Washington (CNN) -- The Department of Defense has launched an investigation into whether a $24 million contract to gather information about developments in towns and villages in Afghanistan and Pakistan may have been inappropriately used instead to run an ad hoc spy ring, according to U.S. military officials.
Concern within the Central Intelligence Agency about the contract prompted the investigation, officials said.
An investigation by the Defense Department's inspector general is under way, according to a U.S. defense official. It's not clear whether that is the only investigation.
The contract was meant to be limited to gathering what is known as "open-source information," in which material is gathered in an unclassified manner from, for example, local media and public events. The contractors may have instead hired local agents to gather information on the specific locations and movements of particular individuals and passed it along to military officials for possible lethal strikes, according to government officials and private-sector businessmen familiar with the investigation.
Military officials say the concern is that contract money used for open-source information cannot be used to target individuals. But a source close to the man overseeing the program says there is an exception if there is a demonstrated threat to U.S. forces and "force protection can be invoked as a reason."
The investigation centers on a program overseen by Michael Furlong, a DOD official who oversaw contracts aimed at gathering information about Afghanistan and Pakistan.
CNN tried to contact Furlong, but he declined to talk.
The New York Times first reported the investigation on Monday.
Two of the three companies hired in the program, according to the Times, included American International Security Corporation and International Media Ventures, neither of which could be reached for comment.
The third company, Afpax, was contracted about two years ago and is run by Eason Jordan, a former CNN news executive who established a company to gather open-source information about Afghanistan.
Jordan, in an interview with CNN, said his company was gathering only open-source information under a contract overseen by Furlong.
Jordan confirmed to CNN that his company is cooperating with the investigation into Furlong's operations. Jordan is partners in Afpax with author Robert Pelton. Pelton told CNN the story first emerged because the CIA leaked a classified memo written by its station chief in Afghanistan to the Pentagon complaining about Furlong's activities.
A CIA complaint to the military in early December got the investigation started, according to a government source and another source close to Furlong. The CIA's Kabul station chief wrote a memo to a counterpart in military intelligence questioning Furlong's activities, according to a U.S. official. The official declined to go on the record because of the sensitivity of the ongoing investigation.
The U.S. official says the CIA and Department of Defense "are of one mind on this."
Rear Adm. Gregory Smith, director of strategic communications for the U.S.-led force in Afghanistan, told CNN the original work proposed by Furlong seemed to lack clarity.
"There was ambiguity about how they were going to collect information," he said, and about whether Afghans were to be used to do the work, and how the information might be used.
"None of us were comfortable with what this contract meant. We wanted to know how they were going to glean information," Smith said.
Smith said he subsequently terminated Furlong's effort last year because of his concerns. He estimates he spent $6 million to $7 million of the funds allocated and does not know what happened to the balance of the contract money.
Furlong works as a strategic planner and technology integration adviser at the Joint Information Operations Warfare Command at Lackland Air Force Base in Texas, according to his military biography. His job entails analyzing information-operation needs and developing "strategic information plans," including assessing and refining communication plans and developing programs to meet the information operations needs of the military, according to the biography.
He served in the Army for 25 years, working for the Joint Chiefs of Staff and U.S. Special Operations Command, among other assignments, and has numerous military awards. He has worked as a contractor and in the private sector since 1997.
The source close to Furlong told CNN he did nothing wrong.
Furlong "doesn't do anything with targeting or vetting. He just takes open-sources information and provides it to the intelligence community if he thinks its of interest to them," the source said.
The status of two companies Furlong appeared to have used -- American International Security Corporation and International Media Ventures -- is not clear. Afpax is still operating but not working on its original effort.
"We were promised several million dollars to do this properly," Afpax's Jordan said. But his company wound up receiving only two payments "in the hundreds of thousands of dollars," Jordan said, adding that Furlong told him "there was diminished interest in what we were doing and there were other priorities."
American International Security Corporation and International Media Ventures may have used contractors to gather intelligence.
Jordan, who emphasized that all of his information was gathered openly, told CNN that IMV was the company that was used to pay him.
CNN's Pam Benson contributed to this report.