Last February, the Defense Policy Board, a group of outside advisors to the Pentagon, received a classified presentation from the super-secret Defense Intelligence Agency on the crises in North Korea and Iraq.
Three weeks later, the then-chairman of the board, Richard N. Perle, offered a briefing of his own at an investment seminar on ways to profit from possible conflicts with both countries.
Perle and his fellow advisors also heard a classified address about high-tech military communications systems at the same closed-door session in February. He runs a venture capital firm that has been exploring investments in that very area.
On Feb. 27, 2003, two speakers — Henry D. Sokolski of the Nonproliferation Policy Education Center and Michael Pillsbury, a Pentagon advisor under Feith — gave [classified] presentations to the Defense Policy Board on the risks and prospects of U.S. conflict with North Korea. The same day, the Defense Intelligence Agency, which works for the Pentagon, also briefed the board on North Korea and Iraq among other subjects, according to several people in attendance.
Three weeks later, Perle participated in a Goldman Sachs conference call in which he advised investors on opportunities tied to the war in Iraq. Perle's talk was called "Implications of an Imminent War: Iraq Now. North Korea Next?"
Retired Rear Adm. Thomas Brooks, who served on the policy board during the Clinton administration, said Perle's actions were "certainly questionable."
"It sounds like he's squeezing every nickel out of the Defense Policy Board," he said.
Defense Policy Board members are not paid but are subject to government ethics prohibitions that bar the use of public office for private gain. They are required to file a disclosure form with the Pentagon listing their business interests. The forms are not made public.
At the time Rumsfeld appointed him chairman of the board, Perle was just forming his new investment fund.
Planning documents from early July 2001 show that he and his partners hoped to raise $500 million, which they aimed to "invest in emerging growth companies," including defense and aerospace firms.
Perle would be "fully engaged in the investment activities of the Partnership," said the prospectus. Gerald Hillman, Perle's friend and business partner, would be the fund's "primary deal-maker." The following month, Hillman was named to the policy board.
Membership on the board, says its charter, "will consist primarily of private sector individuals with distinguished backgrounds in national security affairs."
Perle, who worked at the Pentagon during the Reagan years, is a resident fellow at the American Enterprise Institute think tank and directed its Commission on Future Defenses. He has also advised members of Congress and is frequently called to testify at defense hearings on Capitol Hill.
The biography of Hillman included in the draft prospectus lists no national security or defense qualifications. It says Hillman has "a strong background in industrial policy, corporate strategy and finance."
During a brief phone conversation, Hillman said he has known Rumsfeld for 35 years. He invited further questions by e-mail, but did not respond.
Several military experts said they had never heard of Hillman.
"He doesn't seem to have any apparent credentials for the board other than being a friend of Richard's," Brooks said. "To not see a causal relationship [between Perle being named as chairman and Hillman being named to the board] strains credulity."
In November 2001, the investment fund was incorporated in Delaware under the name of Trireme Partners.
Trireme is part of the story that Seymour Hersh broke in March 2003, as described by the LA Times: "The New Yorker magazine first reported on Perle's involvement with Trireme while he was serving as chairman of the Defense Policy Board. Its story, written by Seymour Hersh, revealed that Perle had met with Adnan Khashoggi, a controversial Saudi arms dealer, and Harb Saleh Zuhair, a Saudi businessman, and sought investments in the fund from them."
The appearance of the fabulously inexperienced Gerald Hillman on the Defense Policy Board is another coup for the Trireme venture capital vultures.
The terminology is somewhat troublesome. To experienced casino gamblers like Bill Bennett, a "nickel" is slang for $500. But "squeezing a nickel" must be venture capitalist slang for "bilking taxpayers out of $500 million."