Booz Allen Hamilton CEO Horacio Rozanski is in an unprecedented position. Not only is he the first CEO to lead the storied consulting firm as a public company, but last year his firm derived 98% of its $12 billion in revenue from the U.S. government. That put him in the crosshairs as DOGE came to town, spooking investors and forcing him to lay off 7% of the company’s staff. Rozanski spoke to Fortune recently, in a wide-ranging conversation covering everything from Iran to national security spending to what exactly Booz Allen Hamilton does.
The following has been condensed and lightly edited for clarity.
Fortune: Where are we on the DOGE continuum right now?
Rozanski: It’s a dynamic environment. The discussion has moved away from a central DOGE conversation to an agency-by-agency efficiency discussion. We had to do a significant cut in our workforce to match where we see the demand in our civil business, which is obviously painful, because we have a great workforce. We took advantage of that to restructure how we run our entire civil business. The conversation on the national security side is different, because funding there is likely to go up if the reconciliation bill goes through in some form. I continue to be very optimistic about that given the value that we bring to the nation.
Let’s go back to that Peter Drucker question, then. What business are you in?
We’re in the business of making our nation stronger and better through technology, and we do that by working with the federal government on what we believe are the most important, most enduring missions, and by bringing technology that we create, that commercial companies create, and putting it together in a way that it addresses real mission needs. Our staff works from the seabed to space.
There must be times when it’s better to be in stealth mode, where people don’t know what you do.
I’m the first CEO of Booz Allen to really run a public company. We went public in 2010, so my predecessor took us public, and I was part of the IPO team. But Carlyle owned the majority of this stock. I found myself having to almost reimagine what the CEO of Booz Allen does, to have a more public conversation. We could do a lot of our work before without necessarily having to share with the people that lead that mission or lead the command or lead an agency much about ourselves. They knew we existed, but now we need them to know who we are and what we do, and we need to make sure that what we’re doing is aligned to the policy priorities. And that’s a different job than what we’ve had in the past.
Ronald Reagan said that line about the nine scariest words being, “I’m from the government, and I’m here to help.” We like to write off government as stodgy, slow, behind the times. What’s changed?
You have effectiveness, and you have efficiency. Our nation is very effective. We have the mightiest fighting force in the history of the world. Things happen that need to happen. And the federal government has been ahead of the private sector on the intelligence front, in areas around cybersecurity and so forth.
Efficiency in the federal government is very, very hard. In large measure, it’s structural. It’s not the Center for Disease Control but the Centers for Disease Control, each one funded individually and independently by Congress with different priorities and different requirements. So the CDC has a hard time operating as one entity. Could it be more efficient? Absolutely. We can quibble about the how, but the fact that we’re talking about it is a good thing.
How are you feeling about the ratio right now?
I think we’re at the point in this transformation where the government can afford to be more precise in the way it cuts. The initial big moves were made. Some people think that’s great. Some people don’t.
You’re very diplomatic.
I think we are now at the point where you know that what needs to be done next has to be much more targeted and precise. That’s my hope for the continuing efficiency push. I would not love a world that says, “Okay, we’re done with efficiency.” Because as a taxpayer and as somebody who lives in the system, I think there’s opportunity for efficiency. I think more precise, even if it’s a little slower, is better.
If the U.S. is heading toward more engagement with Iran, the question of readiness comes to mind.
I think the commanders and the nation are ready. The investments that the country has made in defense technology, not just the next generation, but the current generation, give the president, the leaders of this country options that, frankly, no other country on earth has. That is a tremendous source of strength.
This technology—some of which we helped build, some of which we had nothing to do with—gives us all of these options for whether to engage and how to engage. There’s an entire ecosystem: First and foremost, you have these men and women in uniform that volunteer to do it, who put their lives at risk on behalf of the rest of us, and that is amazing. Second, we have an economic engine that allows us as a country to fund the defense of the country in a way that most countries can’t. Third, we have an entire ecosystem that cuts across public and private that has generated tech dominance. I’d rather live in a world where the U.S. is leading the way and has options, even if the option is to do nothing. In most countries, doing nothing is the only option they have.
“I’d rather live in a world where the U.S. is leading the way and has options, even if the option is to do nothing. In most countries, doing nothing is the only option they have.”Horacio Rozanski, CEO, Booz Allen Hamilton
That’s an incredible position we find ourselves in, and one that we need to invest in because you don’t want to be second. You don’t want to be second in AI. You don’t want to be second in quantum. You don’t want to be second in autonomy, and you don’t want to be second in nuclear. In space, you just can’t afford it. If you fall to second, the dynamics of our options change dramatically. A year ago, I was already talking about speed and moving faster than China, how companies needed to engage and compete differently, how the government needs to engage the private sector differently.
Are we at risk of falling to number two right now?
The challenge with all this is to try and figure out what number one means. What does number two mean? What is the metric for success? China has made the first launch in putting a significant compute constellation up in space. We should not let them have that while we’re still thinking about it; we need to get there first. Why? Because if you can have compute in space—and there’s a lot of ifs in what they’re postulating they’re going to do, and I’m not entirely sure that they can do it—if they can have really significant compute capacity in space with very, very low latency down to the ground, they can essentially embed AI into much cheaper, much simpler systems.
Take quantum. If the threat of breaking encryption through quantum is as real as many of us believe it is, you don’t want China to be able to break all of our encryption, and us not being able to break theirs. The price for that is tremendous. It would limit our options. They’re making significant investments, and they’re accelerating; I believe in most of these areas, we’re still ahead.
When you start talking about compute power in space, I wonder to what extent the field of battle will shift to there?
I think we’re already talking about five war-fighting domains. You have sea, ground, air, cyber, and space, and all five of those interact, so I think the risk is real. I could certainly argue that it’s a bad thing to militarize anything, but to unilaterally disarm is worse. The reality is these capabilities in space have commercial applications and feed economic growth. China in particular understands the strategic value of space—and they’re going to look for dominance. We need to accelerate ourselves. It’s the same thing with AI. The question is not, Can we slow them down? The question is, Can we move faster than they can?
Has the conversation been shifting in the direction it needs to?
I think it has. There’s now a much greater interest on the part of the private sector to engage in these discussions. Back in 2017, I had the experience of being personally sanctioned by Iran. We didn’t know what it meant. For a while, my kids were not allowed to ride the school bus, and they had security details and all of that because you just don’t know. But the point is, if Iran did that, it’s because they understood the role we played in these critical missions. That was the time where most of Silicon Valley and tech companies were saying, Government is not for us. You know, our stuff cannot be used in the national defense and all of that. I am really happy that that conversation has shifted.
Tech companies want to engage, and government is understanding that they need to work differently with the private sector to enable that. Government should behave as an early adopter of these technologies. If you look at the experience with cloud, by the time the government got into cloud, the private sector was already there. And the downside of that is these clouds were not architected to meet the exacting security needs that the government has—even to this day. Because the core architecture did not have this in the initial requirements, they’re playing catch up.
It would have been a lot better if the government had moved together with the private sector and said, “We want to adopt this technology. We are going to be a big customer, and this is what we need.” When you get to autonomy, robotics, physical AI, quantum, I would want the government to again be at the table saying, “We want to be, we’re going to use a lot of this, and this is what we need to be able to use it. We want it to be responsible and safe and have a set of safeguards, and we want you to build those into the code on day one, as opposed to trying to apply it 10 years from now, when we get around to buying it.”
What doyou think business leaders need to know right now about Iran?
Geopolitics are increasingly interconnected. When I traveled to Taiwan—which was in the early days of post October 7, and Ukraine was well underway—I was really surprised by the level of scrutiny that Taiwan had over everything that’s happening. It was shaping their policy. I assume it was shaping Chinese policy as well. What’s happening in Iran will probably shape the policies of China, of Russia, and of other actors, including our own—given the understanding that these things are so interconnected.
In what way?
Will Iran accelerate their cyberattacks? Will their proxies in the region accelerate in some way? Will other state actors, say North Korea, take advantage of the fact that so many resources are going towards Iran to do something? The place that we all need to be most concerned about is cyberspace, because it’s faster acting.
A lot ofCEOs are spending more time in Washington now. Any advice?
The most important thing is to engage. I will talk to anybody who will talk to me. I learn everything from every conversation. And sometimes I learn more from their questions than I learn from my answers. But it also is an opportunity to ask questions. So I think consistent, persistent engagement, very broad engagement. Who’s relevant today, who’s relevant tomorrow, the political process will dictate that, so you can’t get narrowly focused.
Is there any question you don’t get asked enough, or one you wish you were asked more often?
I love the question: “What do you guys actually do?” There’s real value in giving people a full understanding of what it is that any company does. When it comes to policymakers, a lot of the time, they just don’t have enough visibility into what’s out there. The more the private sector engages, the more they can do their jobs, and then the more you have an opportunity to express a point of view.
If you were to say, “Here’s what we do that so few others are able to replicate,” what would it be?
I’ll give you some examples. Our work with the VA has helped decrease plane processing time by an order of magnitude. Our work on fraud prevention across the federal government has helped reduce fraud by billions of dollars. Our work in defense has helped accelerate capabilities that keep our soldiers safer on the field. Our work in innovation has made commercial companies that weren’t able to serve the federal government become extremely successful at doing that to the benefit of the federal government. I’m most proud of the fact that our workforce has 10,000 veterans. I know we are making a difference. We secure the vast majority of the dot-gov domain. We have helped advance the country’s cyber capabilities to current levels from scratch, from the very beginning, in a way nobody else has. Now, the thing for us has always been, and the line I still want to walk is, people in the federal government are the ones that deserve the majority of the credit, not us, because at the end of the day, they are the decision-makers. People in uniform are the ones that are putting their lives at risk, not us.
A man who carried out an attack in Syria that killed three U.S. citizens had joined Syria’s internal security forces as a base security guard two months earlier and was recently reassigned amid suspicions that he might be affiliated with the Islamic State group, a Syrian official told The Associated Press Sunday.
The attack Saturday in the Syrian desert near the historic city of Palmyra killed two U.S. service members and one American civilian and wounded three others. It also wounded three members of the Syrian security forces who clashed with the gunman, interior ministry spokesperson Nour al-Din al-Baba said.
Al-Baba said that Syria’s new authorities had faced shortages in security personnel and had to recruit rapidly after the unexpected success of a rebel offensive last year that intended to capture the northern city of Aleppo but ended up overthrowing the government of former President Bashar Assad.
“We were shocked that in 11 days we took all of Syria and that put a huge responsibility in front of us from the security and administration sides,” he said.
The attacker was among 5,000 members who recently joined a new division in the internal security forces formed in the desert region known as the Badiya, one of the places where remnants of the Islamic State extremist group have remained active.
Attacker had raised suspicions
Al-Baba said the internal security forces’ leadership had recently become suspicious that there was an infiltrator leaking information to IS and began evaluating all members in the Badiya area.
The probe raised suspicions last week about the man who later carried out the attack, but officials decided to continue monitoring him for a few days to try to determine if he was an active member of IS and to identify the network he was communicating with if so, al-Baba said. He did not name the attacker.
At the same time, as a “precautionary measure,” he said, the man was reassigned to guard equipment at the base at a location where he would be farther from the leadership and from any patrols by U.S.-led coalition forces.
On Saturday, the man stormed a meeting between U.S. and Syrian security officials who were having lunch together and opened fire after clashing with Syrian guards, al-Baba said. The attacker was shot and killed at the scene.
Al-Baba acknowledged that the incident was “a major security breach” but said that in the year since Assad’s fall “there have been many more successes than failures” by security forces.
In the wake of the shooting, he said, the Syrian army and internal security forces “launched wide-ranging sweeps of the Badiya region” and broke up a number of alleged IS cells. The interior ministry said in a statement later that five suspects were arrested in the city of Palmyra.
The U.S. has had forces on the ground in Syria for over a decade, with a stated mission of fighting IS, with about 900 troops present there today.
Before Assad’s ouster, Washington had no diplomatic relations with Damascus and the U.S. military did not work directly with the Syrian army. Its main partner at the time was the Kurdish-led Syrian Democratic Forces in the country’s northeast.
That has changed over the past year. Ties have warmed between the administrations of U.S. President Donald Trump and Syrian interim President Ahmad al-Sharaa, the former leader of an Islamist insurgent group Hayat Tahrir al-Sham that used to be listed by Washington as a terrorist organization.
In November, al-Sharaa became the first Syrian president to visit Washington since the country’s independence in 1946. During his visit, Syria announced its entry into the global coalition against the Islamic State, joining 89 other countries that have committed to combating the group.
U.S. officials have vowed retaliation against IS for the attack but have not publicly commented on the fact that the shooter was a member of the Syrian security forces.
Critics of the new Syrian authorities have pointed to Saturday’s attack as evidence that the security forces are deeply infiltrated by IS and are an unreliable partner.
Mouaz Moustafa, executive director of the Syrian Emergency Task Force, an advocacy group that seeks to build closer relations between Washington and Damascus, said that is unfair.
Despite both having Islamist roots, HTS and IS were enemies and often clashed over the past decade.
Among former members of HTS and allied groups, Moustafa, said, “It’s a fact that even those who carry the most fundamentalist of beliefs, the most conservative within the fighters, have a vehement hatred of ISIS.”
“The coalition between the United States and Syria is the most important partnership in the global fight against ISIS because only Syria has the expertise and experience to deal with this,” he said.
Later Sunday, Syria’s state-run news agency SANA reported that four members of the internal security forces were killed and a fifth was wounded after gunmen opened fire on them in the city of Maarat al-Numan in Idlib province.
It was not immediately clear who the gunmen were or whether the attack was linked to the Saturday’s shooting.
When China wanted to set up its answer to the World Bank, it picked Jin Liqun—a veteran financier with experience at the World Bank, the Asian Development Bank, China’s ministry of finance and the China Investment Corporation, the country’s sovereign wealth fund—to design it. Since 2014, Jin has been the force behind the Asian Infrastructure Investment Bank, including a decade as its first president, starting in 2016.
Jin’s decade-long tenure comes to an end on January 16, when he will hand over the president’s chair to Zou Jiayi, a former vice minister of finance. When Jin took over the AIIB ten years ago, the world was still mostly on a path to further globalization and economic integration, and the U.S. and China were competitors, not rivals. The world is different now: Protectionism is back, countries are ditching multilateralism, and the U.S. and China are at loggerheads.
The AIIB has largely managed to keep its over-100 members, which includes many countries that are either close allies to the U.S.—like Germany, France and the U.K.—or have longstanding tensions with Beijing, like India and the Philippines.
But can the AIIB—which boasts China as its largest shareholder, and is closely tied to Beijing’s drive to be seen as a “responsible stakeholder”—remain neutral in a more polarized international environment? And can multilateralism survive with an “America First” administration in Washington?
After his decades working for multilateral organizations—the World Bank, the ADB, and now the AIIB—Jin remains a fan of multilateralism and is bullish on the prospects for global governance.
“I find it very hard to understand that you can go alone,” Jin tells Fortune in an interview. “If one of those countries is going to work with China, and then China would have negotiations with this country on trade, cross-border investment, and so on—how can they negotiate something without understanding the basics, without following the generally accepted rules?”
“Multilateralism is something you could never escape.”
Why did China set up the AIIB?
Beijing set up the Asian Infrastructure Investment Bank almost a decade ago, on Jan. 16, 2016. The bank grew from the aftermath of the Global Financial Crisis, when Chinese officials considered how best to use the country’s growing foreign exchange reserves. Beijing was also grumbling about its perceived lack of influence in major global economic institutions, like the International Monetary Fund and the World Bank, despite becoming one of the world’s most important economies.
With $66 billion in assets (according to its most recent financial statements), the Asian Infrastructure Investment Bank is smaller than its U.S.-led peers, the World Bank (with $411 billion in assets) and the Asian Development Bank (with $130 billion). But the AIIB was designed to be China’s first to design its own institutions for global governance and mark its name as a leader in development finance.
Negotiations to establish the bank started in earnest in 2014, as several Asian economies like India and Indonesia chose to join the new institution as members. Then, in early 2015, the U.K. made the shocking decision to join the AIIB as well; several other Western countries, like France, Germany, Australia, and Canada, followed suit.
Two major economies stood out in abstaining. The U.S., then under the Obama administration, chose not to join the AIIB, citing concerns about its ability to meet “high standards” around governance and environmental safeguards. Japan, the U.S.’s closest security ally in East Asia, also declined, ostensibly due to concerns about human rights, environmental protection, and debt.
“They chose not to join, but we don’t mind.” Jin says. “We still keep a very close working relationship with U.S. financial institutions and regulatory bodies, as well as Japanese companies.” He sees this relationship as proof of the AIIB’s neutral and apolitical nature.
Still, Beijing set up the AIIB after years of being lobbied by U.S. officials to become a “responsible stakeholder,” when then-U.S. Secretary of State Robert Zoellick defined in 2005 as countries that “recognize that the international system sustains their peaceful prosperity, so they work to sustain that system.”
Two decades later, U.S. officials see China’s presence in global governance as a threat, fearing that Beijing is now trying to twist international institutions to suit its own interests.
Jin shrugs off these criticisms. “China is now, I think, the No. 2 contributor to the United Nations, and one of the biggest contributors to the World Bank and the Asian Development Bank” (ADB), Jin says. “Yet the per capita GDP for China is still quite lower than a number of countries. That, in my view, is an indication of its assumption of responsibility.”
And now, with several countries withdrawing from global governance, Jin thinks those lecturing China on being responsible are being hypocritical. “When anybody tells someone else ‘you should be a responsible member’, you should ask yourself whether I am, myself, a responsible man. You can’t say, ‘you’ve got to be a good guy.’ Do you think you are a good guy yourself?” he says, chuckling.
Why does China care about infrastructure?
From its inception, Beijing tried to differentiate the AIIB from the World Bank and the ADB through its focus on infrastructure. Jin credits infrastructure investment for laying part of the groundwork for China’s later economic boom.
“In 1980, China didn’t have any expressways, no electrified railways, no modern airports, nothing in terms of so-called modern infrastructure,” Jin says. “Yet by 1995, China’s economy started to take off. From 1995, other sectors—manufacturing, processing—mushroomed because of basic infrastructure.”
Still, Jin doesn’t see the AIIB as a competitor to the World Bank and the ADB, saying he’s “deeply attached” to both banks due to his time serving in both. “Those two institutions have been tremendous for Asian countries and many others around the world. But time moves forward, and we need something new to deal with new challenges, do projects more cost-effectively, and be more responsive.”
Jin is particularly eager to defend one particular institutional choice: the AIIB’s decision to have a non-resident board, with directors who don’t reside in the bank’s headquarters of Beijing. (Commentators, at the time of the bank’s inception, were concerned that a non-resident board would reduce transparency, and limit the ability of board directors to stay informed.)
“In order for management to be held accountable, in order for the board to have the real authoritative power to supervise and guide the management, the board should be hands-off. If the board makes decisions on policies and approves specific projects, the management will have no responsibility,” he says.
Jin says it was a lesson learned from the private sector. “The real owners, the board members, understand they should not interfere with the routine management of the institution, because only in so doing can they hold management responsible.”
“If the CEO is doing a good job, they can go on. If they are not doing a good job, kick them out.”
What does Jin Liqun plan to do next?
Jin Liqun was born in 1949, just a few months before the official establishment of the People’s Republic of China. He was sent to the countryside during the Cultural Revolution, and spent a decade first as a farmer, and eventually a teacher. He returned to higher education in 1978, getting a master’s in English Literature from Beijing Foreign Studies University.
From there, he made his way through an array of Chinese and international financial institutions: the World Bank, the Asian Development Bank, China’s Ministry of Finance, the China International Capital Corporation, and, eventually, the China Investment Corporation, the country’s sovereign wealth fund.
In 2014, Jin was put in charge of the body set up to create the AIIB. Then, in 2016, he was elected the AIIB’s first-ever president.
“Geopolitical tensions are just like the wind or the waves on the ocean. They’ll push you a little bit here and there,” Jin says. “But we have to navigate this rough and tumble in a way where we wouldn’t deviate from our neutrality and apolitical nature.”
He admits “the sea was never calm” in his decade in office. U.S. President Donald Trump’s election in 2016 intensified U.S.-China competition, with Washington now seeing China’s involvement in global governance as a threat to U.S. power.
Other countries have also rethought their membership in the AIIB: Canada suspended its membership in 2023 after a former Canadian AIIB director raised allegations of Chinese Communist Party influence among leadership. (The AIIB called the accusations “baseless and disappointing”). China is also the AIIB’s largest shareholder, holding around 26% of voting shares; by comparison, the U.S. holds about 16% of the World Bank’s voting shares.
Still, several countries that have tense relations with China, like India and the Philippines, have maintained their ties with the AIIB. “We managed to overcome a lot of difficulty which arose from disputes between some of our members, and we managed to overcome some difficulty arising from conflicts around the world,” he said.
“Staff of different nationalities did not become enemies because their governments were having problems with each other. We never had this kind of problem.”
A JetBlue flight from the small Caribbean nation of Curaçao halted its ascent to avoid colliding with a U.S. Air Force refueling tanker on Friday, and the pilot blamed the military plane for crossing his path.
“We almost had a midair collision up here,” the JetBlue pilot said, according to a recording of his conversation with air traffic control. “They passed directly in our flight path. … They don’t have their transponder turned on, it’s outrageous.”
The incident involved JetBlue Flight 1112 from Curaçao, which is just off the coast of Venezuela, en route to New York City’s JFK airport. It comes as the U.S. military has stepped up its drug interdiction activities in the Caribbean and is also seeking to increase pressure on Venezuela’s government.
“We just had traffic pass directly in front of us within 5 miles of us — maybe 2 or 3 miles — but it was an air-to air-refueler from the United States Air Force and he was at our altitude,” the pilot said. “We had to stop our climb.” The pilot said the Air Force plane then headed into Venezuelan air space.
Derek Dombrowski, a spokesman for JetBlue, said Sunday: “We have reported this incident to federal authorities and will participate in any investigation.” He added, “Our crewmembers are trained on proper procedures for various flight situations, and we appreciate our crew for promptly reporting this situation to our leadership team.”
The Pentagon referred The Associated Press to the Air Force for comment. The Air Force didn’t immediately respond to a request for comment.
The Federal Aviation Administration last month issued a warning to U.S. aircraft urging them to “exercise caution” when in Venezuelan airspace, “due to the worsening security situation and heightened military activity in or around Venezuela.”
According to the air traffic recording, the controller responded to the pilot, “It has been outrageous with the unidentified aircraft within our air.”
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Politics8 years ago