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What Did These Idiots Think Would Happen If We Hired Contractors To Handle Spying?

1:41 pm in Failed government by masaccio

Whose side are cyber contractors on?

Apparently it has escaped the notice of politicians and bureaucrats that the interests of contractors are not the same as the interests of their customers. The contractor wants to make lots and lots of money. The contractor wants to make the customer happy, so it tells the customer whatever it wants to hear: oh sure, we can do that; or oh sure, that’s a great idea, you must be very smart to have thought of it; or I’m sure you’ve heard about the steps being taken by your competition, but fortunately we can stop them. The contractor has no interest whatsoever in completing the work, because that stops the money flows.

The contractor benefits from sleazy practices: hiring high-ranking government people to lobby their friendly former employers, or promising, wink wink to hire them in the future; hiring lower-level government employees who actually know how to do the work, leaving the government less able to do the work; paying off politicians with massive campaign contributions and in-kind goodies and trips and payments for speaking at corporate events; and lots more.

We know this because we can read the paper, because pretty much all of this is standard practice, and none of it is illegal. And we can see the results: massive boondoggles in every sphere of government, software that doesn’t work, hardware that doesn’t work, combinations that don’t work, purchases of unnecessary and useless hardware, and money pouring into the private sector, at least to the people at the top of the private sector.

Which government official thought this wasn’t applicable to spying? According to the Defense Department, General Keith Alexander, director of the National Security Agency, chief of the Central Security Service, and commander of the US Cyber Command testified before the Senate Appropriations Committee that

The IT infrastructure was outsourced about 14 years ago, which provided more federal work in that area to contractors, Alexander noted. “As a consequence,” he added, “many in government — not just us — have system administrators who are contractors working and running our networks.”

The New York Times has a slightly different take:

Since 9/11, the vast majority [of] I.T. experts in the intelligence world have worked for private contractors, and the Snowden case has set off a new debate about whether the government could have more control of the workers if they were direct employees.

Fourteen years ago would have been 1999. The NYT’s implication that this has something to do with 9/11 seems really wrong.

Systems administrators for all intelligence operations working for contractors? These people have access to pretty much everything on the system. They could look at the private emails of General Alexander, other government workers, senators, representatives, staffs, administrative agencies, purchasing officers, planners, pretty much anyone, and pretty much everything they see or do on the internets. And if they did, they could tell their bosses what those government workers thought about things. Who would know? How would they know?

What could possibly go wrong with that in a system already rotting from crony capitalism?

It’s Much More than the Appearance of Corruption

1:36 pm in Courts by masaccio

Photo by Praline3001 via Flickr

As we move into heavy campaigning season, let us reflect on Citizens United. Perhaps the silliest statement in the opinion written by Justice Anthony Kennedy is this:

For the reasons explained above, we now conclude that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.

The “reasons explained above” are in fact one reason: in an earlier case, Buckley v. Valeo, the Court ruled that a ban on direct contributions was justified to prevent corruption or the appearance of corruption, but that a ban on expenditures, as opposed to direct contributions, was not. Kennedy quotes Buckley:

“The absence of prearrangement and coordination of an expenditure with the candidate or his agent not only undermines the value of the expenditure to the candidate, but also alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate.”

The naïveté, or something worse, of Kennedy and the concurring judge/politicians is breath-taking, as Stephen Colbert and Jon Stewart convincingly demonstrated. But this isn’t funny. There are a raft of academic studies showing that Kennedy and the rest of the CU majority are fools if they really believe what they wrote, and viciously political if they don’t. I reviewed a couple of them here, studies showing that political contributions and lobbying affect law enforcement against corporations and the humans who work for them.

Here are some more. I include some lobbying papers, because the two are closely related. I note that these papers don’t make the inane distinction between expenditures and direct contributions that Kennedy loves so much, probably because they live in the real world. I found all of these papers at SSRN. Quotes are from the abstracts; I haven’t read the papers.

1. Do Corporate Political Contributions Enhance Shareholder Value?

Overall, the results suggest that corporate political contributions cause an increase in the equity value of the contributing firms, and the valuation effects of these contributions are larger for firms that make larger contributions as well as for firms more affected by government policies.

2. Crony Capitalism and Antitrust

In August 2011, the United States brought a landmark antitrust lawsuit to prevent the merger of two of the nation’s four largest mobile wireless telecommunications services providers, AT&T Inc. and T Mobile USA, Inc. But why are so many elected officials asking the Obama administration to intercede in the Department of Justice’s lawsuit to force a settlement? Why are they approving a merger that would likely lead to higher prices, fewer jobs, less innovation, and higher taxes for their constituents? Does it have anything to do with the money they are receiving from AT&T and T-Mobile?

This Essay examines the recent lobbying efforts in the AT&T/T-Mobile merger. AT&T spent $11.69 million on political lobbying in the first six months of 2011. In addition to hefty campaign contributions, it lobbied lawmakers with $52 steaks and $15 gin-and-cucumber puree cocktails.

But lobbyists, as this Essay outlines, are not the problem. The problem is the combination of lax campaign finance rules and antitrust’s prevailing legal standard, a flexible fact-specific rule of reason.

Read the rest of this entry →

Obama Fails to Meet Emotional Needs Of Bankers

7:08 pm in Financial Crisis by masaccio

Bankster Scrooge McDuck wonders where his White House invitation may be, while insisting on anonymity. (photo: dreamagicjp via Flickr)

Once again President Obama has failed to meet the needs of his constituents. This time, it’s the bankers he has failed.

On the mental list of slights and outrages that just about every major figure on Wall Street is believed to keep on President Barack Obama, add this one: When he met recently with a group of CEO’s at Blair House there was no representative from any of the six biggest banks in America.

Not one!

“If they don’t hate us anymore, why weren’t any of us there?” a senior executive at one of the Big Six banks said recently in trying to explain his hostility toward the president.

Maybe because he knew the only thing you want to talk about is you and your needs? Maybe because you have produced nothing for the rest of the country except loss and misery? Maybe because the President is embarrassed that he can’t afford that special shower that throws money directly onto your bare skin?

It’s all personal with these weepy people:

“You have to understand, it is very personal. He raised money from us,” one executive at a top six bank said. “Then he started calling us bad people. So forgive us for not wanting to buy him a drink after getting punched in the eye.”

We outsiders think it doesn’t count as a punch in the eye when Obama signs off on that tax gift in direct violation of his pledge to the rest of us, refuses to consider prosecutions for your crimes, rejects controls on your outrageous bonuses paid out of direct taxpayer transfers, agrees to wimpy regulation of your thieving industry, and appoints your drinking buddies to be his personal economic advisers. We like action. Your feelings are hurt by some words.

You Wall Streeters think Obama and the lackeys you sent to run the economy are ignorant putzes:

“You go down to the White House now and sit down to talk with members of the inner circle and the issue is no longer so much hostility as it is sheer incomprehension,” said one senior private equity executive. “You wind up talking about things they are not at all interested in and are generally outside their area of competence.”

So you admit that Geithner and Summers and the rest of that crowd are incompetent. That’s exactly what we all think, maybe for different reasons. I hope it means Obama has figured out that you are a bunch of crooks. That hope gets a tiny boost from this:

A senior Wall Street lobbyist explained his feelings this way: “This president came into office in the midst of an economic crisis and started off by demonizing insurance companies and then going after Wall Street banks. Never did he try to bring together CEOs and say, ‘We are in this together, we are Team America and we are going to go out and get things done.’ That’s the power you have as president. Instead this White House pushed people away and they did it consciously and they are still doing it.”

This is a perfect example of narcissism. I bet it never dawned on this arrogant jerk that from the far right of the political spectrum to the far left, and from the least to the most politically alert citizen, there is one area of absolute agreement: Team America was held hostage by Team Banker, Team Banker paid a corrupt congress and a compliant administration to salvage it from its gambling losses and theft, and Team America’s underwater homeowners, savers, retirees and workers were sold into serfdom to protect the wealth of Team Banker.

This time the President got it right: nobody can stomach you or your pestilential business. You got the money. You won’t get the love.