While corporate politicians consider cuts to essential programs like Social Security, the ultra-rich continue to exploit dodgy tax loopholes for their own personal gain.
Let’s place private corporations with government contracts under surveillance — to make sure no one is getting rich off our tax dollars.
Only 23 percent of Americans, says a new Reuters poll, consider former National Security Agency employee Edward Snowden a “traitor” for blowing the whistle on the federal government’s massive surveillance of the nation’s telecom system.
Many Americans, the poll data suggest, clearly do find the idea of government agents snooping through their phone calls and emails a good bit unnerving.
But Americans have more on the surveillance front to worry about than overzealous government agents. Government personnel aren’t actually doing the snooping the 29-year-old Snowden revealed. NSA officials have contracted this snooping out — to private corporate contractors.
These surveillance contracts, in turn, are making contractor executives exceedingly rich. And none have profited personally more than the power suits who run Booz Allen Hamilton and the private equity Carlyle Group.
Whistle-blower Snowden did his snooping as a Booz Allen employee. Booz Allen, overall, has had tens of thousands of employees doing intelligence work for the federal government.
Booz Allen alumni also populate the highest echelons of America’s intelligence apparatus — and vice versa. The Obama administration’s top intelligence official, James Clapper, just happens to be a former Booz Allen exec. The George W. Bush intelligence chief, John McConnell, now serves as the Booz Allen vice chair.
All these revolving doors open up into enormously lucrative worlds. In their 2010 fiscal year, the top five Booz Allen execs together pocketed just under $20 million. They averaged 23 times what members of Congress take home.[pullquote]In fiscal 2010, the top five Booz Allen execs took home just under $20 million.[/pullquote]
But the real windfalls are flowing to top execs at the Carlyle Group, Booz Allen’s parent company since 2008. In 2011, Carlyle’s top three power suits shared a combined payday over $400 million.
More windfalls will be arriving soon. Carlyle paid $2.54 billion to buy up Booz Allen. Analysts are now expecting that Carlyle’s ultimate return on the acquisition will triple the private equity giant’s initial cash outlay.
What do all these mega millions have to do with the massive surveillance that Edward Snowden has so dramatically exposed? Washington power players, from the President on down, are insisting that this surveillance has one and only one purpose: keeping Americans safe from terrorism.
But who can put much faith in these earnest assurances when other motives — financial motives — so clearly seem at play?
Corporate execs at firms like Booz Allen and the Carlyle Group are making fortunes doing “systematic snooping” for the government. These execs have a vested self-interest in pumping up demand for their snooping services — and they’re indeed, the Washington Post reported last week, pumping away.
This past April, the Post notes, Booz Allen established a new 1,500-employee division “aimed at creating new products that clients (read: government agencies) don’t know they need yet.” This new division is developing “social media analytics” that can anticipate the latest “cyber threat.”[pullquote]Private contractors like Booz Allen have a vested self-interest in pumping up demand for their snooping services.[/pullquote]
In other words, this new unit will be figuring out how to get the federal government to pay up even more for investigating who we “like” on Facebook.
In one sense, none of this should surprise us. Corporate executives — particularly in the defense industry — have been enriching themselves off government contracts for years. Post-9/11 political dynamics have only turbocharged that process. America now sports, as Pulitzer Prize-winning analyst David Rohde observed last week, a “secrecy industrial complex.”
Do the Snowden revelations have the potential to upset Corporate America’s long-running government contracting gravy train? Maybe, but only if anger over the revelations translates into real changes that keep private corporate contractors from getting rich off tax dollars.
What might these changes entail? The Affordable Care Act enacted in 2010 — Obamacare — suggests one initial step. Under this new legislation, private health insurance companies can no longer deduct off their corporate income taxes any compensation over $500,000 that they pay their top executives.
A more potent antidote to contracting windfalls would be simply denying government contracts to corporations that overcompensate their top execs, a course of action U.S. senator Hugo Black from Alabama, later a noted Supreme Court justice, proposed back in the early years of the Great Depression.
[toomuch_promo]How might this approach work today? The President of the United States makes about 25 times the compensation of the lowest-paid federal employee. We could apply that standard to federal contracting and deny our tax dollars to companies that pay their top execs over 25 times what any of their workers are making.
Protecting privacy in a dangerous world will never be easy. But we’ll never have even a shot at protecting privacy until we take the profit out of violating it. Ending windfalls for contractors would be the logical place to start.
Labor journalist Sam Pizzigati, an Institute for Policy Studies associate fellow, writes widely about inequality. His latest book, The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970, has just been published.