WASHINGTON (Reuters) - Former National Security Agency director Keith Alexander has ended a deal with a senior U.S. intelligence official allowing the official to work part-time for his firm, an arrangement current and former officials said risked a conflict of interest.

Former National Security Agency Director Keith Alexander participates in a panel discussion at the Center for Strategic and International Studies (CSIS) in Washington, June 2, 2014. REUTERS/Yuri Gripas

Reuters reported on Friday that the U.S. National Security Agency had launched an internal review of the arrangement between NSA Chief Technical Officer Patrick Dowd and IronNet Cybersecurity Inc, which is led by Alexander, his former boss.

On Tuesday, Alexander said: “While we understand we did everything right, I think there’s still enough issues out there that create problems for Dr. Dowd, for NSA, for my company,” that it was best for him to terminate the deal.

U.S. intelligence officials past and present said the agreement risked a conflict of interest between sensitive government work and private business, and could be seen as giving favoritism to Alexander’s venture, even if the deal was approved by NSA lawyers and executives.

Alexander, who stepped down in March and has moved rapidly to build a lucrative cybersecurity business, said that he spoke to Dowd on Monday night and that it was his understanding Dowd would remain at the NSA.

Attempts to reach Dowd were unsuccessful. The NSA declined to comment beyond a statement issued on Friday in which it said it was reviewing Dowd’s work arrangement with IronNet.

Under the now-defunct deal, Dowd was to have stayed in government service but work up to 20 hours a week at IronNet, which would pay him for his time there.

The arrangement had been approved by top managers at the NSA, which specializes in electronic eavesdropping, code breaking and protecting U.S. military and intelligence computer networks from intrusion.

Following inquiries by Reuters, an NSA spokeswoman said on Friday that the deal between Alexander and Dowd was under “internal review.”

The deal also came in for criticism on Capitol Hill. The Senate Intelligence Committee has asked for a copy of NSA’s internal review, a congressional official said on Monday.