Privatizing Homeland Security

Nearly one of three dollars of the annual $42 billion budget of the Department of Homeland Security budget flows to private contractors. The corporate community, led by the national security sector, has greeted with enthusiasm and outstretched hands this flood of homeland security dollars. But in the wake of this surge in contract dollars for homeland security are rising questions about the management and oversight of this outsourcing, the purported benefits to national security, and the rising power and influence of the national security sector – now led by corporations that dominate all military, homeland security, and intelligence contracting. Outsourcing Government The DHS budget has expanded rapidly since its creation in 2003 led by the rising numbers for immigration enforcement and border security. The annual budgets for immigration enforcement and border security (not including supplemental funding and special administration initiatives for border fences and drug control) have more than doubled since the creation of DHS, rising from $7.4 billion to $14.9 billion in 2009. Outsourcing to the private sector by DHS has increased at even a faster pace than annual budget increases, rising from $4.2 billion in 2003 to $13.7 billion in 2009. DHS is not alone in the rush to the private sector to do the government’s job. Outsourcing now defines governmental operations, with private contractors now doing everything from running prisons, protecting U.S. embassies, gathering intelligence, interrogating foreign prisoners, building border walls (virtual and real), and fighting our wars in Afghanistan and Iraq. Private contracting – promoted as “public-private partnerships” by both the corporate world and the privatization divisions of federal departments -- has far outpaced federal budget increases even for such favored programs as border security. The dollar amount of federal contracts for goods and services from the private sector – led by national security firms – experienced an unprecedented surge during the Bush administration, rising from just over $200 billion in 2000 to $528 billion in 2008. (See chart. Not included in these figures in intelligence outsourcing, which now dominated intelligence operations, accounting for an estimated 70 percent of the intelligence budget, estimated by GlobalSecurity.org to be $66 million this year.) Leading the way in private contracting is the Department of Defense, with a whopping $3.1 trillion in private contracts, followed by the Department of Energy and with DHS ranking sixth in federal contracts in 2008.

What’s The Problem? For the booming homeland security industry, this public-private partnership brings flexibility and innovation to protecting the homeland. Marc Pearl, president of the Homeland Security & Defense Business Council (established in 2004), told a management subcommittee of the House Committee on Homeland Security: “This partnership then provides our government with the ability to access the best solutions and capabilities to achieve mission success – a safer and more secure nation.” Soon after DHS opened for business there were new concerns that a “homeland security complex” was in the offing – much as the onset of the cold war raised concerns by President Dwight Eisenhower and others about the undue influence of a new “military-industrial complex.” For the most part, though, criticism about the role of private homeland security contractors has not touched on concerns about power, influence, or security achievements of the homeland security industry. Rather most criticism of the outsourcing practices of DHS has focused on the department’s incapacity to manage and monitor its private sector contracts. The toughest critics of DHS come from government itself – various congressional committees, the General Accounting Office, and the department’s own Office of Inspector General. Although congressional critics and government reports express concern about the waste of taxpayer money because of the lack of adequate procurement and oversight procedures, there is little evaluation of the DHS public-private partnership itself – and how much the government needs to rely on private firms for services that it formerly provided in-house. The issue of increased outsourcing is, of course, not one particular to DHS. It runs through government, which has since the 1980s increasingly relied on the private sector. The ideological conviction that the private market should be the engine of the entire economy, the associated political push to downsize government, weakened unions and the related effort to skirt unionization, and government strategies to cut costs and increase efficiency (oftentimes proving counterproductive) have all driven outsourcing of government functions.

Chart: Federal Contracts, FYs 2000-2008, USAGovernmentSpending.org Next: Federal Contract Dollars Creating New National Security Corporations