NSA Contractor Booz Allen Hamilton’s Profit‑Driven Model and Its Role in Snowden Leak

165 companies acted less like management consultants and more like temporary employment agencies in finding for the NSA the computer specialists, who had the necessary security clearances. Unlike intelligence services, their fate depended on turning profits. Since the value of their contracts was largely limited by competitive bidding, their business plans were predicated on their ability to minimize the costs of fulfilling these contracts. Their principal cost was the salaries they paid their independent contractors. Their business plans therefore depended on finding large numbers of computer technicians in the private realm willing to work at a NSA base at relatively- low wages. This task became more difficult as many potential recruits could find higher paying employment with more of a future in the burgeoning private sphere. They could also increase their revenue streams by getting additional contracts which, in turn, meant recruiting even more workers. It was hardly a business plan which could afford to give priority to quality control. In the private sector, there is usually an unambiguous external measure of failure. For example, for an automobile company such as General Motors can measure the performance of its executive by reckoning it change in net income. With secret intelligence work, the metrics for failure are far less clear. This curious aspect of secret work was part of the advice given to White House lawyer in the Obama Administration seeking a position with the NSA in 2012, He was advised that among the advantages of working for a super-secret agency was that if one errs or has a failure. “Tt stays secret.” He later found out in the Snowden case which exploded during his tenure at the NSA, that not all failures stay secret. Even so, the NSA cannot always find convenient metrics to measures its own failures. For example, it can quantify the amount of data it is intercepting, it cannot count the intelligence it misses. There is no getting around the a priori proposition in the intelligence game: “what is successfully hidden is never found.” But there is a failure that cannot be hidden: a security breach in which a perpetrator uses NSA data to publically expose the NSA’s sources. Up until the Snowden breach in 2013, the NSA had had experienced only one such a public failure. It was the capture by North Korea in 1968 of the USS Pueblo, which had been carrying out highly-sensitive electronic communications interception for the NSA. Because the Pueblo crew failed to destroy the NSA’s encoding machines, which several days were flown to Russia. The stakes were so high that the Pentagon even considered using nuclear weapons to limit the damage of the seizure. The Snowden breach was much worse because, among the thousands of documents he stole, he selected lists of the NSA’s secret sources in adversary nations. Making matters worse, the Snowden breach was a failure that directly traced back to Booz Allen Hamilton, the NSA’s largest contractor. Such a failure calls into question the vexing issue of privatizing secret intelligence. Booz Allen, like all other outside contractors, was in the business to make money. Indeed, it had found government contracts so much more profitable than its work in the private sector that it sold its private sector unit to Price Waterhouse. The profitability of government work led the Carlyle group’s hedge fund to acquire a controlling stake in Booz Allen in July 2008. By 2013, it had increased its revenue by $1.3 billion by expanding its government contracts. Even more HOUSE_OVERSIGHT_020317