Non-official cover (NOC’s) CIA operatives do not have diplomatic immunity and, if discovered operating on foreign soil, they can be arrested or even executed. Most CIA officers operate out of a U.S. Embassy and have protection. Implanting a NOC in a foreign country involves great risk and requires detailed preparation and an elaborate cover story. Just to use one example, a NOC might enroll in the London School of Economics and pursue a graduate degree. During that time they may do little or no actual reporting. Their primary mission is to establish their bona fides so that they can enter the corporate world later.

NOC’s frequently make use of front-companies. These are companies set up by the CIA to look legitimate, but that really just serve as part of an officer’s cover. If you followed the Valerie Plame case this should all be familiar to you. Robert Novak revealed both that Valerie Plame Wilson was a CIA operative and that she worked for Brewster-Jennings, an energy consulting business. But Brewster-Jennings wasn’t an energy consulting business, it was a shell company set up to provide Ms. Wilson with a paycheck and a cover story. When she donated money to Al Gore’s presidential campaign, she listed the company as her employer (which is how Novak discovered the relationship).

Once Novak revealed her cover company (actually once he revealed her employer) the CIA had to do a damage assessment to see, among other things, how many of their officers had used Brewster-Jennings as a cover. Under the standards practiced at the time, Brewster-Jennings should not have had more than 2-3 officers associated with it. That standard is set up to limit the fallout from any single officer’s cover getting blown. But, according to the LA Times the CIA abandoned normal practices after 9/11 in an effort to get more NOC’s into the field. In doing so they took absurd risks and made stupid and expensive mistakes.

The CIA set up a network of front companies in Europe and elsewhere after the Sept. 11 attacks as part of a constellation of “black stations” for a new generation of spies, according to current and former agency officials.

But after spending hundreds of millions of dollars setting up as many as 12 of the companies, the agency shut down all but two after concluding they were ill-conceived and poorly positioned for gathering intelligence on the CIA’s principal targets: terrorist groups and unconventional weapons proliferation networks.

The black stations were very poorly conceived, as this makes clear.

The companies were the centerpiece of an ambitious plan to increase the number of case officers sent overseas under what is known as “nonofficial cover,” meaning they would pose as employees of investment banks, consulting firms or other fictitious enterprises with no apparent ties to the U.S. government.

But the plan became the source of significant dispute within the agency and was plagued with problems, officials said. The bogus companies were located far from Muslim enclaves in Europe and other targets. Their size raised concerns that one mistake would blow the cover of many agents. And because business travelers don’t ordinarily come into contact with Al Qaeda or other high-priority adversaries, officials said, the cover didn’t work.

Here’s the worst of it.

Although the agency has used nonofficial cover throughout its history, the newer front companies were designed to operate on a different scale. Rather than setting up one- or two-person consulting firms, the plan called for the creation of companies that would employ six to nine case officers apiece, plus support staff.

The NOC program typically had functioned as an elite entity, made up of a small number of carefully selected case officers, some of whom would spend years in training and a decade or more overseas with only intermittent contact with headquarters. But the new plan called for the front companies to serve as way stations even for relatively inexperienced officers, who would be rotated in and out much the way they would in standard embassy assignments.

This is terrible tradecraft that needlessly put people’s lives at risk and had no success in penetrating terrorist or proliferation networks. Using inexperienced officers and putting them into a system where one slip up can wind up rolling up a whole operation, including six to nine case officers and their front company?

Successfully penetrating a terrorist organization can require years of training and preparation and entails (usually) unacceptable levels of risk. It cannot be done while posing as an investment banker. That might work with proliferators…maybe.

So, once again, we’ve wasted a ton of money on the ill-conceived pipe dreams of the Bush administration.