The Situation Report: Contractors and Clearances in the Post-Snowden Era

When news broke this week that the FBI in August had arrested another NSA employee for allegedly stealing and hoarding highly classified information in his home and car, many immediately raised questions about the efficacy of the security reforms put in place at the agency in the aftermath of the leaks by Edward Snowden.

Such questions are absolutely valid and logical. In the aftermath of the Snowden incident—arguably the most damaging intelligence leak in U.S. history—why was Harold Thomas Martin III able to walk out of what is believed to be one of the most secure buildings in the world with top secret documents and digital information over the course of a decade?

But there are more fundamental questions at stake in this case. Like Snowden, Martin was an employee of Federal contractor Booz Allen Hamilton. Former senior officials who’ve worked at both Booz Allen and in the intelligence community as government employees are now questioning the efficacy of the security clearance process and the hiring practices of the firm that provides one of the largest pools of cleared Federal contractors.

A former senior career intelligence official, who spoke to MeriTalk on condition of anonymity, said this latest incident doesn’t reflect poorly on Booz Allen but rather highlights the urgency to once and for all reform and modernize the security clearance process.

“We have silos that have to be changed and we have to do it now,” said the former official, who’s worked for decades throughout the intelligence community. “The OPM backlog on investigations and periodic re-investigations is also a huge problem, as is the need for better identity management and user authentication.”

The former official, who knows many of the senior leaders at Booz Allen personally, defended the company. “Booz is the largest intel community firm I know. I don’t think there will be any repercussions from this. They’re as good as anybody,” the official said. “What is certainly needed now is moving the continuous evaluation program out of pilot phases more rapidly. We’re going to be moving into a rapid period of modernization and we should use this incident as an opportunity to move faster.”

The Obama administration last month tapped former Northrop Grumman chief of security Charles Phalen to lead the newly established National Background Investigations Bureau. But Phalen and the new NBIB have inherited a massive backlog of investigations and will have to find a way to deal with what one former official described as the out-of-control growth of the contractor workforce.

“When I worked at Booz Allen they were considered the best, at the top of their game,” the official said. “I mean, I wanted to get my Booz Allen shirt to wear so everybody knew I was with the best. Then I moved into government and in 2011, shortly after the company announced their initial public offering (IPO), they underwent this massive expansion. If you had a college degree, they were hiring you. And I immediately began to see a significant decrease in the quality of the employees that they were detailing to my office,” the former official said. “The profit motive was very strong.”

According to the company’s latest SEC filings, it employs 22,600 people, of which more than 15,000 hold a government security clearance.

But one official pointed to a challenge faced by the entire intelligence community: a major generational disconnect between the secrecy requirements of intelligence operations and the millennials entering the workforce. More than 65 percent of the intelligence community workforce date their entrance into the profession to during or immediately following the terrorist attacks Sept. 11, 2001. And many have brought with them fundamentally different views of secrecy.

“Many millennials view access to government secrets as a right, when in fact as a member of the intelligence community it is a privilege,” said a former Department of Homeland Security official. “The old Cold War warriors are all but gone now. But with companies like Booz Allen, where are they hiring from? They’re hiring kids right out of college, who sometimes bring with them the most liberal ideologies and ideas of government secrecy that are so rampant today on college campuses.”

According to the most recent statistics from the Director of National Intelligence, more than 2.8 million people hold a government security clearance. Of those, more than 860,000 are private contractors.