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Booz in the News and Whistleblower Blues

Booz Allen Hamilton

The recent revelation that it was Edward Snowden, an employee of National Security Agency (NSA) contractor Booz Allen Hamilton, who blew the whistle on the NSA’s surveillance programs has sparked a debate over the government’s use of private companies to perform sensitive national security work. It has also thrust Booz Allen Hamilton into the spotlight.

Most of the media coverage of Booz Allen has focused on its size ($5.8 billion in annual revenue and 25,000 employees according to NBC News.com), its close government connections (current company vice chairman John McConnell is the former director of national intelligence; current director of national intelligence James Clapper is a former Booz Allen executive) and even the damage this recent controversy is causing to its stock value. A company that derives between 97 and 99 percent of its revenue from federal contracts (see “Government Contracting Matters” on page F-31) can expect to take a hit when one of its employees publicly reveals classified government data.

Unfortunately, Booz Allen’s track record of business ethics and integrity has largely escaped scrutiny.

The Project On Government Oversight has kept an eye on Booz Allen for years, primarily through our Federal Contractor Misconduct Database. According to our database, the company currently has 3 instances of misconduct and $3.8 million in fines, penalties, and settlements resulting from those instances.

NBC News.com correctly observed that 3 misconduct instances since 1995 for a company as big as Booz Allen is “a relatively small number.” But consider the nature of these instances: Two involve allegations of federal contract fraud, one of which almost got Booz Allen debarred in 2006. The third case is particularly relevant to the recent controversy, as it involved the mishandling of sensitive government data. As we blogged in February of last year, the Air Force suspended and proposed debarment of Booz Allen’s San Antonio office and five employees—one of whom was a retired Air Force officer—for improperly sharing protected, non-public government contracting information. When the suspension was lifted two months later, we were surprised to learn that the company admitted to having larger, company-wide ethics problems, including problems with its use of non-public information. The company also admitted it needs to do a better job of curbing potential revolving door abuses when it hires former government employees. (The non-public contracting data at issue in the matter had been obtained by the ex-Air Force officer, and he shared it with co-workers on his first day at Booz Allen intending to give his new employer an advantage in a contract competition.)

POGO was bothered by the fact that the three-year administrative agreement Booz Allen signed with the Air Force last year to settle the San Antonio matter did not address the issue of employees reporting misconduct directly to the government. It has long been our concern that intelligence agency contractors have virtually no whistleblower protections. With the dramatic growth in the number of intelligence contractors, and the number of contractor employees granted clearances to handle sensitive information, the lack of a viable whistleblower protection framework could make bombshells like the Edward Snowden disclosure more likely in the future.

Image by Flickr user GoWin a Deltek Network.

By: Neil Gordon
Investigator, POGO

Neil Gordon, Investigator Neil Gordon is an investigator for the Project On Government Oversight. Neil investigates and maintains POGO's Federal Contractor Misconduct Database.

Topics: Contract Oversight

Related Content: Contractor Accountability, Ethics

Authors: Neil Gordon

Submitted by Jack at: June 18, 2013
Americans should support Edward Snowden not the criminals in Washington that set up this spy ring of corruption. "We are rapidly entering the age of no privacy, where everyone is open to surveillance at all times; where there are no secrets from government." William Orville Douglas - (October 16, 1898 - January 19, 1980) served as an Associate Justice of the Supreme Court of the United States. "The real danger is the gradual erosion of individual liberties through automation, integration, and interconnection of many small, separate record-keeping systems, each of which alone may seem innocuous, even benevolent, and wholly justifiable." Anon., U. S. Privacy Study Commission, 1977 "It is the first responsibility of every citizen to question authority." Ben Franklin "Truth is coming, and it cannot be stopped" - Edward Snowden NSA whistleblower "In an interview with the French TV station LCP, former French minister for Foreign Affairs Roland Dumas said: ‘’ I’m going to tell you something. I was in England two years before the violence in Syria on other business. I met with top British officials, who confessed to me that they were preparing something in Syria." "This was in Britain not in America. Britain was organizing an invasion of rebels into Syria. They even asked me, although I was no longer minister for foreign affairs, if I would like to participate." <"Naturally, I refused, I said I’m French, that doesn’t interest me.’’" "Dumas went on give the audience a quick lesson on the real reason for the war that has now claimed the lives of tens of thousands of people." Former French Foreign Minister: The War against Syria was Planned Two years before “The Arab Spring”
Submitted by John H at: June 15, 2013
I would like to know who ruled against the recommended debarment. Was the person a former employees of the company or has the person gone to work for them since 2006? There should be a 12 month prohibition on employment by a government contractor after leaving government employment. Or at the very least they should be prohibited from working on government work for 12 months.
Submitted by Conehed at: June 15, 2013
Although there have been leaks in the past by govt employees, outsourcing of govt functions to for-profit contractors and third parties, such as info gathering, reveals the weakness of this process. Sadly, expect more of this.
Submitted by Makaainana at: June 15, 2013
The more things change the more they stay the same.
Submitted by Shaker47 at: June 15, 2013
All companies that go after government contracts are unethical and immoral because they have to be in order to compete against their unethical and immoral competition. It's the way of big business and actually most everything in life. The sports industry, and religion are big business now and they have been knee deep in scandal for many years. Anything that offers obscene amounts of money for winning is going to be waste deep in corruption. Some get caught but most slither out with victory. The only way to stop it is make the penalties much harsher.
Submitted by Carol at: June 15, 2013
But then they wouldn't make as much money, so that's out.
Submitted by arky72 at: June 15, 2013
And this is just the tip of the iceberg. Another private spy agency was contracted by the US Chamber of Commerce to go after left leaning groups, one of which was Move On.ORG. If Rep Darrell Issah is looking for scandals, he would hit the mother lode with this one.
Submitted by Carola Von H. at: June 15, 2013
Good job of investigative reporting. Interesting that Clapper is a former Booz boy. In general, contracting intelligence work seems highly unintelligent.
Submitted by mbneace at: June 13, 2013
It may be interesting to consider a 'wait period' for employment for all personnel, including military, that have security clearances (classified, secret, top secret), before being permitted to be employed by a direct government contractor (and subcontractor), such as BAH and the hundreds of others, say for two years. It is done is other situations.
Submitted by JadeQueen at: June 13, 2013
Another issue here is whether the information gathered is being used to front-run the market and end-run insider-protection mechanisms that are broken anyway, presently (that is, from the perspective on a non-insider).

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