44. Outsourcing Part I: Security

When a single individual can expose the contents of an entire secret, hidden and somewhat illicit intelligence network involving different agencies, corporations and separate government departments, it is easy for some of my patriotic but naïve friends, as well as a vast number of politicians, to focus the blame on that scapegoat ‘traitor.’ The real challenge is not to punish the wrongdoer but to recognize that the problem is much larger: it is systemic. It encompasses not only the whole intelligence community but our security. As an extremely well-researched article in Vanity Fair1 made clear to me, not only has a lateral, “dark” intelligence network developed, but also, while one level of operations is driven by the critical security needs of government, another, which has been outsourced and privately owned, is also driven by money and profit.

Tackling such a large subject in one relatively short blog was overwhelming, so I have divided it into three separate submissions: The first deals with the overall challenges of outsourced and privately owned security, the second is focused on the operations of one of the largest of these secretive groups, and the third concentrates on the associated but curiously parallel security operations of the privately owned prison industry. Government outsourcing of security now encompasses such diverse areas as Information technology (IT), border controls, prisons and intelligence gathering. A few of the larger outsourced security groups, like Serco and G4S that are involved in our protection, hire thousands of public servants to work in their private, for-profit endeavors.

I will be asking three basic questions:

  • Is outsourcing government functions to privately owned groups the way to make the state and its inhabitants more secure?
  • Does outsourcing security save money for the state?
  • Who actually benefits from the outsourcing of security?

The annual spending of billions of dollars and pounds on outsourced security is not being seriously examined in either the United States nor the UK. In large measure this is because there is an ethical and political as well as economic division between those who fear and deplore “big government” and those who believe that an efficiently run government – irrespective of its size – can provide effective security for the nation. Another factor not often considered, is that outsourcing to private corporations provides those in government, and in particular the intelligence groups like the CIA and the NSA, with an easy way out of responsibility or being held to account.

There are also those ideologues and politicians in Wall Street and the City (of London) who want government to falter so that private enterprise (read: profits) can take over. There appears to be no limit to Republican machinations in Washington to privatize governmental functions regardless of the risk and danger this might pose for the nation. Republican strategy entails starving the governmental agencies of resources so as to give the impression to the electorate that agencies like the EPA (Environmental Protection Agency) are failures. They want to convince voters that everyone would be better served by private enterprise. Ergo: outsource security.2

In large measure outsourcing governmental functions is a considerable source of wealth for those with political connections like the Carlyle/Booz group (to be examined in the next blog), for the vast network of lobbyists, the huge corporations like IBM and Dell, and the ever growing group of security operators like Serco and G4S in both the US and the UK. Little attention is paid to the fact that 70 percent of the entire US intelligence budget is spent on hiring private contractors. And here we are considering billions of dollars. According to the Washington Post, just the NSA’s ‘black budget‘ (allocations to covert operations) is over $10 billion (£6 billion). The private companies that have been outsourced by the government’s intelligence agencies vastly increased in numbers and in profits after the terror attacks of September 11, 2001.

“Especially since 9/11, the NSA has increasingly outsourced much of its core mission, relying on private contractors to do the dirty work of government” said a former employee of the agency and a Booz Allen Hamilton contractor. Edward Snowden, who worked for the same contractor said in an interview for a German television channel that ‘Anyone who has the skills – who can convince a private company that they have the qualifications to do so – will be empowered by the government to do that; and there’s very little oversight – there’s very little review.”

Many companies were involved in building the NSA and CIA’s internal telephone and computer networking systems, their data networks, and expanded into operational areas which had not previously been open to outside contractors. They included SAIC (Science Applications International Corporation), L-3 Communications, Northrop Grumann, Lockheed Martin, Palantir, Raytheon Intelligence and Information Systems, Narus, The Analysis Corporation, Verizon, Boeing Integrated Defense Systems, Serco and many others who played a role in the ‘shadow’ NSA and its new surveillance operations like Muscular, Prism, ThinThread and Trailblazer. These were all part of a legally questionable metadata collection program.

While allowing its own workforce to slowly atrophy, the government was all too willing to outsource to private contractors much of the security operations for which it used to be responsible. The result was minimal oversight. The development of closely-knit financial relationships between the NSA and its contractors extended to a ‘revolving door’ where former spooks became CEO’s of surveillance companies and the executives of private contracting firms who held top-secret clearance landed high ranking jobs with NSA.3 However, the increasingly convoluted history of the intertwined relationship in security matters between the private and governmental sectors was kept largely hidden from the public until exposed by Snowden.4



1Suzanna Andrews, Brian Burrough and Sarah Ellison, “The Snowden Saga,” Vanity Fair, May 2014 p.158
2Richard McGregor and Geoff Dyer, ”Too much information,” Financial Times, November 2, 2013
3David E. Sanger, “NSA Nominee,” New York Times, March 12, 2014, p. A18
4Glenn Greenwald, “They have gone too far,” The Guardian, June 8, 2013, p.7

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