How "private" are corporations that depend heavily on government contracts?

Glenn Greenwald raises an intriguing point, as he so often does, this time on the relationship of the telecommunications industry in the US with the federal government, in Telecom amnesty would forever foreclose investigation of vital issues Salon 10/15/07:

The cooperation between the various military/intelligence branches of the Federal Government -- particularly the Pentagon and the NSA -- and the private telecommunications corporations is extraordinary and endless. They really are, in every respect, virtually indistinguishable. The Federal Government has its hands dug deeply into the entire ostensibly "private" telecommunications infrastructure and, in return, the nation's telecoms are recipients of enormous amounts of revenues by virtue of turning themselves into branches of the Federal Government.

There simply is no separation between these corporations and the military and intelligence agencies of the Federal Government. They meet and plan and agree so frequently, and at such high levels, that they practically form a consortium. Just in Nacchio's limited and redacted disclosures, there are descriptions of numerous pre-9/11 meetings between the largest telecoms and multiple Bush national security officials, including Paul Wolfowitz, Condoleezza Rice, NSA Director Gen. Michael Hayden and counter-terrorism advisor Richard Clarke.

The top telecom officials are devoting substantial amounts of their energy to working on highly classified telecom projects with the Bush administration, including projects to develop whole new joint networks and ensure unfettered governmental access to those networks. Before joining the administration as its Director of National Intelligence, Mike McConnell spearheaded the efforts on behalf of telecoms to massively increase the cooperation between the Federal Government and the telecom industry.

The private/public distinction here has eroded almost completely. There is no governmental oversight or regulation of these companies. Quite the contrary, they work in secret and in tandem -- as one consortium -- with no oversight at all. (my emphasis)

His focus in the post is on the disastrously bad idea of giving telecoms and their officers amnesty for breaking the law in concert with the Cheney-Bush administration in surveillance matters. And he surely exaggerates a bit when he says that they operate "with no oversight at all". At least, I hope he's exaggerating.

But he raises a point that deserves far more attention, and should be at the center of public discussion about companies in the fabled "military-industrial complex", but really more generally about companies that depend heavily on federal contracts.

Which is that to a significant extent, they are companies that operate with government direction and financial assistance. In theory, corporations that sell stock are considered to be "public" corporations. But in regulatory and legislative attitudes, and certainly in the reporting of our broken national press corps, they are treated as part of the "private sector" along with "private" companies.

Yet for companies like Blackwater (to take just one example) that are so intimately involved with the federal government and which benefit so handsomely from federal contracts, that's at best a polite fiction. They aren't state-owned enterprises. But they also are not functioning separately from government in the sense that the "private sector" label implies.

Tags: glenn greenwald, military industrial complex, war profiteering