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This photograph shows a copy of the US Foreign Intelligence Surveillance Court order requiring Verizon on an “ongoing, daily basis,” to give the National Security Administration (NSA) information on all landline and mobile telephone calls of Verizon Business in its systems. (AP Photo) Ad Policy

When I first heard that the source for Glenn Greenwald’s blockbuster stories on the National Security Agency was a contractor working for Booz Allen Hamilton, I felt a surge of vindication. After all, I’ve been writing about the murky world of intelligence contracting for a decade, and here was finally a sign of how extensively the government has outsourced its most secretive operations. Plus at the center of the scandal was a company that I have long identified as one of the most important companies in the intelligence-industrial complex.

Edward Snowden, who is only 29, worked for Booz Allen at the NSA as an infrastructure analyst and telecommunications systems officer. His time there and at other private contractors included stints at NSA listening posts in Hawaii and Japan, and his job gave him access to some of the NSA’s most classified operations. They included a massive surveillance program called PRISM that monitors virtually all global Internet traffic on a real-time basis, and a telephone-monitoring program that gives the NSA access to millions of phone records of calls, including domestic ones, routed through telecom provider Verizon.

From his vantage point, he learned that the NSA monitors Americans “even if you’re not doing anything wrong.” From “just sitting at my desk,” Snowden said he had the “authority to wiretap anyone…” “If I wanted to see your e-mails or your wife’s phone, all I have to do is use intercepts. I can get your e-mails, passwords, phone records, credit cards.” He also discovered that the NSA is “using the system to go back in time to discover everything you’ve done.”

All of this is terrifying stuff that confirms much of what has been revealed about NSA surveillance by Bill Binney and his fellow NSA whistleblowers Tom Drake and Kirk Wiebe, who I recently profiled in The Nation.

Some news reports have focused on how such a “low level” contract employee could possibly have access to such secret material. But to me the greater revelation is what he has said about his employer. Thanks to Snowden, we now know that Booz Allen operates at the highest levels of the world’s most powerful intelligence-gathering organization and is engaged in operations that many Americans believe are unconstitutional and dangerous. We can only assume that the other companies at these heights—a list that includes SAIC, Northrop Grumman, Lockheed Martin, Raytheon, CSC, CACI, ManTech and many others—are doing the same.

If that is so, then tens of thousands of Americans working for private intelligence contractors have access to the personal information of millions of their fellow citizens, including their phone and e-mail communications as well Internet chats on Yahoo, Google and other ISPs. Combine this private army of contractors with the outlandishly huge federal intelligence bureaucracy, and the term Stasi—the East German secret police frequently invoked by Bill Binney—doesn’t sound like an exaggeration. Except this is state surveillance plus capitalism: spying for profit.

Snowden’s revelations also belie the claim that the government uses contractors like Booz Allen only to fill technical gaps, provide a little analysis here and there, or for engineering or management skills. This is something I’ve heard frequently from agency and corporate flacks. It was also the theme of former Director of National Intelligence Michael McConnell—who came from Booz and is back there now—when he ordered the government’s first and only press conference on the use of contractors.

In that 2008 briefing, Ronald Sanders, the associate DNI for human capital, confirmed that 70 percent of the intelligence budget goes to the private sector, as I’d reported a year earlier. These contractors, he argued, “augment our intelligence staffs—the military and civilian members of the intelligence community.” But he stressed that “the reason they’re are so important to us is because they provide flexibility, responsiveness, and in many cases very unique expertise in support of the intelligence mission.” Well, if Snowden was merely “augmenting” the NSA workforce, you have to wonder what the actual workforce is up to. (Interestingly, Sanders too is now in the private sector, working for—who else?—Booz Allen).

To be honest, all of this makes me a little jealous. When I was researching my 2008 book Spies for Hire, I interviewed dozens of people, including many contractors, and managed to ferret out a huge amount of information about what private companies do for the NSA, the CIA and the rest of the intelligence community. Their insights also helped me get deep inside some of the agencies (check out my chapter on imagery and geospatial intelligence, for example).

But even though I tried, I never found anyone in the industry who could get beyond the veil of secrecy and confirm what I’d heard about the involvement of contractors with US surveillance programs or other aspects of the dark side. Kudos, then, to Greenwald and his colleagues for finding a source like Snowden: a contractor whistleblower inside US intelligence is a rare bird indeed.

I came close: at one point, I had several intriguing conversations with a former NSA contractor who had spent a year monitoring communications in Iraq for the agency. He told me a story about a contract manager who managed to convince the NSA that a gang of thugs in Baghdad who used their cellphones to plan robberies was in fact a terrorist organization. As a result of his “discovery,” his company won a new contract to monitor this new “threat.” That seemed pretty corrupt to me. But my source had no documents to back his claim. He was also frightened. Before we sat down at a bar in Washington, he asked me to turn my phone all the way off and sit on it. The NSA, he explained, could remotely activate your phone and listen in—anytime, anywhere. I never confirmed either one of his stories.

Since I wrote my book, of course, I’ve gotten to know the four NSA whistleblowers who exposed the corruption behind the agency’s foolish decision to privatize its analysis of signals intelligence in 2000. That project, called Trailblazer, wasted billions of dollars—Tom Drake estimates the damage at over $6 billion, far more than the official figure of $1.2 billion—and may have played a role in NSA’s failure to detect the 9/11 attacks. (Booz Allen, by the way, was deeply involved in the project as an adviser and subcontractor).

Unlike Snowden, however, none of the NSA Four ever revealed classified information, and they still refuse to talk about anything they know is secret. But my conversations with Drake, Binney, Wiebe and Ed Loomis were a revelation to me. I had written in detail about Trailblazer in the book and gotten most of the details right; but until I met the NSA Four and heard their story, I never knew how unbelievably corrupt the system was. That’s the value of whistleblowing.

But here’s the rub. The NSA Four followed protocol all the way; they complained about the corruption to a Pentagon hot line and tried to alert Congress. The Pentagon eventually exonerated them with a report, but stamped it secret and still keeps about 95 percent of it classified. But the government went after them anyway, persecuted them for leaking NSA secrets and eventually charged Tom Drake with a spying charge under the Espionage Act. The case fell apart, and a federal judge accused the Justice Department of overreach. Still, their careers were ruined, and they were denied thousands of dollars in income when their security clearances were yanked.

Perhaps if Snowden had seen a legal way out that would have allowed him to report wrongdoing without jeopardizing secrets or himself, he might have chosen a different route. But he’s on the run, and being called a traitor and worse. These are the costs of our surveillance state, and it’s a modern-day tragedy.

Take Action: Help End the ‘Secret Law’ Behind Government Surveillance