The Republic of T.

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Exposed!: Post 9/11 Privatization & Conservative Failure

Where’s the Tea Party when you really need them? There’s a bit of investigative reporting from the Washington Post that ought to have launched a Tea Party protest, complete with signs, slogans, and speeches (from the likes of Michelle Bachmann, Sarah Palin, and Rand Paul — just to name a few.)

Tax dollars spend on a Mercedes? For someone on the government payroll? It seems right up their alley. Come on people. The placards and impassioned speeches practically write themselves.

So far, though. Nothing. Maybe they’re too busy demanding that the government hold BP accountable for the oil disaster in the Gulf.

Oh. Wait.

Maybe it’s because the wasteful government spending happened not only on the previous conservatives administration’s (and the previous conservative Congress’ watch), but as a result of a right-wing American article of faith: privatization.

The Post’s two-year investigative reporting project focuses on "The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001," which it describes as having become "so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work."

These are some of the findings of a two-year investigation by The Washington Post that discovered what amounts to an alternative geography of the United States, a Top Secret America hidden from public view and lacking in thorough oversight. After nine years of unprecedented spending and growth, the result is that the system put in place to keep the United States safe is so massive that its effectiveness is impossible to determine.

The investigation’s other findings include:

* Some 1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States.

* An estimated 854,000 people, nearly 1.5 times as many people as live in Washington, D.C., hold top-secret security clearances.

* In Washington and the surrounding area, 33 building complexes for top-secret intelligence work are under construction or have been built since September 2001. Together they occupy the equivalent of almost three Pentagons or 22 U.S. Capitol buildings – about 17 million square feet of space.

* Many security and intelligence agencies do the same work, creating redundancy and waste. For example, 51 federal organizations and military commands, operating in 15 U.S. cities, track the flow of money to and from terrorist networks.

* Analysts who make sense of documents and conversations obtained by foreign and domestic spying share their judgment by publishing 50,000 intelligence reports each year – a volume so large that many are routinely ignored.

The first article in the series concerns itself with the government’s role in the "expanding enterprise" of national security. Today’s article, focuses on the phenomenon of private contractors working in the homeland security and intelligence industries.

To ensure that the country’s most sensitive duties are carried out only by people loyal above all to the nation’s interest, federal rules say contractors may not perform what are called "inherently government functions." But they do, all the time and in every intelligence and counterterrorism agency, according to a two-year investigation by The Washington Post.

What started as a temporary fix in response to the terrorist attacks has turned into a dependency that calls into question whether the federal workforce includes too many people obligated to shareholders rather than the public interest — and whether the government is still in control of its most sensitive activities. In interviews last week, both Defense Secretary Robert M. Gates and CIA Director Leon Panetta said they agreed with such concerns.

The Post investigation uncovered what amounts to an alternative geography of the United States, a Top Secret America created since 9/11 that is hidden from public view, lacking in thorough oversight and so unwieldy that its effectiveness is impossible to determine.

In particular, it tells the story of SGIS, a company that started in its founder’s living room in 2002, won its first defense contract four months later, and by 2006 had revenues of $30.6 million — some of which it invested in hiring employees specializing in government contracts. To help it land more such contracts of course. The company was selected for Inc. magazine’s 2009 list of the 5000 fastest growing companies, coming in at 1,371.

Near as I can tell, the company’s sole client — and thus its sole source of revenue — is the government. So, some of that $30.6 million in 2006 ($88 million by 2008) was spent on getting more contracts — or rather, invested in making sure the company kept its sole client. That is, some portion of the tax dollars paid to the company was spent to make sure tha more tax dollars would come SGIS’s way in the future.

Some of it went towards some rather extravagant compensation for the company’s employees.

Eight years after it began, SGIS was up to revenue of $101 million, 14 offices and 675 employees. Those with top-secret clearances worked for 11 government agencies, according to The Post’s database.

The company’s marketing efforts had grown, too, both in size and sophistication. Its Web site, for example, showed an image of Navy sailors lined up on a battleship over the words "Proud to serve" and another image of a Navy helicopter flying near the Statue of Liberty over the words "Preserving freedom." And if it seemed hard to distinguish SGIS’s work from the government’s, it’s because they were doing so many of the same things. SGIS employees replaced military personnel at the Pentagon’s 24/7 telecommunications center. SGIS employees conducted terrorist threat analysis. SGIS employees provided help-desk support for federal computer systems.

Still, as alike as they seemed, there were crucial differences.

For one, unlike in government, if an SGIS employee did a good job, he might walk into the parking lot one day and be surprised by co-workers clapping at his latest bonus: a leased, dark-blue Mercedes convertible. And he might say, as a video camera recorded him sliding into the soft leather driver’s seat, "Ahhhh . . . this is spectacular."

OK. Stop. Wait a minute. How did we get here? How did we become a country with a that can hand tax dollars to companies that spend them on Mercedes for employees, but can’t won’t extend unemployment benefits to the jobless, and can increase spending on wars in Afghanistan, but can’t won’t spend money to keep teachers on the job or keep 900,000 state government employees employed?

It’s an old story, of course, that 9/11 led to a "big government boom," and government actually got bigger. calculates that the discretionary sums contained in appropriations bills signed by Bush for the current fiscal year — including the $87 billion supplemental appropriation for Iraq — amount to nearly a 36% increase over Clinton’s last year.

Most of the increase has indeed come from military spending (including wars in Iraq and Afghanistan) and activities that the administration classifies as homeland security. But that still leaves a 16% increase in funding for other discretionary programs.

That 3-year increase in discretionary spending, including a 180% increase for Homeland Security, tells the rest of the story. Bush started a government spending spree that left Clinton in the dust. (The Cato and WND links are for the teabaggers, so they don’t just have to take my word for it.) Not long after, private companies quickly figures out that fear was a profitable business, and beat a path to Washington to cash in on the huge increase in government spending.

After all, it was a conservative president doing the spending — with the relative silence, if not the blessing, of many congressional conservatives. And big government conservatism comes with a healthy (or unhealthy, depending on which end of the deal you’re on) serving of privatization.

Once in line for the government privatization gravy train, companies also found themselves in the enviable position to profit from government spending without government oversight. The Center for Public Integrity did a great job of researching and reporting on how this played out across the country.

This seems to have been, for the private companies that came to Washington looking for an angle on homeland security, the business equivalent of getting dessert without having to eat their vegetables. According to the House Committee on Government and Oversight Reform that’s exactly what happened.

Under the Bush Administration, the “shadow government” of private companies working under federal contract has exploded in size. Between 2000 and 2005, procurement spending increased by over $175 billion dollars, making federal contracts the fastest growing component of federal discretionary spending.

This growth in federal procurement has enriched private contractors. But it has also come at a steep cost for federal taxpayers. Overcharging has been frequent, and billions of dollars of taxpayer money have been squandered.

At the request of Rep. Henry A. Waxman, this report is the first comprehensive assessment of federal contracting under the Bush Administration. The report reaches three primary conclusions:

  1. Procurement Spending Is Accelerating Rapidly. Between 2000 and 2005, procurement spending rose by 86% to $377.5 billion annually. Spending on federal contracts grew over twice as fast as other discretionary federal spending. Under President Bush, the federal government is now spending nearly 40 cents of every discretionary dollar on contracts with private companies, a record level.
  2. Contract Mismanagement Is Widespread. The growth in federal contracts has been accompanied by pervasive mismanagement. Mistakes have been made in virtually every step of the contracting process: from pre-contract planning through contract award and oversight to recovery of contract overcharges.
  3. The Costs to the Taxpayer Are Enormous. The report identifies 118 federal contracts worth $745.5 billion that have been found by government officials to include significant waste, fraud, abuse, or mismanagement. Each of the Bush Administration’s three signature initiatives — homeland security, the war and reconstruction in Iraq, and Hurricane Katrina recovery — has been characterized by wasteful contract spending

Anyone who’s not asking how we got here, and demanding that we change course, either isn’t paying attention or doesn’t care.

That brings me — on the off chance that some of them might read — back to the teabaggers with a simple question: Which is it?

One Comment

  1. Privatization always leads to corruption. This is especially significant given the fact that most of right “ideology” originates with corporate pr people and lobbyists who know that what they are saying is nonsense, but the wealthy and corporate interests paying the bills don’t care.