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How Private Contractors Are Profiting from Government Surveillance

Authorities can't do all that snooping by themselves.

Today, the 11th of February, is a "day of action" against government surveillance. The basic idea – set out by the people behind The Day We Fight Back – is for around 6,000 websites to display banners saying they're not down with being spied on by their governments. How exactly this will stop the single largest surveillance operation in the history of the world remains to be seen. But we thought we'd get in the spirit anyway with a couple of articles relating to the NSA. Here's one about the private contractors making big bucks out of spying on people.


A Booze Allen Hamilton display booth at a trade fair (Photo via)

Unless you have a real eye for detail, you could have been following the NSA leaks without realising that Edward Snowden wasn't actually working for the government surveillance agency. Instead – at the time he released "the biggest intelligence leak in history" – he was employed by a private contractor, Booz Allen Hamilton (BAH).

Like many other companies, BAH has shareholders, quarterly profit targets and minimal public accountability. Unlike many others, however, the firm is contracted by governments to spy on their citizens for a profit.

The NSA has "private, for profit companies doing inherently governmental work, like targeted espionage, surveillance, compromising foreign systems", said Snowden in his recent interview with German television channel ARD. "And anyone who has the skills – who can convince a private company that they have the qualifications to do so – will be empowered by the government to do that; and there's very little oversight – there's very little review."

"Especially since 9/11, the NSA has increasingly outsourced much of its core mission, relying on private contractors to do the dirty work of government," said Thomas Drake, a former Booz Allen Hamilton contractor and NSA employee who left the agency to blow the whistle on American citizens' privacy being violated. The extent that the NSA relies on contractors is massive: "We're talking down to the desktop; we're talking the entire network," Drake told me.


The US government's use of contractors for security, training and active combat is hardly a secret. Ever since security firm Blackwater became responsible for the deaths of civilians in Baghdad – prompting claims that the Iraq war was being outsourced – the involvement of hired groups in military campaigns has been discussed and lambasted.

Blackwater's staff – typically made up of ex-special forces – enjoyed immunity from prosecution under Iraqi law, until eventually being banned by the country's government from operating on their soil. But after several name changes, they still enjoy highly profitable contracts all over the world, including security in New Orleans in the aftermath of Hurricane Katrina.

Edward Snowden (Photo via)

Very little attention, however, has been paid to these companies' digital counterparts, even though 70 percent of the entire US intelligence budget is spent on hiring private contractors, and the NSA "black budget" (budgets allocated to covert operations, essentially) – as published by Washington Post – is over $10 billion (£6 billion), a lucrative landscape for anyone with the technical know-how.

The proliferation of cheap information technology in the late 20th and early 21st centuries is one reason for this mass outsourcing. "There's been such an explosion of spy apparatus since 9/11 that they had to, otherwise they can't keep up," according to former MI5 agent Annie Machon.


But who are these companies, and how deep is their involvement with US surveillance?

This, unfortunately, is hard to work out. The opaque nature of the contracts, and the very complex network of contractors and sub-contractors, means that the exact outer limits of their work is cloudy at best. But there is some information available, and from that it can be deduced that their work ranges from the "non-critical" installation of systems, right up to the targeted and mass surveillance programmes revealed by Snowden.

After winning a $5 billion (£3 billion) contract to build the intelligence agency's internal telephone and computer networking systems, Computer Sciences Corporation and Northrup Grumann paired up and formed The Eagle Alliance. The alliance then swept in a slew of other well known sub-contractors: BAE Systems, Lockheed Martin and Verizon, the last of whom are behind the NSA's legally questionable metadata collection programme in the US.

Palantir, the CIA-funded digital analysis firm, also has contracts with the NSA, with one civil liberties analyst describing their technology as the precursor to a "true totalitarian nightmare, monitoring the activities of innocent Americans on a mass scale". Raytheon, as well as providing the tech needed for some of the Pentagon's advanced targeting systems, provides the tools for the NSA to protect their information.

And, of course, there's Snowden's old home – Booz Allen Hamilton – where he, a civilian, had the power to “wiretap anyone”.


“If I wanted to see your e-mails or your wife’s phone, all I have to do is use intercepts. I can get your e-mails, passwords, phone records, credit cards,” he said.

Thomas Drake, a former NSA employee who left to blow the whistle on the invasion into people's privacy. (Picture via)

This surge in outsourcing sensitive surveillance tasks is part of a much wider trend across the US intelligence community, where one fifth of full time staff across all the agencies are private contractors rather than government employees (and that doesn't include those hired for specific one-off projects). Half a million civilian contractors hold top-secret security clearance, and, existing outside the direct chain of command of the agencies employing them, they are – just like Blackwater – subject to a minimum amount of oversight.

“Without oversight, you end up with massive fraud, waste and abuse," Thomas told me. This was one of the reasons he blew the whistle on Trailblazer, the flagship NSA surveillance programme that would "catapult" the agency into the 21st century. The largely ineffective system – which was outsourced to IBM and others – wasted billions of dollars and seriously threatened American citizens' privacy.

When I asked Annie who can hold these companies to account if mistakes are made or if they start abusing their power, her reply painted a pretty bleak picture: "Nobody, really," she said. "In the UK – and obviously in the US – it's very difficult to hold even the official spies to account."


That becomes even harder when you're dealing with closed companies, and is actually part of the attraction of hiring them in the first place. As Annie told me, "Outsourcing for certain dubious operations from the official spies to… these corporate spies [creates an aura of] plausible deniability." In other words, if something does go wrong or they get caught, it is the private company that has to take the blame, not the government agency.

"At no point do we see the level of accountability that we would expect from an institution providing surveillance services," said Matthew Rice from Privacy International. In fact, he continued, the only people who keep these guys in check are those with a financial stake in their performance. "The general public, voters or a constituency base are not the ones who ultimately hold private companies accountable, but shareholders who want to make sure they are getting a good value for their investment."

A contractor, whose aim is to provide a return on investments, is not going to kick up a fuss by raising concerns around privacy. While the NSA hired their first ever "Civil Liberties and Privacy Officer" just this year in response to the worldwide backlash against their programmes, it's hard to imagine Blue Coat – who have a history of selling surveillance technology to authoritarian regimes – doing the same with any effect.

A protest against government surveillance (Photo via)


This bias is likely to result in surveillance programmes being weighted against the public: "What's in the best interest of the public is not always what will be in the best interest of the private contractor," Matthew continued. "At what point do [the contractors] ask whether the work they're doing affects privacy or other human rights? In our experience with researching companies selling surveillance technologies, that point never arrives."

The close-knit relationships between the NSA and contractors are not just financial, though. A "revolving-door" policy, where ex-spooks become surveillance company CEOs and private contractor executives land high-ranking NSA jobs, is the norm. James Clapper, current head of National Intelligence, is a former Booz Allen Hamilton executive. Mick McConnell, who was head of National Intelligence under Bush, is now Vice Chairman of BAH – and he has an even more convoluted history with the private and government sectors.

According to Thomas Drake, Mick started out at the Pentagon and was promoted to director of the NSA. After four years of service, he left the agency and entered BAH at a senior position, before moving back into the government and becoming director of National Intelligence. Here, he controlled the entirety of the intelligence community, and he would brief the president every day on intelligence developments. Finally, he returned to BAH.


So it appears that there is less of a "revolving-door" and more of a free pass to jump between the different sectors at will. With this in mind, the distinction between private contractor and government agency becomes largely irrelevant. "When you have corporations of that size so closely aligned with governments that you really don't know the difference – that's a different form of government," Thomas told me.

This may lead to a perpetuation of those policies that benefit the contracting companies. "If these actors are always involved in that same conversation, and it's only them, it creates a culture of groupthink where there is no one challenging assumptions," Matthew pointed out. "It becomes incestuous, where private companies staffed by former spooks are the ones writing surveillance policy."

To really understand the scope of the NSA's programmes, it is necessary to address the agency's deep relationship with private surveillance contractors. And even with the limited understanding we're able to cobble together from the information available, it seems that the threat to privacy worldwide is even greater than previously thought.

Follow Joseph on Twitter: @josephfcox

More stories about mass government surveillance:

The Future of Journalism in an Age of Government Surveillance

The Town Promising to Shoot Surveillance Drones Out of the Sky

Southern Europe Is Becoming One Big Surveillance State