Spies, Inc: the NSA’s catastrophic outsourcing failure – and what it means for surveillance today

In our first post in the run-up to the premiere of A Good American, we introduced ThinThread: the most powerful surveillance tool you’ve probably never heard of. This groundbreaking model of digital information mapping was, its proponents argued, proof that you can track the bad guys without infringing the privacy of the innocent.


Coming up with this solution did not win Bill Binney and his NSA colleagues any accolades though. Instead, their programme was scrapped and their homes were raided by the FBI, and the government began spying on its citizens in an unprecedented way.

The reasons would appear to be depressingly familiar – according to the whistleblowers, it was money, greed and corruption that led the US government down this path.

Government IT disasters are legendary

Some context first. For many people, and industries, the move into the digital age has been a painful one. Huge sums of money have been poured into solutions, often failing dismally. But it’s not just older relatives and libraries who have struggled: those institutions which you might hope have more of a handle on things are often woefully behind on IT too, relying on semi-digitised, outdated and fragmented systems. In fact, the “wobbly” and piecemeal IT systems of global banks were highlighted in Joris Luyendijk’s in-depth Guardian investigation into the City of London, with one insider even telling the journalist that the perilous state of information systems in the banking sector would be the cause of the next financial crash. Even more surprisingly, the security services seem to have fared little better with the move to the ‘information age’.

Government IT disasters are of course legendary, and costly, with the most infamous in the UK being the £10bn NHS database failure. In this era of mass privatisation, these tales of tech tragedy share a common thread – private contractors securing massive profits while courting controversy over incompetence and worse.

Some of the biggest government contracts – and the most controversial – are in security and military operations. The names Halliburton and Blackwater will forever be associated with the Iraq war, as the use of private mercenaries began to eclipse regular forces. It would seem that this outsourcing trend was taking hold at the National Security Agency too, as Bill Binney, Ed Loomis and other former analysts recount in A Good American. One minute their small research unit, working on ThinThread, is offered millions of dollars. There’s great relief that a digital transition can be made relatively smoothly thanks to this sophisticated program. The next minute, the agency wants the project shut down.


What preceded this sudden change of heart? New officials appeared at the head of the agency from SAIC, a vast private contractor specialising in security, surveillance and tech. In 2007 it was reported that the company held 9,000 federal contracts, some worth billions of dollars; it was also heavily involved in the war in Iraq. As well as the new deputy director, another former SAIC man was chosen to head up the ‘Trailblazer’ project, which would replace ThinThread as the agency’s surveillance model of choice. It would be privately run, at an initial cost of $280m for just 26 months. The contract was awarded, naturally, to SAIC.

So: outsourcing, money influencing questionable decisions… so far, so familiar. But what sharpened the blow for Binney and his colleagues was not only that ThinThread was dropped just as it was starting to show promise, but that elements of it were, in Binney’s words, “twisted” into an unconstitutional, unprecedented spying programme affecting the entire US population. TrailBlazer was essentially a data-scraping program which did away with the encryption and anonymisation that characterised ThinThread. Instead of discarding most of the data, the authorities began hoarding it.

Perhaps more shocking is the timing: the termination of ThinThread was announced in August 2001. Three weeks later thousands died in the 9/11 attacks – and Binney’s claim is that ThinThread, properly implemented, would have prevented them. This is disputed by others in the security community, in particular General Michael Hayden, who was in charge of the NSA at the time.

Would the ThinThread programme have prevented 9/11?

In his recent memoir Playing to the Edge, Hayden dismisses ThinThread; it had “scalability” problems. He admits that TrailBlazer was flawed (the program became the largest failure in NSA history, costing an astounding $3.8bn) – but Hayden actually blames this failure in part on the “guerrilla warfare” launched within his agency by ThinThread’s proponents, who by 2001 had resigned, speaking publicly against TrailBlazer’s privacy infringements.

Binney compared this ‘collect it all’ level of surveillance to “the Stasi on steroids”; Hayden was furious at the perceived disloyalty, and in his memoir accuses Binney and his colleagues of a “messianic approach”. “The small group of passionate Thin Thread supporters have elevated this into a sort of digital age morality play”, he writes. 

It’s an interesting accusation, because the revelations that were to come in 2013 had morality at their core. One of the most striking aspects of the film Citizenfour – which documents NSA whistleblower Edward Snowden deliberately ruining his life – is his overwhelmingly moral reasons for doing so. Journalist Glenn Greenwald, who was involved in the story, recalls Snowden telling him: “I do not want to live in a world where we have no privacy and no freedom, where the unique value of the Internet is snuffed out.” Describing the events in his book No Place to Hide, Greenwald explains: “He felt compelled to do what he could to stop that from happening or, more accurately, to enable others to make the choice whether to act or not in defense of those values.”


The information that Snowden managed to make public, at massive personal risk, shook the world. Suddenly it became clear that surveillance programs conducted for years by the UK, US, Canadian and Australian governments in particular had been invasive on an almost unimaginable scale. The NSA’s ability – and willingness – to tap into personal communications via programs like XKeyscore and Prism was exposed, and the security agencies came under a barrage of criticism. It massively undermined public trust, shaking those foundations already fractured by the claims of Binney, Loomis and Kirk Wiebe years earlier. 

“We lost all moral standing in the world”, says Diane Roark, a Republican who served on the House Intelligence Committee, and who sided with the ThinThread group. “When I found out all the things we were doing as a result of 9/11, and heard Vice-President Cheney’s statement about ‘having to go to the dark side’, I looked on it as a total destruction of our society.”

The story of ThinThread, TrailBlazer, and this small group of whistleblowers who brought it out in the open, is an incredible one. But even so, it is just one part of a larger jigsaw. Those with a more cynical view of US foreign policy over the years might question the ‘move to the dark side’; arguably the US government has always used unethical tactics to maintain its influence around the world, particularly when it comes to the role of the security services.

War on terror – or on citizens?

But once the ‘War on Terror’ kicked in and the money started flowing, the US began bugging and tracking all its citizens, rather than just dissidents and ‘foreigners’. And now, this roll-out of surveillance tactics and hoarding of data threatens the freedom of every person across the world. In the UK authorities have enthusiastically embraced bulk surveillance. Privacy campaigners say the upcoming ‘Investigatory Powers Bill’ takes us irrevocably down a dystopian path – and Binney himself has warned that it’s all about the money, once again. Speaking in the UK parliament against bulk powers, he warned that the UK government had taken this approach “because the NSA did, and the NSA did it because of the contractors and [their] interest in getting money… There’s an awful lot of money behind the scenes that contractors want to feed on.”  

This bill, nicknamed the ‘Snooper’s Charter’, looks set to become law in the coming months, taking the UK further in bulk surveillance powers than anywhere else. Similar legislation is being introduced across Europe. Next week’s post will look at the massive implications this will have for every citizen.

A Good American in cinemas

Moving Docs is bringing A Good American to cinemas across Europe. Screenings right now in Spain; from 15 September in the UK, together with Take One Action and The Guardian Live; and from 12 November in Greece.

This post was written by Jen Stout for Film & Campaign on behalf of Scottish Documentary Institute, a Moving Docs partner. Images and quotes are taken from A Good American unless attributed otherwise.