The Privatization of Intelligence

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Editors note: Over the coming days we will be discussing (see here) Professor Simon Chesterman’s article: “We Can’t Spy . .  . If We Can’t Buy!: The Privatization of Intelligence and the Limits of Outsourcing Inherently Governmental Functions”  (2008) 19 EJIL 1055 (available here).

Simon Chesterman is Global Professor and Director of the New York University School of Law Singapore Programme and Associate Professor of Law at National University of Singapore, Faculty of Law. His publications include:  From Mercenaries to Market: The Rise and Regulation of Private Military Companies (Oxford University Press, 2007) (ed. with Chia Lehnardt), Shared Secrets: Intelligence and Collective Security (Lowy Institute for International Policy, 2006)

This piece builds on two discrete areas of research that I’ve been pursuing for a couple of years and are now beginning to intersect.

The first is the privatization of the military and security sector. Building on the project on Global Administrative Law at New York University School of Law, the work that I’ve done with colleagues like Chia Lehnardt has focused on regulation of private military and security companies (PMCs or PMSCs). One product of that research was the book, From Mercenaries to Market, and a key argument was that we need to take the emerging market for force seriously – rather than pursuing the abolitionist approach that had long dominated discussion of this issue within the United Nations.

The second area is the oversight and accountability of intelligence services. I now teach a course on “Intelligence Law” at the National University of Singapore under the auspices of the NYU School of Law Singapore Programme and have written about the difficulty of using law that must normally be public to regulate government activities that must often be kept secret.

The article partly documents the privatization of intelligence, but also suggests the beginnings of an answer to a question that has long dogged debates over PMCs: what can and what cannot be outsourced?

Though it still lags behind the privatization of military services, the privatization of intelligence expanded dramatically with the growth in intelligence activities after September 11. This has seen an enormous increase in the money spent on intelligence (dominated by large items such as spy satellites) but also in the proportion of personnel working on contract. At the CIA’s station in Islamabad, for example, contractors reportedly outnumber government employees three-to-one.

Controversy over government reliance on outsourcing in this area frequently coalesces around issues of cost (a contractor costs on average $250,000 per year, about double that of a government employee), “brain-drain,” and periodic allegations of self-dealing and other forms of corruption. More recently, however, the confirmation by the Director of the CIA that contractors have probably participated in waterboarding of detainees at CIA interrogation facilities has sparked a renewed debate over what activities it is appropriate to delegate to contractors, and what activities should remain “inherently governmental.” This is, of course, separate from whether such activities should be carried out in the first place.

Privatization of intelligence services raises many concerns familiar to the debates over private military and security companies. One of the key problems posed by such companies is their use of potentially lethal force in an environment where accountability may be legally uncertain and practically unlikely; in some circumstances, they may also affect the strategic balance of a conflict. The engagement of private actors in the collection of intelligence exacerbates the first set of problems: it frequently encompasses a far wider range of conduct that would normally be unlawful, with express or implied immunity from legal process, in an environment designed to avoid scrutiny. Engagement of such actors in analysis raises the second set of issues: top-level analysis is precisely intended to shape strategic policy and the more such tasks are delegated to private actors the further they are removed from traditional accountability structures such as judicial and parliamentary oversight, and the more influence they may have on the executive.

The simplest way of containing some of these problems would be to forbid certain activities from being delegated or outsourced to private actors at all. In the United States, this question is framed in the language of “inherently governmental” functions, which are defined as being “so intimately related to the public interest as to mandate performance by government personnel.” Significant loopholes exist, however. In times of military mobilization, for example, the Defense Department is allowed to determine whether such rules apply to it at all.

Uncertainty in this area appears to be intentional and thus exacerbates the accountability challenges posed by secrecy and problematic incentives for private actors. At the very least, the article argues, the responsibility to determine what is and is not “inherently governmental” should itself be an inherently governmental task.

In the meantime, however, my depressing conclusion is that – even with revelations that U.S. contractors appear to have engaged in torture – reforms seem unlikely to come because of concerns about accountability and links to democratic structures. Rather they are more likely to be driven because each of those torturers cost the U.S. taxpayer double the salary of a Federal employee.

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