If you think that the American state is all-knowing, all-powerful and always in control, you couldn’t be more wrong. In fact, some of the most sensitive areas of state activity are not actually under the control of federal employees at all but are in the hands of contractors answerable to shareholders.
A significant change in America’s state has placed private sector corporations at the very heart of military and intelligence operations, in a clear breach of the country’s federal rules. These state that contractors may not perform what are called "inherently government functions."
An effective merger between the secret state and corporations began after the 9.11 attacks. It has flourished to such an extent that no one in Washington can actually put a figure on the numbers involved. Senior members of the Obama administration have expressed their concerns, as well they might.
The scope of the changes is fleshed out by a two-year investigation by the Washington Post called Top Secret America. It estimates the number of contractors who work on top secret programmes at an astonishing 265,000 – almost a third of the total workforce.
There are about 2,000 companies working with 45 government organisations in hundreds of secret locations across America. More than a quarter of the firms came into existence after 2001.
The report warns: “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.” The investigation shows that:
- Contractors can offer more money – often twice as much – to experienced federal employees than the government is allowed to pay them.
- Contractors cost an estimated 25% more to hire than federal workers.
- At the CIA, employees from 114 firms account for roughly a third of the workforce, or about 10,000 posts.
- Private contractors working for the CIA have recruited spies in Iraq, paid bribes for information in Afghanistan, helped snatch a person in Italy and interrogated detainees held at secret prisons abroad.
- Contractors kill enemy fighters. They spy on foreign governments and eavesdrop on terrorist networks.
- The defence secretary cannot find how out how many contractors work in the civilian side of his department.
- Most contractors do work that is fundamental to an agency's mission. As a result, the government has become dependent on them.
- The National Security Agency, which conducts worldwide electronic surveillance, hires private firms to come up with most of its technological innovations.
- The National Reconnaissance Office cannot produce, launch or maintain its large satellite surveillance systems, which photograph countries such as China, North Korea and Iran, without the four major contractors it works with.
- Each of the 16 intelligence agencies depends on corporations to set up its computer networks, communicate with other agencies' networks, and analyse information. More than 400 companies work exclusively in this area.
The merger between state and corporate interests is a process that has its origins in the period of intense globalisation that took off in the early 1980s. As capital gained its global wings, the capitalist state more and more became the facilitator of their interests. As the financial crash of 2008 demonstrated, the state is duty bound to save the system at any cost.
With the United States in the grip of a worsening economic crisis, and a presidency which is mounting difficulties as a result, the loyalty of the state to federal authorities under a weakened Obama administration is always going to be tested. With the secret state essentially out of control and increasingly driven by shareholder values, any attempt to cut costs or curb power is sure to provoke an unpredictable reaction.