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Today’s issue is co-authored with Mariam Baksh, a journalist who has spent years covering the tech industry at D.C. trade publications focused on government procurement. This one’s about the guts of governing, a kind of peak behind the curtain.

As Jerry Seinfeld once put it, all awards are stupid. But that doesn’t mean they are pointless. In this piece, you’ll see how certain awards given out by trade associations are designed as lobbying mechanisms to influence the permanent governing class.

A few days ago, the Federal Aviation Administration had an IT meltdown that grounded all airplanes. These kinds of government failures are not unusual. The Obamacare website failed to launch in 2014, and many government agencies were hacked via a software product produced by the now-infamous firm SolarWinds. This article is about how our ability to govern ourselves is hamstrung by a very basic element of our system: influence peddling. And it starts, of all places, with an awards show.

For multiple years now, the Information Technology Industry Council - which is a lobbying group for major software companies - has given out a bunch of shiny trophies to federal government officials at annual ceremonies. Award events like these pull on a very basic human impulse - ego - which is in some ways more powerful than other basic human motivators, like greed or love. Little kids love trophies. But awards also fill a social purpose. They are designed to help people in industries understand who has prestige. Take, for instance, the Oscars. Sure the show has financial implications, but it is really about a social ecosystem, who is up and who is down in Hollywood.

There are an endless number of award ceremonies across America similar to the Oscars. Virtually every industry has one, and they are mostly structured the same way. The people choosing Oscar winners are members of the Academy of Motion Picture Arts and Sciences, an honorary society of movie insiders in the industry who vote in every category. Similarly, insiders are the ones who tend to pick winners for most industry awards.

In government, it’s no different. Public officials have egos, they are proud of what they do, they seek prestige, and they like to pursue excellence. The President gives awards, and so do individual government agencies. But there also are many trade associations who give awards to public officials. Some happen at fancy award shows, with nicknames like ‘Telecom Prom’ and ‘Tech Prom,’ based on the industry segment and how it is regulated. They usually talk about ‘communities,’ like the ‘intelligence community,’ the ‘foreign policy community,’ or the ‘federal acquisition community,’ which references the interlinked set of government and corporate officials and ex-officials who know each other, marry each other, and live near each other. Trump called this dynamic the ‘deep state.’ Former Biden advisor Jeff Connaughton nicknamed these communities ‘the blob,’ but the essence is the same - a set of D.C.-based elites accountable to each other and not the voters they ostensibly work for.

An awards show doesn’t seem like a big deal. And yet, if you’ve ever been to one of these events where a bunch of highly paid lobbyists praise a lowly paid government official, it feels a bit off. And the reason is that there’s a transaction happening, but one few want to acknowledge. Contractors in D.C. who sell to the government or seek to influence government are engaged in institutionalized flattery of the people they are trying to influence.

*ITI has now removed Polly Hall’s name and image from its website, but had also posted this record of her accepting the award to its Twitter account.*

And that brings us back to ITI, which is your basic lobbying operation for large software and technology firms. ITI advocates on behalf of major providers of networking infrastructure and computing services—including those for cybersecurity—many of which sell their wares to federal agencies, or would like to.

In a December press release, ITI promoted its “Public Sector Government Acquisitions Awards,” an event to highlight and celebrate select procurement officials. In this case, they lauded the teams behind $161 million in contracting opportunities that benefit its member companies.

According to an ITI spokesperson, the winning procurement officials are treated to a reception with appetizers and drinks. They are presented with a trophy which has no monetary value, but the prize - according to a spokesperson - also includes being featured on the ITI website. The acquisition officers winning the lobbyists’ commendation in 2022 were from the Federal Energy Regulatory Commission and the Food and Drug Administration. The panel making the awards consists of procurement-industry insiders such as David Drabkin, Soraya Correa, and Jim Williams, each of whom is a former government officer who now works in the private sector.

Like all industry insiders, everyone involved appreciates the status quo. They believe that the government should buy from the private sector, rather than building its own solutions, and the awards are offered to the government officers who accomplish that. There’s nothing wrong with having the government use commercial technology, of course, that’s necessary. But to push the idea that the government should *only* use commercial technology is a highly ideological approach that led to messes like Booz Allen being able to rent us back our national parks.

There are, naturally enough, deep conflicts of interest in how these awards go out. The teams that received awards from ITI had also given government contracts to ITI members. For instance, Accenture, the consulting firm, is an ITI member. It turns out the FERC team feted at the ITI ceremony gave Accenture Federal Services a vendor position for data management services last January in a contracting vehicle worth up to $112 million. Similarly, California-based automation firm ServiceNow is an ITI member. And the FDA team that got high praise from ITI gave ServiceNow a $49 million contract over five years, “to prioritize industry engagement and streamline the award process.”

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ITI’s award ceremony for procurement officials isn’t illegal. Ethics laws generally prohibit gifts from contractors, but allow for things like awards, honorary degrees, and modest amounts of food and drink. But according to one industry lawyer and ethics guidelines posted by various agencies, officials are usually pretty careful, and get approval from their ethics office before participating in these kinds of events. “Federal officials tend to be pretty conservative about the things they can do,” the attorney said.

One way we know that ITI isn’t totally comfortable with its own awards program is that after a few questions during the course of reporting for this story, they started taking down public-facing web pages about it, including a description of the awards and their ethics policy around them.

These award shows are an important method of influence. Most of us are familiar with lobbying operations in Congress, and ITI members are heavily involved there. This past summer, for instance, the big software companies — represented by among other trade associations ITI - defeated a bill that would have started to lay the groundwork for placing liability on the industry for cybersecurity failures. The measure had gained momentum after the previously-mentioned SolarWinds hack of various government and corporate facilities.

Establishing liability for the software industry could have allowed software customers to sue their vendors, and win, if something went wrong as a result of the product. Such a dynamic would have changed incentives in software and upended the unhealthy private equity-owned model of harming quality to squeeze out cash. But even though the provision passed the House of Representatives, it was blocked from full passage, largely due to software industry lobbying pressure.

So the administration is pressing on with a strategy of trying to do what it can without Congress. In May, 2021, Biden issued EO 14028, as it’s known in cybersecurity circles. The gist of the executive order is that agencies have to buy software that is less vulnerable to hacking, and a rule to make that happen is almost ready for publication.

This is where ITI really shines. The award shows offer a softer form of influence—shaping the thinking of the large administrative apparatus doing the much quieter work of governing through boring rule-making. In this case, that influence appears to have flowed through a woman named Polly Hall, a Department of Homeland Security official, who received one of ITI’s first acquisition awards, in 2021, for ‘Outstanding [Information and Communications Technology Acquisition Program of the Year,’ according to the webpage ITI has now disappeared.

Hall, joining the ITI executives who gave her the award, publicly disagreed with the thrust of the Biden executive order, saying, in the passive aggressive tone so characteristic of government-speak, that the “federal acquisition community” should be allowed to see what works best before the government embarks on “long and complex rule-making.” A blog post articulating Hall’s position was updated days after ITI published a web page highlighting her achievement.

Instead of rule-making that might upset big software companies, Hall called for a form of deregulation that encourages a method of contracting known as Other Transaction Authority. OTAs are exempt from a whole series of procurement rules designed to stop price gouging. Their use can disadvantage smaller government contractors, and facilitate more sole-source monopoly contracts. But the policy merits aren’t the point. Hall, despite being in the executive branch, is working to undermine an order from the White House. What Hall did was similar to the economist at the Department of Agriculture who testified against the Antitrust Division on behalf of a sugar merger.

Hall isn’t an isolated instance. There are tens of thousands of officials like her, part of these different ‘communities’ who are influenced by the shiny trophies given out by ITI. There are also tens of thousands of officials who oppose the desired result from this kind of nonsense. For instance, at one October meeting where government officials discussed structuring procurement practices in a way that would essentially allow big software vendors to regulate themselves, Brett Baker, a former inspector general at the Nuclear Regulatory Commission, let them have it. “You can’t just trust vendors, we have to stop that,” he said.

Since the 1990s ‘Reinventing Government’ initiative, government bureaucracies have been picked apart ideologically, and encouraged to defer to commercial interests. Vendors overcharge taxpayers with poor quality software and services, do not deliver what they say they will, and then use their profits to engage in influence peddling through lobbying, and yes, award shows. It’s why the FAA’s system collapsed, and why we’re still vulnerable to embarrassing software hacks. But there are alternatives too. The Consumer Financial Protection Bureau rejected this contractor model, and its technology delivers. NASA, though weaker than it once was, has some of the greatest technological capacity in human history.

Nothing is inevitable. People want awards, they want to be recognized, and they want meaning. But there’s no reason we have to rely on this particular way of organizing our government. We can tighten ethics rules. We can regulate industry. And we are in fact moving in that direction, because that’s what the public wants. It’s what an industrial policy, such as the reshoring initiatives the Trump and then Biden administration are (sort of) pursuing, demands. One day, we may even have trophies for it.

Thanks for reading!

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cheers,

Matt Stoller

BIG by Matt Stoller

The Deep State Awards