Privatization Profiteering

Whenever Frank Anderson speaks the way he did at a recent public forum
in Washington, D.C. about "essential state functions performed by
businesses," people better listen. Mr. Anderson is the president of the
Middle East Policy Council, but previously he was the chief of the Near
East and South Asia Division of the CIA.
A discussion-relayed over C-Span-featuring Mr. Anderson, was among
established scholars and policy wonks focused on national security in
that tumultuous area of the world. Mr. Anderson was asked about
Blackwater, the controversial corporation whose profits come from
Pentagon and State Department contracts to provide security to U.S.
government personnel in west and central Asia and to perform such
secret operations that it could have an identity crisis with the CIA.

Blackwater has gotten in trouble for shooting up Iraqi civilians in
unprovoked situations. The corporation's operatives are involved in
sensitive missions, such as the recent double-agent suicide explosion
in Afghanistan. Again and again, the line between corporate and
governmental functions is not only blurred, it has ceased to exist.

Rep. Jan Schakowsky (D-IL.) called Blackwater a "repeat offender
endangering our mission repeatedly, endangering the lives of our
military and costing the lives of innocent civilians." She asked why
Blackwater is employed anywhere by the U.S. government.

Outsourcing national security activities, right down to interviewing
job applicants for intelligence agencies, is troubling many retired and
active members of the national defense and security agencies. Yet
corporate contracting, launched big time by Ronald Reagan, seems
unstoppable. There are more contractors in Iraq and Afghanistan than
there are U.S. soldiers. Over two hundred thousand of them and

The rationale for these contracts is (1) greater efficiency, (2)
greater talent and (3) more flexible personnel in and out whenever they
are needed.

First, throw out the tax dollar savings argument. Mr. Anderson
estimates that the costs are two to three times more when corporations
do the work. Other estimates are higher, even when non-deliveries,
contaminated food and drinking water, embezzlements and fraud that keep
Pentagon auditors awake at night, are not included.

Government acquisition specialists accuse politicians of creating
layers and layers of contractors with their massive, convoluted
contracts dissipating accountabilities. It is a Kafkaesque nightmare of
corporate statism. Of course, all this has led to a government brain
and skill drain over to the corporate sector which pays so much more
than government. A vicious cycle of incapacity and hollowing out sets
in and allows the governmental departments to rationalize more

"No way that we should have allowed businessmen to perform essential
state functions," said Mr. Anderson, especially, he added, in the areas
of "intelligence and the application of violence."

At the same forum, Bruce Riefel, senior fellow in foreign policy at the
Brookings Institution and former CIA officer and specialist in Middle
East Affairs, agreed with Mr. Anderson, bemoaning more and more layers
of reviews and contracts.

Messrs Anderson and Riedel are not loners. Their views often reflect a
larger circle of governmental professionals who have seen the wholesale
stampede of contracting out government from DOD, CIA, AID, and NASA.
The Congress is sort of looking into this mindlessness that is swelling
deficits and escaping standards of public service and ethics. The
prospects for change? Mr. Anderson said "fixing this would require
revolutionary changes." That objective can only come from the
proverbial people-aroused and determined. If that does not happen, what
Franklin Delano Roosevelt called fascism in 1938-that is corporate
control of government-will tighten its very costly grip.

The corporate government mentality is not restricted to Washington,
D.C. State governments are also outsourcing with similar though lesser
waste, fraud and escape from accountabilities.

Just last week, Virginia's incoming governor, Robert F. McDonnell,
announced that he will let his Cabinet secretaries have dual
allegiances by serving on commercial corporate boards of directors.
Virginia is one of the states that permits this in-built conflict of
interest between duty to the citizens and loyalty to specific corporate

So his new Secretary of Commerce and Trade, Robert Sledd, will continue
to sit on three corporate boards. In his day job, Sledd is responsible
for 13 agencies that regulate business policy, according to the
Washington Post. On the side, he sits on the board of a tobacco company
and a medical supplies business.

Down in Arizona, a new slide toward the pits is about to occur. Beset
with a large state deficit, the state officials and their Governor
refuse to end corporate welfare and corporate tax abatements and
subsidies. Instead, get this, they have put "for sale" signs on
Arizona's state buildings hoping to realize $735 million and then start
paying the buyers rent!! (Breaking News--they've got a sale!)

Also up for sale, among other structures, go the legislative buildings,
the Department of Public Safety, the prisons and the state Coliseum.
Organizational psychiatrists and efficiency economists, please help us

Wouldn't it have been better for the state legislators to just sell the
back of their jackets to corporate advertisers? Then at least, there
would be truth in advertising!

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