It's reference to general Keith Alexander and secretary of homeland security Alejandro Mayorkas having infiltrated, assimilated and neutered Defcon. The latter did the last keynote speech.
It was definitely not associated with the military or govt. at the time though. That really came about with the founding of Blackhat and the open wooing of the Feds.
I should also say that almost no "hacker" conference, even back then, was primarily attended by hackers. We used to joke back then that Defcon was a "retarded fashion show" (sorry for the offensive terminology). There were always more journalists, narcs, and hangers-on at cons back then than people who were actually hacking anything.
The reality is simply that there aren't that many people seriously criming, and there weren't that many before. Attendance at these events has always been driven primarily from enthusiasts and spectators; you couldn't even fill a bar with the number of meaningfully active people, even in 1995.
(Obviously, this is a private-sector and America/Europe-centric observation).
Flat out, not being aware of what people are capable of is a threat, and so they make sure they are aware.
In my experience, and I have some that is a good parallel but is also not software / hacking related, these things happen in layers. There is a core layer, call it the actor guild, who are three letter lifers, let's say. They are insular, not having broad contact outside trusted peers.
These people won't be doing the work directly.
They will seek others who have various inclinations and or liabilities who can do that work, or even more insidiously, they know who will do the work due to those inclinations or simply being misguided. These people may be almost entirely removed from the actors guild, or if associated, it's murky. They will be directed by people who clearly are of the guild, but also are not core. There are layers of these people who actually do the work and are in contact more generally and who also lack knowledge and or may well be unaware of the real purpose behind their actions.
A good look at what was done, and frankly is still being done in various civil rights, environmental and political activist groups would hint very strongly at what I would be shocked to find is not being attempted (with some degrees of success) in these more technical circles.
Life has taken me well into territory exposed to this stuff, and is currently taking me well out of it for now. Good opportunities tend to work that way, so this is largely a matter of curiosity for me and maybe more should I return to a closer place one day.
In terms of things like activist collectives, I've seen the following:
Promotion of people inclined to favor established interests, who then influence the potential of the group toward low value actions.
Division. Basically, start shit among key players and watch the thing dissolve into uselessness meta.
Pollution. Increase group size and or decrease coherency with a combination of people and misinformation.
Dilution. Impact vital players in ways that reduce their agency and zeal to participate.