[throwaway357]

I've worked for the NSA too, and everyone can see Alexander's defense of this arrangement ("The NSA can't afford to lose this guy, he's just so good") is horseshit, which is why the deal is now under formal investigation.

The ethical issues here are very serious and very simple. To begin, Dowd (the CTO of NSA) is not an irreplaceable commodity or even particularly qualified relative to his peers. He is however a very close personal friend of the former Director of NSA - who is now competing for contracts awarded by NSA - and in his CTO position retains a massive influence over what technologies get adopted and what contracts get awarded with NSA's ~$10b a year budget. On top of this already obviously disqualifying conflict of interest, the NSA is handicapped with a part-time, 20-hour-a-week CTO in the midst of the largest intelligence scandal in the NSA's history.

Beyond this, Keith Alexander, who supported Dowd in his pursuit of the CTO position, just began a company that competes solely based on his former NSA assocation (the desire to benefit from decisions informed by classified knowledge) and personal patents that he alleges sprang fully formed from his head during his time at NSA but were in no way influenced or produced as a result of his classified knowledge.

Alexander has lost direct access to current classified information as a result of terminating his ties to the NSA. However, as a result of this scheme, he can retain access to that information by having the HIGHEST RANKED TECHNOLOGY OFFICIAL AT THE NSA on his personal payroll with a perfect 50/50 time split. Dowd's equal time commitment (and surely larger pay via Alexander's company) create an unreasonably high incentive to develop greater loyalty to Alexander's $1m-a-month-for-classified-consulting company (http://www.foreignpolicy.com/articles/2014/07/29/the_crypto_...) than he has to the NSA.

This is the same reason you can't take a side job working for Kaspersky while you work in NSA's TAO division developing malware.

It doesn't matter whether or not it's a great deal for the employee: it's a bad deal for the country.