Booz Allen Hamilton: 70% of the U.S. Intelligence Budget Goes to Private Contractors


Following Edward Snowden's leaking of details of government surveillance programs, the issue of the U.S. intelligence community's use of private contractors has again been highlighted. Snowden worked for Booz Allen Hamilton, a consulting firm that which describes itself as a leading provider of management and technology services to "government clients in defense, intelligence, and the civil sectors." Yet Booz Allen Hamilton is just one of many private contractors; other prominent examples include Palantir Technologies Inc, i2, and Science Applications International Corp (SAIC), working for the government in the intelligence sector, with a massive 70% of the U.S. intelligence budget currently going to such firms.

Although the extent of the government's use of private contractors has been known since at least 2007, the current NSA surveillance scandal has again raised concerns about the growing outsourcing of government work in the defense and intelligence sectors to corporations and the unaccountable use of taxpayers' money to spy on them.

The outsourcing of government intelligence work to private contractors took off after 9/11, with Salon's Tim Shorrock arguing in 2007 that "spying has become one of the fastest-growing private industries in the United States." The trend is part of an increasing government reliance on private contractors, especially in the military, over the past decade or so which can be seen in their use in the Iraq and Afghan wars. Back in March 2007, the U.S. government publicly revealed for the first time that it spends 70% of its intelligence budget on private contracts. An investigation by the Washington Post in 2010 found that "1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the country." In 2005, the value of these contracts was $42 billion, more than double what it was in 1995.

One of the key issues with outsourcing such work, as Shorrock noted, is that "because of the cloak of secrecy thrown over the intelligence budgets, there is no way for the American public, or even much of Congress, to know how those contractors are getting the money, what they are doing with it, or how effectively they are using it." In a recent interview with Democracy Now, Christopher Pyle, a whistle-blower who exposed the CIA and Army's surveillance of millions of back in the 1970s, said that Trailblazer, a precursor to the PRISM program, "wasted $1 billion on private contracts." The problem, according to Pyle, is that:

"We now have a situation where members of the Intelligence Committee and other committees of Congress intercede with the bureaucracy to get sweetheart contracts for companies that waste taxpayers’ money and also violate the Constitution and the privacy of citizens [and this] means that it’s much more difficult to get effective oversight from Congress."

Key members of the U.S. intelligence community have held, or have gone on to hold, key positions within these these private firms, highlighting the worryingly symbiotic nature of the relationship. The current head of U.S. national intelligence (DNI), James Clapper, is a former Booz Allen executive, while the man he took over from as DNI, Mike McConnell, is the current vice-chairman of the firm. Former CIA director James Woolsey was also a vice president of the company, while another former CIA director, George Tenet, has also earned millions of dollars working for private corporations with contracts with U.S. intelligence agencies. William J. Black, who used to work for the NSA, left the agency and started working for SAIC, before rejoining the NSA as deputy director.

The revolving door between the government and these private firms is similar to the revolving door between Wall St and the government. And we all know the effect that has on efforts to hold Wall St accountable. As Stephen Benavides writes for Truth Out, "if you thought that the FBI and CIA were the only ones watching you online, think again." And this should worry you.