<em>Shadow Elite</em>: Selling Out Uncle Sam - The Collision of State & Private Power

When government contractors hire former directors of intelligence and defense-related government agencies, they are banking on coincidences of interest between their hires and their hires' former (government) employers.
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An earlier version of this piece did not include credit on several quotes to reporter Tim Shorrock, author of Spies for Hire: The Secret World of Intelligence Outsourcing. We apologize for the omissions.

2010-08-04-unclesam.jpgThis is the fourth installment of a Shadow Elite series, investigating the game-changing effects of government contracting on the most vital government functions.

Forget the "United States of Tara". If you want to witness multiple personality disorder in action, look no further than the United States of America - the federal government workforce to be precise, which has become so thoroughly embedded with contractors that sometimes the workers themselves aren't sure who's a civil servant and who's a private hire. This intertwining of state and private power is happening at the lowest level government procurement office all the way up to Cabinet and Cabinet-level positions, creating not just operational ambiguity, and potential security lapses, but also conflicts of interest that may be near impossible to ferret out with current oversight tools.

A systemic transformation has taken place over the past decade and a half resulting in a "blended" workforce. Janine studied this development as part of her research for her book Shadow Elite and in a follow-on study (supported by the Ford Foundation), Selling Out Uncle Sam: How the Myth of Small Government Undermines National Security, which was just released. New forms of governing join together the state and the private, often most visibly in intelligence, military, and homeland security enterprises, where so much has taken place since 9/11. These forms are the body and soul of federal governing today--the system as it works in practice and the ground upon which any future changes will occur.

Contractor officials and employees are involved in all aspects of governing and negotiating "over policy making, implementation, and enforcement," as one legal scholar has noted. Yet contractors' imperatives are not necessarily the same as the government's imperatives. Contractor companies are responsible for making a profit for their shareholders; government is supposedly answerable to the public and the nation in a democracy.

Amid this environment complicated by mixed motives, new institutional forms of governing have gathered force as government and contractor officials interact (or don't) in the course of projects; as chains of command among contractors and the agencies they supposedly work for have become ever-more convoluted; as contractors perform inherently governmental functions beyond the capacity of government to manage them; and, as contractors standing in for government are not subject to the same rules that apply to government officials.

Contractors not only "work side by side and perform the same functions as their government counterparts," as the Government Accountability Office put it in a study of defense contracting, but "the line separating contractor from government employee is blurry." And contractors did not always identify themselves as such in the documents they prepared or when dealing with the public, the GAO learned. In some cases contractors were even specified on contract documents as the government's point of contact. "In situations such as these," the GAO concluded, "contractor employees may appear to be speaking for the government, a situation that could create the impression in the general public that they are government employees."

Even more troubling is the ambiguity and identity-blurring that happens further up the chain.It is telling that, nowadays, not only are salaries and perks for comparable jobs typically greater in the private sector, but, often, so is prestige. The landing spots that supply the big bucks, and with them influence and stature, are often those held by former government officials now in an industry perch.

Although there are rules to address the revolving door syndrome, companies with significant government contracts are often headed by former senior officials of intelligence- and defense-related government agencies. For instance, William Studeman went from being a director of the National Security Agency, where outsourcing has grown rapidly, to serving as a vice president of Northrop Grumman, the defense giant. Several former vice presidents of Booz Allen (the company that was called the "shadow intelligence community" by a former CIA deputy director in the book Spies for Hire, by Tim Shorrock) previously served as intelligence agency directors, including James Woolsey, who headed the CIA during the Clinton administration. A number of former defense and intelligence officials, including defense secretaries Melvin R. Laird and William J. Perry, former NSA director Bobby R. Inman, along with former CIA director and current Defense Secretary Robert M. Gates have either worked for or served on the board of defense contractor SAIC.

As one intelligence expert puts it, in a CorpWatch piece by Tim Shorrock: "The Intelligence Community and the contractors are so tightly intertwined at the leadership level that their interests, practically speaking, are identical." And what are those interests? The problem with this is that government leaders of course should be operating in the public interest, not in their own personal interest or that of, say, the contractor they are so deeply connected to. And while conflict-of-interest laws and regulations are well established, rules and practices that can address "coincidences of interest" are not. A coincidence of interest occurs when a player crafts an array of overlapping roles across organizations to serve his own agenda--or that of his network--rather than those of the organizations for which he supposedly works. Means of accountability have not evolved accordingly.

When government contractors hire former directors of intelligence and defense-related government agencies, they are banking on coincidences of interest between their hires and their hires' former (government) employers. As Shorrock observes in Spies For Hire:

What we have today with the intelligence business is something far more systemic: senior officials leaving their national security and counterterrorism jobs for positions where they are basically doing the same jobs they once held at the CIA, the NSA, and other agencies--but for double or triple the salary and for profit. It's a privatization of the highest order, in which our collective memory and experience in intelligence--our crown jewels of spying, so to speak--are owned by corporate America.

And it's not just the crown jewels of spying owned by corporate America - the collision of state of private is now government-wide. Private players are afforded fresh opportunities to make governing and policy decisions without meaningful government involvement. Whether for profit or to advance an agenda, they can privatize policy beyond the reach of traditional monitoring systems.

It's a far cry from the purported aims of leaders from both parties who helped create this governance Frankenstein. Over the past three decades, they insisted they would make government smaller, more efficient. Instead, they just shopped out the work to contractors and didn't impose the crucial oversight. At this point, the governing landscape has been so fundamentally redrawn that it is not a question of simply insourcing, or reclaiming these jobs. Thankfully, President Obama has tried to rein in runaway contracting, and has acknowledged the complexity of the beast, but the task is immense: "Reinventing Government" needs nothing short of a top-to-bottom reappraisal.

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