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The “National Security” Apparatus Has Been Hijacked to Serve the Needs of Big Business

Washington’s Blog
Thursday, September 16, 2010

As I noted yesterday:

Claims of “national security” are … used to keep basic financial information – such as who got bailout money – secret. That might not bode for particularly warm and friendly treatment for someone persistently demanding the release of such information.

I gave the following two examples:

  • Reuters noted in January:

    U.S. securities regulators originally treated the New York Federal Reserve’s bid to keep secret many of the details of the American International Group bailout like a request to protect matters of national security, according to emails obtained by Reuters.

  • And Business Week wrote on May 23, 2006:

    President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations

Further evidence comes from the Department of Homeland Security’s involvement in requests for information under the Freedom of Information Act. As AP noted in July:

For at least a year, the Homeland Security Department detoured requests for federal records to senior political advisers for highly unusual scrutiny, probing for information about the requesters and delaying disclosures deemed too politically sensitive.


The Freedom of Information Act, the main tool forcing the government to be more open, is designed to be insulated from political considerations.


Career employees were ordered to provide Secretary Janet Napolitano’s political staff with information about the people who asked for records — such as where they lived, whether they were private citizens or reporters — and about the organizations where they worked.If a member of Congress sought such documents, employees were told to specify Democrat or Republican.


The special reviews at times delayed the release of information to Congress, watchdog groups and the news media for weeks beyond the usual wait, even though the directive specified the reviews should take no more than three days.

Two exceptions required White House review: requests to see documents about spending under the $862 billion stimulus law and the calendars for Cabinet members.Calendars became politically sensitive after AP obtained them for Treasury Secretary Timothy Geithner. They described calls several times each day with Wall Street executives.

***Under the law, people can request copies of U.S. government records without specifying why they want them and are not obligated to provide personal information about themselves other than their name and an address where the records should be sent.

Yet several times, at least, junior political staffers asked superiors about the motives or affiliations of the requesters

Wired described it this way:

The DHS issued a directive to employees in July 2009 requiring a wide range of public records requests to pass through political appointees for vetting. These included any requests dealing with a “controversial or sensitive subject” or pertaining to meetings involving prominent business leaders and elected officials. Requests from lawmakers, journalists, and activist and watchdog groups were also placed under this scrutiny.

Moreover, as the ACLU notes, Fusion Centers – a hybrid of military, intelligence agency, police and private corporations set up in centers throughout the country, and run by the Department of Justice and Department of Homeland Security – allow big businesses like Boeing get access to classified information which gives them an unfair advantage over smaller competitors:

Participation in fusion centers might give Boeing access to the trade secrets or security vulnerabilities of competing companies, or might give it an advantage in competing for government contracts. Expecting a Boeing analyst to distinguish between information that represents a security risk to Boeing and information that represents a business risk may be too much to ask.

(Similarly, Blackwater/Xe provides security for both the government and large corporations, and is interconnected with intelligence gathering operations.)

And a large portion of all intelligence work has now being outsourced to private companies. For example, according to the Washington Post:

Close to 30 percent of the workforce in the intelligence agencies is contractors.

And under the FBI’s Infraguard program, businesses sometimes receive intel even before elected officials.

Of course, “no-bid” contracts in Iraq and elsewhere are another example of how national security claims have been used to bypass the normal bidding process which is designed to save taxpayers money. Halliburton and other friends of the Bush administration have received tremendous windfalls in this fashion. And because BP supplies most of the oil and gas to the U.S. military, I would be surprised if BP has to participate in normal bidding procedures for new war-related projects.

Indeed, the whole Gulf oil spill is a classic example of how national security claims have been used to protect a private corporation. Specifically, as many locals have testified (and as will come out more in the next couple of years), the Department of Homeland Security has helped to enforce a blackout of information on how bad the oil spill was, and has hindered scientists from collecting data from the most impacted sites.

And Treasury Secretary Hank Paulson warned Congress that there would be martial law unless the Tarp bailouts were approved. As I pointed out last October:

The New York Times wrote on July 16th:

In retrospect, Congress felt bullied by Mr. Paulson last year. Many of them fervently believed they should not prop up the banks that had led us to this crisis — yet they were pushed by Mr. Paulson and Mr. Bernanke into passing the $700 billion TARP, which was then used to bail out those very banks.

Congressmen Brad Sherman and Paul Kanjorski and Senator James Inhofe all say that the government warned of martial law if Tarp wasn’t passed:

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