Snooping and spying for profit

WASHINGTON – Right now, Washington is all in a tizzy over the mushrooming disclosures that the U.S. government, through the National Security Agency, snooped and spied on millions of Americans, their phone calls, and their Internet interactions, allegedly looking for connections to “terrorists.”

But let’s put in an extra fact: NSA itself wasn’t doing the snooping and spying. It contracted the task out to private corporations. So let’s put those firms and their contracts under a little surveillance of our own, to see who’s getting rich off our tax dollars, and off of prying into our private lives.

Only 23 percent of Americans, says a new Reuters poll, consider former National Security Agency contract employee Edward Snowden a “traitor” for blowing the whistle on the federal government’s massive surveillance of the nation’s telecom system. Many Americans, the poll data suggest, clearly find the idea of government agents snooping through their phone calls and emails a good bit unnerving.

But the 29-year-old Snowden wasn’t working for NSA. He was working for Booz, Allen Hamilton, which was working for NSA.

These surveillance contracts, in turn, make contractor executives exceedingly rich. And none have profited personally more than the power suits who run Booz Allen Hamilton and the private equity Carlyle Group.

Booz Allen has tens of thousands of employees doing intelligence work for the feds. Booz Allen alumni also populate the highest echelons of America’s intelligence apparatus, and vice-versa. The Obama administration’s top intelligence official, James Clapper, just happens to be a former Booz Allen exec. George W. Bush’s intelligence chief, John McConnell, now serves as the Booz Allen vice chair.

All these revolving doors open up into enormously lucrative worlds. In their 2010 fiscal year, the top five Booz Allen execs together pocketed just under $20 million. They averaged 23 times what members of Congress take home.

And 98 percent of Booz Allen’s business comes from the feds, especially those snoop-and-spy contracts. Which means the firm reaps billions off of ripping off the privacy of you and I.

But the real windfalls flow to top execs at the Carlyle Group, Booz Allen’s parent company since 2008. In 2011, Carlyle’s top three power suits shared a combined payday over $400 million.

More windfalls will arrive soon. Carlyle paid $2.54 billion to buy Booz Allen. Analysts now expect Carlyle’s ultimate return on the acquisition will triple the private equity giant’s initial cash outlay.

What do all these mega millions have to do with the massive surveillance Snowden so dramatically exposed? Washington power players, from the president on down, insist this surveillance has one and only one purpose: Keeping Americans safe from terrorism.

But who can put much faith in these earnest assurances when other motives – financial motives – so clearly seem at play?

Making a fortune off of snooping 

Corporate execs at firms like Booz Allen and Carlyle make fortunes doing “systematic snooping” for the government. These execs have a vested self-interest in pumping up demand for their snooping services — and they’re indeed, the Washington Post reported, pumping away.

This past April, the Post notes, Booz Allen established a new 1,500-employee division “aimed at creating new products that clients (read: government agencies) don’t know they need yet.” This new division is developing “social media analytics” that can anticipate the latest “cyber threat.”

In other words, this new unit will be figuring out how to get the federal government to pay up even more for investigating whom we “like” on Facebook.

In one sense, none of this should surprise us. Corporate executives — particularly in the defense industry — have enriched themselves off government contracts for years. Post-9/11 political dynamics only turbocharged that process. America now sports, as Pulitzer Prize-winning analyst David Rohde observes, a “secrecy industrial complex.”

Do the Snowden revelations have the potential to upset Corporate America’s long-running government contracting gravy train? Maybe, but only if anger over the revelations translates into real changes that keep private corporate contractors from getting rich off tax dollars.

What might these changes entail? The Affordable Care Act enacted in 2010 — Obamacare — suggests one initial step. Under this new legislation, private health insurers can no longer deduct off their corporate income taxes any compensation over $500,000 that they pay their top executives.

A more potent antidote to contracting windfalls would be simply denying government contracts to corporations that overcompensate their top execs, a course of action the late U.S. senator Hugo Black, D-Ala., later a noted Supreme Court justice, proposed back in the early years of the Great Depression.

How might this approach work today? The U.S. president makes about 25 times the compensation of the lowest-paid federal employee. We could apply that standard to federal contracting and deny our tax dollars to companies that pay their top execs more than 25 times what any of their workers make.

Protecting privacy in a dangerous world will never be easy. But we’ll never have even a shot at protecting privacy until we take the profit out of violating it. Ending windfalls for contractors would be the logical place to start.

Veteran labor journalist Sam Pizzigati edits Too Much, an online weekly publication of the Institute for Policy Studies. Email:

Photo: Snowden was employed by a private company paid by taxpayers to do spying and snooping. AP


Sam Pizzigati
Sam Pizzigati

Veteran labor journalist and Institute for Policy Studies associate fellow Sam Pizzigati co-edits, the Institute’s weekly newsletter on our great divides. He also contributes a regular column to OtherWords, the IPS national nonprofit editorial service.