The practice of 'outsourcing' work to subcontractors is one that has been around for a long time in the private sector, but it became popular in government especially after Reagan was elected and he deemed that 'government was too big', and that was 'bad' for society. Action required: reduce the size of government, which really meant reduce the welfare state and upgrade corporate welfare, as Ralph Nader used to say. Reagan launched a massive effort to strengthen corporate welfare, using the public sector (taxpayer money) to strengthen private enterprise, and that included outsourcing federal government jobs in every agency.
Given that the private sector was weakening amid global competition after the Vietnam war, government became the pillar of support in a more direct manner than it had before. In part to circumvent federal hiring limits and to act quickly, government hires contractors who are paid more than public employees, but they can be dismissed easily. On the other hand, government agencies have become a farm system for contractors, as the CIA has acknowledged.The morale of the public employees has been sinking along with the sense of apprehension that their jobs are evaporating and their agencies are used to farm out work.
Outsourcing intelligence services may make sense on the surface, because the field is technology-driven and it does project the image that by some magic the private contractor is more efficient than the slothful federal employee. On the surface it appears that it may be cheaper and faster to farm out work to contractors - currently half of intelligence contracted work is in computers, management, planning, and personnel.
All of this started after 9/11 when Bush and congress raised CIA funding from $26.6 billion in 1997 to $44 billion in 2005. Between 50 and 60 percent of the budget goes to private contractors in every area from analysts and computer personnel to field personnel. Similarly, the Defense Intelligence Agency (DIA) spends about half of its budget on contractors, as does the National Clandestine Service (NCS). Among the corporations receiving contracts are AT and T, Verizon, Narus, Verint, the last two that have a working relationship with Israeli intelligence MOSSAD; a problem for the US given that information is sold and trades hands owing to profit motive.
There is a disturbing pattern between the private contractors and America's pro-Israel policy, but even worse is Israel's spying on the US and lack of congressional oversight and accountability for contractors. Even progressive Democrats would not call for public congressional hearings on the mercenary spy business that extended into domestic operations and created a climate of secrecy and police-state atmosphere.
Relying on private industries for intelligence means that very sensitive information passes through hands of people whose loyalty is to 'for-profit corporation' with only one motive, getting more contracts. The private sector has a motive for perpetuating its existence and generating profits means generating crises. Some in government, a few in the media and in academia have warned that lack of congressional oversight of private intelligence industry, the fastest growing in the US in the last five years, poses a major problem.
That the Defense Intelligence Agency spends 70% of its $50 billion budget on private contracts gives enormous leverage to contractors, as the Director of National Intelligence (DNI) has acknowledged. The US currently has 'top secret security clearance' employees who are about 1.5 times the population of Washington - more than 850,000 including private contractors. Who knew that an open democratic society society would have such a large number of 'intelligence' officers, many of them spying on their own citizens! Welcome to TOP SECRET AMERICA!
While there were contractors before 9/11, the number rose to the degree that the DNI became dependent on outsourcing, thereby completely transforming the Cold War intelligence bureaucracy into a 21st century private contractor machine. All this may sound great for advocates of less government and strengthening the private sector. But has privatization of spying enhanced US national security, or has it been a case of one disaster after another and countless cases of corruption as critics charge? Does it make any difference if a federal government employee is analyzing intelligence data or a private contractor, or if computer maintenance is carried out by CIA employees or a private contractors, even if the latter costs a great deal more to the taxpayers?
Because intelligence budgets are secret, it is impossible for the public to have any sense of what contractors are doing with the billions of taxpayer dollars. Lack of accountability and the myth that contractors are 'better and more efficient' than federal government employees means that the cult of outsourcing precludes criticism for fear of appearing to go against the trend. Those who know people working in federal government are well aware of this fear. For a number of years, the stigma is with the federal government employee, while the glory is with the private contractor. But what if the private contractors have been manipulating intelligence data on terrorism, cheating and overcharging the government, engaged in official corruption, and what if they are generating and/or manufacturing crises with the use of such data to keep renewing their contracts? If so, is democracy in the hands of elected officials or have mercenaries hijacked it?
After six years of spying in the hands of private contractors, has the US made any progress in fighting terrorism? By the way, whatever happened to capturing Osama Bin Laden and eliminating al-Qaeda? CIA director Leon Panetta has stated that there are only a couple of hundred al-Qaeda operatives in the mountains of Pakistan and Afghanistan, but the US has close to one million 'intelligence' people dedicated to fighting this terrorism beast that seems to be growing with each contract offered to a private corporation! And all this while the US may still secretly be cutting deals with war lords in Afghanistan?
Where is the empirical evidence that private contractors have served national security interests better than federal employees? The government has created a huge problem in the intelligence field, as former CIA officer Robert Baer admitted: “Everyone I know in the CIA is leaving and going into contracting whether they’re retired or not.” Why not receive higher pay for doing the same work? Do we not live in the age of market ideology?
The mainstream media has had some reports that are critical of outsourcing intelligence, but in general there is a conspiracy of silence about intelligence contractors, even when they are involved in money scandals or death squads as has been the case with a number of them. Advising reducing dependence on private contractors, the Senate Intelligence Committee has found that the average annual cost of an intelligence contractor is double that of a government officer. Such reductions however are very difficult today because the private contractors are politically entrenched with powerful political allies in Congress and private sector. The House Permanent Select Committee on Intelligence has been equally skeptical about private contractors.
One of the country's largest intelligence contractors, Science Applications International Corp., has spent millions on congressional lobbying to make sure the billions in outsourcing contracts keep on coming. It is virtually impossible for politicians to go up against intelligence contractors like Lockheed Martin, Northrop Grumman, SAIC, General Dynamics, L-3 Communications, Booz Allen Hamilton, CACI International, DRS Technologies and Mantech International. It helps outsourcing of course to have former intelligence officials like George Tenent who earns millions as a consultant to four private intelligence firms.
Lawmakers support contractors from their districts because it means delivering jobs, but there are also the bribes that flow from these firms to politicians. In March 2006, Randy “Duke” Cunningham (R-Calif) resigned from congress and was sentenced to 8 years in prison for accepting $2 million from MZM defense contractor. The 'Duke' helped deliver tens of millions in intelligence contracts to his patrons mostly for spying on US citizens. The Cunningham case helped expose former CIA deputy director Kyle “Dusty” Foggo for steering contracts to MZM. Arizona Republican congressman Rick Renzi was also caught trying to steer contracts to intelligence contractor Mantech International where the congressman's father is an executive.
More than $75 billion for intelligence and how are taxpayers' interests served? Scandal and corruption, overcharging and no congressional accountability, declining morale among intelligence officers, conflict of interest on the part of private companies working for more than one government, death squad killings that further aggravate the very problem the US is supposedly trying to fix. What does the trend of outsourcing government services as sensitive as intelligence tell us about the nature of government? Is this a democratic government by people and for the people, or is it government by corporations and for corporations. Why stop here? Why not privatize government in its entirety, including the IRS and have people pay corporations directly?