of how many times President Bush and various CIA directors had talked publicly about it.

Countering the arguments of the American Civil Liberties Union, which represented five victims of the program who all claim they were abducted abroad and shipped to a foreign country to be brutally tortured, the government claimed that even allowing the federal judge overseeing the case to review any classified evidence behind closed doors would endanger national security.

The ACLU, the bipartisan Constitution Project and others have been watching this case closely. Since we first reported on it, in the past week The New York Times and The Los Angeles Times‘ editorial boards have both weighed in, urging the Obama administration to reconsider the Bush Justice Department’s claims.

Today, we got our answer: Obama’s executive orders and presidential memoranda on ending needless government secrecy notwithstanding, the Bush administration’s view that allowing torture victims to have their day in court is a danger to national security still stands.

It’s worth noting that while it’s still early in the new administration and Attorney General Eric Holder was just recently confirmed, the Justice Department did NOT ask the court for more time to consider its views on the case. Instead, it supported the Bush administration’s position that the case should be dismissed.

The Obama administration took a similar position in a related British case that I wrote about last week.

None of this bodes well for the likelihood of obtaining additional information about the Bush administration’s interrogation policies in the future.

Update: Here’s what ACLU Executive Director Anthony Romero had to say after today’s hearing:

Eric Holder’s Justice Department stood up in court today and said that it would continue the Bush policy of invoking state secrets to hide the reprehensible history of torture, rendition and the most grievous human rights violations committed by the American government. This is not change. This is definitely more of the same. Candidate Obama ran on a platform that would reform the abuse of state secrets, but President Obama’s Justice Department has disappointingly reneged on that important civil liberties issue. If this is a harbinger of things to come, it will be a long and arduous road to give us back an America we can be proud of again.

I’ll be writing this week about an important FOIA case in which the Obama Justice Department will soon have to take a stand as well. Stay tuned.

Yesterday the American Civil Liberties Union held a press briefing on the matter, and today, the bipartisan Constitution Project sent a letter to new Attorney General Eric Holder urging him to reconsider the government’s position.

Constitution Project President and Founder Virginia Sloan wrote:

Attorney General Holder promised during his confirmation hearing to reexamine all cases where the Justice Department asserted the state secrets privilege. The Justice Department’s review of the state secrets privilege should begin with this case and result in its agreement to an independent review of the evidence by the trial judge and the administration’s repudiation of the Bush administration’s broad secrecy claims. The trial judge, not the executive branch, should determine what evidence the government can legitimately withhold, and whether enough non-privileged evidence exists to allow the case to proceed.

As I reported earlier, the ACLU is representing five victims of the Bush administration’s “extraordinary rendition” policy in a lawsuit against Jeppesen, a subsidiary of Boeing, for allegedly assisting the CIA in abducting suspects of Middle East descent and flying them around the world to be tortured. Although the case was carefully NOT filed against the U.S. government, the CIA under Bush intervened, and convinced the federal court in California to dismiss the case, claiming that simply letting it proceed would endanger national security.

How? The government insisted — despite numerous public statements about the program from top U.S. officials, including CIA directors and the president himself — that the CIA’s extraordinary rendition practices are a secret, and any information about them would endanger the United States and strengthen its enemies.

Although the ACLU lawyers had no objection to the judge sealing from public view any particularly sensitive and classified evidence that would emerge in the course of the case, the government insisted that the entire lawsuit posed a threat and that the case must be dismissed. The court accepted the government’s view, based largely on a sealed CIA declaration.

The ACLU appealed the dismissal, and the matter is scheduled for oral argument before the Ninth Circuit Court of Appeals in California on Monday.

Despite recent media reports requests for clarification from advocacy groups, the Obama administration so far has not changed its position in this case — the first major test of its early pronouncements to eliminate unnecessary secrecy and renounce torture.

Interestingly, as I reported earlier this week, the Obama administration apparently just affirmed Bush secrecy policies in a related case filed in the United Kingdom. In that lawsuit, in which Gitmo detainee Binyam Mohamed (also a plaintiff in the Jeppesen case) sought evidence to support his claims of mistreatment by U.S. officials, the Obama administration refused to change an earlier U.S. government position insisting that the evidence– and even the U.K. court’s summary of the evidence– remain secret.

The Jeppesen case, taking place in a U.S. court, provides an even more compelling case for the Obama administration to reverse its predecessors’ course and allow the judge to handle the evidence in accordance with U.S. law, which has many methods for protecting against dangerous disclosures.

We will be watching closely to see how the new administration proceeds.