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Stefan Halper, the shadowy Cambridge academic who may have helped the FBI spy on the Trump campaign, was paid more than $1 million by a U.S. agency for research papers of dubious value, according to a new government report. But even as it shed new light on Halper’s work, the report left unanswered central questions about his Trump-Russia role and raised new ones about the circuitous winds on which Washington dollars manage to fly out the window.

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.

Sen. Chuck Grassley: Halper audit results “illustrate a systemic failure to manage and oversee” federal dollars.

Sen. Chuck Grassley (R-Iowa), who requested the report, said that the audit results “illustrate a systemic failure to manage and oversee” federal dollars.

“The Office of Net Assessment,” according to the Department of Defense, “conducts and sponsors analyses that compare the standing trends, and future prospects of U.S. and foreign military capability and military potential.” Not a terrible idea, especially back in the Cold War days of 1973 when the ONA was formed. But how to decide which issues to study and which thinkers to hire to do the analysis?

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. Currently, the ONA is looking for scholars to write analyses of the future of naval warfare, treatises on nuclear proliferation, space warfare, and “The Information Dimension of Warfare” among other topics.

The applicant proposing that the Department of Defense fund a study is asked to list the cost of “labor hours” and “labor rates,” together with “Fringe Benefits, Overhead, G&A, etc.” Applicants aren’t exactly encouraged to keep the pricing lean: “All proposal submissions will be evaluated through a technical/scientific/cost decision process,” reads the call for proposals, “with technical and scientific considerations being more important than cost.”

The ONA doesn’t necessarily expect applicants to do the work themselves. It recommends hiring consultants. Which isn’t to say there aren’t limits as to what they can be paid, however: The ONA sets a “Max daily rate of $1,500.00.”

That helps explain how Halper was able to collect more than $1 million from the Pentagon in four years.  The late ONA director, Andrew Marshall, presided over the first three of Halper’s studies looked at by the IG. The one in 2016 was approved by the current ONA director, James Baker. ONA "acquisition officers" are in charge of the paperwork.

Some of that money went into Halper’s pockets; some went to subcontractors writing large parts of the “studies”; and some went into travel. And yet the inspector general’s audit found that none of Halper’s contracts with the ONA required him “to submit justification or obtain prior approval before traveling.” This may seem an odd criticism to those who have spent their careers in the private sector; but federal government employees will be properly slack-jawed. It’s not a big exaggeration to say that the standard paperwork for an overnight trip on the federal dime normally rivals the red tape needed to procure an F-16. 

Things are simpler with the ONA, which asks only that the original proposal include basic details of proposed travel: “Destination, number of trips, number of days per trip, departure and arrival destinations, number of people, etc.” But the inspector general found that the ONA doesn’t hold contractors to the travel plans they have proposed. The only limit on potential waste and abuse of travel expenses is a “Required Form for Submission of Travel Receipts.”

Consider the travel Halper undertook ostensibly as part of a study on Russia-China relations. His proposal had built in travel to Moscow and Beijing, sensibly enough, and London, perhaps less sensibly so, given the topic of the research. Anticipated price tag: $9,260. When Halper turned in his receipts, however, they were for three trips from his Virginia home to London[P10] , one trip to New York, and no trips to Russia or China. Once Halper’s receipts were in, his total travel bill had ballooned to $14,717.86.

With exquisite deadpan, the IG writes, “ONA personnel could not provide an explanation for why the cost for Professor Halper’s travel differed from his proposal.” Nor could the ONA document that Halper’s travels had anything to do with studying Russia-China relations.

The supposed value of Halper’s studies was that he was going to sit down with the best and the brightest to glean their wisdom on the topics at hand. To study how a slowing economy in China might affect neighboring countries, Halper proposed to interview scores of scholars and such pooh-bahs as “a former Russian Deputy Foreign Minister and Ambassador to India, a former President of the Naval War College, and a former Secretary of the Navy.” When the inspector general’s office checked the citations in Halper’s finished study, it found that not one of the 348 footnotes “attributed source material to an interview conducted by Professor Halper.”

This proved to be a recurring phenomenon. For his Russia-China study, Halper proposed (and determined costs based on the proposal) that he would interview analysts and experts at the Naval War College, Harvard, Cambridge University, the Japanese Self-Defense Force, the Carnegie Endowment in Moscow, and former Russian diplomats and intelligence officers, among many others. “None of the 851 footnotes” in that study, the IG found, “attributed source material to an interview conducted by Professor Halper.” The bureaucrats with their bundles of ready cash seem not to have noticed. “ONA personnel could not provide us any evidence,” according to the inspector general, that Halper “visited any of these locations … or met with any of the specific people listed in the statement of work.” RealClearInvestigations reached out to China scholars and was able to find one — Timothy Heath of RAND — who was actually interviewed by Halper.

Notwithstanding the slim evidence that Halper did the work he had promised, when the professor turned in his Russia-China study invoices, between December 2015 and December 2016, for $244,417.86, the Office of Net Assessment promptly paid it out to the 86th cent.

The question of whether the U.S. government funded spying on Americans, of course, hangs over the Defense Department IG review, but goes unmentioned. The IG also ignored the “potential partisan political” question and focused on the less fraught questions of waste, fraud, and abuse.

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.

Professor Halper may now find it difficult to get any more quarter-million-dollar paydays. Which means there might be some room for new blood at the Office of Net Assessment. Anyone interested in getting in on the action should note that the next submission cut-off date is Oct. 15.

And this raises a policy question outside the IG’s ken: Even if done without waste, without fraud, and without the possibility of professors moonlighting as intelligence agents, is the money spent by the ONA bringing a return? When it comes to the sort of research into China being done by Halper, the answer is no, according to Gordon Chang, author of “The Coming Collapse of China.” “China information, due to voracious demand, has become commoditized, generally available 24/7,” Chang says. “The next time the Defense Department wants to spend several hundred thousand dollars on assessments on China, tell them I would be willing to give them, for the price of a stamp, what they need.”


July 16, 2019, 8:00 AM Eastern
An earlier version of this article misidentified the fictional company used as a secret-service cover in James Bond's exploits. It is Universal Exports, not Imports.

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