Edward Snowden and Booz Allen: How Privatizing Leads to Crony Corruption

Contractors recruit government employees, then lease them back to the government -- where they do the same jobs at much higher cost.
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Reuters

Booz Allen Hamilton, Edward Snowden's former employer, is a cash cow earning billions from its intelligence work for the U.S. government. Snowden is among thousands of people who used to work for the government who went on to earn far more doing the same things for legions of private contractors. Almost 500,000 private employees held top-secret clearances in 2012, giving them access to the most sensitive secrets of the United States, with much of the clearance process itself done by ... the self-same private contractors.

All this raises larger questions, questions that are not new (in fact, they go back to the beginning of the republic) about privately contracting out public work. Privatization itself goes back to a 1789 statute that said, "It shall be the duty of the Secretary of the Treasury to provide for contracts which shall be approved by the President, for building a lighthouse near the entrance of the Chesapeake Bay, and for rebuilding when necessary, and keeping in good repair, the lighthouses, beacons, buoys, and public piers in the several states ...."

There are good reasons why not all governmental functions can or should be done by government employees or officials. It can be more cost-effective to hire contractors instead of training government employees; contractors can have more expertise; and contractors can do many things more efficiently. Some states have privatized such things as toll roads in order to raise cash in the short run to resolve serious budget problems (in the process, of course, sacrificing long-term revenue). In other cases, such as infrastructure, public-private partnerships can be the most cost-effective and efficient way to accomplish public and private ends.

But in recent decades, the dramatic push for more and more privatization of federal functions has gone beyond a discussion or analysis about how to best sort out public and private functions, turning into a headlong rush to privatize more. A good part of this is ideological in nature -- driven by vociferously antigovernment ideologues who want to squeeze the size and role of government, decapitate government-employee unions, and discredit government generally along the way. Another part is greed: Sell off parts of government, or hand out contracts, in ways that reward one's cronies and campaign benefactors. And a third part is to hide the costs of difficult or unpopular activities such as war or spying. Mixed in with these motives is a broader, less malign one: As government has been squeezed and public employees vilified and cut back, the only feasible way to hire competent people who are needed to fill important functions is to do it through the back door.

The intelligence brouhaha and Snowden fiasco -- how could this guy have been hired, given his high-level classification, paid $122,000 a year, and gain access to areas expressly off-limits for someone at his level? -- should make us focus on the bigger issue, and bigger problem, here. We have vastly over-privatized, and in the process lost control over swaths of important policy areas while allowing unaccountable and even outlaw behavior to expand. And we have created areas where crony capitalism can meet crony government to create crony corruption that cheats all taxpayers.

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Norm Ornstein is a correspondent for The Atlantic, a contributing editor and columnist for National Journal, and a resident scholar at the American Enterprise Institute for Public Policy Research.  More

Ornstein served as codirector of the AEI-Brookings Election Reform Project and participates in AEI's Election Watch series. He also serves as a senior counselor to the Continuity of Government Commission. Ornstein led a working group of scholars and practitioners that helped shape the law, known as McCain-Feingold, that reformed the campaign financing system. He was elected as a fellow of the American Academy of Arts and Sciences in 2004. His many books include The Permanent Campaign and Its Future; The Broken Branch: How Congress Is Failing America and How to Get It Back on Track, with Thomas E. Mann; and, most recently the New York Times bestseller, It's Even Worse Than It Looks: How the American Constitutional System Collided With the New Politics of Extremism, also with Tom Mann.

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