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Firms that profit from terror war

West across the Potomac River that runs south of Washington, the unofficial seats of power — private and corporate — become visible at night. There in the Virginia suburbs are the brightly illuminated company logos of Top Secret America: Northrop Grumman, SAIC, General Dynamics.

world Updated: Jul 27, 2010 00:41 IST

West across the Potomac River that runs south of Washington, the unofficial seats of power — private and corporate — become visible at night. There in the Virginia suburbs are the brightly illuminated company logos of Top Secret America: Northrop Grumman, SAIC, General Dynamics.

Of the 1,931 companies known to work on top-secret contracts, 110 of them do roughly 90 per cent of the work on the corporate side of the defense-intelligence-corporate world.

Ten years ago, General Dynamics’ center of gravity was the industrial port city of Groton, Connecticut, where workers churned out submarines.

Today, the firm’s commercial core is made up of data tools such as the digital imagery library and the secure BlackBerry-like device used by President Barack Obama.

General Dynamics embraced the emerging intelligence-driven style of warfare. It developed small-target identification systems and equipment that could intercept a single insurgent’s cellphone and laptop communications. It found ways to sort the billions of data points collected by intelligence agencies into piles of information that a single person could analyse.

Between 2001 and 2010, the company acquired 11 firms specialising in satellites, signals and geospatial intelligence, surveillance, reconnaissance, technology integration and imagery.

On 9/11 General Dynamics worked with nine intelligence organisations. Now it is has contracts with all 16. Its employees fill the halls of the National Security Agency and Department of Homeland Security.

The corporation was paid hundreds of millions of dollars to set up and manage the latter’s new offices in 2003, including its National Operations Center, Office of Intelligence and Analysis and Office of Security. Its employees do everything from deciding which threats to investigate to answering phones.

General Dynamics’ bottom line reflects this transformation. The company reported $31.9 billion in revenue in 2009, up from $10.4 billion in 2000.

Its workforce has more than doubled in that time, from 43,300 to 91,700 employees. Revenue from General Dynamics’ intelligence- and information-related divisions, where the majority of its top-secret work is done, climbed to $10 billion in the second quarter of 2009, up from $2.4 billion in 2000. This was 34 per cent of its overall revenue last year.

In the shadow of giants such as General Dynamics are 1,814 small to midsize companies that do top-secret work. About a third of them were established after 9/11 to take advantage of the huge flow of taxpayer money into the private sector.

Many are led by former intelligence agency officials. The vast majority have not invented anything at all, they just replicate what the government’s workforce already does.

Of the different companies in Top Secret America, the most numerous are the information technology, or IT, firms. About 800 companies do nothing but IT.

Some IT companies integrate the mishmash of computer systems within one agency; others build digital links between agencies; still others have created software and hardware that can mine and analyse vast quantities of data.

The government is nearly totally dependent on these firms. The result has been a remarkably cozy government-business relationship. This worries officials who believe the post-9/11 defense-intelligence-corporate relationship has become, as one intelligence officer described it, a “self-licking ice cream cone.”

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