Chalmers Johnson - Dismantling the Empire

Reagan launched his campaign to shrink the size of government and offer a large share of public expenditures to the private sector with the creation in 1982 of the “Private Sector Survey on Cost Control.” In charge of the survey, which became known as the Grace Commission, he named the conservative businessman J. Peter Grace Jr., chairman of the W. R. Grace Corporation, one of the world’s largest chemical companies—notorious for its production of asbestos and its involvement in numerous antipollution suits. The Grace company also had a long history of investment in Latin America, and Peter Grace was deeply committed to undercutting what he saw as leftist unions, particularly because they often favored state-led economic development.

The Grace Commission’s actual achievements were modest. Its biggest success was undoubtedly the 1987 privatization of Conrail, the freight railroad for the northeastern states. Nothing much else happened on this front during the first Bush’s administration, but Bill Clinton returned to privatization with a vengeance.

According to Shorrock:

Bill Clinton . . . picked up the cudgel where the conservative Ronald Reagan left off and . . . took it deep into services once considered inherently governmental, including high-risk military operations and intelligence functions once reserved only for government agencies. By the end of [Clinton’s first] term, more than 100,000 Pentagon jobs had been transferred to companies in the private sector—among them thousands of jobs in intelligence. . . . By the end of [his second] term in 2001, the administration had cut 360,000 jobs from the federal payroll and the government was spending 44 percent more on contractors than it had in 1993.

These activities were greatly abetted by the fact that the Republicans had gained control of the House of Representatives in 1994 for the first time in forty-three years. One liberal journalist described “outsourcing as a virtual joint venture between [House Majority Leader Newt] Gingrich and Clinton.” The right-wing Heritage Foundation aptly labeled Clinton’s 1996 budget as the “boldest privatization agenda put forth by any president to date.”

After 2001, Bush and Cheney added an ideological rationale to the process Clinton had already launched so efficiently. They were enthusiastic supporters of “a neoconservative drive to siphon U.S. spending on defense, national security, and social programs to large corporations friendly to the Bush administration.”

THE PRIVATIZATION—AND LOSS—OF INSTITUTIONAL MEMORY

The end result is what we see today: a government hollowed out in terms of military and intelligence functions. The KBR Corporation, for example, supplies food, laundry, and other personal services to our troops in Iraq and Afghanistan based on extremely lucrative no-bid contracts, while Blackwater Worldwide supplies security and analytical services to the CIA and the State Department in Baghdad. (Among other things, its armed mercenaries opened fire on, and killed, seventeen unarmed civilians in Nisour Square, Baghdad, on September 16, 2007, without any provocation, according to U.S. military reports.) The costs—both financial and personal—of privatization in the armed services and the intelligence community far exceed any alleged savings, and some of the consequences for democratic governance may prove irreparable.

These consequences include the sacrifice of professionalism within our intelligence services; the readiness of private contractors to engage in illegal activities without compunction and with impunity; the inability of Congress or citizens to carry out effective oversight of privately managed intelligence activities because of the wall of secrecy that surrounds them; and, perhaps most serious of all, the loss of the most valuable asset any intelligence organization possesses—its institutional memory.

Most of these consequences are obvious, even if almost never commented on by our politicians or paid much attention in the mainstream media. After all, the standards of a career CIA officer are very different from those of a corporate executive who must keep his eye on the contract he is fulfilling and future contracts that will determine the viability of his firm. The essence of professionalism for a career intelligence analyst is his integrity in laying out what the U.S. government should know about a foreign policy issue, regardless of the political interests of, or the costs to, the major players.

The loss of such professionalism within the CIA was starkly revealed in the 2002 National Intelligence Estimate on Iraq’s possession of weapons of mass destruction. It still seems astonishing that no senior official, beginning with Secretary of State Colin Powell, saw fit to resign when the true dimensions of our intelligence failure became clear, least of all Director of Central Intelligence George Tenet.

A willingness to engage in activities ranging from the dubious to the outright felonious seems even more prevalent among our intelligence contractors than among the agencies themselves, and much harder for an outsider to detect. For example, following 9/11, Rear Admiral John Poindexter, then working for the Defense Advanced Research Projects Agency (DARPA) of the Department of Defense, got the bright idea that DARPA should start compiling dossiers on as many American citizens as possible in order to see whether “data-mining” procedures might reveal patterns of behavior associated with terrorist activities.

On November 14, 2002, the New York Times published a column by William Safire entitled “You Are a Suspect” in which he revealed that DARPA had been given a $200 million budget to compile dossiers on 300 million Americans. He wrote, “Every purchase you make with a credit card, every magazine subscription you buy and medical prescription you fill, every web site you visit and every e-mail you send or receive, every bank deposit you make, every trip you book, and every event you attend—all these transactions and communications will go into what the Defense Department describes as a ‘virtual centralized grand database.’ ” This struck many members of Congress as too close to the practices of the Gestapo and the Stasi under German totalitarianism, and so, the following year, they voted to defund the project.

However, Congress’s action did not end the “total information awareness” program. The National Security Agency secretly decided to continue it through its private contractors. The NSA easily persuaded SAIC and Booz Allen Hamilton to carry on with what Congress had declared to be a violation of the privacy rights of the American public—for a price. As far as we know, Admiral Poindexter’s “Total Information Awareness Program” is still going strong today.

The most serious immediate consequence of the privatization of official governmental activities is the loss of institutional memory by our government’s most sensitive organizations and agencies. Shorrock concludes, “So many former intelligence officers joined the private sector [during the 1990s] that, by the turn of the century, the institutional memory of the United States intelligence community now resides in the private sector. That’s pretty much where things stood on September 11, 2001.”

This means that the CIA, the DIA, the NSA, and the other thirteen agencies in the U.S. intelligence community cannot easily be reformed because their staffs have largely forgotten what they are supposed to do, or how to go about it. They have not been drilled and disciplined in the techniques, unexpected outcomes, and know-how of previous projects, successful and failed.

As numerous studies have by now made clear, the abject failure of the American occupation of Iraq came about in significant measure because the Department of Defense sent a remarkably privatized military filled with incompetent amateurs to Baghdad to administer the running of a defeated country. Defense Secretary Robert M. Gates (a former director of the CIA) has repeatedly warned that the United States is turning over far too many functions to the military because of its hollowing out of the Department of State and the Agency for International Development since the end of the Cold War. Gates believes that we are witnessing a “creeping militarization” of foreign policy—and, though this generally goes unsaid, both the military and the intelligence services have turned over far too many of their tasks to private companies and mercenaries.