Thursday, October 7, 2010

Top Secret America

The Washington Post series on Top Secret America points out there are about 850,000 people in the U.S. with top secret security clearances, which is about the same as the number of physicians in the U.S. or half the number of U.S. citizens who work for Walmart. One person with a top security clearance for every 350 people in the U.S.  Also, there are over 10,000 locations where top secret work takes place, approximately the same as the number of Starbucks locations in the U.S.  Note that of all the Iraq, Afghanistan and embassy cable leaks presented by wikileaks  the highest classification is secret, none of them are top secret.


Washington Post article on 'top secret America' 


A top secret security clearance is often required for jobs related to the methods of collecting intelligence or the design of advanced weapons systems which tend to be technology jobs with good salaries.  Compare the 850,00 U.S. citizens with top secret security clearance to the substantial overestimate of 768,700 total number of U.S. employees of IBM, HP, Oracle, Intel, AMD, Apple, yahoo, amazon, cisco, Alcatel-Lucent, motorola, Facebook, Microsoft, texas instruments, Cray and Google combined (it is difficult to get numbers for U.S. employment of most companies, the Bureau of Labor Statistics does not publish them, most likely a result of pressure to not publish politically sensitive statistics from the multinational corporations).  The defense department tech employment dwarfs the commercial U.S. tech industry employment, U.S. military spending is about one trillion dollars a year, about 25% of the U.S. federal budget.  As another example the Boeing Company, which is the only major commercial aircraft manufacturer in the U.S., is also a major defense contractor, half of the companies revenue comes from defense contracts.  The defense contracts of a single company, Boeing, are basically as large as the entire U.S. commercial aircraft manufacturing sector and commercial aircraft manufacture is one of the few commercial industries that the U.S. still competes well in internationally.  Also note that many of the employees in the U.S. commercial tech sector either have H1-B visas, visas for specialty occupations (often tech), or are working on defense department contracts or other government contracts.  Here is a leaked video of a legal conference on fraudulent strategies to disqualify U.S. citizens for work so that it becomes legally open to cheaper H1-B applicants, of course no one is punished for implementing the fraud.  Most H1-B visas last between 3 and 6 years.  Over the last ten years the number of H1-B visas granted per year have been between 65,000 and 195,000.  So a reasonable lower bound estimate for H1-B visa employment is 300,000, a pretty good chunk of U.S. tech employment.  Basically the deal for U.S. tech workers is, don't complain too much about off shoring and H1-B visas and you get insulated government jobs like those requiring a security clearance.  U.S. tech workers are finding it increasingly difficult to compete with Chinese and Indian engineers, in a 2005 study (congressional testimony) it is estimated that India and China combined graduated over three times the number of engineers as the U.S. in 2004.  These engineers have a much lower salary target than U.S. engineers.  Another sobering statistic is that according to a Forbes article by a retired Lockheed Martin CEO, Norm Augustine, 70% of U.S. engineering phD students are foreign born In China, eight of the top nine political posts are held by engineers. In the U.S., almost no engineers or scientists are engaged in high-level politics, it is primarily MBA's and lawyers in those positions. In case you didn't know lawyer is Latin for liar. The U.S. wins on natural resources per capita, China wins on brain power.  A big problem with government tech jobs from the U.S. tech workers perspective is substantial fraud in the government tech industry and religious influence on the military.


For examples of government tech contracts see IBM's contracts for the supercomputers at national labs Los Alamos, Lawrence Livermore and Argonne.  My focus is information technology, you could also look into the big weapon systems contracts like the F22 and F35.  Some of the supercomputer contracts are at least partially managed by the National Security Agency.  IBM system S (50 million estimate) was developed substantially by money from the NSA, called distillery internally.  One might speculate that IBM was interested in getting the NSA hooked on IBM proprietary software in order to extract much more revenue in the future, this is a very common strategy in the software industry, basically get them hooked on your crack and you have a great future revenue stream.  Note that IBM was founded on a government contract for the tabulating machines to compute the 1890 census.  Oracle has substantial contracts at the National Security Agency (NSA).  Oracle was founded on a CIA contract in 1977.  Sun Microsystems (bought by Oracle) was founded to commercialize two DARPA funded projects which turned into the solaris operating system (based on darpa's BSD project which is also at the heart of Apple's OSX) and the SUN project.  In fact much of Silicon valley was built by the DOD post world war two.  Currently, silicon valley is facing a major crisis as the engine of its growth, Moore's law, is petering out (some comments on the issue by Gordon Moore, co founder of Intel and the Moore of Moore's law).  Cray computer's MTA/XMT line was substantially funded by NSA contracts over a 20 year period and is a machine built without a purpose.  The vast majority of U.S. tech jobs that are truly open to U.S. citizens (not fraudulently targeted at cheaper H1-B visa holders) are controlled by defense contracts or other federal contracts.  Often times these contracts have very little to do with performance and more to do with corruption, with a revolving door policy at the pentegan and DOD (80% of retiring 3 and 4 star generals 2004-2008 got lucrative contractor jobs, in particular check out the revolving door man Mike McConnell) that is similar to the regulatory capture in the U.S. financial sector.  Classifying a contract so that it is not open to public scrutiny is a very common way to cover up corruption.  See the NPR piece on the 20 million the military spent on bogus contracts with Dennis Montgomery for what he claimed was software that could decode hidden terrorist communication, no one has spent time in jail as a result of this fraud.  While I worked at the NSA I witnessed similar abuse.  For instance I was at some of the meetings discussing the vivomind project (1-2 million estimate) which was clearly bogus, in the meetings there was substantial misrepresentation of fact, false claims of having won contracts from oil companies.  There were also rumors at the NSA that one of the major reasons for the failure of the future combat systems program which cost tens of billions of dollars was the NSA demanding the use of specialized cryptographic equipment so that favored contractors would share in the very lucrative contracts, unfortunately their products were nearly unusable.  The future combat systems program was eventually canceled, the primary contractors were Boeing and SAIC.  Also see how the "Justice" department handled Thomas Drake whistlblowing about mismanagment at the NSA.  For other examples of fraud in defense contracting see the BAE bribery case (billions), Frontline's black money episodeBoeing Air Force tanker fraud (billions), Halliburton-KBR bribery(6 billion)Siemens bribery case(billions), SAIC Trailblazer contract fraud(1 billion), SAIC's FBI information system fraud(170 million), SAIC New York City CityTime fraud(700 million).  Lots of fraud with basically no accountability and this is likely just the tip of the defense department fraud iceberg.  The trailblazer project demonstrates that the federal government has willfully neglected to learn that a very competitive information system can be built very cost effectively using commodity hardware and open source software, lessons taught by google, facebook etc.  The reason the Federal government refuses to learn this lesson is the power of the contractor ecosystem in federal government contracts, basically regulatory capture which is what Obama's outgoing Chief Information Officer (CIO) has indicated.  CIO Vivek Kundra complained of "an IT cartel," (IBM, SAIC, Booze Allen, Oracle), Kundra managed $80 billion in federal IT annual spending.  Kundra said the reason the federal system "defied logic" is partly due to how funding is allocated.  The "cartel" gamed the system.  Kundra also noted "that true value lies at the intersection of multiple data sets."  The information sharing problem in the federal government has been noted before, for example in the 9-11 commission report.   Better information management and information sharing could improve fraud detection in the defense industry as well as fraud detection in the U.S. financial sector.


NPR on Dennis Montgomery DOD fraud 


 NYTimes on Dennis Montgomery DOD fraud


Bogus vivomind project  


Here is a good documentary on the mismanagement of the Iraq war called "No End In Sight" by Charles Ferguson.


No End In Sight part 1 

 No End In Sight part 2 

No End In Sight part 3  


It is costing the U.S. about 80 billion a year for the war in Afghanistan. The GDP of Afghanistan is about 15 billion. There are about 35k Taliban. So the war costs the U.S. about 2 million per Taliban per year while the average Taliban makes about $500 per year. Our country is run by true geniuses.



Company   employment

IBM            105,000  (U.S. employment which is 25% of IBM's 400k worldwide employment)

Microsoft    56,000  (U.S. employment)

HP              100,000 (estimate U.S. employment based on similar sized multinational IBM and the fact that HP had 68k U.S. employees in 1999)

Google        23,000 (worldwide employment)

Intel             83,500 (worldwide employment)

AMD           10,400 (worldwide employment)

Oracle          105,000 (worldwide employment)

Apple          49,500 (worldwide employment)

Amazon       31,500 (worldwide employment)

Yahoo         14,000 (worldwide employment)

Cisco           70,700 (worldwide employment)

Alcatel-Lucent 30,500

motorola      60,000 (worldwide employment)

Facebook     1,700

Cray               800

Texas Instruments  27,100 (worldwide employment)

total             768,700

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