SHORTLY after 9/11, Senator Bob Graham, the chairman of the Senate Intelligence Committee, called for ''a symbiotic relationship between the intelligence community and the private sector.'' They say you should be careful what you wish for.
In the intervening years a huge espionage-industrial complex has developed, as government spymasters outsourced everything from designing surveillance technology to managing case officers overseas. Today less than half of the staff at the National Counterterrorism Center in Washington are actual government employees, The Los Angeles Times reports; at the C.I.A. station in Islamabad, Pakistan, contractors sometimes outnumber employees by three to one.
So just how much of the intelligence budget goes to private contracts? Because that budget is highly classified, and many intelligence contracts are allocated without oversight or competitive bidding, it seemed we would never know. Until last month, that is: a procurement executive from the Office of the Director of National Intelligence gave a PowerPoint presentation at a conference in Colorado and let slip a staggering statistic -- private contracts now account for 70 percent of the intelligence budget.
Of course, our spies always relied on private sector expertise. But in the decade after the cold war the intelligence community's budget was cut by 40 percent. On 9/11, our spies found themselves shorthanded -- untrained in the languages spoken by terrorists, unable to crack new communications technologies, generally lagging behind their counterparts outside the government. The privatization boom emerged out of sheer necessity. As one slide at the Colorado briefing had it, ''We can't spy ... if we can't buy!''
As it happened, the dot-com bubble had burst shortly before 9/11, cutting loose a generation of technology entrepreneurs who, when the government came calling, were only too happy to start developing new data-mining algorithms and biometric identification programs. New startups began sprouting in the suburbs around Washington. The number of ''contractor facilities'' cleared by the National Security Agency grew from 41 in 2002 to 1,265 in 2006. It was a gold rush, a national security bubble.
Seeing this emerging market, the traditional Beltway Bandits -- military-industrial giants like Boeing, Lockheed Martin and Northrop Grumman -- established intelligence and homeland security divisions. At Booz Allen Hamilton, a consulting firm one former C.I.A. official called ''the shadow intelligence community,'' revenue has doubled since 2000.
There is nothing inherently wrong with all this. We want our spies to have access to the best technology and expertise, and if that means they have to look outside the building -- and pay top dollar -- then so be it. The problem is that the ''symbiotic relationship'' has turned decidedly dysfunctional, if not downright exploitative.
Take, for example, one (very big) contractor, and one (very big) contract. In 2002, Science Applications International Corporation, a San Diego behemoth with more than 40,000 employees and $8 billion in annual revenue, received a $280 million contract from the National Security Agency to modernize its systems for sifting through the vast flows of information it intercepts. The project was called Trailblazer. By 2005, costs had ballooned to over $1 billion and the system had still not gotten off the ground. One C.I.A. veteran familiar with the program has declared it ''a complete and abject failure.''
Trailblazer was a notorious boondoggle, but it wasn't the biggest. That prize goes to the Future Imagery Architecture, a contract Boeing won before 9/11, in 1999, to develop a new generation of spy satellites that could photograph targets from space.
