NYR iOS app Android app More

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors
Janine R. Wedel

Janine R. Wedel

Posted: January 28, 2010 07:30 AM

Shadow Elite: Did The Supreme Court Just Trash Democracy and the Free Market?

What's Your Reaction:

In a much-debated 5-4 decision, the Supreme Court voted to strike down regulations that stretch well back into the last century (as well as a portion of the 2002 McCain-Feingold act) prohibiting corporations from using their general treasuries, without monetary limits, to finance ads that explicitly call for the victory or defeat of a candidate.

The vote, the balance of which was tipped by the court's conservative majority, has been touted by some as a victory for principles of freedom. Far from it. The decision is poised to aid and abet the further intertwining of state and private power--the quintessence not of a "free market" but of a communist state. And the decision offers the shadow elite even more opportunities, sans government oversight or public input, to skew public policies to their own agendas. Through direct campaign contributions they are now more empowered than ever to use their corporate affiliations for greater leverage elsewhere.

The justices have laid the groundwork for an even stronger "Government Inc." Most of the work of the federal government today is performed not by government bureaucrats but by a vast off-the-books "shadow government"--the consulting firms, companies, nongovernmental organizations, and "Beltway Bandits" that occupy entire high-rise bastions in the Washington suburbs. Many contractors work solely or primarily for the government. For instance, the consulting giant Booz Allen Hamilton, with more than 13,000 employees in the Washington area alone and whose clients include the Department of Homeland Security, the Department of Defense, the Internal Revenue Service, and the Department of Health and Human Services, acquires the bulk of its $4.5 billion in annual revenue from government contracts. And more than 90 percent of the business of the now infamous Blackwater (renamed Xe), the private security contractor whose questionable activities in Iraq have done severe damage to America's reputation, is in government contracts. Contractors, of course, are not subject to the same rules as civil servants; contractor executives, unlike government leaders, are seldom dragged before congressional committees for hostile questioning when their activities come under fire.

By allowing companies to spend without limit on their pet candidates, the court's decision promises to further embed such contractors, enhance the entrenched culture of dependency, and make already cozy arrangements completely incestuous.

The shadow government knows little competition--the embodiment of a market system--but is instead born and bred on government largesse. The shadow labor force, which has grown dramatically in the last two decades, now comprises three-quarters of the people who work for the federal government. It has also grown up from supplying things like food service, printing, and landscaping to also routinely performing core government functions. Contractors today draft official documents, choose and oversee other contractors, run intelligence operations, control homeland security databases, execute military and occupying operations, and manage federal taxpayer monies doled out under stimulus plans and bailouts.

Competition in the free-market sense--adherence to the "discipline of the market"--is not what drives the companies of the shadow government. Far-reaching legislative and policy changes instituted since the Clinton years have transformed contracting rules to make government contracting less "burdened" by competition and government oversight while also less transparent. The companies promote themselves through networking and politicking to "win" not-always-competed contracts and keep the largesse coming. It helps to enlist former government executives. Thus Booz Allen Hamilton, which a former CIA deputy director dubbed "the shadow intelligence community," has employed at least three vice presidents who previously served as intelligence agency directors and has hired, or had on its board, a number of former defense and intelligence officials. Such efforts are richly rewarded. In the Pentagon alone, for instance, the Center for Public Integrity found that, over a period of six fiscal years, no-bid contracts accounted for more than 40 percent of its contracting--with $362 billion going to companies without competitive bidding. Some companies are, in fact, the only game in town and have no competitors. Today one firm has acquired a virtual monopoly on electronic voting machines.

In the "blended" workforce of the shadow government, new forms of governance are being created that fuse the power of the state with the agendas of "private" companies. The public is familiar with the excesses of Xe (Blackwater), but companies such as Booz Allen, Accenture, Lockheed Martin, and Science Applications International Corporation (SAIC) that daily stand in for government and influence policy may be far more insidious (communism turned on its head). Many public priorities and decisions are driven by private companies instead of government officials and agencies that must answer to citizens, with officials only signing on the dotted line. In numerous reports, government investigators (such as the Government Accountability Office, the watchdog agency of Congress, and inspectors general of government agencies) have asked whether government has the information, expertise, institutional memory and personnel to manage contractors--or is it the other way around? And who really sets policy--government or contractors? In even as critical a function as homeland security, much government work is substantially in the hands of contractors rather than those of government officials who are sworn to uphold the Constitution. In one instance, the GAO warned--albeit in its typical bureaucratese--about the Department of Homeland Security's loss of control over decision making, saying that the practices of the DHS encourage "the risk that government decisions may be influenced by, rather than independent from, contractor judgments."

By permitting companies to bankroll their candidates, last week's decision leads down the road to communism--in reverse--toward the mother of all state-private mergers. Now, even more than in the past (think Henry "Scoop" Jackson, the "Senator from Boeing"), a government contractor can virtually "buy" a legislator, with his blessing design or influence policy to have a built-in demand for the goods or services that it provides, and enjoy readymade support from the legislator both for favored policies and future government contracts. Ever-more interdependent government and business march in lockstep and unaccountable shadow government becomes ever bigger.

And what of the shadow elite? Thanks to the Supreme Court decision, they can capitalize on an even more hospitable environment. Flexians, of course, test all the rules--those of the government (accountability) and those of the private sector (competition). Snaking through government, business, think tanks, and media in not-fully-revealed roles--and always in pursuit of their own agendas--flexians now can also, almost unlimitedly, use their company affiliations to buy legislative influence and further enhance their agenda-serving opportunities. They can take off their gloves (if they ever wore any) because they have been handed more points of entry from which to maneuver policy toward their own agendas.

Far from sounding the bells of freedom, the Supreme Court has further imperiled government of the people, by the people, and for the people. Whether the world's model democracy can be counted on to act in the national and public interest is more questionable than ever.

Don't forget to join us today at 2pm EST for a live video interview with Janine Wedel!

 
 
 

Follow Janine R. Wedel on Twitter: www.twitter.com/profjanine