100% of my work is government contracting, thats not how this works. The only question is whether the FBI will ever use this company again, if the FBI thinks they are incompetent then HBGary is out of work. But if the FBI still believes they are competent then they will get another contract to find more information even if some of that information is already in the public domain. The FBI won't punish them for a criminal action. At my job, just because something leaked through Wikileaks doesn't mean its unclassified. We still abide by all the rules and you can get in a lot of hot water for talking about something off of Wikileaks that you do not have need-to-know on. It's as if leaks don't exist to the government.
You or I, and many companies would take advantage of the situation and just use the publically available information and not pay the PI firm. But this is the government. They operate in a whole different ballgame with a different set of rules. Anyone pointing their finger and laughing hasn't been through the requisition process, the government has thrown good money after bad in much fouler situations than this.
...as long as you're clear that this is merely company policy and is not actually a point of law.
Actual prosecutions for people without clearance revealing classified information are generally rare because it's usually done as a form of journalism, which brings first ammendment issues into play. That's probably why wikileaks has made such an effort lately to re-cast themselves as a journalistic organization instead of just a clearinghouse for "whistle blowers."
The scenario you describe simply doesn't exist, it has nothing to do with journalism, and the onus is on those advocating for the validity of these kinds of prosecutions to distinguish acts from those which AIPAC members had charges dropped in the Franklin case just a few years ago.
I'd be interested in hearing about any successful prosecutions, so consider me eager to be proven wrong.
I also didn't describe any scenario for prosecution, so I'm not sure what you're referring to when you say that the scenario I describe simply doesn't exist. The only scenario I described was the kind where prosecution doesn't happen.
My overall point was that your statement regarding the illegality was wrong: the illegality of distributing classified materials is not based on covenant, it is based on statute. The covenant part gives prosecutors a few extra charges to pile on for people who have clearances, but it's not the main piece. Whether or not such laws are enforceable in a practical sense does not change the fact that distributing classified material is, under current law, illegal regardless of who you are.
If the hypothetical piece of paper on the street were a single page marked with a classification level, but without the cover sheet and its explanation, you might be able to argue that you didn't think that you were legally prohibited from distributing that information. Then again, "I didn't know that was illegal, your honor," generally doesn't play well in the courts. IANAL, so I can't tell you what would happen in this situation, but I can tell you that even if you were to avoid conviction the overall experience would probably be time consuming, expensive, and generally unpleasant.
For that matter, I honestly couldn't tell you which statutes provide for prosecution of non-cleared persons who distribute classified materials. All I can tell you is that every classified document has a cover sheet, and that at least some of those cover sheets specifically state that you can be prosecuted for distributing the contents to unauthorized people, even if you haven't agreed to protect it. It's been a long time since I've seen one, so I don't remember the exact wording but the warnings were stern enough that I remember them being there. Maybe the cover sheets cite a statute, maybe they don't specify. Maybe the whole bit about prosecution is a bluff, but I somehow doubt that an anal-retentive government bureaucracy would print official documents with a bluff that audacious.
Virtual Case File anybody? - http://en.wikipedia.org/wiki/Virtual_Case_File
Excuse me?
The FBI can't be that dense, can it?
If the FBI believes that the company can still fulfill its contract terms, and in a lot of situations that comes down to providing the requisite documentation showing sufficient protocols in place, then the FBI will continue to work with HBGary.
Much greater incompetence has been rewarded by the government bureaucracy than poorly picked passwords.
Isn't that a little bit kafkaesque?