In April 2007, a report into the extent to which American intelligence has been outsourced to private contractors was buried because its contents were deemed too explosive. The US intelligence budget (the 16 spy agencies overseen by the DNI, including the NSA, CIA, FBI, DIA, etc.) is classified but in 2007 was generally considered to be around $44 billion. At least half of this went directly to private contractors.
The privatizing of intelligence began under the Clinton Administration but really took off under Bush. Some of the largest intelligence contractors are Booz Allen, SAIC, CACI International, General Dynamics, Lockheed Martin, and Northrop Grumman. The current DNI Mike McConnell used to work at Booz Allen (see item 12). This one outfit alone has 10,000+ employees with TS/SCI (Top Secret/Sensitive Compartmentalized Intelligence) the highest kind. Waste, cronyism, conflicts of interest, the revolving door abound (see item 217), and, like so many things associated with the Bush Presidency, you have to wonder if this is healthy for, or compatible with, a democracy.