EXCLUSIVE

Deep Pockets, Deep Cover: The

UAE Is Paying Ex-CIA Officers
to Build a Spy Empire in the
Gulf
They hired Americans to professionalize
their intelligence service. But how far can
former U.S. spies go?
BY JENNA MCLAUGHLIN
ILLUSTRATION BY TAYLOR CALLERY

DECEMBER 21, 2017

Not far from the northeastern Zayed Port in Abu Dhabi, in a typical
modern Gulf villa framed on one side by an elegant swimming pool, Westerners are
teaching Emiratis the tools of modern spycraft.

The day starts with the basics: a 10 a.m. seminar on Sunday morning is titled “What is
intelligence?” On Thursday, the recruits learn how to operate in four- to six-man
surveillance teams. Over the course of the first week, they embark on scavenger hunts
intended to hone their problem-solving skills. The following weeks get more advanced
— students are schooled on creating cover identities to use when attending galas with
diplomats, they are taught how to groom intelligence assets, and they watch skits about
recruiting Libyan sources.

The Emirati recruits also train at another site about 30 minutes outside downtown Abu
Dhabi called “The Academy” — complete with gun ranges, barracks, and driving
courses — reminiscent of the CIA’s “Farm” at Camp Peary, a training facility located in
 southeastern Virginia.

The details of the training are contained in an official course schedule reviewed by
Foreign Policy and were described by former U.S. intelligence officials who have been
involved in the effort. The facilities and courses are part of the United Arab Emirates’
nascent efforts to create a professional intelligence cadre modeled after the West’s.

Former CIA and government officials were

Former CIA and government drawn to the Gulf nation by the promise of
officials were drawn to the Gulf
interesting work and, perhaps even more
nation by the promise of
importantly, lucrative careers.
interesting work and, perhaps
even more importantly, lucrative “The money was fantastic,” one former
careers.
employee told FP. “It was $1,000 a day — you
could live in a villa or in a five-star hotel in
Abu Dhabi.”

The key figure behind this growing intelligence training operation, according to
multiple sources, is Larry Sanchez, a former intelligence officer who helped kickstart a
controversial partnership between the CIA and the New York Police Department that
tried to pre-empt the radicalization of potential terrorists by tracking people — many of
them Muslims — in mosques, bookstores, and other places around New York. Sanchez, a
veteran of the CIA clandestine services, has been working for the crown prince of Abu
Dhabi in the United Arab Emirates for the past six years to build large pieces of its
intelligence services from the ground up, six sources with knowledge of the matter tell
FP.

But Sanchez is just one of many former Western security professionals who has made his
way to the Gulf nation to provide security training. Erik Prince, the founder of
Blackwater, famously moved to the UAE to create a battalion of foreign troops serving
the crown prince, details of which were first revealed by the New York Times in 2011.
And Richard Clarke, the former White House counterterrorism czar, is also a longtime
top advisor to the crown prince of Abu Dhabi as the CEO of Good Harbor Security Risk
Management.

The UAE’s reliance on foreigners to build its security institutions is not new, but the
Gulf state has usually tried to keep the details of that help out of public view, and when
it comes to training its nascent intelligence operations, details have been kept
particularly quiet. However, the use of former U.S. intelligence employees to build up
foreign nations’ spying capabilities is still treading into new territory.

Sanchez’s role in providing a blueprint for the UAE’s intelligence operation, making it
from whole cloth, shows just how far private contractors have gone in selling skills
acquired from decades spent working for the U.S. military and intelligence community.
That sort of work is also now raising legal questions as the U.S. government struggles to
decide how laws govern highly trained intelligence officials hawking their skills abroad.
 Sanchez declined to comment on an extensive list of questions sent to him by FP.

Six former intelligence officials and contractors described the training operation to FP,
but they requested anonymity to discuss sensitive intelligence operations, to shield
friends and associates still working in the UAE, and to protect their future
employability.

Two of those interviewed expressed concerns about whether the company had the
proper export licenses for the advanced training, especially as other international
instructors arrived on the scene.

Even more concerning for employees was that

Even more concerning for the government-affiliated UAE company now
employees was that the
involved in managing the contract,
government-affiliated UAE
DarkMatter, is currently under investigation
company now involved in
managing the contract, by the FBI.

DarkMatter, is currently under

The FBI told FP it does not comment on
investigation by the FBI.
ongoing investigations.

While former employees had a range of views on whether the training was effective,
legal, and in the U.S. interests, they all agreed that having private contractors create a
foreign intelligence service was likely unprecedented.

“The dream” one source explained, was to help the UAE create its own CIA.

Then assistant New York City police Commissioner Larry Sanchez, left, testifies on Capitol Hill in Washington on Oct. 30, 2007. (Dennis Cook/AP)

Larry Sanchez’s road from CIA headquarters in Langley, Virginia, to

Abu Dhabi went by way of New York. During much of his career at the CIA, Sanchez
worked as an undercover operative working under roles in other agencies or
organizations. But in 2002, shortly after the 9/11 terrorist attacks, George Tenet, then the
director of central intelligence, sent Sanchez to work in New York with David Cohen, the
deputy commissioner of intelligence at the NYPD.

There was already an informal link between the CIA and NYPD: Cohen was also the
former deputy director of operations at the agency. In New York, Sanchez provided law
enforcement with real-time intelligence about al Qaeda. The NYPD, in turn, sent officers
to infiltrate mosques and Muslim communities, as well as any other potentially
“radicalizing” places pointed out by tipsters. The goal was to prevent another 9/11-type
attack.

While Sanchez was at the NYPD, the department also had an expanding — and unusual
— relationship with the UAE. In 2008, the NYPD and the UAE’s government struck an
intelligence-sharing deal, and New York police set up a satellite office in Abu Dhabi. The
UAE also gave the New York City Police Foundation a million dollars for its intelligence
 division in 2012, providing funds to enable “the NYPD to station detectives throughout
the world to work with local law enforcement on terrorism related incidents,” per a
public tax filing.

During his tenure at NYPD, Sanchez developed

During his tenure at NYPD, “an ongoing relationship” with high-level
Sanchez developed “an ongoing
Emirati officials, including Sheikh Khalifa bin
relationship” with high-level
Zayed Al Nahyan, the ruler of Abu Dhabi,
Emirati officials, including
Sheikh Khalifa bin Zayed Al according to a former law enforcement source.

Nahyan, the ruler of Abu Dhabi,

The Emiratis were unfamiliar with “the world
according to a former law
of intelligence,” the source explained, and
enforcement source.
Sanchez went to them and said, “‘Listen, I’m
not going to be like some of these other U.S. entities who fly in and then leave, I will be
here for you all the time. Call me at 3 a.m., I’m here.’ … He won them over by his
commitment to them.”

Even as Sanchez built up his relationship with the UAE, his work at home was gaining
scrutiny. A 2011 CIA inspector general investigation into its officers embedded in the
NYPD did not find specific violations of the law, but concluded that the perception of
coziness between the nation’s top foreign spy agency and a local domestic police
department was eroding public trust.

The revelation led to major public outcry from civil liberties organizations tracking
privacy after 9/11. The CIA argued its support did not constitute spying on Americans,
but civil rights advocates disagreed.

“The CIA is not permitted to engage in domestic surveillance,” Ginger McCall, then the
director of the Electronic Privacy Information Center’s Open Government Project, told
the Times.

By the time the dust had settled and the CIA decided to end its program at the NYPD,
Sanchez had already made his way to the Middle East.

Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al Nahyan attends the 2017 Dubai Airshow on Nov. 12, 2017. (Mahmoud Khaled/Anadolu
Agency/Getty Images)

When the Twin Towers fell in New York in 2001, the UAE found itself
caught up in concerns about international terrorism. The Gulf nation had unknowingly
served as a transit hub for the terrorists, and two of the hijackers were Emiratis. The
attacks were a turning point for the UAE, said Jon Alterman, the director of the Middle
East Program at the Center for Strategic and International Studies.

“That prompted them to do a number of things involving religious organizations within

the UAE, but also on the broad national security front,” he told FP. “There was always a
concern with national security, but I think a lot of it was really exacerbated by 9/11.”
 The UAE wanted to build up its intelligence infrastructure, and for assistance it turned
to the West. Emirati officials have historically aimed to replicate the West’s security
structures as closely as possible. When formulating their defense strategy, the UAE
examined Australia, the United Kingdom, the United States, and other Western nations.

The downside of that approach, however, is that the UAE has purchased strategies,
putting them together like ill-fitting puzzle pieces and often lacking a central vision and
plan, according to those familiar with their work.

During Sanchez’s time in the UAE, a significant Western presence involved in

intelligence training was growing. Both Australian and British military intelligence vets
worked there, too. But

Sanchez benefited from his personal

Sanchez benefited from his relationship with the ruling family forged
personal relationship with the
during his years working on counterterrorism
ruling family forged during his
in New York City.
years working on
counterterrorism in New York The U.S. government has also at times assisted
City.
directly. In 2010 and 2011, as the Iranians built
up their cyberattack capabilities, U.S.
government officials and defense contractors traveled to the UAE and help train
Emiratis in digital security and offensive cyber operations. While the U.S. government
generally embraced the efforts of Gulf nations to build up their own cadre with help
from the United States, senior officials drew the line at allowing American citizens to
participate in offensive cyber operations, i.e., launching attacks.

In late 2011, U.S. government advisors and contractors helped set up the UAE’s
equivalent to the National Security Agency in the United States, whose name changed to
the National Electronic Security Authority, and now the Signals Intelligence Agency.
The United States was involved in everything from helping select a safe site with access
to power and fiber connectivity to determining which buildings would be public and
which classified, according to documents and slides shared with FP by a former
intelligence official.

Around this same time, Sanchez and his team arrived and began teaching techniques for
domestic surveillance. As president of the low-profile intelligence contractor CAGN
Global Ltd., based in Baltimore, Sanchez began manning a team of mostly former law
enforcement officers, retired Western intelligence officials, and ex-soldiers to train the
Emiratis on how to be spies and paramilitary operators.

The training program, which started as a simple mentorship with the leadership of the
Emirates, grew faster than anyone involved could have anticipated. They began to rely
heavily on Sanchez, to the point that they wanted him to construct all its major
intelligence agencies.
 The courses, some modeled on the CIA’s training, are broken up into different segments,
including a “basic intelligence pipeline” involving straightforward boot camp along
with report writing, debriefing, and note taking, the foreign intelligence “external”
program, an FBI/law enforcement course, and a paramilitary course, among others.

The training schedule obtained by FP includes “rabbit runs,” where the instructor takes
students on a surveillance mission.

The students are trained not to draw the

The students are trained not to attention of another instructor, who is trying
draw the attention of another
to evade them. They’re also taught “the art of
instructor, who is trying to evade
observation” and how to spot potential targets.
them. They’re also taught “the
art of observation” and how to The external surveillance courses are nearly an
spot potential targets.
exact replica of the CIA’s farm training. “It’s
exactly what they teach at the farm … it’s the
same material,” one former employee of Sanchez’s firm told FP. According to a second
source familiar with the company, the trainers’ use of materials modeled after CIA
training actually drew CIA scrutiny and fury, prompting a review of the program that
ultimately concluded in Sanchez’s favor.

In one course, for example, former Delta Force operators teach paramilitary skills, such
as driving and shooting. “Usually they’ll go to that course before or after being deployed
to a place like Yemen,” one of the former instructors explained.

Though the skills being taught to Emiratis are similar to those taught by the CIA, one
former instructor argued the courses were simpler — the kind of skills you’d see on an
episode of The Americans. “The U.S. is running NASCAR drivers, but we’re teaching
driver’s ed,” the source said.

All those interviewed about their experience agreed, however, that while the material
taught ranged in complexity, the students themselves were green. “It’s all incredibly
new to them,” one of the former instructors said.

A view of Abu Dhabi in August. (Alexander Shcherbak/TASS via Getty Images)

As Sanchez and other former U.S. intelligence contractors expanded

their training in the UAE, one of the nagging questions for many trainers was over
whether what they were doing was completely legal. Americans face restrictions on the
kind of military and intelligence training they’re allowed to provide abroad, because the
U.S. International Traffic in Arms Regulations, a complex set of rules, classifies such
training as “exports.”

Americans who run afoul of those regulations risk prosecution.

Sanchez’s firm, CAGN Global, obtained an export license from the State Department to
 conduct basic security and intelligence training when it started. But it came under
review last year by several government agencies, including the State Department and
the CIA. Some instructors were concerned the review had to do with the course
expanding beyond its remit, though one source said it had more to do with a missed
payment to the State Department and CIA frustration over use of training materials
similar to its own. The review appears to have been resolved.

The State Department declined to comment on the record.

Sanchez’s work expanded from domestic intelligence courses focused on internal

surveillance and threats like al-Islah, a UAE Islamist group affiliated with the Muslim
Brotherhood. In the last six months or so, Sanchez and his team have looked outward in
the aims of molding a new foreign intelligence service through an “external” course,
focused on threats beyond the Gulf nation’s borders in countries including Yemen, Iran,
Syria, Qatar, Eritrea, and Libya.

The Emiratis “live in a bad neighborhood,” one of the sources noted. They see Yemen as
a “failed state,” regularly confront al Qaeda leaders, and fear uncertainty in Somalia and
Oman. Their conflict with Iran is “so deep it’s always going to be there,” the source
continued.

The Emiratis are friends of the United States,

The Emiratis are friends of the but they’re wary the West will abandon them
United States, but they’re wary
someday, the source explained. They thought,
the West will abandon them
“We need to start protecting ourselves.”
someday, the source explained.
They thought, “We need to start Even as the UAE produces newly minted spies,
protecting ourselves.”
deploying them overseas isn’t assured, two
sources familiar with the training program
noted. The UAE isn’t consistently funding embassies in those countries, so there isn’t
the kind of necessary physical support to completely get the program off the ground,
especially in larger, more security-conscious nations like Iran.

While dreaming up a surveillance panopticon in an autocratic country might seem like a

strange retirement plan for a former CIA operative, Sanchez shared similar security
concerns as the UAE government. Potential enemies, whether Iran, the Muslim
Brotherhood, or al Qaeda, were high on the UAE’s list of potential threats. Similarly,
Sanchez “always had a level of concern about the Brotherhood and the Iranians,” said
the former law enforcement source. “He felt he was doing good.”

He was also doing well. Sanchez owns a luxury fishing boat gifted to him by the crown
prince, four sources told FP.

And it’s not just Sanchez and the UAE leadership that shares these concerns; top D.C.
policymakers are focused on similar threats. “Most of our targets are compatible,” one of
the former trainers and a former intelligence official told FP.
 Sanchez’s work in the UAE is not without concerns, however. From the start, one of the
questions among some in the intelligence community was whether the UAE regime
brandishes legitimate critics as terrorists or foreign agents. “The UAE claims anyone
against the regime is Iranian or Persian-influenced … either that or the Muslim
Brotherhood,” the former intelligence official with knowledge of the region told FP.

Even as it builds institutions modeled after the West, the UAE also has a reputation for
crushing political dissent. Human rights groups have documented cases of arbitrary
detention and torture of activists and dissidents. Most notably, the government has
used some of its imported surveillance tools to target Ahmed Mansoor, a prominent
activist who has been detained since March.

But intelligence officials and former trainers interviewed by FP said the training course
is focused on foreign threats, not political opponents, and on building intelligence
skills, not planning operations. “I never saw them apply the capabilities they’re still
developing to … protect the regime,” one source said.

“Their human rights record is a problem, but civil liberties aren’t defined the way they
are here,” said Mark Lowenthal, the owner of the Intelligence and Security Academy, an
intelligence consulting company that advises companies and governments around the
world.

Lowenthal served as the assistant director for analysis and production at the CIA in the
early 2000s, and he directed the staff of the House Permanent Select Committee on
Intelligence. “The idea of other companies or countries coming to us for help is not new
… this has been going on for a very long time,” he said. “Intelligence services cooperate.”

Intelligence cooperation may not be new, but the use of private contractors to provide
that intelligence training is still a relatively new phenomenon, and not one that
everyone is comfortable with.

U.S. intelligence employees working in the

U.S. intelligence employees UAE tended to avoid direct contact with
working in the UAE tended to
Sanchez or his company, the former law
avoid direct contact with
enforcement source noted.
Sanchez or his company, the
former law enforcement source They want to avoid the appearance of
noted.
“impropriety” by working with him, despite
the fact that CIA and State are directly
involved in approving export licenses.

Even if CIA employees don’t have direct contact with Sanchez, the agency also doesn’t
appear to have a problem with his work. According to three sources, the CIA station
chief in Abu Dhabi was well aware of Sanchez’s mission — in fact, the station chief’s
wife worked for Sanchez for a time.

The CIA declined to comment.

The UAE Embassy in Washington did not respond to multiple requests for comment on
any of the issues relating to American intelligence contractors. An email sent to a press
office for the UAE government went unanswered.

But they might not need to worry about Sanchez in the UAE anymore, as he may soon
retire or draw back the time he spends there after internal disputes, multiple sources
noted — depending on the resolution.

There’s been high turnover in recent months over leadership squabbles; the program is
bleeding instructors. “There are a lot of big egos out there and bad management,” one
former employee said. While Sanchez drew a lot of high-level former officials, some
former CIA chiefs of station included, many of those people did not stay long.

One of the biggest reasons for the high turnover, sources told FP, was a another former
U.S. intelligence official Sanchez hired in charge of operations. According to two
sources, the official has regularly fired instructors and created a toxic work
environment. That official did not respond to request for comment.

The company paying the bills and providing leadership for the intelligence training
contract has since changed twice, according to two former employees and one source
with knowledge of the region.

An Emirati company called LUAA LLC, manned by a former British Special Air Service
official, took over last spring. A third Emirati firm, a subsidiary of a company called
DarkMatter, which works for the UAE government on cybersecurity and intelligence, is
now heavily involved.

LUAA’s ownership made some trainers uncomfortable. Since LUAA was an Emirati
company, American employees were unsure if it might complicate their ability to
maintain a security clearance.

In the meantime, the intelligence training program continues to morph. According to

two sources, CAGN Global and Sanchez are both on the outs after a falling out with
Emirati officials, and DarkMatter, which is under FBI investigation, is in charge now.
DarkMatter declined to comment on its ongoing operations but explained that nations
and businesses seeking “a professional cyber security and intelligence capability” are a
“good business opportunity” for the company.

As for the Americans who helped build the UAE’s intelligence operations, there’s always
the next program. Two sources noted that there’s been a stalled yearslong effort to bring
a similar intelligence training program to Saudi Arabia.

Jenna McLaughlin is Foreign Policy's intelligence reporter. You can reach her on Signal
at 203-537-3949. (@JennaMC_Laugh)