Privatization follies

Halliburton fraud. IRS tax-collection shenanigans. Voting-machine madness. There's got to be a better way.

By Ellen Dannin

Nov 22, 2004 | Imagine how the world would be different if Diebold, the electronic voting-machine manufacturer, were owned by the government.

Well-documented flaws in Diebold's machines set off alarms long in advance of Nov. 2. Today, as a result, many people feel a sense of doubt about the results of the presidential election -- doubt that is impossible to assuage and that does no one good. It undermines the credibility of the "winner" and fosters suspicion and cynicism among the public.

As a private-sector company, Diebold is accountable only to its owners. As a part of the government, Diebold would still be accountable to its owners, but its owners would be the public, and we would have many tools to take it to task. Surely, the importance of voting equipment to a free, democratic society would make it a natural candidate for truly public ownership.

Except, the current trend in government is precisely the opposite -- to take things out of the public sector and move them to the private. For decades, privatization enthusiasts, such as the Reason Public Policy Institute and the Mackinac Center, have been engaged in a full-bore campaign to persuade us that private is better than public. In the Bush administration, such enthusiasts have some of the strongest support they've ever had.

But privatization has a dark underbelly that the public is only now becoming aware of. We see glimpses of this in the ongoing investigations into fraud, profiteering, misfeasance -- and acts of downright anti-Americanism -- by Halliburton. Those actions cast doubt on the officeholder one heartbeat away from the presidency. Now Diebold casts a cloud over the validity of our election.

Diebold and Halliburton are not the only private contractors who appear to have betrayed the public's trust, pillaged our treasury, and endangered our national security. Here are just a few recent incidents.

A contractor with a history of violating IRS security policies was hired by the IRS to develop software and was given root access for 50 of its employees to the IRS operating environment. Root-level access to a computer system is no trivial privilege. It allows the user to make unlimited and unrestricted changes to any part of the computer system, including the operating system and computer applications. An audit report released in March by the treasury inspector general for tax administration (TIGTA) noted, "In many cases, a user with root-level access could turn the audit trail off and/or erase audit trail data, without any record as to who used the root-level privilege." This means that the contractor or a hacker could have navigated the system and gained access to taxpayer information.

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