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🌊 Inside “Big Spy”
How private intelligence contractors became America's shadow agencies
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By Barratt Dewey
In the Washington, DC suburb of McLean, Virginia, just a short drive from CIA headquarters, sits the headquarters of what many call "the world's most profitable spy organization." It's not a secret government facility or top-secret agency, but the headquarters of a publicly traded company that generates 98% of its roughly $11B in annual revenue from the US government.
That company is Booz Allen Hamilton.
Booz Allen exemplifies a remarkable shift in how America conducts intelligence and security operations. What began as a business consulting firm in 1914 has transformed into a cornerstone of America's national security infrastructure – and potentially a target for significant budget cuts under the Trump Administration's Department of Government Efficiency (DOGE).
Booz Allen's path to becoming an intelligence powerhouse began innocently enough. In 1940, a year before Pearl Harbor, the US Navy turned to what was then called Booz, Fry, Allen & Hamilton for help tracking German U-boats. The firm helped develop sensor systems that would eventually help sink much of Nazi Germany’s submarine fleet.
This one-off wartime collaboration transformed into a permanent relationship. By 2008, Booz Allen had become so entrenched in government work that it sold off its commercial consulting business to focus exclusively on federal contracts. Today, Booz Allen employs more than 34,000 people, over 76% of whom hold classified clearances.
The revolving door between government intelligence agencies and Booz Allen spins fast. James Clapper, former Director of National Intelligence under President Obama, previously worked as a Booz Allen executive. Mike McConnell, the firm's longtime vice chairman, was Director of National Intelligence under President George W. Bush and, before that, Director of the NSA.
The list goes on.
This is why critics have nicknamed the company the "shadow IC" – a shadow intelligence community populated by "former secretaries of this and directors of that," as a former CIA deputy director put it.
And nothing was better for Booz’s business than 9/11.
This deep dive documents Booz Allen’s rising power since 2001, the role it plays today, and what DOGE’s efforts mean for the company’s survival.
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Editor’s Note
Thank you, Roca readers! As always, we’d love to hear your thoughts on today’s deep-dive: What are the implications of outsourcing national security? Should DOGE’s cuts target the intelligence-industrial complex? Why or why not? Email us here! Also, we want to know whether you have enjoyed the series this week? Please send in recommendations for other stories you’d like us to cover.
If you missed our recent deep-dives, here they are:
Folks who wrote in to yesterday’s story are pretty optimistic about the rise of Anduril and other AI firms. Jerry from Chesapeake, VA sums it up here:
This is a major positive for DoD. Anduril’s philosophy of “build a great product and then sell it” is exactly the medicine a now broken DoD acquisition system needs. They may serve as a big disrupter to the defense industry’s concept that the big five have to wait to be asked before they develop and force them to become more proactive, innovative, on time and within budget.
That’s it for today. See you tomorrow!
–Max and Max