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

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Washington’s Blog

As I noted yesterday:

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:

    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

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:


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.




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 recordssuch 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.




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:

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 to get access to classified
information which gives them an unfair advantage over smaller

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.

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 reporters, scientists and 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.  See this, this and this.

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.

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

Bait And Switch

Indeed, the Tarp Inspector General has said that Paulson misrepresented some fundamental aspects of Tarp.

And Paulson himself has said:

During the two weeks that Congress considered the [Tarp] legislation, market conditions worsened considerably. It
was clear to me by the time the bill was signed on October 3rd that we
needed to act quickly and forcefully, and that purchasing troubled
assets—our initial focus—would take time to implement and would not be
sufficient given the severity of the problem
. In
consultation with the Federal Reserve, I determined that the most
timely, effective step to improve credit market conditions was to
strengthen bank balance sheets quickly through direct purchases of
equity in banks.

So Paulson knew "by the time the bill was
signed" that it wouldn't be used for its advertised purpose - disposing
of toxic assets - and would instead be used to give money directly to
the big banks?

And see this and this.

the above-described ways - and many others as well - the entire
"national security" apparatus has been hijacked to serve the needs of
big business.

President Eisenhower warned us about the
military-industrial complex. But its not just the "military".
Homeland Security, intelligence agencies, and other portions of the
government have also become servants of big business as well.

Indeed, the interests of the government and big business are so closely aligned
that some high-level government officials may consider any threat to
the bottom line of the big banks and other corporate giants as an
existential threat to the nation's security.