By Warren Strobel and Mark Hosenball
WASHINGTON, Oct 17 (Reuters) - The U.S. National Security Agency has launched an internal review of a senior official's part-time work for a private venture started by former NSA director Keith Alexander that raises questions over the blurring of lines between government and business.
Under the arrangement, which was confirmed by Alexander and current intelligence officials, NSA's Chief Technical Officer, Patrick Dowd, is allowed to work up to 20 hours a week at IronNet Cybersecurity Inc, the private firm led by Alexander, a retired Army general and his former boss.
The arrangement was approved by top NSA managers, current and former officials said. It does not appear to break any laws and it could not be determined whether Dowd has actually begun working for Alexander, who retired from the NSA in March.
In a statement in response to inquiries by Reuters, NSA spokeswoman Vanee Vines said, "This matter is under internal review. While NSA does not comment on specific employees, NSA takes seriously ethics laws and regulations at all levels of the organization."
Current and former U.S. intelligence officials, some of whom requested anonymity to discuss personnel matters, said they could not recall a previous instance in which a high-ranking U.S. intelligence official was allowed to concurrently work for a private-sector firm.
They said it risked a conflict of interest between sensitive government work and private business, and could be seen as giving favoritism to Alexander's venture. IronNet Cybersecurity is developing a new approach to protect computer networks from hackers and is marketing it to financial institutions and other private-sector firms.
Alexander, who was the eavesdropping and code-breaking agency's longest-serving director, confirmed the arrangement with Dowd in an interview with Reuters. He said he understood it had been approved by all the necessary government authorities, and that IronNet Cybersecurity, not the government, would pay for Dowd's time spent with the firm.
Dowd, he said, wanted to join IronNet, and the deal was devised as a way to keep Dowd's technological expertise at least partly within the U.S. government, rather than losing him permanently to the private sector.
"I wanted Pat to stay at NSA. He wanted to come on board," Alexander said.
He acknowledged that the hybrid arrangement "is awkward," but added, "I just felt that his leaving the government was the wrong thing for NSA and our nation."
Dowd did not respond to requests for comment.
Alexander and Dowd have jointly filed patents based on technology they developed while at the NSA. Alexander said the cybersecurity techniques that IronNet is developing are not based on those patents.
The NSA's review comes at a sensitive time for the electronic spy agency, which last year went through the worst crisis in its 62-year history following revelations by former contractor Edward Snowden of widespread government electronic surveillance.
The NSA, whose technological wizardry helped the U.S. government eavesdrop on Soviet leaders during the Cold War and is an important ingredient in the Obama administration's counter-terrorism efforts, is based in Fort Meade, Maryland, about 25 miles (15 km) from Washington D.C., where IronNet is headquartered.
In an earlier statement to Reuters, spokeswoman Vines said that "under ethics rules, senior executive employees, among others, are required to obtain written permission through their supervisors if they wish to pursue outside employment with a prohibited source."
Stewart Baker, a former NSA general counsel, said that he had never heard of an arrangement under which an NSA executive is allowed to work part time for a private company presumed to be involved in some of the same type of business as the NSA.
"I agree this is unusual," Baker said, adding, "It's complex, but probably manageable."
Baker said that there is already a program in place which allows government executives to leave, spend some time in the private sector, and then return to government without giving up seniority or other rights. Such arrangements traditionally require a total break with government service.
Paul Rothstein, a criminal law and ethics professor at Georgetown University law school, said the arrangement in which NSA is allowing Dowd to work part time for Alexander's company "seems problematic."
"If it isn't structured very carefully, this runs the risk of conflict of interest and disclosure of national secrets," Rothstein said. "It is a situation that in the interests of good government should be avoided unless there's some very strong reason to do it." (Editing by Jason Szep, Toni Reinhold)