Updated 3:48 p.m.

Ever since WikiLeaks began releasing a series of documents about the surveillance system Trapwire, there's been a panicked outcry over this supposedly all-seeing, revolutionary spy network. In fact, there are any number of companies that say they comb through video feeds or suspicious activity reports in largely the same way that Trapwire claims to do. What's truly extraordinary about Trapwire was how it was marketed by the private intelligence firm Stratfor, whose internal e-mails WikiLeaks exposed.

The documents show Stratfor being less than straight with its clients, using temporary jobs in government to set up Trapwire contracts, and calling it all a "wet dream." In their e-mails, executives at Stratfor may have been hyping up a surveillance technology. But what they really did was provide reconnaissance on the $25 billion world of intelligence-for-hire that's ordinarily hidden from public view. In this case, the sunlight isn't particularly flattering.

>'Once Fred is the #2 dude in the Texas Department of Public Safety, he is going get $1,500,000 to install TrapWire.'

On Nov. 4, 2009, Fred Burton, the vice president of the private intelligence firm Stratfor, co-wrote an essay on emerging terrorist threats and the means to stop them. Particularly impressive, Burton wrote, was a new software tool called Trapwire, which works "with camera systems to help detect patterns of preoperational surveillance ... to help cut through the fog of noise and activity and draw attention to potential threats."

The essay was typical of the trend analyses, news summaries, and hot tips that Strator provides every day to its customers in government and in industry. For these services, Burton's clients pay his firm handsomely; a single Stratfor enterprise license costs more than $20,000 (.pdf). These customers rely on Burton and his team to provide the latest word from flashpoints worldwide – and to explain what this torrent of information all means. They count on Stratfor to help make sense of the world.

What his customers reading that November 2009 essay may not have realized was that Burton was also marketing them a product. On Aug. 17 of that year, Stratfor and Trapwire signed a contract (.pdf) giving Burton's company an 8 percent referral fee for any business they send Trapwire's way. The essay was partially a sales pitch – a fact that Burton neglected to mention.

After the November 2009 essay, Burton told a fellow Stratfor executive: "I plugged TrapWire in our weekly [report] that has gone out to thousands.... Hopefully, it would generate some business."

That's a breach of trust and possibly worse, says Matthew Aid, author of Intel Wars: The Secret History of the Fight Against Terror. "It's a conflict of interest."

"If I was one of Stratfor's business clientele or government clientele, I'd be a little alarmed or a little confused or both," adds Aid, a former executive at the private intelligence firm Kroll Associates. "If you don't tell the people who are paying for your products caveat emptor [buyer beware] ... that's constructive fraud, to use a legal term."

Trapwire did not immediately respond to e-mail and telephone inquiries from Danger Room. Stratfor declined to comment.

NYPD commissioner Ray Kelly. Stratfor says the department uses surveillance tech from its partner Trapwire; the NYPD says that's not so. Photo: NYP

The pattern repeated itself on Sept. 25, 2010. Burton launched his public blog with a post lauding Trapwire, which was, in his words, "leading the way" in video analytics. "A suspect conducting surveillance of an HVT [high-value target] in one city can ... be spotted by TrapWire conducting similar activity in another location, connecting the infamous dots," he added. "I can also see the tool being very effective in identifying general street crime as well." Again, clients were not told of Stratfor's relationship with Trapwire.

And Stratfor did more than promote Trapwire in Burton's writing, as independent journalist Ben Doernberg discovered as he sifted through the WikLeaked emails. In the late summer of 2009, Fred Burton was appointed as the Texas Department of Public Safety's assistant director for intelligence. To Stratfor president Don Kuykendall, the convergence of the Trapwire contract and the Burton appointment were a potential gold mine.

"Fred has said that, once he is #2 dude in the Texas DPS (September oneth) that he is going use the appropriated $1,500,000 to install TrapWires [sic] product on the Texas border," Kuykendall wrote on August 22, 2009. "George, 8% X $1,500,000 = $120,000 for the good guys. Now, this all could be a wet dream, but stranger things have happened."

Burton only stayed with the Texas DPS a few months. But he and the company continued to use his connections with the department to promote the surveillance system. On Dec. 18, 2009, Strafor executive Patrick Boykin told Burton that the Texas Department of Public Safety would be signing up as a Trapwire customer. In an e-mail entitled "Trapwire and Perry" – an apparent reference to Texas governor Rick Perry – Boykin reported, "I talked with a good friend of mine, Patrick Rose, Texas rep [state representative] for Dripping Springs and he said that come March its [sic] full on again."

When the Trapwire contract didn't immediately follow, Burton began tapping his government contacts. On March 30, 2010, for example, Burton reached out to Blake Sawyer of the Texas DPS to see if Trapwire was "on the schedule" to be purchased by the agency. Burton sent a similar note on April 2, a follow-up on May 22, and a fourth note on July 6.

On July 16, Burton reported to his colleagues that "TrapWire for the Great State of Texas is a go. Cash should begin to flow to Abraxas within 10 days. As many of you old-timers know, we arranged to get a cut. I think the first dump is $250,000 to Abraxas, with an annual renewal of $150,000 per year for the TrapWire license. The point man for the project worked directly for me at DPS."

Even without the Texas contract, Trapwire already had a rather impressive client roster. "We have the Pentagon, Big Army and the USMC [United States Marine Corps] on the system now. Navy's next on the list," Burton crowed in July of 2011. Police departments in Washington D.C., Los Angeles, and New York City were also testing out the system, according to the WikiLeaked e-mails. (NYPD chief spokesman Paul Browne flatly denied this to The New York Times, saying "We don’t use TrapWire.”)

When these documents began surfacing last week, it was greeted by some of the unveiling of a vast, Orwellian network that had previously lurked just beyond public view. "A detailed surveillance system more accurate than modern facial recognition technology," announced Russia Today, the Kremlin-funded news service. Infowars.com proclaimed that "Big Brother Now Monitors Your Every Move."

But video analytics firms have been promoting their relative omniscience for more than a decade – often with disappointing results. In 2008, for example, the NYPD announced a new surveillance camera network for lower Manhattan, and publicly promised that it would catch terrorists before they struck. In private, police officials admitted that the cameras were more for show than for terror prevention. "The cameras become a great subject for conversation because they'll all be in public areas," one NYPD official told me at the time. "Quite frankly, we want people to see them."

These video analytics systems are good at analyzing crime scenes – after the fact. They can spot a truck entering through an exit or a bag left on a subway platform. With precisely the right lighting conditions, they can occasionally identify a face. Beyond that – well, be careful about taking Stratfor's promises and promotion as the literal truth, cautions Tim Shorrock, author of Spies for Hire: Inside the Secret World of Intelligence Outsourcing. "You've got to be so skeptical of what these contractors say – even to each other," he says.

Especially because, to Strafor, every new Trapwire installation was an opportunity to upsell more products.

"The agencies with TW are potentially the single biggest captive audience we have that could purchase something from us especially in the govt arena. Do you know how much a Lockheed Martin would pay to have their logo/feed into the USSS CP? MI5? RCMP? LAPD CT? NYPD CT?" Burton asked, using the acronyms for the U.S. Secret Service, the British security service MI5, the Royal Canadian Mounted Police, and the counterterrorism divisions of the Los Angeles and New York Police Departments. "Its [sic] unbelievable access. Either we handle this one right, or we'll fall flat on our faces."

A May 31, 2009 e-mail from Kuykendall illustrates other ways that the company looked to turn its connections into cash. The message describes a set of potential contracts in Mexico for the Dutch chemical concern LyondellBasell.

One - a $28,000 "easy" one and another ... to determine the effort and $$$$$$$$$ from me after getting the info. Also out there with LyondellBasell is a biggie we priced at $300,000 which is centered around Fred [Burton]'s cashing in some chits in Mexico. This has nothing to do with time spent - it's all about introductions to the right people which is VALUE to LyondellBasell. This is "easy money" and therefore has low probability of getting done. LyondellBasell is loosing [sic] between $1,500,000 and $5,000,000 / year on the local Mexicans skimming production from one of their plants in Mexico. I'm not counting on this. The company is taking our proposal to their Board next week.

Stratfor's now-famous business partner, Trapwire Inc., began as a division of Abraxas Corporation, one of the more prominent intelligence contractors to crop up after the 9/11 attacks. Begun by Richard "Hollis" Helms, the former head of the CIA's European division, the company grew so quickly that by 2005, Helms boasted it was "the largest aggregate of analytical counter-terrorism capabilities outside of the U.S. government." The CIA began entrusting Abraxas with one of its most sensitive tasks: constructing false identities, front companies, and cover stories for agents traveling overseas. At one point, so many CIA employees were jumping ship for Abraxas that the director of the CIA asked it, and a handful of other firms, to stop recruiting in the agency cafeteria.

Today, contractors make up about one-third of the 845,000 people with top-secret security clearances in this country, the Washington Post estimates. It's safe to assume that at least the same portion of the $80 billion annual intelligence budget goes to these outside firms. The Post counted 1,931 private companies in nearly 10,000 locations across America working on counterterrorism, homeland security and intelligence efforts.

In 2009, most of Abraxas was sold off to the defense contractor Cubic Corporation. Trapwire was not included in the deal; it hadn't generated the revenue that executives had expected when the product was first launched. On Monday, Cubic took the unusual step of issuing a press release stating that it has "no affiliation" with the surveillance firm. If only everyone in this sordid story was so clear about their corporate connections.