One of the basic pay to play schemes we see in most states and in the Federal government involves the privatization of government services to third party contractors who then kick back money through campaigns or lobbyists for increased privatization. It’s a transfer of state power from the public, which elects the government, to private actors, who increasingly control the data, the hiring standards, and the purchasing decision of the Federal bureaucracy.

Sometimes the kickback scheme is direct, and that’s illegal. But more often than not, it’s indirect. A firm, through subsidiaries or parent companies, hires a bunch of lobbying firms staffed by ex-officials. Then those ex-officials go to work to get the government to award contracts to the firm doing the hiring. The money flows in a nice circle of corruption.

This is just the latest example of indirect and legal bribery. Federal Computer Week reports:

In November, President Barack Obama signed into law the “VOW to Hire Heroes Act,” which included language to set up an expedited process for hiring returning solders for federal jobs.
But the VA’s own outsourcing, which began to grow under the Bush Administration and are continuing to expand, are abolishing many federal jobs currently held by veterans, the American Federation of Government Employees (AFGE), an AFL-CIO union, said in a Feb. 8 news release.
For example, the Veterans Benefits Administration recently entered into a $54 million three-year contract with ACS Government Systems to perform claims processing work.
That work currently is being performed by “large numbers of veterans,” the union said. “To add insult to injury, the VBA employees are being asked to volunteer to train the contractors to do their work.”
“Contract claims processors working for profit will now handle the most personal information of our veterans.” AFGE National President John Gage said in the release.
In several other outsourcing contracts in recent years, the VA also has gotten rid of many government jobs historically held by veterans, AFGE said…
The VA also has failed to comply with a 2009 law that requires the agency to do a cost-benefit analysis before each outsourcing contract is awarded, to determine whether the contract is cost-effective for taxpayers, the union said.
“The agency continues to violate federal law by contracting out work that has been traditionally performed by veterans,” the union said. “The outsourced jobs include many entry level jobs that disabled veterans rely on to get back on their feet after returning from the battlefield.”

ACS Government Systems spent $900,000 on lobbying in 2010, and the company itself is a subsidiary of Xerox. Xerox spent $1.25 million on lobbying in 2011. Lobbying firms hired by ACS include the BGR Group, Federal Advocates, B&D Consulting, Akerman, Senterfitt & Eidson, and Manatt, Phelps & Phillips.

As just one example, the BGR Group describes its business as follows. It’s bureaucrat-speak for “we raise a lot of money for politicians and get plum positions because of it”.

The backgrounds of the BGR team include senior-level appointments in the White House, Congress, and Executive Branch departments and agencies, and involvement in political campaigns at the presidential, congressional, and gubernatorial levels. In these key roles, each member gained expertise in public policy, strategic thinking, effective advocacy, and delivering results.

Many of the employees at the BGR group were and are political fundraisers, some for the GOP and some for the Dems.  So there you have it. The money sluicing through the system is so pervasive that it has effectively created a whole series of shell organizations whose sole purpose is to extract money from government on behalf of powerful corporate entities. These entities move some money back into the political system through campaign contributions and lobbying, but it’s essentially one giant network of officials and former policy-makers, a sort of shadow government.

In this case, it’s profitable to these people to have the Veterans Department fire its veterans so it can award the contract to a subsidiary of Xerox. So that’s what’s happening.

Filed under: Lobbying