thenation | So here’s the bottom line: not only has intelligence been privatized to an unimaginable degree, but an unprecedented consolidation of corporate power inside US intelligence has left the country dangerously dependent on a handful of companies for its spying and surveillance needs.
To be sure, concentration by itself isn’t necessarily a bad thing. When a few companies dominate a single market, as in banking or the railroads, the result can be greater efficiencies all around, and sometimes even lower prices—if the industry is well-regulated. But if not, as we know from the collapse of Wall Street a few years ago, the downside can be pretty ugly: high-level corruption, taxpayer bailouts, and business failures that create destructive ripple effects throughout society. All of that and more has happened in intelligence contracting.
“There comes a point when the marketplace is so concentrated that the service provider simply becomes too big to fail, no matter how lousy their performance,” says Isenberg, who closely monitors the privatization of national-security work. “If that makes you think of the financial-services industry, well, that’s exactly what I’m talking about.”
In fact, being “too big to fail” is especially potent in intelligence, which has experienced numerous failures over the years. One of the most spectacular was the infamous Trailblazer project at NSA. It was designed by contractors in the spring of 2001 to “revolutionize” the NSA’s collection of signals intelligence from the Internet. SAIC won the prime contract to build it.
But Trailblazer ended up a costly failure, wasting over $7 billion, according to whistleblower Tom Drake, who was a senior NSA executive from 2001 to 2008. In 2003, because Drake and others had blown the whistle on the project, Trailblazer was the subject of a highly critical Pentagon audit into corporate fraud. But the audit remains classified to this day. And the prime culprits, SAIC and Booz Allen (which helped design it), continue to win big contracts despite strong evidence that they wasted billions of taxpayer dollars and modified and suppressed internal studies about the project.
“When companies are found to have falsified documents or even committed outright fraud, they’re often so large and specialized that they compel the government to overlook those violations,” warns Mike German, a former FBI special agent who works on counterterrorism issues as a fellow with the NYU’s Brennan Center for Justice. “Especially with intelligence being such a nebulous concept, doing wrong doesn’t always result in a reassessment of methods.”
Yet with few exceptions, intelligence privatization has been largely ignored by the national media and the publications established to expose what they call the “surveillance state.” And Congress, by ignoring this huge elephant in the room, is simply not doing its job.