Column, 632 words

Snooping Makes an Easy Road to Riches

Corporate execs at firms like Booz Allen have a vested self-interest in pumping up demand for their snooping services.

Sam Pizzigati

Only 23 percent of Americans, a new Reuters poll says, consider former National Security Agency employee Edward Snowden a “traitor” for blowing the whistle on the federal government’s massive surveillance habit.

Many Americans clearly do find the idea of government agents snooping through their phone calls and emails a good bit unnerving.

Pizzigati-Snooping-Steve Rhodes

Steve Rhodes/Flickr

But Americans have more to worry about on the surveillance front than overzealous government agents. Government personnel aren’t actually doing the snooping Snowden revealed. NSA officials have contracted this work out — to private companies.

Surveillance contracts, in turn, are making a handful of corporate executives exceedingly rich. And none have profited personally more than the suits who run Booz Allen Hamilton and the private equity Carlyle Group.

Snowden did his snooping as a Booz Allen employee. Booz Allen, overall, has had tens of thousands of employees doing federal intelligence work.

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, Mike McConnell, now serves as Booz Allen’s vice chairman.

All these revolving doors connect enormously lucrative worlds. Three years ago, the top five Booz Allen execs together pocketed just under $20 million. They averaged 23 times what members of Congress take home.

But the real windfalls are flowing to the Carlyle Group, Booz Allen’s parent company. In 2011, Carlyle’s top three power suits shared a combined payday of over $400 million.

More windfalls are coming. Carlyle paid $2.5 billion to take over Booz Allen. Analysts now expect that Carlyle’s ultimate return on the acquisition will triple the private equity giant’s initial cash outlay.

What do these billions have to do with our surveillance mess? Washington power players, from President Barack Obama on down, are insisting that the government’s expansive surveillance program has but one purpose: to keep Americans safe from terrorism.

But who can put much faith in these assurances when other motives — the financial kind — are so obviously at play? Corporate execs at firms like Booz Allen have a vested self-interest in pumping up demand for their snooping services.

In April, The Washington Post reports, Booz Allen established a new division “aimed at creating new products” their government agency clients “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 who we “like” on Facebook.

Corporate executives have, of course, been enriching themselves off government contracts for years. But post-9/11 political dynamics have turbocharged that process. America now sports, as analyst David Rohde has observed, a “secrecy industrial complex.”

Could Snowden’s revelations 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? We could take our cue from Hugo Black, the former U.S. Supreme Court justice. As a U.S. senator from Alabama in the early years of the Great Depression, Black proposed denying government contracts to corporations that overcompensated their top execs.

How might this approach work today? President Obama makes about 25 times the compensation of the lowest-paid federal employee. We could apply that ratio to all federal contracting and deny our tax dollars to companies that pay their top execs over 25 times what 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.

OtherWords columnist Sam Pizzigati is an Institute for Policy Studies associate fellow. His latest book is The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class.

  • Rick Gunter

    Thank you, Sam, for this splendid column. I long have told my reporters to follow the money because the money will tell us what is behind events and so much more. You followed the money, sir. I am honored to publish your column in my rural weekly.

  • Kyle

    Setting limits on the compensation paid to executives of companies contracted by the federal government is a splendid idea.

  • SanfordA

    The Talmud states that it is forbidden to read someone’s mail without permission. This is a very wise and good idea. We need to pass laws to prohibit the government from accessing any citizen’s computer, email, Internet access, or phone calls.

    The claim that this is necessary for security does not justify the risks. Specifically, if the government has control over your computer, they can plant false data on your computer and destroy you. This is similar to stealing your identity.

    Governments have been doing this for a long time. We need to stop. If necessary, we need to pass a Constitutional amendment. If Congress will not do this, citizens can create a Constitutional convention and pass amendments bypassing Congress.

    This danger is far, far greater than the danger of people commandeering planes to crash into buildings.