Janine Wedel - Unaccountable - How Elite Power Brokers Corrupt Our Finances, Freedom, and Security

The window, for its part, has become opaque because transparency has gone AWOL too. We are in the “information age,” right? Yet the amassing of information often does not benefit us, the public. The shadow government’s rise is draining the government’s “brain”—meaning its information, expertise, institutional memory, personnel, and practically everything that would enable government not only to know what’s going on, but to oversee its contract employees. 6Information that once was or should be in official hands is being privatized, ceded to government contractors at a time when government agencies have diminished capacity to monitor them, especially in real time.

And while government contractors like Booz Allen, SAIC, and Northrop Grumman are well known, some prefer anonymity. Case in point: Endgame Systems, founded in 2008 to ride the cyber defense tsunami. 7“‘We’ve been very careful not to have a public face on our company,’” wrote a former Endgame vice president to a business colleague. That e-mail surfaced in a WikiLeaks dump and is quoted here from what was reported by Wired magazine. The company’s founder added: “‘We don’t ever want to see our name in a press release.’” As Wired commented, “Endgame is transparently antitransparent.” 8Its anonymity, of course, obscures what is being done in the name of the American people.

In this “antitransparent” company-state, many public priorities and decisions are driven by contractor companies instead of government officials and agencies that must answer to citizens, with officials only signing on the dotted line. In piles of reports from the Government Accountability Office (GAO, the watchdog agency of Congress), inspectors-general audits of agencies, and congressional testimony, investigators have asked whether government has the information, expertise, institutional memory, and personnel to manage contractors—or is it the other way around? 9And who really sets policy—government, or contractors?

These questions are especially pressing when it comes to rapidly expanding portfolios, such as cyber security, a $30 billion annual government business, almost entirely in private hands. Wired calls this the “cyber-industrial complex.” 10

As you’ll see from the various examples provided in this chapter, the interface between state and private, and the lack of accountability therein, runs the gamut. There are agencies that are so strapped for expertise and manpower that they contract with companies saddled with glaring conflicts, and provide little or no government monitoring. These firms are often filled with former government workers now earning higher salaries than they would or did with the government and effectively carrying out tasks that should be performed by the agencies themselves.

Aside from contracting, the company-state also encompasses agencies that have mixed mandates, directing them to promote the very industries they are supposed to be regulating. More to the point, businesses aren’t just sidestepping or fighting regulators: their MO is to try to make themselves the de facto regulators of their own activities. As in the case of BP and the oil spill it caused, which we’ll explore later, this can have catastrophic results.

Then there are arenas that have evolved into seamless operations in which government work and core functions are totally meshed with companies (and other “private” entities) in nearly indistinguishable forms. In these cases, “accountability” and the “public interest” seem as anachronistic as the vocabulary of the charmed past.

Consider, for example, Booz Allen.

THE SHADOW INTELLIGENCE COMMUNITY

Booz Allen has been called the “shadow IC (intelligence community)” (by a former CIA deputy director) and “the world’s most profitable spy organization.” 11With the Carlyle Group (a prominent private equity firm) its majority owner, Booz has been at the forefront of the mass explosion of intelligence, “homeland security,” and military contracting-out that followed 9/11. 12In 2008, the company was ranked the “No. 1 Consulting Company by Federal Revenue and a Top 10 contractor for Department of Homeland Security headquarters.” 13With some seventy percent of the U.S. intelligence budget now outsourced, Booz Allen’s operating profits have soared in recent years. 14The company now boasts an annual revenue of nearly $5.8 billion, upwards of half of which derives from U.S. intelligence and military agencies and nearly all of which is from government contracts. 15Keep in mind that in the case of a contractor, their revenue is actually your taxpayer dollars. In the past few years, Booz Allen’s profit margins have grown much faster than the company’s sales would indicate, suggesting that, at least in this aspect of the company-state partnership, the company has the upper hand. 16

Based in McLean, Virginia, the consulting giant employs some 24,500 people, the majority in the Washington area. 17Its clients range from the Department of Homeland Security to the Department of Defense and the U.S. Army, to the Internal Revenue Service and the Department of Health and Human Services.

While Edward Snowden was (briefly) part of the Booz rank-and-file, earning $122,000 a year, the Booz Allen leadership is a case study in how melding state and private power can create a black hole of accountability. 18

The DNI-Booz Fuse

Let’s consider the relationship that’s emerged between Booz Allen and the nation’s top intelligence official—the Director of National Intelligence (DNI), the position created after 9/11 to integrate what were then deemed dangerously fractured operations of the intelligence community. The DNI heads the Office of the Director of National Intelligence (ODNI), leading and overseeing the work of the U.S. government’s sixteen intelligence agencies and reporting directly to the president.

In 2007, for the first time in the sixty-year life of the intelligence community, a government contractor was appointed to head it. 19When President Bill Clinton’s former NSA director, Vice Admiral (Ret.) John Michael “Mike” McConnell, was named DNI after a decade as vice president at Booz Allen, he was asked what it was like to be back in government. In a telling statement, he unabashedly said to the New York Times that his work as a (Booz Allen) consultant “has allowed me to stay focused on national security and intelligence communities as a strategist and as a consultant. Therefore, in many respects, I never left [government].” 20

Indeed.

McConnell is not just spinning through the proverbial revolving door. It’s almost as if the door has disappeared completely. As journalist Glenn Greenwald noted in 2010, several years before he helped break the Snowden revelations: 21

It isn’t that people like Mike McConnell move from public office to the private sector and back again. That implies more separation than really exists. At this point, it’s more accurate to view the U.S. Government and these huge industry interests as one gigantic, amalgamated, inseparable entity—with a public division and a private one. When someone like McConnell goes from a top private sector position to a top government post in the same field, it’s more like an intra-corporate re-assignment than it is changing employers. When McConnell serves as DNI, he’s simply in one division of this entity and when he’s at Booz Allen, he’s in another, but it’s all serving the same entity.

“Same entity,” yes. But players earn very different pay depending on their role. When McConnell wears his public hat, he earns less than $250,000 a year; when he puts on his private hat at Booz Allen, that salary jumps at least tenfold. Clearly, that time in public service pays off. 22