The irreplacable Digby dug up an interesting exchange the other day between a student [edited] and President Bush:

Q Thank you, Mr. President. It's an honor to have you here. I'm a first-year student in South Asia studies. My question is in regards to private military contractors. Uniform Code of Military Justice does not apply to these contractors in Iraq. I asked your Secretary of Defense a couple months ago what law governs their actions.

THE PRESIDENT: I was going to ask him. Go ahead. (Laughter.) Help. (Laughter.)

Q I was hoping your answer might be a little more specific. (Laughter.) Mr. Rumsfeld answered that Iraq has its own domestic laws which he assumed applied to those private military contractors. However, Iraq is clearly not currently capable of enforcing its laws, much less against -- over our American military contractors. I would submit to you that in this case, this is one case that privatization is not a solution. And, Mr. President, how do you propose to bring private military contractors under a system of law?

THE PRESIDENT: I appreciate that very much. I wasn't kidding -- (laughter.) I was going to -- I pick up the phone and say, Mr. Secretary, I've got an interesting question. (Laughter.) This is what delegation -- I don't mean to be dodging the question, although it's kind of convenient in this case, but never -- (laughter.) I really will -- I'm going to call the Secretary and say you brought up a very valid question, and what are we doing about it? That's how I work. I'm -- thanks. (Laughter.)

Lockheed Martin Corp. is seeking a counterintelligence analyst to work for the Pentagon's newest intelligence agency, the Counterintelligence Field Activity (CIFA), in its Colorado Springs facility to "create and deliver briefings, write reports, and represent Counterintelligence Field Activity," according to a Web classified ad.

These positions and thousands like them are part of a growing trend at the Pentagon to contract out intelligence jobs that were formerly done primarily by service personnel and civil service employees.

But, by using contract employees, government agencies lose control over those doing this sensitive work and an element of profit is inserted into what is being done. Also, as investigations have revealed, politics and corruption may be introduced into the process.

The office of Director of National Intelligence John D. Negroponte has quietly begun to study the contracting issue because "it already is a problem," a senior intelligence official said in a recent interview.

A related concern for intelligence agencies inside and outside the Pentagon is that the government is training people and getting them security clearances, but they then leave for better pay offered by contractors, sometimes to do the same work.

The Defense Department has expanded its programs aimed at gathering and analyzing intelligence within the United States, creating new agencies, adding personnel and seeking additional legal authority for domestic security activities in the post-9/11 world.

The moves have taken place on several fronts. The White House is considering expanding the power of a little-known Pentagon agency called the Counterintelligence Field Activity, or CIFA, which was created three years ago. The proposal, made by a presidential commission, would transform CIFA from an office that coordinates Pentagon security efforts -- including protecting military facilities from attack -- to one that also has authority to investigate crimes within the United States such as treason, foreign or terrorist sabotage or even economic espionage.

Steven Aftergood, director of the Project on Government Secrecy at the Federation of American Scientists, believes that the kind of military intelligence work contracted to CACI, Titan Corp., and other companies is particularly ripe for problems because intelligence agencies "operate under unusual authority." He adds: "I don't think the current oversight system is equipped to monitor the activities of contractors. That is one of the central lessons of the Abu Ghraib affair."

Like the defense industry, the intelligence business is driven by a network of lobbyists and a web of close connections between government and the private sector. But unlike the arms industry, intelligence contractors operate in a world where budgets are classified and many activities -- from covert operations to foreign eavesdropping -- are conducted in secret. Even the bidding for intelligence contracts is often classified. As a result, there is virtually no oversight of the intelligence community and its corporate partners. That was one of the central findings of the 9/11 commission, which called congressional supervision of intelligence and counterterrorism "dysfunctional."