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The ChoicePoint Conundrum & The Empires of Outsourcing

Public-private arbitrage in illegal access to Mexican voting records by the FBI. At some point the consultant ChoicePoint bribed federal officials for data that ended up in the hands of a U.S. opposition political party, passing through the hands of the FBI. That is the working theory, at least

See also Greg Palast, Bush Team Helps Ruling Party “Floridize” Mexican Presidential Election

Source: CartaCapital.

By: Maurício Dias

Topic: Aggressive Tone Assumed by Brazilian Diplomats in Espionage Episode; Role of Major Consultancies in the Brazilian Government. 

Spy x Spy

The decision of president Dilma Rousseff to cancel her trip to the United States in October, in reaction to the espionage affair, was an opportune one.

In this spy tale there are, however, certain contradictions. At the National Petroleum (ANP), the Databank for Petroleum Exploration and Production  (BDEP) is managed by the American Halliburton, through Landmark Solution.

The company just laid off about 100 Petrobras workers.

The firings are sparked mainly because Petrobras is developing a smaller amount of new wells in older areas, especially in the Campos basin, as it seeks to increase efficiency, he said.

And there is more.

McKinsey performs almost all the strategic studies of the national development bank (BNDES). During the Cardoso government, it occupied an entire floor of the Petrobras building, where, they say, it also managed the state-owned oil company’s strategic information

Booz-Allen — former employer of the independent contractor Edward Snowden — was responsible for preparing the plan “Brazil in Action,” a management plan for the second mandate of Cardoso’s government.

Booz Allen in turn is owned by the infamous Carlyle Group, a corporation known for ties to insider politicians.

Now, if you are willing to get excited about newsflow from the shrill Huffington Post, read this interview with Snowden, whose revelations received major play from both Globo and international news groups.

Surprisingly, Brazil now gets along with a fair portion of the international press, having gotten over that distasteful episode with Larry Rohter of the New York Times.

Like the Dilma snub, various acts of Brazilian diplomatic self-assertion …

… merely confirm what many U.S. diplomats already concede privately: that is to say, that Brazil is a force to be reckoned with and the country may even undermine or upset traditional regional U.S. dominance in the not too distant future.

The leftist Carta Maior is well informed as usual.

The revolving door between major corporations and the U.S. government reflects the efficient synergy between the State and the Market in the most powerful capitalist economy on earth.

Strategic appointments in the government are regularly occupied by ranking business executives and the CEOs of gargantuan industrial complexes or financial institutions.

Activities theoretically specific to the private sector are outsourced with maximum chutzpah in order to maximize private business dealings. Since the war, even security and intelligence services have become vacuum cleaners sucking public money into private accounts.

It is this blurring of borders and economic sectors that underwrites the myth of privatization and the maximization of private profits.

In this symposium among money, power and infuence, a name to reckong with is Booz-Allen, long-time partner of the State Department in intelligence and consulting.

Since the 1940s, during the Second World War, the group has worked closely with the U.S. military-industrial complex.

It has come to point at which Booz is recognized as a sort of parallel cabinet to the U.S. intel community.

Its status as an arm of the State and U.S. interests, is therefore a fundamental feature of Booz-Allen — which the Cardoso government knew very well it hitched its strategic and public interest wagon to the company.

Booz-Allen was founded  in 1914 and rapidly grew into a giant in the consulting sector.

Like many major U.S. corporations, it meshed its profits with the opulent budget of the State, predominantly based on the cost of the war.

The book”Spies for Hire: The Secret World of Intelligence Outsourcing” (“Espiões de aluguel: o mundo secreto da terceirização do serviço de inteligência”, New York: Simon and Schuster, 2009), by Tim Shorrock and Dick Hill, dedicates an entire chapter to Booz-Allen. It provides details of how the company drummed up its own business on the screens of the U.S. intelligence community.

The book relates how,in 1998, a career employee of the secret service, who had accepted a directorship at the CIA, already considered Booz-Allen a veritable extension of the U.S. intel community.

According to Dempsey, in a sworn statement published by magazines specializing in national defense,  it was easier to meet ex-secretaries directors of the intel community in private than in official meetings.

In 2005, proving her point, Dempsey became a VP at Booz-Allen, who workforce is 18.000 (here we have the faction of supposedly staunch defenders of the Minimal State that hides the real dimensions of its enormous State) and the company netted US$3.7 billion in earnings. In 2012 these revenues rose to US$ 5.76 bilhões (more than R$ 12 bilhões). The numer of Booz employees passed 25,000 persons (agents?) scattered over the four corners of the earth.

Half and Half 

Again according to Shorrock & Hill, at least 50% of the company’s business is financed by the U.S. government.

The other 50% are consulting contracts with major private sector firms, in areas ranging from energy and chemicals to consumer goods.

A specialty of the firm is helping to influence governments and public agencies in other countries to follow policies that represent business opportunities for big business and U.S. investment funds.

One of its most lucrative lines of business, as it reports in its own reports, has been privatization programs.

This is was the foundation of the company’s successful penetration of Brazil during the FHC government.

Relations between Booz-Allen and the Ministry of Defense, which had been close for some time now, became even more explicitly, and deepened during the Bush II regime.

From that point on, the company became involved in the most sensitive intelligence activities of the the Pentagon.

More than this, it headed up the most important Defense projects after the 9-11 attacks.

This was the trigger for the institution of the espionage system denounced by Edward Snowden.

Bush and his VP, the omnipotent Dick Cheney, sent a clear message to the Dept. of Defense: the private corporations, coordinated by Booz-Allen, were authorized to management the U.S. intelligent system.

The Booz-Allen professions, notoriously much more than simple consultants, were notoriously known as more than mere consultants. They were given internal access to act as high-ranking members of the intel community. 

What had already become a parallel power had become the flesh and bone of U.S. intelligence.

“Our man in theCasa Branca”

A central figure in this intimate relation was Mike McConnell. After retiring from the Marines, McConnell became a vice-director at Booz-Allen in the “cyber division.” 

In 2007, he was named vice-director of the Department National of Intelligence, running a team of 100,000 (secret agents, surveillance specialists, informants, information analysts, with a budget of $ 47 bilion — or at least that was the formal budget).

In presenting his CV, McConnell boasts of having been a government leader, respsonsible for relations between the Oval Office and Congress, as well as with international leaders and the “business community in the U.S.”

In 2009, with Obama as president, McConnell returned to Booz-Allen.

From Useful to the Criminal    

In Booz-Allen’s public profile, there are certain areas in which the company operates which … has been subjected to accusations of wide-ranging, general and unrestricted espionagem. Veja writes:

The “governamental reforms” of the 1990s play a notable role.

The company had already overseen the reform of the Mexican election system and the privatization of companes is various regions and companies: Banks, in Brazil and México; Engergy  (Brasil, Argentina, Peru in Bolívia), railways in Argentina), petrochemical (Brasil), ports  (México and Venezuela), smelting (Argentina and Brasil) and telecom (Brasil, México and Uruguai).

These sectors, as most of you will remember, were no longer considered as strategic polls for development and the national state — the latter a term which fell into disuse under the Toucans, treated with derision by their theoreticians and political operators. 

Something similar would occur in other neoliberal presidencies in the region who infested Latin American governments. 

These became strategic, however, for U.S. interests, based on the recommendations of their intel operations and related consultancy business. 

On the part of the U.S., it was an orchestrated intelligence operation. For Latin America, it was an example of enormous stupidity based on neoliberal common wisdom that left deep scars and, as we now see, exposed strategic flanks to the civil services of other nations. 

A Parallel Case: Mexico 2006

Possibly the worst case of this kind ever heard of was the bribery of Mexican election officials that gave U.S. intelligence access to 65 million voter IDs.

The theft was demonstrated by a group of hackers on the daily show of Carmen Aristeguí of CNN en Español.

They pulled up a private Web site, entered an encrypted pass key, then showed Carmen her own voter registration record, along with a few others to establish that they could get the goods on absolutely everybody.

Now that was an impressive journalstic feat.

The strategic communications company that pulled off this feat was ChoicePoint, working with a tech company with ties to president to be, called Hildebrando.

(The IT consultant and the presidential candidate were brothers in law).

The election was an absolute farce. The story: