Insiders on the Loose : Nobody Knows What All the Government’s Consultants Are Doing

When the Justice Department announced Operation Ill Wind last June, it was as if a hurricane had suddenly struck the entire defense-procurement system.

The revelations concerning potential criminal behavior on the part of some well-connected defense consultants brought the usually behind-the-scenes world of consulting out into the open. Just as the eye of a hurricane provides a brief respite, the secrecy of the grand-jury process has thrown a calmness over the events of the scandal over procurement. It is appropriate then, in this time of relative calm, to take a systematic look at the role that consultants play in our government.

Since 1978, when President Jimmy Carter asked for a short list of all consultants who were working for the federal government, we have been aware of an abysmal lack of information on the government’s use of such people. We do not know the answers to such basic questions as how many consultants work for the government, how much we pay them (estimates have ranged from $243 million a year to $26 billion a year), what work they are doing, or whether anyone has checked to see if federal workers could have done the job.

Yet, increasingly, the basic work of government has been delegated to a work force that is nowhere to be found on the official organization charts--a shadow government.

It is not my contention that this shadow government is totally corrupt. It is my contention that Congress, the press and the public should have easy access to the “real organizational charts” of our federal agencies. Only when we have information on the numbers of consultants and the actual work that they are performing can we then have a true picture of our government.

We found in the past that the Department of Energy employed a contractor to help plan our nation’s response to future oil shortages. This same contractor also worked for the Organization of Petroleum Exporting Countries. A federal worker would not be allowed to maintain this potential conflict of interest. But in the shadow of government the agencies often don’t know what private-sector (or in this case what international) interests the consultants or contractors have.

At the Department of Defense, we recently found that a consulting organization had largely written the department’s directive that established the Pentagon’s policy on consultants.

In 1981 the Department of Defense testified that it had 31,000 contractors performing consulting services, studies, management and professional services. The government did not know in 1981, and the government still does not fully know in 1989, what potential conflicts of interests exist between the work that these individuals do for the government and the work that they do for the private sector.

In the defense-procurement scandal we have seen that private contractors themselves have the resources and the incentive to hire their own private consultants. The actual work performed by these private-sector consultants and their relationship to the government is shrouded in the same shadow as the government’s own consultants and contractors.

It is all too difficult to find the most basic data on the government’s private work force. But at least when a consultant is hired by the government some record should exist. This new level in the private bureaucracy, where consultants hire consultants, defies even the most basic opportunity for scrutiny. Though tax dollars might (it is hard to say with certainty) be paying these consultants to consultants, neither Congress nor the public can find out what these people are actually doing.

We are becoming a nation of insiders and outsiders, not public officials and citizens. On the one hand, the public is unaware of the decisions and actions made by this unelected bureaucracy. On the other hand, those who happen to be plugged into this shadow government have privileged access to government information. When unscrupulous individuals trade on this government information and are caught, we have a scandal. I deplore this alleged example of profiteering off one’s privileged access to information. Until we have total disclosure, however, we simply don’t know the extent of the procurement problems.

We need our own glasnost in this area. Unless we have comprehensive disclosure of the private-sector connections of persons hired as government consultants or contractors, then neither Congress, the citizens nor indeed the majority of the federal work force can have complete trust that we are receiving unbiased and untainted advice. Furthermore, as far as defense contracting is concerned, only through disclosure will we know if major procurement decisions (that is, weapon systems) are being made based on reasons of national security and not based on who had the best inside information. While the disclosure of who is doing what for the federal government and who his private-sector clients are will not solve all the defense-procurement problems, this openness will go a long way toward restoring confidence in our system.

I am somewhat encouraged by the Pentagon’s recent announcement that it no longer opposes the registration of consultants. With the Defense Department’s support, perhaps the congressionally mandated requirement for the Administration to formulate a consultant registration proposal will result in some meaningful procurement reform. Unfortunately, the legislation gives the incoming Bush Administration the option of deciding whether or not to actually use the registration proposal.

Yet when the grand-jury indictments start the Operation Ill Wind hurricane blowing again, I hope that the new Administration will seize the concept of consultant registration as a way of restoring taxpayer confidence in a troubled system.