Private contractors accelerate growth of government


Article Highlights

  • Many companies flock to the Hill warning Republicans against serious spending cuts

    Tweet This

  • Many Americans are upset the NSA had access to their emails and phone logs.

    Tweet This

  • When a well-paid, revolving-door lobbyist for BOA shows up at a congressional office, there's a subconscious pull on all the staffers.

    Tweet This

NSA leaker Edward Snowden didn't draw a paycheck from the federal government, but instead from a federal contractor, Booz Allen Hamilton, which brought in $1.3 billion for its government intelligence work, nearly a quarter of its revenue, according to the New York Times.

Dozens of companies, including telecoms, military contractors and surveillance specialists, are paid to assist surveillance efforts by the Defense Department, intelligence agencies, the FBI, and even the IRS.

On one level, this makes sense. On another, it's cause for concern.

A big military-industrial complex and intelligence-industrial complex are inevitable. The Department of Defense cannot build its own fighter jets. Contractors, freed from public-service rules and federal procurement rules, can be more efficient in acquiring labor and parts than the government.
Many journalists worry that reliance on the private sector compromises the security of surveillance data -- suggesting that people on the government payroll are more trustworthy. Critics on the Left argue that contracting out government works ends up costing more than government doing things itself.

But even if the economic efficiency question comes out in favor of contracting, and even if the security concerns are overblown, the political dynamic of government outsourcing deserves more attention.

When government outsources much of the work in any area, it creates a powerful lobbying constituency for expanding the government's role in that area. And it's self-perpetuating: The bigger the surveillance-industrial complex, the stronger the lobby for expanded government surveillance.

Government agencies, to be sure, are pretty good at lobbying for their own expansion. Public-employee unions funnel millions to Democrats, making them a powerful lobby for bigger government. But adding Booz Allen and other big contractors, along with their legions of K Street operatives, accelerates the growth of government.

"If you take a few billion dollars worth of intelligence spending and transfer it onto the Booz Allen balance sheet," left-leaning blogger Matt Yglesias wrote at Slate this week, "then political organizing around the cause of higher intelligence spending can avail itself of the tools of private enterprise along with the tools of bureaucratic politics."

Lobbying filings show who's petitioning Congress for surveillance funding. Dozens of companies, large and small, report lobbying on "surveillance" as a federal budget matter. The representative of one tech contractor, Electronic Warfare Associates, reports lobbying for "funding for biometric optical surveillance system," for instance.

Lobbyist Linda Hall Daschle, wife of Obama confidant and former Senate Majority Leader Tom Daschle, represents tech giant L-3 communications on funding many federal surveillance programs.

The IRS this week solicited bids from private companies for a contract to provide surveillance equipment including "Covert Coffee tray with Camera concealment," as CNSNews first reported. (According to the General Services Administration website, the IRS cancelled the solicitation.)

All of these government contractors and their lobbyists can, as Yglesias pointed out, offer PAC contributions and bundled contributions to lawmakers. More importantly, they implicitly hold out the unspoken promise of future employment to the staffers and politicians from whom they are asking favors.

When a well-paid, revolving-door lobbyist for Booz Allen shows up at a congressional office to ask for more money, there's a subconscious pull on all the staffers hearing the siren song -- play ball, and one day, you can buy nice suits like this guy.

In these ways, there's a structural incentive for the surveillance state to grow beyond what might be in the public's interest. The broader military-industrial complex likewise increases the size of our military.

None of this is unique to national security. The best way to increase government is to put private business in a position to profit from it. When Republicans expanded Medicare in 2003 and when Democrats passed Obamacare in 2010, they made sure to get powerful industry lobbies on their side with lucrative mandates and subsidies.

Pay attention next time there's a big debate about government spending or sequestration. Many companies flock to the Hill warning Republicans against serious spending cuts. And when industry speaks, Republicans are more likely to listen.

Many Americans are upset the NSA had access to their emails and phone logs. Some are more upset that private companies were running these programs. If you're a conservative or libertarian, maybe you should be worried that an industry is growing that will lobby to expand this government surveillance of our private lives.

Also Visit
AEIdeas Blog The American Magazine
About the Author


Timothy P.

What's new on AEI

AEI Election Watch 2014: What will happen and why it matters
image A nation divided by marriage
image Teaching reform
image Socialist party pushing $20 minimum wage defends $13-an-hour job listing
AEI on Facebook
Events Calendar
  • 27
  • 28
  • 29
  • 30
  • 31
Monday, October 27, 2014 | 10:00 a.m. – 11:30 a.m.
State income taxes and the Supreme Court: Maryland Comptroller v. Wynne

Please join AEI for a panel discussion exploring these and other questions about this crucial case.

Tuesday, October 28, 2014 | 9:30 a.m. – 12:15 p.m.
For richer, for poorer: How family structures economic success in America

Join Lerman, Wilcox, and a group of distinguished scholars and commentators for the release of Lerman and Wilcox’s report, which examines the relationships among and policy implications of marriage, family structure, and economic success in America.

Tuesday, October 28, 2014 | 5:30 p.m. – 7:00 p.m.
The 7 deadly virtues: 18 conservative writers on why the virtuous life is funny as hell

Please join AEI for a book forum moderated by Last and featuring five of these leading conservative voices. By the time the forum is over, attendees may be on their way to discovering an entirely different — and better — moral universe.

Thursday, October 30, 2014 | 2:00 p.m. – 3:00 p.m.
A nuclear deal with Iran? Weighing the possibilities

Join us, as experts discuss their predictions for whether the United States will strike a nuclear deal with Iran ahead of the November 24 deadline, and the repercussions of the possible outcomes.

Thursday, October 30, 2014 | 5:00 p.m. – 6:15 p.m.
The forgotten depression — 1921: The crash that cured itself

Please join Author James Grant and AEI senior economists for a discussion about Grant's book, "The Forgotten Depression: 1921: The Crash That Cured Itself" (Simon & Schuster, 2014).

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.