Intelligence experts warn that a proposal to merge two Pentagon intelligence units could create an ominous new agency

An informal panel of senior Pentagon officials has been holding a series of unannounced private meetings during the past several weeks about how to proceed with a possible merger between the Counterintelligence Field Activity (CIFA), a post-9/11 Pentagon creation that has been accused of domestic spying, and the Defense Security Service (DSS), a well-established older agency responsible for inspecting the security arrangements of defense contractors. DSS also maintains millions of confidential files containing the results of background investigations on defense contractors’ employees.

Pentagon officials began discussions about merging the two after the commission issued its recommendations. An initial round of meetings about the merger, however, failed to come up with a plan. In the meantime, CIFA, a mysterious and secretive unit created in 2002 and charged with making Defense counterintelligence efforts more effective, became the subject of two public controversies. One regarding the collection of intelligence on peace activists and anti-administration demonstrators, the other involving disgraced Duke Cunningham and his attempt to use CIFA to influence contracting awards.

Both Pentagon insiders and privacy experts fear that if CIFA merges with, or, in effect, takes over DSS, there would be a weakening of the safeguards that are supposed to regulate the release of the estimated 4.5 million security files on defense-contractor employees currently controlled by DSS. Those files are stored in a disused mine in western Pennsylvania.