06/02/2010 12:46 pm ET | Updated May 25, 2011

Are Private Contractors the Vulnerable Underbelly of the Intelligence Community?

We hear so much about the use of private military and security contractors by the Defense and State departments that it is easy to forget that outsourcing goes far beyond those two government departments. Private contractors are present in every aspect of government; constituting a fourth branch of government from homeland security to public diplomacy

As a case in point nearly two years ago I reviewed Spies For Hire: The Secret World of Intelligence Outsourcing by Tim Shorrock; an excellent book on the intelligence community's use of private contractors.

It is an important topic which does not receive the attention it merits so I was happy to see it discussed in this 2009 paper "Security outsourced: is it safe?" by Judit Nénye . Here is what she writes:

But what happens if the work of such US governmental organizations as the CIA, the DIA (Defence Intelligence Agency), the NRO (National Reconnaissance Office) or the NSA (National Security Agency) is outsourced?

Strange as it may seem at first sight, the US government spends on foreign and domestic intelligence about 60 billion USD each year, 42 billion USD of which was the cost of activities outsourced to private contractors in 2006. The number of contractors exceeds the CIA‟s full-time workforce of 17,500. In 2006 it was altogether 5,400 companies that sought to do business with CIA. The activity of NRO, responsible for the maintenance of reconnaissance satellites, is outsourced to contract employees of private companies. It is the most privatized part of the intelligence activity, controlling over 7 billion USD of the entire annual budget (which is about 8 billion). A case-study of such public-private partnerships can be Retired Admiral John Michael "Mike" McConnell, Director of National Intelligence (DNI) since February 2007. Beforehand, he was vice president and director of Booz Allen & Hamilton's Infrastructure Assurance Center of Excellence.

He was also the former chair of the board of the Intelligence and National Security Alliance (INSA), the private intelligence industry‟s lobbying arm, of which Booz Allen & Hamilton is a founding member.

One would expect a considerable rise in effectiveness to justify such a degree of outsourcing. However, it is not the case. The NSA was unable to analyze much of the gathered information in 2006. Only 5 % of it was translated from its digital form into text and sent for analysis. The rest was thrown away. The dependence of the government intelligence on private companies makes every phase of intelligence gathering, processing and preserving extremely vulnerable. Even one of the most sensitive U.S. intelligence documents, the Presidential Daily Briefing, is prepared in part by private companies, despite having the official seal of the U.S. intelligence apparatus! It is better not to think of how a private company could tamper intelligence and thus influence national or even international policy if its corporate interest requires so. Consequently, the same risks apply to the outsourcing of intelligence tasks as to the privatization of other military and security activities: impunity for abuse, lack of oversight (public or congressional), leakage of classified information and loss of such traditional professionalism that can only be formed in the course of long years of service - but in the service of state and not of corporate institutions. As Tim Shorrock points out, the joining of former intelligence officers to the private sector (and this phenomenon started in the early 1990s) means that the institutional memory of the United States intelligence community now resides in the private sector.

Patrick Henry, Assistant Secretary of the US Army, suggested as early as in 2000 restricting the use of PMCs in intelligence work, stating that the tactical intelligence gathering could not be contracted because it was "integral to the application of combat power". At the strategic level, contracting out intelligence work poses unacceptable risks to national security.