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Monday, June 25, 2007

The "Espionage-Industrial Complex"

Are we "alert and knowledgeable" enough "so that security and liberty may prosper together"?:

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together. -- Dwight D. Eisenhower, Farewell Address, 1961

We now have the "espionage-industrial complex," and exactly how citizens stay alert and knowledgeable about secret government programs is a mystery:

Don’t Privatize Our Spies, by Patrick Radden Keefe, NY Times: Shortly after 9/11, Senator Bob Graham, the chairman of the Senate Intelligence Committee, called for “a symbiotic relationship between the intelligence community and the private sector.” They say you should be careful what you wish for.

In the intervening years a huge espionage-industrial complex has developed, as government spymasters outsourced everything from designing surveillance technology to managing case officers overseas. Today less than half of the staff at the National Counterterrorism Center in Washington are actual government employees, ... at the C.I.A. station in Islamabad, Pakistan, contractors sometimes outnumber employees by three to one.

So just how much of the intelligence budget goes to private contracts? Because that budget is highly classified, ... it seemed we would never know. Until last month, that is: a procurement executive from the Office of the Director of National Intelligence ... let slip a staggering statistic — private contracts now account for 70 percent of the intelligence budget. ...

On 9/11, our spies found themselves shorthanded... The privatization boom emerged out of sheer necessity. ... As it happened, the dot-com bubble had burst shortly before 9/11, cutting loose a generation of technology entrepreneurs who, when the government came calling, were only too happy to start developing new data-mining algorithms and biometric identification programs. New startups began sprouting in the suburbs around Washington. The number of “contractor facilities” cleared by the National Security Agency grew from 41 in 2002 to 1,265 in 2006. It was a gold rush, a national security bubble. ...

There is nothing inherently wrong with all this. We want our spies to have access to the best technology and expertise... The problem is that the “symbiotic relationship” has turned decidedly dysfunctional, if not downright exploitative. ...

For contractors, ... failure is seldom punished — it’s often rewarded. Many contracts are “cost plus,” meaning there will be no penalty if a contractor wildly exceeds the initial projection. Better still, a contractor can break something, then bid for the job of putting it back together. When the N.S.A. wanted to create another program ... to replace Science Applications International’s failed Trailblazer, it needed a contractor to build it. Who got the job? Science Applications. ...

It’s not just the money that flows out the door, ... companies offer hefty raises to government employees who join their ranks. A recent report ... found that “contractors recruit our own employees, already cleared and trained at government expense, and then ‘lease’ them back to us at considerably greater expense.”

This process — called “bidding back” — has created a brain drain. Two-thirds of the Department of Homeland Security’s senior officials and experts have departed for private industry. Michael Hayden, the C.I.A. director, worries that his agency has become “a farm team for these contractors.” ... Can a government acquisitions officer who might someday like a job at a contractor really evaluate the contractor’s bid objectively? ...

The good news is that Congress seems to have finally caught on to the scale of the problem. The intelligence authorization bill that passed the House last month included ... promising first steps. But the inspectors general of America’s intelligence agencies must become more aggressive in policing how contracts are awarded — and in halting cost overruns before they reach the billions. The intelligence community should limit the parasitic practice of bidding back... It should also fine companies — or at least stop rewarding them — when they fail to deliver on time and on budget.

Congress should enact more comprehensive legislation, establishing oversight procedures to govern the many conflicts of interest that arise when agencies and industry are this close. If our spy agencies are truly going to protect us, they must learn how to develop — and retain — their own in-house expertise.

    Posted by on Monday, June 25, 2007 at 02:43 AM in Economics | Permalink  TrackBack (0)  Comments (9)

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