Corporate Money and The National Security State

Fred Lapides writes

Today’s congressional hearing was a joke. The reason: Firms like Booz Allen bankroll and own Congress. Here’s how: Have you noticed anything missing in the political discourse about the National Security Administration’s unprecedented mass surveillance? There’s certainly been a robust – and welcome – discussion about the balance between security and liberty, and there’s at least been some conversation about the intelligence community’s potential criminality and constitutional violations.

Thanks to what I’ve previously called the No Money Rule, however, there has only been indirect references to how cash undoubtedly tilts the debate against those who challenge the national security state.

Those indirect references have come in the form of stories about the business model of Booz Allen Hamilton, the security contractor which employed Edward Snowden.

CNN/Money notes that 99 percent of the firm’s multi-billion-dollar annual revenues now come from the federal government. Those revenues are part of a larger and growing economic sector within the Military-Industrial Complex – a sector that, according to author Tim Shorrock, is “a $56 billion-a-year industry.”

For the most part, this is where the political discourse about money stops. We are told that there are high-minded debates about security and liberty, with politicians of differing parties contributing to those debates from positions of principle and ideology. We are also told in passing that there’s this massively profitable private industry that makes billions a year from the policy decisions that ultimately emerge from such a debate.

Thanks to the No Money Rule among the Washington press corps, though, there is mostly silence about the connection between the private industry and the public policy. Indeed, few in D.C. are willing to say that the policy debate may be, in part, driven by the private industry and almost nobody dares mention that politicians’ attacks on surveillance critics may actually have nothing to do with principle, and everything to do with going to bat for their campaign donors.

For a taste of what that kind of institutionalized corruption looks like, take a look at the amount of money Booz Allen Hamilton and its parent company The Carlyle Group,

This is just an example from two companies among scores, but it exemplifies a larger dynamic. Simply put, there are huge corporate forces with a vested financial interest in making sure the debate over security is tilted toward the surveillance state and against critics of that surveillance state. In practice, that means when those corporations spend big money on campaign contributions, they aren’t just buying votes for specific private contracts. They are also implicitly pressuring politicians’ to rhetorically push the discourse in a pro-surveillance, anti-civil liberties direction – that is, in a direction that preserves the larger political assumptions on which the profits of the entire surveillance-industrial complex are based.

The success of that pressure is exemplified by the title of today’s congressional hearing with the head of the NSA, Gen. Keith Alexander. The hearing doesn’t ask why Alexander lied to Congress or whether the NSA has engaged in illegal acts. No, a Congress bankrolled by firms like Booz Allen predictably calls the hearing “How Disclosed NSA Programs Protect Americans & Why Disclosure Aids Our Adversaries” – the two preconceived assumption being that 1) the NSA’s surveillance programs, which generate huge profits for companies like Booz, are beneficial to Americans’ security and 2) critics of those programs hurt the country.

None of this, by the way, is exclusive to debates over domestic national security policy. As Booz Allen’s business model suggests, there are also foreign policy implications to the pay-to-play culture.

As the New York Times notes, the firm is expanding its profit potential by “marketing” its surveillance and security services to Middle East dictatorships that want to strengthen their grip on power. According to the Washington Business Journal, that includes Kuwait, Qatar, Omar, the United Arab Emirates, Saudi Arabia, Bahrain and “other countries” working to crush democratic dissent “associated with the Arab Spring.” That means American politicians who are financed by Booz and other firms with a similar multinational business model not only have a vested campaign-contribution interest in shilling for the domestic surveillance state that their donors profit from. They also have a similar interest in denigrating the democratic protest movements that challenge Mideast surveillance states that make those donors big money, too.

Obviously, this kind of moneyed influence should be a critical focus of the political reporting on politicians’ declarations about Snowden, the NSA, foreign policy and surveillance in general. When, for instance, a journalist reports on a politician slamming critics of the surveillance state, the public should be told whether that politician has taken money from firms that make their money off the continued expansion of that surveillance state. But that isn’t happening thanks to the aforementioned No Money Rule in the Washington press – and that rule isn’t just about etiquette. On national security issues, it is often about the elite agenda-setting Washington media outlets which also financially rely on an ever-expanding national security state.

For a microcosmic (but not the only) example of that little-mentioned reliance – and how it may skew the way the elite media frame the national security debate – look at these side-by-side pages from the ultimate agenda-setting D.C. newspaper, Politico:

As you can see, the ad on the left side is for a defense contractor. Like surveillance/security firms, it is part of a larger industry that relies on the ever-expanding national security state for its profits – and that therefore is hostile to national security state critics like Snowden. That industry invests heavily not only in politicians, but in advertising in Washington publications like Politico. Is it any coincidence that (as you can see on the right page) such publications loyally frame the debate over Snowden not as a question that ponders possible positive qualities (heroism, courage, etc.) but as a question exclusively of negatives: specifically, did he commit treason or is he a traitor?

Noting all of this isn’t to allege conspiratorial micromanagement of politicians and media by the military-intelligence community. It isn’t, for instance, to claim that everything that comes out of surveillance defenders’ mouths comes from talking points provided by Booz Allen’s lobbyists, nor is it to claim that Politico writers are directly ordered by their advertisers to depict national security critics on exclusively negative terms. It is actually to suggest something much more pernicious and ubiquitous than that.

As anyone who has worked in Washington politics and media well knows, the Capital is not a place of competing high-minded ideologies — in terms of the mechanics of legislation and policy, it is a place where monied interests duke it, where those with the most money typically win, and where a power-worshiping media is usually biased toward the winners. In the context of money and national security, there is a clear imbalance — there are far fewer moneyed interests whose business is transparency and protecting civil liberties than there are moneyed interests whose business is secrecy and curtailing civil liberties. That imbalance has consequently resulted in a larger environment in Washington that is so dominated by national-security-state money that the capital’s assumptions reflexively, unconsciously and automatically skew toward the national security state without overt corporate orders ever having to be given to politicians or media outlets.

If the simplest most straightforward explanation is often the most accurate, then this skewing is almost certainly part of why the pro-surveillance terms of the political debate in Washington is so at odds with public opinion polling on the matter. Big Money has helped create that disconnect – even though Big Money is somehow written out of the story.

Who is all the Spying Really Protecting?

We are being monitored on the job if we have one and because we are out of work if we don't. We are seen as a danger if we are hungry, short on water, or speak out for those who are. Those that feel we must be monitored and spied on for signs of trouble are serving the very corporate Terrarists that are creating poverty, desperation and shortages by destroying the biosphere for their own short-term gain. As Mr. Snowdon and other operatives know, as soon as you look up from your monitor and ask why, you are the enemy too. The Corporate Oligarchy have governments at their disposal. They are the 1%. They rule the world and are tightening their grip as their own system begins to crumble due to the consequences of its own shortsighted plunder. It is their government, inseparable form the global corporate oligarchy and their security that is defending itself against the rest of us.

Who are the individuals that pull the strings? The folks for whom the National Security State operates?, This article by Andrew Gavin Marshall, Occupy.com from Truth-out begins to expose the people who make up the 1% and, what Citibank calls the "plutonomy."

The Global Power Project, an investigative series produced by Occupy.com, aims to identify and connect the worldwide institutions and individuals who comprise today's global power oligarchy. By studying the relationships and varying levels of leadership that govern our planet's most influential institutions — from banks, corporations and financial institutions to think tanks, foundations and universities — this project seeks to expose the complex, highly integrated network of influence wielded by relatively few individuals on a national and transnational basis. This is not a study of wealth, but a study of power.

Many now know the rhetoric of the 1% very well: the imagery of a small elite owning most of the wealth while the 99% take the table scraps. This rhetoric and imagery was made popular by the growth of the Occupy movement, so it seems appropriate that a project of Occupy.com should expand on this understanding and bring the activities of the global elite further to light.

In 2006, a UN report revealed that the world’s richest 1% own 40% of the world’s wealth, with those in the financial and internet sectors comprising the “super rich.” More than a third of the world’s super-rich live in the U.S., with roughly 27% in Japan, 6% in the U.K., and 5% in France. The world’s richest 10% accounted for roughly 85% of the planet's total assets, while the bottom half of the population – more than 3 billion people – owned less than 1% of the world’s wealth.

Looking specifically at the United States, the top 1% own more than 36% of the national wealth and more than the combined wealth of the bottom 95%. Almost all of the wealth gains over the previous decade went to the top 1%. In the mid-1970s, the top 1% earned 8% of all national income; this number rose to 21% by 2010. At the highest sliver at the top, the 400 wealthiest individuals in America have more wealth than the bottom 150 million.

A 2005 report from Citigroup coined the term “plutonomy” to describe countries “where economic growth is powered by and largely consumed by the wealthy few.” The report specifically identified the U.K., Canada, Australia and the United States as four plutonomies. Published three years before the onset of the financial crisis in 2008, the Citigroup report stated: “Asset booms, a rising profit share and favorable treatment by market-friendly governments have allowed the rich to prosper and become a greater share of the economy in the plutonomy countries.”

"The rich," said the report, "are in great shape, financially.”

In early 2013, Oxfam reported that the fortunes made by the world’s 100 richest people over the course of 2012 – roughly $240 billion – would be enough to lift the world’s poorest people out of poverty four times over. In the Oxfam report, "The Cost of Inequality: How Wealth and Income Extremes Hurt Us All," the international charity noted that in the past 20 years, the richest 1% had increased their incomes by 60%. Barbara Stocking, an Oxfam executive, noted that this type of extreme wealth is “economically inefficient, politically corrosive, socially divisive and environmentally destructive...We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true.”

The report added: “In the UK, inequality is rapidly returning to levels not seen since the time of Charles Dickens. In China the top 10% now take home nearly 60% of the income. Chinese inequality levels are now similar to those in South Africa, which is now the most unequal country on Earth and significantly more unequal than at the end of apartheid.” In the United States, the share of national income going to the top 1% has doubled from 10 to 20% since 1980, and for the top 0.01% in the United States, “the share of national income is above levels last seen in the 1920s.”

Previously, in July of 2012, James Henry, a former chief economist at McKinsey, a major global consultancy, published a major report on tax havens for the Tax Justice Network which compiled data from the Bank for International Settlements (BIS), the IMF and other private sector entities to reveal that the world’s super-rich have hidden between $21 and $32 trillion offshore to avoid taxation.

Henry stated: “This offshore economy is large enough to have a major impact on estimates of inequality of wealth and income; on estimates of national income and debt ratios; and – most importantly – to have very significant negative impacts on the domestic tax bases of ‘source’ countries.” John Christensen of the Tax Justice Network further commented that “Inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people... This new data shows the exact opposite has happened: for three decades extraordinary wealth has been cascading into the offshore accounts of a tiny number of super-rich.”

With roughly half of the world’s offshore wealth, or some $10 trillion, belonging to 92,000 of the planet's richest individuals —representing not the top 1% but the top 0.001% — we see a far more extreme global disparity taking shape than the one invoked by the Occupy movement. Henry commented: “The very existence of the global offshore industry, and the tax-free status of the enormous sums invested by their wealthy clients, is predicated on secrecy.”

In his 2008 book, Superclass: The Global Power Elite and the World They Are Making, David Rothkopf, a man firmly entrenched within the institutions of global power and the elites which run them, compiled a census of roughly 6,000 individuals whom he referred to as the “superclass.” They were defined not simply by their wealth, he said, but by the influence they exercised within the realms of business, finance, politics, military, culture, the arts and beyond.

Rothkopf noted: “Each member is set apart by his ability to regularly influence the lives of millions of people in multiple countries worldwide. Each actively exercises this power and often amplifies it through the development of relationships with other superclass members.”

The global elite are of course not defined by their wealth alone, but through the institutional, ideological and individual connections and networks in which they wield their influence. The most obvious example of these types of institutions are the multinational banks and corporations which dominate the global economy. In the first scientific study of its kind, Swiss researchers analyzed the relationship between 43,000 transnational corporations and “identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.”

In their report, "The Network of Global Corporate Control", researchers noted that this network – which they defined as "ownership" by a person or firm over another firm, whether partially or entirely – “is much more unequally distributed than wealth” and that “the top ranked actors hold a control ten times bigger than what could be expected based on their wealth.” The “core” of this network – which consists of the world's top 737 corporations – control 80% of all transnational corporations (TNCs).

Even more extreme, the top 147 transnational corporations control roughly 40% of the entire economic value of the world’s TNCs, forming their own network known as the “super-entity.” The super-entity conglomerates all control each other, and thus control a significant portion of the rest of the world’s corporations with the “core” of the global corporate network consisting primarily of financial corporations and intermediaries.

In December of 2011, the former deputy secretary of the Treasury in the Clinton administration, Roger Altman, wrote an article for the Financial Times in which he described financial markets as “a global supra-government” which can “oust entrenched regimes... force austerity, banking bail-outs and other major policy changes.” Altman said bluntly that the influence of this entity “dwarfs multilateral institutions such as the International Monetary Fund” as “they have become the most powerful force on earth.”

With the formation of this “super-entity” – a veritable global supra-government – made up of the world’s largest banks and corporations exerting immense influence over all other corporations, a new global class structure has evolved. It is this rarefied group of individuals and firms, and the relations they hold with one another, that we wish to further understand.

According to the 2012 report, "Corporate Clout Distributed: The Influence of the World’s Largest 100 Economic Entities," of the world’s 100 largest economic entities in 2010, 42% were corporations while the rest were governments. Among the largest 150 economic entities, 58% were corporations. Wal-Mart was the largest corporation in 2010 and the 25th largest economic entity on earth, with greater revenue than the GDPs of no less than 171 countries.

According to the Fortune Global 500 list of corporations for 2011, Royal Dutch Shell next became the largest conglomerate on earth, followed by Exxon, Wal-Mart, and BP. The Global 500 made record revenue in 2011 totaling some $29.5 trillion — more than a 13% increase from 2010.

With such massive wealth and power held by these institutions and "networks" of corporations, those individuals who sit on the boards, executive committees and advisory groups to the largest corporations and banks wield significant influence on their own. But their influence does not stand in isolation from other elites, nor do the institutions of banks and corporations function in isolation from other entities such as state, educational, cultural or media institutions.

Largely facilitated by the cross-membership that exists between boards of corporations, think tanks, foundations, educational institutions and advisory groups — not to mention the continual "revolving door" between the state and corporate sectors — these elites become a highly integrated, organized and evolved social group. This is as true for the formation of national elites as it is for transnational, or global, elites.

The rise of corporations and banks to a truly global scale – what is popularly referred to as the process of “globalization” – was facilitated by the growth of other transnational networks and institutions such as think tanks and foundations, which sought to facilitate these ideological and institutional structures of globalization. A wealth of research and analysis has been undertaken in academic literature over the past couple of decades to understand the development of this phenomenon, examining the emergence of what is often referred to as the "Transnational Capitalist Class" (TCC). In various political science and sociology journals, researchers and academics reject a conspiratorial thesis and instead advance a social analysis of what is viewed as a powerful social system and group.

As Val Burris and Clifford L. Staples argued in an article for the International Journal of Comparative Sociology (Vol. 53, No. 4, 2012), “as transnational corporations become increasingly global in their operations, the elites who own and control those corporations will also cease to be organized or divided along national lines.” They added: “We are witnessing the formation of a ‘transnational capitalist class’ (TCC) whose social networks, affiliations, and identities will no longer be embedded primarily in the roles they occupy as citizens of specific nations.” To properly understand this TCC, it is necessary to study what the authors call “interlocking directorates,” defined as “the structure of interpersonal or interorganizational relations that is created whenever a director of one corporation sits on the governing board of another corporation.”

The growth of “interlocking directorates” is primarily confined to European and North American conglomerates, whereas those in Asia, Latin America and the Middle East largely remain “isolated from the global interlock network.” Thus, the “transnationalization” of corporate directorates and, ultimately, of global class structures “is more a manifestation of the process of European integration – or, perhaps, of the emergence of a North Atlantic ruling class.”

The conclusion of these researchers was that the ruling class is not “global” as such, but rather “a supra-national capitalist class that has gone a considerable way toward transcending national divisions,” notably in the industrialized countries of Western Europe and North America; in their words, "the regional locus of transnational class formation is more accurately described as the North Atlantic region.” However, with the rise of the "East" – notably the economic might of Japan, China, India, and other East Asian nations – the interlocks and interconnections among elites are likely to expand as various other networks of institutions seek to integrate these regions.

The influence wielded by banks and corporations is not simply through their direct wealth or operations, but through the affiliations, interactions and integration by those who run the institutions with political and social elites, both nationally and globally. While we can identify a global elite as a wealth percentage (the top 1% or, more accurately, the top 0.001%), this does not account for the more indirect and institutionalized influence that corporate and financial leaders exert over politics and society as a whole.

"We hack everyone everywhere,"

From The Guardian "I had the authorities to wiretap anyone – you, a federal judge, to even the president if I had a personal email." He describes a "horrifying" infrastructure where he and other analysts could intercept the vast majority of human communications around the world.


And now Edward Snowden has gone and blown it open – literally. He has stepped out of the shadows and revealed himself to be the source of the Guardian's string of recent disclosures of what the National Security Agency has been up to in recent years – some of it ostensibly legal. He asserts that the NSA has routinely misled the people who are supposed to oversee its actions. He is only too aware that he has himself broken the law by going public with his concerns and that the consequences could well be personally extremely uncomfortable. His actions make him a different kind of frightening figure – to those whose methods he is now directly challenging.


The script for what happens next is, in a sense, routine. It is certain that the US government and security agencies will pursue Snowden to the ends of the earth – appropriately, in his case, since he has taken himself off to Hong Kong. But in other ways the usual processes are already wrong. There is no need for a leaks inquiry: the source has outed himself. And Snowden's current location complicates matter immensely for the US administration. He cannot easily be arrested, rendered and kept in solitary confinement – the fate of another young whistleblower, Bradley Manning, currently on trial and facing an eternity in prison. Edward Snowden promises to be a much more complex problem.


It is doubtless futile to suggest that the US government holds off from its pursuit of Snowden. The legal and diplomatic machinery is probably unstoppable. The appropriate authorities will doubtless bear in mind the parallels with the last comparable attempt to prosecute such a high-profile whistleblower – Daniel Ellsberg, leaker of the Pentagon Papers, who also revealed his own actions. His case, 40 years ago this year, was dismissed on grounds of government misconduct.


But it is not, we hope, ridiculous to suggest that both White House and Congress (and governments abroad, including in Westminster) take an intense interest in what Snowden has to say.


President Obama made much this week of the constitutional oversights of the intelligence infrastructure from both Congress and the courts – even if the secret proceedings of the Foreign Intelligence Surveillance Courts offer limited comfort to the general public. If this oversight is to be at all meaningful members of Congress ought to be seeking the earliest opportunity to learn what Snowden has to say – by video link, if necessary. Snowden is self-evidently not a common thief. He is more like a conscientious objector. It is not enough for Congress to outsource his interrogation to the FBI. It is vital, above all, that elected representatives test the truth of what he is saying – and not simply the ones who, it seems all too possible, have been asleep while minding the shop.

© 2013 Guardian News and Media Limited

"A Massive Surveillance State"

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Julian Assange Interview

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