Tags: Booz Allen | Snowden | secret | Carlyle

FT: Government Secrecy and Classified Information Is Often Outsourced

By    |   Wednesday, 12 June 2013 07:54 AM

The dramatic revelations about government surveillance programs unveil the fact that private contractors — not public servants — are often the ones manning the walls of government secrecy, the Financial Times reported.

Edward Snowden, the man who leaked the information about the surveillance programs, worked at the National Security Agency (NSA) as an employee of Booz Allen Hamilton, one of the largest private contractors for U.S. intelligence agencies.

The firm derives almost all of its revenue from government contracts, about one-quarter of which are obtained by intelligence work, the Times reported.

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The ties expose "the close ties and revolving doors between private and public that characterize the intelligence business," the newspaper said.

For instance, James Clapper, the current director of national intelligence, is a former Booz Allen Hamilton employee. His predecessor Mike McConnell, a retired Navy admiral, was working at the company when he was appointed to the top intelligence slot, and returned to the company when he stepped down.

An expansion in the government intelligence sector since 9/11 has led to a corresponding increase in the number of people who have access to top secret information, the Times reported. It estimated the total at 4 million people, including those who work for private firms.

"Everybody agrees that there is too many secrets created by the system these days and too many people with access to them," William Leonard, a former Pentagon official, told the Times.

The Times reported many private contractors have suffered from recent government spending cuts, and are hoping that increased investment by the Pentagon in cyber security — the area where Snowden worked — will cushion some of the blow.

Booz Allen is owned by private equity firm The Carlyle Group, which has its own deep ties to the government, ZeroHedge reported. Booz Allen went public in 2010 and The Carlyle Group still owns two-thirds of the shares.

In its annual report, Booz Allen stated it cannot provide some significant information about its financial results because of its secret government contracts, according to Bloomberg.

"This seems like it would be a dream arrangement for some corporations: Not only is Booz Allen allowed to keep investors uninformed, it's required to. I suppose we should give the company credit for being transparent about how opaque it is," Bloomberg reported.

There are many global political and business figures who have had financial ties as paid advisers or with other roles at The Carlyle Group and Booz Allen Hamilton, ranging from General Motors CEO Daniel Akerson and Freddie Mac CEO Daniel Moffett to former Clinton White House chief of staff Mack McLarty and former British Prime Minister John Major, ZeroHedge noted.

But Snowden is no longer among them. Booz Allen announced Tuesday he had been fired.

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The dramatic revelations about government surveillance programs unveil the fact that private contractors — not public servants — are often the ones manning the walls of government secrecy, the Financial Times reported.
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Wednesday, 12 June 2013 07:54 AM
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