Binyamin Applebaum and Eric Lipton profiled Booz Allen in The New York Times this weekend.



The company, based in Virginia, is primarily a technology contractor. It reported revenues of $5.76 billion for the fiscal year ended in March and was No. 436 on Fortune's list of the 500 largest public companies. The government provided 98 percent of that revenue, the company said.



(For the latest Booz Hamilton stock price, click here.)

As Slate's Matt Yglesias points out, having this kind of wealth transferred from the public to the private sector creates an enormous incentive for rent-seeking lobbying.



An established government bureaucracy has, of course, considerable capacity to lobby on behalf of its own interests. That's particularly true when the bureacracy's leadership can claim possession of secret information. But it's also constrained in certain respects. The National Security Agency can't bundle campaign contributions, give money to independent expenditure campaigns, or offer nice paydays to former congressional staffers.



But if you take a few billion dollars worth of intelligence spending and transfer it onto the Booz Allen balance sheet, then political organizing around the cause of higher intelligence spending can avail itself of the tools of private enterprise along with the tools of bureaucratic politics.



One of the problems created by government contracting is that it expands the universe of potential so-called rent-seeking, trying to obtain your share of existing wealth. That is creating additional support for growing the government spending pie. So instead of capitalists lobbying for less regulation and lower taxes, you get capitalists lobbying for more spending and favorable regulation. This is one of the reasons that the growth of government spending is so closely connected with an increasing share of goods and services being provided to the government by outside contractors.



You can see by the chart below that much of this growth came under the supposedly conservative Republican administration of George W. Bush.