Janine Wedel - Shadow Elite - How the World's New Power Brokers Undermine Democracy, Government, and the Free Market

An example of venture capital funds is the Enterprise Funds set up with U.S. aid money in Central and Eastern Europe after the fall of communism. For an analysis of how the Enterprise Funds functioned in the region, see Janine R. Wedel, Collision and Collusion: The Strange Case of Western Aid to Eastern Europe (New York: Palgrave, 2001), pp. 180–194. See also Kosar, The Quasi Government , p. CRS–27.

Federal advisory committees are provided for in the Federal Advisory Committee Act (FACA), which allows most federal agencies to have boards, but only applies to agencies. Boards also can be established by statute. See, for example, GAO, Federal Advisory Committees: Additional Guidance Could Help Agencies Better Ensure Independence and Balance , Washington, DC: GAO, GAO-04–328, April 2004; and Twenty-Seventh Annual Report of the President on Advisory Committees, Fiscal Year 1998 . In 2007 there were 52 agencies with 915 “active” federal advisory committees. GAO, Federal Advisory Committee Act: Issues Related to the Independence and Balance of Advisory Committees Statement of Robin M. Nazzaro, Director, National Resources and Environment , Washington, DC: GAO, GAO-08–611T, April 2008, p. 1, http://www.gao.gov/new.items/d08611t.pdf. The number of members sitting on federal advisory committees grew from some 52,000 in 2000 to 67,000 in 2006, while the number of committees oscillated between 900 and 1,000 during the same period. Jim Morris and Alejandra Fernandez Morera, “Network of 900 Advisory Panels Wields Unseen Power: Concerns Raised about Secrecy, Industry Influence and Political Interference,” The Center for Public Integrity, March 29, 2007, at http://www.publicintegrity.org/shadow/report.aspx?aid=821 (accessed 8/6/2007). The quote and other information are from the GAO, Federal Advisory Committee Act: Issues Related to the Independence and Balance of Advisory Committees Statement of Robin M. Nazzaro, Director, National Resources and Environment , Washington, DC: GAO, GAO-08–611T, April 2008, p. 1, http://www.gao.gov/new.items/d08611t.pdf; and GAO, Federal Advisory Committees: Additional Guidance Could Help Agencies Better Ensure Independence and Balance , Washington, DC: GAO, GAO-04–328, April 2004, http://www.gao.gov/new.items/d04328.pdf, p. 14.

11. The exchange with Alfred Regnery was at a book talk and signing event, Washington, DC, August 9, 2008. The book is Alfred S. Regnery, Upstream: The Ascendance of American Conservatism (New York: Threshold Editions, 2008).

12. On bipartisan support for shadow government, see Dan Guttman, “Contracting, an American Way of Governance: Post 9/11 Constitutional Choices,” Meeting the Challenge of 9/11: Blueprints for More Effective Government , Thomas H. Stanton, ed. (Armonk, NY: M. E. Sharpe Publishers, 2006), pp. 233, 236.

13. Regarding efforts to cap or reduce the number of civil servants: From 1940 to 1997, there were 24 pieces of legislation or executive actions to limit the number of civil servants who could be hired, to stop their hiring, or decrease their total number. During the same period, there were only 10 pieces of legislation or executive actions that created the potential to increase the civil service. Paul Light, The True Size of Government (Washington, DC: Brookings Institution Press, 1999), pp. 207–209. The number of contractor and grantee jobs as a proportion of the total federal workforce (contractor and grantee jobs plus federal civil servants, uniformed military personnel, and postal service workers) increased steadily over a dozen years, from 59 percent in 1990, to 61 percent in 1993, 63 percent in 1999, and 66 percent in 2002. Paul C. Light, “Fact Sheet on the New True Size of Government,” Center for Public Service, The Brookings Institution, http://www.brookings.edu/gs/cps/light20030905.pdf. In 2008, Light calculated that the contract workforce consisted of upwards of 7.6 million employees, or “three contractors for every federal employee.” Paul C. Light, “Open Letter to the Presidential Candidates,” Huffington Post , June 25, 2008. With regard to data predating 1990, comparing 1984 to 1996 (earlier and annual data between these years are not available), the ratio of contractor and grantee workers to civil servants decreased 4.3 to 1 in 1984 to 4.2 to 1 in 1996 (Paul Light, The True Size of Government , pp. 198–199). This relative decrease is attributable to drastic cuts in defense contracting associated with the end of the Cold War. However, when defense jobs are excluded, the ratio of contractor and grantee workers to civil servants increased from 3.5 to 1 in 1984 to 3.9 to 1 in 1996 (Ibid., pp. 41, 198–199.) In recent years defense and homeland security jobs have accounted for a sizeable portion of the growth in government outsourcing.

14. With respect to the rise in federal dollars spent on contractors’ services: These figures are calculated from data available on the Federal Procurement Data System (FPDS), at https://www.fpds.gov/. While the FPDS data base shows the 2001 service figures by category, the 2008 data base does not. The total combined figure of goods and services for 2008 is $534 billion. Because procurement spending on services currently accounts for more than 60 percent of total procurement dollars, the $320 billion figure given is 60 percent of $534 (see http://www.fpdsng.com/downloads/agency_data_submit_list.htm). For the assessment that “procurement spending on services accounts for more than 60 percent of total procurement dollars,” see Report of the Acquisition Advisory Panel to the Office of Federal Procurement Policy and the United States Congress , January 2007, p. 3, http://acquisition.gov/comp/aap/24102_GSA.pdf.

The latest FPDS data in which services are compiled by category are for 2006, and the figure for that year is $244.7 billion. See Federal Procurement Data System, “Federal Procurement Report 2006: Section 1 Total Federal Views,” pp. 31–32, http://www.fpdsng.com/downloads/FPR_Reports/2006_fpr_section_I_total_federal_views.pdf. The number was calculated by adding total spending on R&D (p. 31), plus total spending on other services (p. 32). No more recent compilation of these numbers is available as of July 2009.

In 2008, the figure for NASA was 88 percent. $15.1 billion in contract spending (http://www.fpdsng.com/downloads/agency_data_submit_list.htm) divided by total NASA budget—$17.1 billion, reported in OMB’s 2009 Historical Tables, Office of Management and Budget, “The Budget for Fiscal Year 2009, Historical Tables,” p. 105, http://www.gpoaccess.gov/USbudget/fy09/pdf/hist.pdf. The 2008 figure for Energy was 88 percent. $24.6 billion in contract spending (http://www.fpdsng.com/downloads/agency_data_submit_list.htm) divided by total Energy budget ($27.8 billion in appropriated funds before offsetting receipts, http://www.cfo.doe.gov/budget/09budget/Content/AppropStat.pdf).

With regard to the portion of government purchases now spent on work previously performed by the civil service: The proportion of services, as compared with total procurement (goods and services) went from 39 percent at the end of the Reagan administration (FY 1988) to 46.5 percent at the beginning of the Clinton presidency (FY 1993) to approximately 60 percent in 2006 (see https://www.fpds.gov/). See also Project on Government Oversight, “Pick Pocketing the Taxpayer: The Insidious Effects of Acquisition Reform, Revised Edition,” March 11, 2002, http://www.pogo.org/pogofiles/reports/contract-oversight/pickpocketing-the-taxpayer/co-rcv-20020311.html. The 2007 report of the Acquisition Advisory Panel assessed that “procurement spending on services accounts for more than 60 percent of total procurement dollars” ( Report of the Acquisition Advisory Panel to the Office of Federal Procurement Policy and the United States Congress , January 2007, p. 3, http://acquisition.gov/comp/aap/24102_GSA.pdf).